Skip to main content

One of the problems is that we all speak different languages we think are English

Over at Delawareliberal, Deldem provides a (completely unconscious, I suspect) example of this.

Here's the paragraph with the sentence in bold that caught my eye:

The classic refrain from Wall Street and the Republicans, in opposition to President Obama’s $500,000 cap on the salaries of those bank executives who have so failed in their jobs that they required billions of taxpayer money, is that 1) the market should determine the salaries; and 2) the best get paid the best. Those two excuses are, of course, wrong. Banks were failing all last year, but the market did nothing to prevent those failed CEOs and executives from receiving hundreds of millions, if not billions, in bonuses that they did not earn. Indeed, some of the bonuses paid out had the feel of a literal robbery. And if these miserable failures in life did earn that money, if they were the best, then why are banks failing everywhere? Why did they need a federal bailout?

OK, I was poised to say (in my own, long-winded way, which would drive donviti nuts because I can spell all the words I want to use), Hey, wait a minute, this sentence just proves you don't have the slightest idea what a market is, or how it operates. Markets are non-sentient, complex dynamic systems. Markets don't have consciousness, much less a conscience or opinions about who should get what, or who should be rewarded. Markets are Darwinian.

Then, a funny thing happened. Scrolling down the comments I noticed that--wonder of wonders!--jason actually sort of made my point for me:

The Bottom Line is that banks need to fail. The people who ran those banks need to be fired and the people who invest in those banks (whether they are governments or individuals) need to lose money.

Exactly, jason: in markets, unsuccessful businesses fail, and people who invest in failure lose their investments.

Ironically, only a few lines down, somebody attacked jason for saying it:

This is an un-American statement.

Why do I find this ironic? Simply because jason spends about 10% of his vehement verbiage in his own posts accusing pretty much anybody who disagrees with his political or economic views of hating America.

But I digress....

Then liberalgeek jumped in to explain to jason's critic that it would only be un-American if jason had said:

Bottom line is that these banks cannot be allowed to fail. The people that ran those banks should be rewarded and the people that invest in those banks need to make money.

Except, of course, we live in a nation wherein banks and multinational corporations have become too big to fail, primarily because the Federal government is so inteventionist and hopelessly corrupt that it doesn't just attempt to regulate the market for fairness in competition, but also actively picks winners and losers for reasons that usually have very little to do with economics (and a lot to do with large envelopes of money and junkets to the Caribbean for the likes of Charlie Rangel and Sheila Jackson-Lee).

Bookend: during World War Two, President Roosevelt blatantly favored the corporations that had funded his (by then) three candidacies by mandating that unions must accept a wide-ranging wage freeze and adopt a no-strike agreement, but not capping the profits that could be made by the corporations for whom they worked. Result? By 1945 those corporations (in the same kind of massive government-induced transfer of wealth economist Paul Krugman would like to see repeated) had put away billions in record profits, and the wages of unionized industrialized workers (adjusted for inflation) had fallen below what they had been in 1938....

Bookend: today, in a misguided protectionist attempt to revive an American steel industry that died three decades ago and should have long been safely embalmed, President Obama wants to use his Bail-out legislation to force companies that receive government stimulus to only purchase American steel. Not only does this threaten to set off a trade war with our most loyal trading partner (Canada), but it also insures that new products will be more expensive than they need to be, because the American steel producers now have a protected market and no competitive dynamics to force prices down. Ironically, this attempt to save the jobs of American steelworkers will only transfer their unemployment to the American citizens who had jobs representing foreign steel manufacturers, and those put out of work when the products they produce become too expensive for the rest of us to buy.

The structural deficiencies in the American system today are the result of decades of uninformed tinkering by both liberals and conservatives who pretty much differ primarily in the particular corporations and market sectors they want to privilege.

The defense-industrial lobby has kept McDonnell-Douglass and Grumman and Raytheon in business long after market forces should have sent that capital in other directions, but since Raytheon lobbyist William Linn is now running the Pentagon, don't look for that to change.

Likewise, for all those liberals decrying the abuses of Blackwater in Iraq (and I happen to agree with them on getting mercenaries out of our foreign policy), the legitimization of military contractors began only very tentatively in the Reagan-Bush years, but hit full steam during the Clinton administration, when Bubba decided to compensate for the US military build-down by creating a whole new market sector with State Department contracts.

I could go on, but readers here generally fall into two categories: those who actually understand the technical defintion of the term market and those who think it means an extension of the government's authority tasked with insuring nobody ever loses a job or an investment, which should also correct social injustices and wash your car every other Saturday.


Brian Shields said…
I am not able to invest in companies via the stock market, but if i did:

Any company that was involved with this mess, and is going through troubles from this mess, I would sell my shares.

If I decided to hang on, I would actually use that little voter thingy that shareholders get to voice my opinion.

If I was a customer, or an account holder of these banks, I would find a new bank. I would end my loan, or refinance it with a reputable company and never deal with them again.

I would make my voice known, or make my absence felt, one way or another.

Why is this not happening? the sheeple and bleating,but aren't straying from the herd.
Anonymous said…
The market exists to make money. That's its only purpose. Morality doesn't enter into its nature - and that's not a good or bad thing, it's simply the way it is.

The markets require regulation in the same way an aggressive dog needs a leash.
Sorry, but that's not why markets exist. Markets are complex nonlinear systems that facilitate exchange.

Money--in the modern capitalist sense you mean it--is not even necessarily a component of a market.

Your metaphorical image of an aggressive dog is inaccurate, because systems like a market don't have the intent to do anything. They just function. Attributing motives to markets makes about as much sense as attributing motives to the evolutionary process.
tom said…
I think that my favorite irony in this whole fiasco is that most of the people who are all for capping salaries at $500,000 (because a beneficiary of the TARP scam should somehow no longer be allowed to choose how much to pay its CEO) have no problem with the jobs that will be created (or saved) by the Porkulus Bill at a cost of $646,214 per job, 100% of which is a direct taxpayer expense.
Anonymous said…
Obama is NOT advocating the Buy American provisions. He has called on the Senate to strip that provision; it's just that he's already spent all of his political capital and so they're ignoring him. However, his reasoning seems to be that he wants to prevent retaliatory tariffs (which is a good thing) rather than wanting to protect American consumers from overpaying monopolistic protectionists (which would also be a good thing to prevent).

Any company that was involved with this mess, and is going through troubles from this mess, I would sell my shares.

Actually, it's a great time to buy them. The government's going to give them a bunch of pork, which will cause the stock value to (temporarily) rise significantly. Then we sell the stocks, the price drops back down, and a few months later journalists start asking how we spent a trillion dollars and apparently got absolutely no benefit from it. And those with the available capital to take advantage of it walk away with a fortune. This, incidentally, is how most/all government programs work.
Anonymous said…
Suppose it were true that markets exist only to make money. Let's not forget that before Adam Smith wrote the Wealth of Nations, people in Scotland were spending about 80% of their income on food. Then free markets blossomed (somewhat) and people engaged in voluntary trade which necessarily benefited all involved (since they wouldn't participate otherwise).

So, markets exist to make money implies markets exist to make people better off implies markets are moral. (Not in a motivated sense, but in terms of their results.) If you have an objection to money, you're free not to make any yourself, but I wouldn't say it's moral to try to force a lower quality of life on everyone else.
tom said…
no, markets are amoral, but not in the sense that most people misuse the word (ie. as a synonym for immoral.

markets are indifferent to morality. the only thing they produce as a byproduct of their operation is information (as in the current value of various commodities in terms of other commodities).

Popular posts from this blog

Comment Rescue (?) and child-related gun violence in Delaware

In my post about the idiotic over-reaction to a New Jersey 10-year-old posing with his new squirrel rifle , Dana Garrett left me this response: One waits, apparently in vain, for you to post the annual rates of children who either shoot themselves or someone else with a gun. But then you Libertarians are notoriously ambivalent to and silent about data and facts and would rather talk abstract principles and fear monger (like the government will confiscate your guns). It doesn't require any degree of subtlety to see why you are data and fact adverse. The facts indicate we have a crisis with gun violence and accidents in the USA, and Libertarians offer nothing credible to address it. Lives, even the lives of children, get sacrificed to the fetishism of liberty. That's intellectual cowardice. OK, Dana, let's talk facts. According to the Children's Defense Fund , which is itself only querying the CDCP data base, fewer than 10 children/teens were killed per year in Delaw

With apologies to Hube: dopey WNJ comments of the week

(Well, Hube, at least I'm pulling out Facebook comments and not poaching on your preserve in the Letters.) You will all remember the case this week of the photo of the young man posing with the .22LR squirrel rifle that his Dad got him for his birthday with resulted in Family Services and the local police attempting to search his house.  The story itself is a travesty since neither the father nor the boy had done anything remotely illegal (and check out the picture for how careful the son is being not to have his finger inside the trigger guard when the photo was taken). But the incident is chiefly important for revealing in the Comments Section--within Delaware--the fact that many backers of "common sense gun laws" really do have the elimination of 2nd Amendment rights and eventual outright confiscation of all privately held firearms as their objective: Let's run that by again: Elliot Jacobson says, This instance is not a case of a father bonding with h

A reply to Salon's R. J. Eskrow, and his 11 stupid questions about Libertarians

Posts here have been in short supply as I have been living life and trying to get a campaign off the ground. But "11 questions to see if Libertarians are hypocrites" by R. J. Eskrow, picked up at Salon , was just so freaking lame that I spent half an hour answering them. In the end (but I'll leave it to your judgment), it is not that Libertarians or Libertarian theory looks hypocritical, but that the best that can be said for Mr. Eskrow is that he doesn't have the faintest clue what he's talking about. That's ok, because even ill-informed attacks by people like this make an important point:  Libertarian ideas (as opposed to Conservative ideas, which are completely different) are making a comeback as the dynamic counterpoint to "politics as usual," and so every hack you can imagine must be dragged out to refute them. Ergo:  Mr. Eskrow's 11 questions, with answers: 1.       Are unions, political parties, elections, and