Right To Work

There is discussion going on about “Right to Work Laws”. There should be discussions about “Right to Compete Laws”. Our businesses are being controlled by oligarchs and there are fewer businesses offering consumers choices. It also means a consolidation of places to work. We are at a crossroads. If we want to stop our drift towards socialism, protect free markets from crony capitalism.

A struggle is going on between oligopolies and socialism. Control over industries in our economy is becoming more centralized everyday. As this happens power, both monetary and political, is more centralized. Our markets are becoming less free and the economic playing field is skewed in favor of the oligarch.

As this centralization of power and wealth is occurring, government can step in and try to “equalize” the playing field by either creating more social programs for the needy or better regulate industries so they are not dominated by crony capitalist. Since the depression of the 1930’s the government’s tendency has been to create more social programs.

This country was founded on the principle that everyone is born with the right to life, liberty and the pursuit of happiness. Our forefathers decided the best economic model to reach these pursuits was capitalism. Free markets were chosen to best attain the nations economic objectives. Capitalism is here to serve society. Society is not here to serve capitalism…. More

Oligarchs And Capitalism

It was inevitable big money would rule politics once Citizens United was ratified as the law of the land. It is the culmination of the oligarchs of big business taking over our free markets. As a result of not enforcing antitrust laws these crony capitalist have taken over what use to be free markets.

Their next step was to take over the political process by buying politicians and control the regulators who are the referees having responsibility to keep our free markets free. Citizens United allowed these oligarchs to do just that. This country, in total unison, demanded the experienced referees in the NFL be brought back immediately after the first week of the season when their replacements made several game changing blunders. Yet, little is said about the lack of enforcing antitrust laws.

The founder of capitalism, Adam Smith, and one its strongest proponents, Milton Friedman, both acknowledged that free markets needed a referee in order to function properly. Now the crony capitalist are beginning to control the politicians that control the referees.

The United States was founded on the principle that everyone is born with the right to life, liberty and the pursuit of happiness. Early on our forefathers decided the best economic model to reach these pursuits was capitalism. Free markets was chosen to best attain the nations economic objectives. Capitalism is here to serve society. Society is not here to serve capitalism.

Questions For Tea Party

Updated 8/3/12: A charter member of the Tea Party movement addressed my questions below and I posted his responses immediately below my questions. The remarks in blue are my comments to his response. I tried to post my comments to his blog; however, he took them down. I guess he did not want his readers to see them.

1. Are many banks too big to fail and should we consider breaking them up??
2. Do free markets need an umpire as ascribed by Milton Friedman: “But we cannot rely on custom or conscious alone to interpret and enforce the rules; we need an umpire. These then are the basic role of government in a free society; to provide a means where we can modify rules, to mediate differences among us on the meaning of rules, and to enforce compliance with the rules on the part of those few who otherwise would not play the game.”
3. Is the Supreme Court decision in Citizens United OK, or should it be repealed?
4. Should anti-trust legislation be implemented to break up monopolies and oligopolies?
5. Should we get out of Afghanistan?
6. Should the health care law be amended to bust up the oligopolies in the insurance industry?
7. What is more important to our long term survival; education or military?
8. Should there be no tax increases on the super wealthy?

Below is the response of a Tea Party Member with my response.

1) Many are too big to fail but only because of crony capitalism. Who would be in charge of breaking the banks up? The same regulators who failed us? The same political cronies that pushed the Community Reinvestment Act and destroyed our economy? Let bad banks fail; don’t place the burden of “bailing them out” on the taxpayer; let the free market decide and everything else will work out.

I agree with your comment about crony capitalism, capitalism without free markets. We would need to rely on the the government; there is no one else to do it.

The key would be to keep their feet to the fire. The Community Investment Act was around since the late seventies and did not cause the sub-prime fiasco that came to a crash in the fall of 2008. Sub prime lending got a slow start in the mid to late nineties. It was a creation of Wall Street and they had many accomplices’ including the banking industry, the credit rating agencies, mortgage brokers and Realtors. These are the villains that should be pursued and my guess is the only reason we are not is campaign contributions.

It is easy to say let the banks fail; however, if that was done the 1930’s would have looked like a mild recession in comparison. Many banks are too big to fail and that is why they need to be broken up. If we broke them up, the next time we could afford to let them fail. The five largest banks in the country have more assets than this country’s GDP.

2) Free markets may “need” an umpire, the problem, however is “who” the umpire is. Is the umpire a Dick Nixon-type character? A benevolent Philosopher King? A loony right-winger? A Bolshevik leftist? “Umpires” of the free market: Rule of law and indisputable contract law.

There is no such thing as “indisputable law”. All laws can be disputed. Again, we have to agree on an umpire.

3) The decision is OK; free speech is free speech.

I believe the constitution should be amended to outlaw contributions from non-people; unions and corporations. They cannot vote, why should they be able to buy votes? This is a major reason for crony capitalism.

4) No. Allow consumers and the free market decide.

My take is many of our markets are not free. A free market is one in which there are many producers competing against one another to provide products of the highest quality at the low prices. They are fighting for your business. There are many industries where this is no longer the case. The mobile phone industry is an example. There are three major companies that control the market.

Adam Smith, the founder of capitalism said in 1776, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public or in some contrivance to raise prices.”

5) Yes

Agreed

6) The health care law should be repealed in its entirety. There should be more competition in the insurance industry and we need to get there by market forces.

I am all for market forces whenever possible. In many states one or two companies control over 80% of the market. Is this a free market? Also, how does market forces protect the truly needy. We are a country founded on christian/Judeo principles. How do we reconcile this?

7) Education; but getting the government (especially federal) out of education is the only way to save our education system in America. Also, we need far more diversity of thought and opinion in the halls of academia. Our military stance going forward should be simple: if you attack us, we will wipe you off the face of the earth (and mean it); otherwise the affairs of nations are, for the most part, none of our business.

I agree with education; however, I am not sure how we do this without government. Yes, government is very inefficient. I just don’t know how we provide education to the child in inner city Detroit who has a mom and no dad. Further, the mom may be working two jobs to keep food on the table and/or she has a drug problem. I don’t think we say too bad it is not my problem.

I heard the other night that our military budget is larger than the next 17 countries military budgets combined.

8) No. This nation does not have a revenue or lack-of-taxing-anyone problem. Ever see how many days of current-day deficit spending Obama’s soak-the-rich tax “plan” covers? What is it, two weeks or so? Thinking that we can fix this nation’s fiscal ills by taxing the “rich” (even more than they are) is a dangerous pipe dream. Close the govt-spending credit card and start cutting. Start at the Military-Industrial complex and move your way down through every single department. Shutter the EPA; close the Department of Education. I can list dozens more agencies/departments that could be closed and shipped off to the states.

(Further noted: Since the author of both the site and poll seems fixated upon “breaking up” monopolies and oligopolies, perhaps he would agree with breaking up the biggest monopoly/oligopoly in the history of mankind – the United States Federal government and sending its “responsibilities,” mandates, regulations, et al. to the 50 states that it monopolizes.

Now that’s a “break up” I support.

LOL! Good comment. We do have a spending problem. The problem was here long before Obama. The governments approach to budgeting was to decide what they wanted to do and do not even think about how we are going to pay for it. I remember like it was yesterday George Bush after 911 telling everyone to keep on spending and consuming while we head off to war.

I am sure the budgeting process in your household starts off with how much money you have to spend and then prioritizing your expenditures and making sure they do not exceed your revenue. That would be a refreshing way for government to approach things.

If we break up the federal government we have 50 nations. We end up like Europe and they are having a tough time and there is only 27 nations.

By the way, I do read Krugman a lot. I assume you are a Milton Friedman capitalist! Am I right?

Jamie Dimon And Mitt Romney

Jamie Dimon’s job is to maximize the wealth of his shareholders. If the government allows him to put the country at risk and to destroy free markets, so be it.

Presidential candidate Mitt Romney has the same approach. When Romney was in Detroit this year campaigning he said of the Chinese, “They are good competitors, and like all good competitors, will take every advantage they can get. As long as we allow it, they will continue doing so.”

“A lot of the proposals are built around things that the Federal Reserve and other regulators believe did not work as well as they could leading up to the financial crisis,” said Deborah P. Bailey, a director in Deloitte & Touche’s banking and securities group. Over all, she added, the proposals “are designed to make sure that banks are strong and won’t need government help going forward.” Fed Proposes New Capital Rules For Banks, New York Times, December 20, 2011, by Edward Wyatt

Many people saw the housing bubble coming during the last decade; however, no one in the banking industry foresaw the magnitude of the problem and the affect that it would have on the banking industry and the economy in general. until it was too late. This will happen again. After all, we are human. The crisis in the future will be a different one. It will come from a different industry and it will present different problems.

The only way to solve the problem is don’t let banks become too big to fail as proposed by Thomas M. Hoenig, President of the Federal Reserve Bank of Kansas City http://goo.gl/kc3TY

Republicans Destroy Free Markets

The New York Times said on November 9, 2011, discussing the latest Republican Presidential Debate held in Michigan, “…With that brief exchange, the candidates moved back to a wide-ranging economic conversation. They drew few distinctions with one another as they embraced Republican orthodoxy — less government intervention and more reliance on markets — while addressing bank bailouts, the nation’s tax structure and declining home values….”
I agree; we need markets free from excessive government interferance and freedom from being taken over by oligopoliies and monopolies. Regrettably, The Republicans ignore the need to protect the market from oligopolies and monopolies.

I am a free market conservative. I voted republican in every presidential election since 1968, except one. It is obvious that our government must live within its means and do so in a manner as not to interfere with a functioning free market economy. If we desire to take control of government, we must demand government carry out one of its primary functions; protecting free markets from tyranny, both public and private. We are vocal about defending it from public tyranny, but silent when it comes to tyranny in the private sector.

“Experience should teach us to be most on guard to protect liberty when the government’s purposes are beneficial. Men born to freedom are naturally alert to repel invasion of liberty by evil-minded rulers. The greater dangers to liberty lurk in insidious encroachment by men of zeal, well-meaning but without understanding.” Justice Louis Brandeis 1928

Today our focus seems to be only on the tyranny of government when it comes to free markets. We need to find the right balance. Often, when we review our present status, we forget the past. Yes, we need to control the federal debt; however, In the last 10-years, we were fighting two wars, cutting taxes to the super wealthy and borrowing to the hilt against our homes to consume. We are in a mess and we put ourselves there. I voted for George W. Bush and I remember him standing at the 911 disaster and boldly saying we should continue consuming while we prepare to fight the enemy. I could not believe someone with conservative principles was saying this; so much for the conservative principle of living within our means. I remember my Mom saying that during World War II she painted her legs because the military needed all the silk they could get for parachutes. In contrast, during this war we were encouraged to keep going to Cold Stone for some very expensive ice cream.

Some conservatives will argue for the need and appropriateness of the Bush tax cuts. They will make the claim that these tax cuts stimulated investment that resulted in the boom years between 2000 and 2007. Hindsight tells us that the housing bubble, financed by the sub prime mortgage fiasco, fueled these unsustainable years of “prosperity”. We borrowed from our future and it was very costly. The result is housing prices collapsing nearly 35% with the highest foreclosure rates in history and the economy in a near depression.

A private sector without umpires and controlled by oligopolies got us into this mess with sub prime lending. The umpire, the government, was bought with campaign contributions from oligopolies.

The federal budget was in balance at the turn of the century and if tax cuts were appropriate, we needed to address cutting the federal deficit at the same time. Instead, we conservatives chose to close our eyes to this problem. When we decided to cut revenues, we should have also cut expenses. We chose not to face that issue.

We averted a depression, thanks to both the Bush and Obama administration; however, it was not without cost. Believing that we were near a depression puts a different perspective on where we were and why we are here now. We did not over stimulate; we clearly avoided a depression. It takes time and money to come back from hell. The difference between this depression and the last one in the thirties is this time we did not wait for a total meltdown before taking action.

Every conservative I know complains about over regulation of our markets by the government. I agree. The market surely would operate more efficiently if we eliminated or cut back many existing regulations. As a fellow conservative, you agree with me on this.

However, private market conservatives never mention having any concern for other factors destroying free markets. Many industries are losing freedom because a few very large corporations are choking off competition and not allowing the market to operate efficiently. Why do most free market conservatives fail to talk about this issue?

‘People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public or in some contrivance to raise prices.’ (Adam Smith, The Wealth of Nations, 1776).

Adam Smith, the author of the concept of capitalism, recognized that in order for industries to remain free, government must protect it from the conspiracy he mentions in the above quote. In order for markets to be truly free there must be a sufficient number of producers so that not one producer, or a small number of producers, can control the market. This is where the greatest threat to free markets lie in our modern society.

What does the American auto industry, the health care industry, wall street firms and the banking industry all have in common; other than they were all on the brink of failure?

These are industries where the production side of the industry is no longer a free market with many producers competing head-to head to earn the business of consumers, or customers, of the industry. Instead each of these industries are controlled by a relatively small number of very large corporations that have transformed these markets into oligopolies.

These oligopolies not only result in higher prices to the consumer. They result in less innovation, a wider disparity in income distribution, egregious salaries to executives and board members of these oligopolies, lower competitiveness by U.S. companies in world-wide markets and consolidation of political power. Where are the free market conservatives? I do not see them clamoring about this issue with the same fervor they complain about over regulation of the private sector.

Adam Smith when he discussed “rational self interest” and competitive markets in his book Wealth of Nations, envisioned many consumers buying goods and services from many producers with everyone looking out for their self-interest. By keeping markets “free”, producers pursue their rational self-interest and this best meets the needs of the consumers and the citizens of our country, who are also looking out for their self-interest. Under this system, what is in the producers self interest is to provide the best product possible to the consumer, while striving to be a low cost producer for their niche.

In today’s market, the major goal of oligopolies is to pursue their self-interest of keeping the oligopoly alive. This goal is not in congruence with the citizens of this country. Why are we not demanding the enforcement of anti-trust laws? This country seems to be transforming into an Oligarch from a Republic and the defenders of free markets are doing nothing about it.

The quote below is from the book Capitalism and Freedom written by Milton and Rose Friedman. Dr. Friedman is the economist quoted most often when conservatives are praising free markets and capitalism.

“…But we cannot rely on custom or conscious alone to interpret and enforce the rules; we need an umpire. These then are the basic role of government in a free society; to provide a means where we can modify rules, to mediate differences among us on the meaning of rules, and to enforce compliance with the rules on the part of those few who otherwise would not play the game.”

We free market conservatives are always complaining about government creating excessive regulations that hold back the productivity of free markets. Why is it we never come down on government for failing as the umpire for free markets? We would never dream of not having referees at a NFL football game; and yet we fail to speak out when the government fails to do its job as the referee of free markets.

Personally, I have concluded that our “conservative” politicians ignore private tyranny because they enjoy the large campaign bribes, I meant contributions, provided to them by these oligopolies. What is the excuse for the rest of us? Why do we allow it and not speak up about the injustice?

I love capitalism and free markets. Let us make sure we keep them for the sake of our children. It will take courage to do this. If we don’t; this is the forecasts.

“Just as the cataclysm of the Second World War revealed the fundamental shift ……. In world power from Great Brittan to the USA …. So to has the financial crisis of 2008 exposed another world upheaval….a new transference of economic power from the west to the east…..” Dambisa Moyo, How The West Was Lost

This is the opinion of one economist, however it is not too late. Free markets made our nation prosperous and free markets will be the engine that restores prosperity. Our problem is free markets are being destroyed. Republicans need to take a stance of protecting free markets from both government and oligopolies. Our countries future is in the balance.

The question is whether the free market conservative movement is so heavily financed by these oligopolies that we will not truly fight for free markets; but rather for free wheeling, un umpired, oligopolies.