Tag: Free Markets

Winner-Take-All Economy

We are told almost daily of the attributes of the “free market” economy….but those markets are far from free….for many years I have written numerous times about this lie….this illusion…..

https://lobotero.com/2008/09/20/free-markets-truth-not-spoken/

https://lobotero.com/2020/05/25/that-free-market-illusion/

Then there is the economic inequality….where 1% of the population owns more than the bottom 80%…..but how bad can it possibly be?

Well as you might imagine I have also written numerous posts on this as well…..

https://lobotero.com/2014/02/25/the-increasingly-unequal-states-of-america-income-inequality-by-state-1917-to-2011-economic-policy-institute/

https://lobotero.com/2018/03/17/inequality-how-bad-can-it-be/

After WW2 the economic growth ranged across all levels of society but that equality was to be short lived……our economy has become winner take all….and each passing year the inequality spreads.

In the three decades following World War II, the US saw economic growth that was shared across all levels of income, from the working class to the richest 1 percent. But that changed after the mid-1970s as income inequality increased exponentially during the next four decades.

A new study by nonprofit research organization RAND nails down what really happened. It shows that this rising inequality took a substantial bite out of the earnings of up to 90 percent of American households.

In this week’s WhoWhatWhy podcast, we talk with the authors of the RAND study, mathematician Carter Price and labor economist Kathryn Edwards.

Price and Edwards detail the unique approach they took in putting this report together. Up until now, they explain, nobody had devised a formula to show just how individuals and their families were affected by the rising inequality across the entire income spectrum. 

Proof Positive of the Winner-Take-All Economy

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That “Free Market” Illusion

We hear a lot about “free markets” and “free trade” these days…well for many decades…..it has been the clarion call of conservs….

Let’s look at the term “free markets”…..

A free market economy is a type of economy that promotes the production and sale of goods and services, with little to no control or involvement from any central government agency. The economic system is primarily based on supply and demand. Order and power in a free market are decentralized, with individuals making all of their own voluntary economic choices.

In a free-market economy, firms and households act in their own self-interest to determine how resources get allocated, what goods get produced, and who buys the goods. A free market economy functions in the opposite manner as a command economy works, where the central government gets to keep the profits and choose how to use them.

Read More….https://www.intelligenteconomist.com/free-market/

That is what a free market world would look like if it were truly a free system…..it is not.

Let’s be honest……A pure market economy has no barriers to economic exchange: you can sell anything to anyone else for any price. In reality, this form of economics is rare. Sales taxes, tariffs on imports and exports, and legal prohibitions—such as the age restriction on liquor consumption—are all impediments to a truly free market exchange.

So free market is total BS.

Now comes the term “free trade”…..Free trade is a largely theoretical policy under which governments impose absolutely no tariffs, taxes, or duties on imports, or quotas on exports. In this sense, free trade is the opposite of protectionism, a defensive trade policy intended to eliminate the possibility of foreign competition.  

Free Trade has an ugly side…..

  • It causes job loss through outsourcing: Tariffs tend to prevent job outsourcing by keeping product pricing at competitive levels. Free of tariffs, products imported from foreign countries with lower wages cost less. While this may be seemingly good for consumers, it makes it hard for local companies to compete, forcing them to reduce their workforce. Indeed, one of the main objections to NAFTA was that it outsourced American jobs to Mexico.
  • It encourages theft of intellectual property: Many foreign governments, especially those in developing countries, often fail to take intellectual property rights seriously. Without the protection of patent laws, companies often have their innovations and new technologies stolen, forcing them to compete with lower-priced domestically-made fake products.
  • It allows for poor working conditions: Similarly, governments in developing countries rarely have laws to regulate and ensure safe and fair working conditions. Because free trade is partially dependent on a lack of government restrictions, women and children are often forced to work in factories doing heavy labor under slave-like working conditions.
  • It can harm the environment: Emerging countries have few, if any environmental protection laws. Since many free trade opportunities involve the exporting of natural resources like lumber or iron ore, clear-cutting of forests and un-reclaimed strip mining often decimate local environments.
  • It reduces revenues: Due to the high level of competition spurred by unrestricted free trade, the businesses involved ultimately suffer reduced revenues. Smaller businesses in smaller countries are the most vulnerable to this effect.

(thoughtco.com)

There you have it “Free Markets” is an illusion….”Free Trade” is an illusion……all made up benefits to make it more appealing to the workers which are continuously scorched by the lies of the oligarchs.

We have come to a point in our nation’s public discourse where there is a widespread realization that many of the economic policies pursued and promoted by our political, business and media elites have failed us in multiple ways. We have heard our trade policies called “Free Trade” and “Free Market”, but those statements were often dishonest.

When crafting these agreements, our elites have been responding to incentives which are beneficial to their institutions but detrimental to the well-being of American citizens.

Traditional conservatives have been observing and asking about these policy failures for some time and have been met with name-calling and general denigration. During this current pandemic crisis, the magnitude of the failure of these misguided agreements and policies has become unavoidably obvious.

The Illusion of ‘Free Markets’ and ‘Free Trade’

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A State Controlled Economy?

Do we still support free markets?

According to the president….HE controls our markets. He has gone so far as to “ORDER” American firms to find an alternate to China’s markets.

ORDERED is the key concept in his statement.

It’s another volatile day on Wall Street, with the Dow down about 500 points at midday. Renewed friction between the US and China is to blame, as President Trump unleashed a series of angry tweets on that subject as well as Fed chief Jerome “Jay” Powell. After Beijing said it would impose tariffs on an additional $75 billion worth of American goods, Trump tweeted that US companies are “hereby ordered” to immediately look for alternatives to China, including relocating operations, reports the Wall Street Journal. “We don’t need China and, frankly, would be far better off without them.” But Beijing was hardly Trump’s only target. After Powell failed to be assertive enough to Trump’s liking in a speech on cutting rates, Trump wrote: “As usual, the Fed did NOTHING!” But his next tweet drew the real attention: “My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?”

Trump’s reference to Xi as an “enemy” strikes CNBC as particularly bad news. It “suggests that the president’s personal relationship with Xi, which Trump has touted as the best route to completing a major trade deal uniting the world’s two largest economies, is at a low point,” writes Tucker Higgins. China’s decision to impose the new tariffs, which go into effect in phases on Sept. 1 and Dec. 15, are retaliation for new tariffs the US is imposing on China, notes the Journal. In another slam against Beijing, Trump wrote that he is ordering “all carriers, including Fed Ex, Amazon, UPS and the Post Office, to SEARCH FOR & REFUSE, all deliveries of Fentanyl from China” because he says the drug is killing Americans

Now if another president who shall remain un-named, had issued this statement the GOP would be having a stroke and going on aimlessly about socialism, communism and stuff like that.

Where are these voices today?

They are still there just aimed at rivals in the political arena…they do not have the inclination to see what their mindless leader is doing to the country and the world.

Let me help those DOLTS in the GOP that may not be aware of what a controlled economy may be…..

The short version……

A centrally planned economy is an economic system in which a single authority, such as a government, makes economic decisions regarding the manufacturing and the distribution of products. Centrally planned economies are the flip-side to market economies, in which such decisions are traditionally made by businesses and consumers, rather than by central authorities.

Is this Trumps “New Economic Policy”?

Do I need to explain this as well?  (it is late and I am tired…use Google)

Not to worry…the “Pussy” president is considering changing his mind on the trade war with China…….

President Donald Trump on Sunday signaled he might be having regrets about his deepening trade conflict with China, telling reporters less than 48 hours after he pledged to raise tariffs on Beijing that he has “second thoughts about everything.”

Asked during a bilateral meeting with Prime Minister Boris Johnson of Britain whether he was second-guessing his posture on China, Trump said: “Yeah, sure why not. Might as well. Might as well.”

The comments marked the president’s first public signal of regret about how he was fighting China through escalating tariffs. They attracted immediate attention across U.S. media because of the unusual nature of Trump’s remarks, leading White House officials to seek clarity from him in between bilateral sit-downs on Sunday morning. The president told aides, “You know what I meant,” according to a person familiar with the conversation.

About five hours later, White House Press Secretary Stephanie Grisham said Trump’s answer to a question about whether he had second thoughts on his approach with China had been “greatly misinterpreted.”

https://www.politico.com/story/2019/08/25/donald-trump-china-trade-war-1474382

Sounds to me like he is scared of the markets and his re-election….so he pussied out.

“Lego Ergo Scribo”

Free Markets! Just Stop It!

Thoughts From the VOMITORIUM

Free markets!  Free markets!  We hear this time and time again from our politicians especially those on the Right….we must have free markets for this country to move forward.

What poppycock! (I wanted to use a stronger word but some of my readers may have sensitivities that I may not know about)……

This term has been used so much that few know what the Hell it means….but they will vote for the loudest toad that uses it ad nauseum….

I recently had a sit down with a friend—-coffee and pastry was delightful—a conserv friend…..we started talking about trade. world trade and my friend being a good conserv started going on about the “free markets”….free markets this and free markets that……as usual I had to point out that the free markets that he so loves do not exist…..in the pure economic sense.

As usual these conservs know not of what the speak….once I started my friend immediately started in on the “socialism” thing….anything that does not meet with their approval is deemed “socialism”…that is a retreat of the ignorant.

First of all….what are the “Free markets”…..Where buyers and sellers can make the deals they wish to make without any interference, except by the forces of demand and supply.

The term “free market” is sometimes used as a synonym for laissez-faire capitalism. When most people discuss the “free market,” they mean an economy with unobstructed competition and only private transactions between buyers and sellers. However, a more inclusive definition should include any voluntary economic activity so long as it is not controlled by coercive central authorities.

In short there are few “free markets’ although the illegal drug trade comes closest to any….

Economic sanctions, quotas, tariffs all are regulations of sorts and go against the perceived benefits of a “Free Market”……

Our new president wants to punish countries like China for dumping steel none of that is part of a free market…..

Time to find a new term to name the economy/markets in the US…..time to stop using a term that does not define the market economy of the US…..

Why Americans Feel So Good

Trump came to office on the promise of the American economy will boom…he will ax crappy trade agreements….he will make the free market blossom for ALL Americans.

The stock markets are going well and Trump points to that as proof positive that he is doing what he promised.

It is true that markets are doing well……sadly the same cannot be said for the economy of this country….at best it is mediocre.

Then why are Americans pleased and satisfied with this situation?

A strange thing seems to be happening to the US economy. On surveys, businesspeople and consumers say the future looks bright. But recent economic activity hasn’t appeared very robust.

Andrew Ross Sorkin of the New York Times noted this in a recent article about mergers and acquisitions. A number of surveys have been reporting that chief executive officers are highly optimistic. For example, the website Chief Executive and the Wall Street Journal/Vistage Small Business CEO Survey both report a surge in CEO confidence since the 2016 election, while Business Roundtable’s CEO Economic Outlook Survey finds an average level of confidence.

But as Sorkin reports, M&A activity is at its lowest level since 2013, and has fallen 40 percent in the past two years. Share buybacks have also slowed. Those “hard” numbers indicate that whatever CEOs are saying on paper, they aren’t taking actions that signal confidence in the future of their businesses. Capacity usage, which fell slightly in May, is another indicator of that true business sentiment is far from giddy.

Source: Why Americans Feel So Good about a Mediocre Economy – ASHARQ AL-AWSAT English

It is typical….Americans have always been satisfied with mediocrity.

Some Do The Right Thing

I am sure that many Americans remember that horrific ferry disaster in South Korea that cost many many children their lives….of course the Korean government has arrested many that worked for the ill fated ferry and its parent company……

I wrote awhile back that the CEO of the ferry company took responsibility for the disaster and immediately went out and wrote and note and killed himself…….after reading that news I wrote that unlike the US people in other countries, especially Asian, that take their responsibility seriously to the point that they would kill themselves because of the embarrassment they have caused the country and their families.

I wrote that it was a shame that American business people cannot do something similar…..like take responsibility for their actions that cause a disaster, ie the 2008 crash……

I bring all this up again…because it has happened again…….

A South Korean man involved in planning an outdoor pop concert where 16 people were killed after falling through a ventilation grate was found dead today in an apparent suicide. The man, 37, an employee of the Gyeonggi Institute of Science and Technology Promotion, was found dead at around 7am in Seongnam, the city south of Seoul where yesterday’s accident occurred, said city spokesman Kim Nam-jun. The site of his death was not far from where 16 people watching a performance by 4Minute, a girls’ band that is popular across Asia, were killed when the ventilation grate they were standing on collapsed. Eleven other people were seriously injured.

It was believed that the man, who was questioned by police last night over the accident, leaped from the top of a 10-story building. In a televised briefing today, Kim said the death toll could rise. Of the 11 people treated at hospitals, eight had life-threatening injuries to the abdomens or lungs, he said. Most of those who were killed were men in their 30s and 40s, while five were women in their 20s and 30s, fire officials said. The collapse came as South Korea is still struggling with the aftermath of a ferry disaster in April that left more than 300 people dead or missing.

I say again…..American business people should be so serious about their actions……..but NOPE!  These parasites like Jaime Dimon will continue their fleecing of the American consumer and any harm they do they will get the Federal government to pass a law that will protect them and possibly allow them to do the same thing all over again without any consequences…..

Personally, I like the idea of these bastards taking dull responsibility for their actions and even suicide if that is what it takes to eliminate these butt monkeys….the American consumer means NOTHING to these capitalist slugs……NO one protects the people from the exploitation.

If them committing suicide drives the point home…..then I say…Let the Bastards Die!

What Is This “Mythical” Beast?

College of Political Knowledge

Subject:  Economics/Political Theory

The beast I speak of this that beast that rears it’s ugly head during and just after any election…….(pause here for thought)……..Free Markets!  A cute slogan that is hammered into the mind of potential voters…..hour after hour….and yet few have any idea what is meant…..

I realize that this is economics and everyone’s eyes will glaze over…….it is so much easier just to go about throwing one slogan after another without ever knowing what the f*ck you are talking about…….oh so much easier.  Back in the day my grandfather gave me great advice and when it comes to economics it is the best advice…..”Never write a novel when a paragraph will do”………K.I.S.S.

One point I would like to make is………government CANNOT be run like a business!  It is a Government NOT a business.  Got that?  And please stop using states as how the federal government should be run…..it cannot be run in the same manner…..it is a country not a state…another point you need to grasp whenever possible……

Back to the mythical beast……….

What does free markets refer to in these times?  In today’s world this is not the idea of laissez faire of the Adam Smith strain……okay……Smith believed that selfish and unrestrained pursuit of self-interest will improve the general welfare….other words greed good…..and he foresaw that there is a natural order in which government has a minimal role……..

But in today’s world……the slogan “free markets” has been moved to the forefront by good old Milton Friedman……that would be the Chicago School of Economics……good old Milty was an economic adviser to Thatcher and Reagan (go figure)…….and he became famous for his free market ideology…….say that again, professor……his free market ideology.

And his ideology consisted of opposition to taxes, dislike for “big” government.  Regulations, according to Uncle Milty,  were an insufficient imposition on markets….he saw government only needed for defense, justice and basic legislation.  He also wanted the allocation of resources left up to business and not the government……does any of this sound the least bit familiar?

These are the basic planks of every GOP presidential platform in the last 25+ years…..free markets are a slogan for a political ideology……it is not about the economy so much as about the running of the country….slogans aside…it is a political ideology and should be treated as such and not some magic pill for the reviving of the economy.

Where Is This “Free Market”?

It is election time and all the candidates have a talking about the “free markets”……but what is the free market they speak of endlessly?  Everybody on the campaign trial has some policy that mention the obscure policy of free markets.

First of all,  contrary to popular belief there is NO field of study in economics called free markets…..a definition from Investopedia……In simple terms, a free market is a summary term for an array of exchanges that take place in society. Each exchange is a voluntary agreement between two parties who trade in the form of goods and services. In reality, this is the extent to which a free market exists since there will always be government intervention in the form of taxes, price controls and restrictions that prevent new competitors from entering a market. Just like supply-side economics, free market is a term used to describe a political or ideological viewpoint on policy and is not a field within economics.

If this is a catch all phrase and a bumper sticker in waiting, why is it so important?

Basically, what the politicians, both flavors, are talking about is really multinational corporations.  In today’s economy there is no local players it is all global and in as such more and more not a free market.  And today’s world offers no real free markets because of the imperfections withing the capitalist theory.  the main players in this new global economy, the multinationals, have extinguished the dream of a truly free market.

For instance, price fixing flies in the face of the old theory of supply and demand by controlling the prices…the oil industry is a good example of this,……in a world where the corporation controls both ends of the chain, the supply and the demand, the idea of market mechanisms does not apply.

There are a couple of things that multinationals have done that has turned them into the conquerors of the colonialism days……there is very little marketplace, it is give as little as possible while extracting as much as possible, they many times export more capital from developing countries than they bring in, they have intensified poverty instead of helping eliminate it, they effectively edge out the native entrepreneurs and finally, use the military to insure their continuing oligarchy.

Thus the multinationals have made a mockery of the idea of free markets…..and turns the very idea into so much nonsense.

So please keep all this in mind while you listen to your candidates go on and on about some obscure policy such as the “free market”!

The Free Market

Over and over, we are bombarded with all the spin on the free market…..how it will save our country from the clutches of that person……Obama

Politicos throw the term around like it was beads at Mardi Gras, the only difference is that there are few woman willing to flash their boobs for a closer look…..but just what is meant by Free Market?  Professor, please keep it simple!

In simple terms, a free market is a summary term for an array of exchanges that take place in society. Each exchange is a voluntary agreement between two parties who trade in the form of goods and services. In reality, this is the extent to which a free market exists since there will always be government intervention in the form of taxes, price controls and restrictions that prevent new competitors from entering a market. Just like supply-side economics, free market is a term used to describe a political or ideological viewpoint on policy and is not a field within economics.

It is all political rhetoric…….keep that in mind while listening to the clowns who want your vote….there will ALWAYS be intervention by government into the economy and to tell people any different…..is a LIE!

The Birth Of Capitalism

College of  Political Knowledge

There are times when I just sit and think…..and suddenly the bright flash of inspiration crawls out my butt and into my head……both locations are seldom in the same place…….contrary to popular belief……after endless debates and politicians rattling on and on about the joys of capitalism…….. I feel I need to set the record straight…….

I was recently having a conversation with a friend….we were talking about federalism and how it had caught on across the world and how cool it was that it had its simple beginnings here in the good old US of A……and then my friend said that it was also cool that capitalism had its beginnings in the US as well….I had to set him right……

This is the silly season and there is a wealth of promises and historical re-writes going on……we hear all about the benefits of capitalism or the free markets or a wealth of other such things……but you realize the politicians have NO idea what they are talking about….and that is most of the time since a majority of them have a very limited knowledge of economics in the first place…….

Let us begin with the birth of capitalism…….believe it or not capitalism was NOT born when the US came into being and NO it was not born with the publishing of Smith’s, The Wealth Of Nations……..sorry to burst your bubble but the birth of capitalism had NOTHING to do with the Constitution or the DoI……or the publishing of a book considered the bible of capitalism….even though they were done in the same year….1776.

If not then….when?

The year is 1648 and after 80 years of fighting Spain finally gives the Netherlands their independence…..this small country had no aristocracy and no discernible class system….but what it did have was a fairly large middle class that had been developed over the years with city dwellers, merchants and small manufacturers and through the massive trade structure like the Dutch East India Company.

The capital Amsterdam was a great city in Europe up to the Industrial Revolution…..if was the first stock exchange and the first insurance company…..all these developments labeled the Netherlands as the first truly capitalist country.

The economic system of the day was mercantilism……..Theory of the responsibility of the state to protect and promote national wealth by encouraging exports and limiting imports.  Its central figure was the authoritarian monarch because only the monarch embodied the state’s general interests and only he could guide economic affairs.

So you see, regardless what you are told….capitalism did NOT originate with the founding of the United States….the concept was in play long before the birth of the US…..