Thursday, October 18, 2012

The Price of Everything

Paul Krugman, writing in the corporate advertiser funded New York Times--and therefore hardly a bastion of true socialism, wrote that Mitt Romney, unlike the robber barons of old, didn't actually build a railroad.  He bought a few corporations, and mostly disposed of them in various ways, most often obtaining more money for the rentier class including himself than ordinary workers, communities, and customers, who often lost the value of implicit contracts they thought they had.  The biggest winner was Bain Capital itself, who often pocketed millions in fees.

This, it is argued by neoliberals, is an essential part of the economy.  Determining the correct price of everything, so that a market of everything can make the right decisions.  These corporations Bain Capital bought were so underpriced that money could be and often was made by destroying them.

Of course this market liberalism (as John Quiggen calls neoliberalism to be politically neutral) does not and cannot make decisions in the best interests of humanity, or even the class of large shareholders.  The whole Efficient Markets hypothesis is bunk (except in the superficial form indistinguishable from pure unpredictability).  John Quiggen's book examines the deficiencies of the hypothesis in vast detail.

And I'm here today to say that even the great classical economist David Ricardo realized this.  He realized that left to its own devices (and he did not really understand how our corporations are hierarchies which introduce wage price stability) a market economy would lead to a collapse in the value of both wages and product prices, with rents becoming oppressive to all but the rentiers, who would inhabit a unique super wealthy class.  No stranger to feudalism, even David Ricardo realized this was Not A Good Thing.

So this is what the hallowed "accurate price determination" thing will lead to, if indeed it is actually perfected, as the Eurocrats are now trying to do.  One of the key bits of all this, is wage deflation without inflation.

Yes, that is what the Rentiers are doing, crushing us.  And why they must be overthrown.

We start by resisting their efforts to enslave us or devalue us.  I will vote for Obama, but when he writes I will plead with him not to tolerate cuts in Social Security as some say he has already said will be needed.  In fact I don't think there should be any cuts in any spending*, I would increase taxes above $250,000 income (including corporate and carried interest income) and $2,500,000 estates to 70%.  (*I would re-purpose the military to homeland defense and renewable energy conversion--no more empire business.  Spend billions on new efficient energy sources and grids instead of bombers and ships.)

I now suggest as step #2, building a parallel world federalist government, organized along the most possibly democratic basis (unlike, say, the UN, which is only slightly more democratic than the superpower it sometimes angers).

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