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To Apologists of Crony Capitalism

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adam smith“Civil government, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all.” __Adam Smith
Today, to become and remain a billionaire, it is necessary to use power and influence to control government. All who recommend free market principles are not inclined to adhere to free market principles personally. Any individual is better off being free from free market constrains at the same time others are bound by these principles. All make the effort to do so but only the rich have the money and power to take over government and turn their desires into reality. There is only one way to maximize economic growth and level the income distribution.
The benefits of the rich commandeering government extend down to about the top forty percent or so of income earners. The largest benefit is concentrated at the very top. The bottom 60 percent suffer without knowing the cause. Our troops overseas are there to preserve and promote crony capitalism. Young men and women in uniform die on behalf of cronyism. The interests of billionaires are worldwide, and their efforts to rig markets cover the globe. Many who dictate U.S. policy live in other countries. There are the acknowledged governments of the world and then there are the interests of those who have the wealth to dictate policy. Those are the elite of the world and they operate very much like a shadow government that controls all of the others. Whether it is that way by virtue of a conspiracy or the natural playing out of common incentives doesn’t matter. The system is in place.
What is important to remember, is that crony capitalism it is a natural occurrence. Self interest is part of every one of life’s activities. In economic activities, self interest trumps all other incentives. It makes sense that highly intelligent aggressive people would use government or anything else as a means to achieve their goals and aspirations. The poor would do the same but they lack the wits and adeptness to do these kinds of things.
The founding fathers anticipated certain difficulties in basing a government on democratic principles. Crony capitalism is something that went under their radar. Also, we must remember that the founders were the elites of their time. They were practitioners of their time. Before the start of the Revolutionary War, as little as ten percent of the population had grievances with England. By the end of the war, about thirty percent were supportive of the effort. American soldiers were mostly fighting for their lives, food and a little money. The elite were fighting for wealth, power and a way to get more. Without exception wars start for this reason. The poor only see danger in external threats, so they march off in droves to die for causes they don’t understand.
So where does this leave us? There is little chance of solving problems without some insight into their causes. There is hope. When common people experience consistent discomfort, they can and will challenge government. The suffering will be forthcoming. This is what happened during the Vietnam War era. Civil rights is another example. In extreme circumstances ordinary folks will rise up. There really is only one solution and that is in converting to a system where government imposes free market principles and ceases to be platform on which to rig markets.
Americans are a little concerned but are not aware of the gravity of the circumstances. Initially I decided not to use the term fascism because it bothers people, but that is what crony capitalism actually is. There are examples of countries which have died using that system. In the coming days we will see how everyone responds to the coming difficulties. When Americans are under stress, they normally ask for more government, even when government is the cause of the problem. This is what the Russians did after they killed the czar. To do anything better, they would have to know the true cause of their poor circumstances.

Subprime Neighborhood is a tune Curbside Jimmy wrote right ofter the 2008 mortgage crisis. It has been well received ever since.

 

Rigged Market Economy

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bush_fascismThe transition has been made in the U.S. from a free market economy to a rigged market economy.

The following is a decent definition of a free market economy.
“DEFINITION of ‘Free Market’
A market economy based on supply and demand with little or no government control. A completely free market is an idealized form of a market economy where buyers and sellers are allowed to transact freely (i.e. buy/sell/trade) based on a mutual agreement on price without state intervention in the form of taxes, subsidies or regulation.” http://www.investopedia.com/terms/f/freemarket.asp
In the beginning, the U.S. economy was largely free in nature. In a new land with little structure, a free market system developed naturally. The free market concept worked so well, the founding fathers saw fit to separate from England rather than accept government interference. From day one in the new country anyone who could used government as a means of living off the efforts of others. But, the opportunities to do so were minimal. As the country grew and became more complex this changed. Corporations became very powerful and increasingly pressured congress to rig markets. From the 1980s on government policy killed off the free market system.
Adam Smith, father of free market thought, addressed the problem in his classic, Wealth Of Nations.
“Civil government, so far as it is instituted for the security of property, is in reality instituted for the defense of the rich against the poor, or of those who have some property against those who have none at all.”
? Adam Smith
“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
Today, for the most part, government decides what citizens purchase and what they pay. Health care is a good example. It is the largest segment of the economy. Government policy dictates that patients pay an insurance company first. The physician is paid by the insurance company. The insurance company plays a role in determining treatment and what medicine is prescribed.
For the most part citizens are happy with the lower living standards of a rigged market system because they are relieved of the stress of making decisions. They are happy to pay more in return for the illusion of being taken care of. They have no choice so they might as well be happy. Government frequently decides what they buy and they don’t mind.
History’s most famous rigged market system was Germany under Hitler just prior to World War II. One of the seldom mentioned attributes of a free market is peace. As a country moves away from free markets, the chances of war accelerate greatly.
Karl Marx is often noted as history’s most destructive economist. In years to come he will probably be supplanted by the names of Ben Bernanke, Henry Paulsen and Janet Yellen. These are the economists who with the authority given them put the last nails in the coffin of the American free market system.