"Redirect the markets so that they serve the people, and not ruin them"

[ar81]

As I was making Space orbinomics I came to realize that if you remove the ability of money to be exchanged for goods, economy would be a videogame. Not all people like videogames. And we have a videogame where only the best players get the best of that game, while half of humanity lives in misery for not being able to play. We have a third world planet.

I found this interesting quote...

"[We must] redirect the markets so that they serve the people, and not ruin them" - Angela Merkel, German Chancellor.

Source: http://news.bbc.co.uk/2/hi/business/7665515.stm

Any comments?

 

[Urwumpe]

Just to quote Volker Pispers, a famous German Cabaret artist:

"There is no better way to insult Angela Merkel, than by quoting her literally."

Her "redirection of the market" is one of the biggest trouble spots in Germany. The banks which are hardest hit by the financial crisis in the USA are not private banks, but actually, public banks, where politicians are controlling the operations. The worst enemies of the markets are former government agencies (Post, Telekom, Deutsche Bahn), where government monopolies got turned into private monopolies, with the government still owning the majority of the shares.

While I am supporting the idea of the government setting the framework and rules of an otherwise free market, Germany is the last country I would like to name as example for such policies today. The social market economy, which made Germany strong and was the best example for such politics, is today only a distant memory of the past, and got replaced by runaway capitalism between 1980 and 2000.

 

[lalbanof]

The worst nightmare of a (classical) liberal

Urwumpe, you have described the monster...

The monopoly that is supposed to generate a profit (or balance accounts) and yet provide a public service from Hell...

Enter Fannie Mae and Freddy Mac. Enter the very Federal Reserve of the United States. Enter Trenitalia and Alitalia...

Sheesh! I am tired of seeing how the free market is thrashed by way of the enormous disservices made to EVERYBODY by semi-public, formerly-public or private (with a state-assured monopoly) corporations.

If an activity should generate a profit, if it's paid for fully by the customers, then ALLOW IN EVERYBODY WHO WANTS TO ENTER THE FRAY AND COMPETE. LET FAIL THOSE WHO DON'T MEASURE UP. From whatever part of the world they might hail from. Whatever they might be. Get out of the way! Don't, by Pete's sake, call another private concern however big (or bloated) "strategic", or "national" anything that you cannot let it adapt or fail or be bought over. It can go seamlessly to Martian ownership for all I care. By hostile takeover with 100 foot tripods, if they buy shares!

If an activity is not to generate a profit. If it's not paid for fully by the customers (by way of subsidies) or does NOT generate profits for a private operator as it is... Then assume it's a public service and assume that it will be paid for by the government. So we pay for it. And pay really low fares for it's use. Coz we have already paid for it.

Then you know that your tax money is not being spent on making rich people richer and powerful bureaucrats omnipotent because they have the luck and connections to have interests in companies that are of "national" interest.

 

[joeybigO]

Interesting, from a Spanish national...
I thought that would be primarily Socialist thinking, I knew it was on the brink for awhile, but however nationalist it may be, it seems to have a flaw.

The problem with government bailing out the world, is why does it have to be the poorest country in the world? Everyone thinks that would be a country say, like Belize. However Belize more than likely has little reserves and is not living on credit. The United States, pretends it is one of the richest countries in the world, however that has a fatal flaw in itself. We live wholly on credit and are now in just a miserable state of debt, that we almost can't pay it. Clinton tried this with the Social Security, however that just (french connection UK, dyslexic) the US all up. Take from the poor to be debt free, and with a surplus. Yet some call him one of the greatest presidents ever. HAH!

Anyways, back to task. The capitalist thinking of letting the strong survive IMHO, is the best way. However this creates monopolies and government derived scandals, that usually the GOP takes abuse for, and yes while I agree that the GOP has their fair share of scandals and "kickbacks" there is no party, government, judicial branch that does not do this all over the world. If you don't think it happens in your country, just wake up and smell the Starbucks (C) coffee.

What we have to really do is let the world decline on its own. Let the strong survive. I know the fallacies with a monopoly, however. Do monopolies really exist and are quite well regulated? Such as OPEC? Let the laws of supply and demand rule. Also take away copyright law, if a lessor competitor can make it cheaper and better then go for it... Take the time to do the R&D. Lockheed Martin, who developed Stealth technology, should be getting paid the big bucks to produce stealth technology, however they gave it away to the government, this cost them the right to produce almost all of the Stealth planes, and I don't think they are worried about putting food on the table. We should do the same. Let things run with LESS government, only bail out the world when it needs it, and by God, keep our noses out of the worlds misery. Those are not our fights.

/rant

 

[Urwumpe]

I think no monopoly should have the right to survive. It is not good for the market. What you need is a healthy balance of power in a market and you can't expect managers to appreciate this balance (after all, this is not their job).

So, the strong shall survive? That is the common misunderstanding some very very stupid German people introduced to the world, after translating Darwin wrong.

It is not the strongest of the species that survive, but the one most responsive to change.

So, it should be in a good capitalist market. As the government is practically owner of some resources affected by industry (soil, water, air), the government has to make the price for these, but the rest should be part of pure adaption.

The quote becomes especially interesting, when looking that there are banks, which can still make profits in these days and other industries. With the government actions actually aiming at punishing these companies for adapting correctly to the market.

 

[joeybigO]

I think no monopoly should have the right to survive. It is not good for the market. What you need is a healthy balance of power in a market and you can't expect managers to appreciate this balance (after all, this is not their job).

So, the strong shall survive? That is the common misunderstanding some very very stupid German people introduced to the world, after translating Darwin wrong.

It is not the strongest of the species that survive, but the one most responsive to change.

So, it should be in a good capitalist market. As the government is practically owner of some resources affected by industry (soil, water, air), the government has to make the price for these, but the rest should be part of pure adaption.

The quote becomes especially interesting, when looking that there are banks, which can still make profits in these days and other industries. With the government actions actually aiming at punishing these companies for adapting correctly to the market.

Sorry, I must have read the German version.

Well, here's where we come to a head to head battle. Price of Gas is regulated by price of oil, yet we all use it, yet here in the US it is still one of the least taxed things in the US. What we should really tax is something like toilet paper. Although women would have a strong rally against this, they would more than likely say that they use more, as seen from my wonderful household of 3 women and me.

True that the one that makes the most responsive changes will survive. Well in speaking about evolution, he described many other things, such as business, love and many other issues in real life. He just didn't know what he tapped into.

The taxation of cigarettes is absurd one would say (one is me)! Why would that be? Due to the fact that i'm hooked on those bad boys and now that i'm down to maybe 3 or 4 a day, i'm still hooked.

Why does the government have to regulate prices? Why doesn't the law of supply and demand regulate the prices? Monopolies are still the cause and solution to most of the economic policies. Hell the government is a monopoly, and dictates the laws of monopolies, how freaking un-fair is that?

So why do we have laws against all these? Due to the fact that we have no laws against morality and greed. If we grew a set of ya yo's then we would have these kinds of laws.

But in the end, those with the Gold rule, and make the rules.

 

[ar81]

The problem of poverty in a corporate centered economy is that all deficits are gradually being transferred to citizens, which is the case of US today.
The problem of socialist states (government centered economy) is that government is paid with citizen's money too.

You have different actors in an economy:
-Government
-Banks
-Companies
-External sector (import/export)
-Citizen

US economy today:
-Government: Govt deficit paid by citizens
-Banks: Increased govt deficit with bailouts paid by citizens. High debt to afford war.
-Companies: Fire people (adding citizen deficit) to subsidize their profits
-External sector: Trade deficit
-Citizen: Pays taxes and losses jobs. Medium to long term increase of poverty is expected due to jobs going overseas (american workers are too expensive for US companies), recession and economical adjustments. Deterioration of education and infrastructure due to reluctance to reduce military expenses.

Venezuelan economy:
-Government: Citizens pay taxes and do not get good services in return (security, food imports, poor energy supply). Oil revenue from nationalized industry brings excess of liquidity to economy that is not passed to citizens.
-Banks: Nationalized banks do not pay taxes as government do not pay taxes to itself.
-Companies: Nationalized companies do not pay taxes.
-External sector: Oil revenue goes to government that is not delivering security to citizens nor free medicines to hopsitals.
-Citizens: Pays taxes. Half of venezuelans have been hit by crime, 27% annual inflation, blackouts and poverty.

The problem of a company centered or a government centered model is that none of them have humans as the center of everything. Those models are the equivalent of an economy without humans, where all deficits and problems are passed to citizens.

 

[lalbanof]

To wit, I only ask that some things remain separate

A "service" like a city street, city policing or emergency medical care is taken to be the responsibility of the government, and is "free" in the sense that we don't pay for it every time we use it. But it is paid for FULLY by taxes. We feel it when we declare incomes and pay taxes. It should then be limited, so as not to interfere unduly with the lives of citizens it is supposed to serve.

Banks, railroads, mines, agriculture, manufacture, airlines, pharmaceuticals, telecommunications, stores, malls and so on are supposed to generate profits. So, there should be full competition, there should (ideally) be more than one of them per airport, per country, per region, per city, per industry competing actively for the same niches. There should be no privileges; anybody investing legitimate money is not hindered by the government. And all the "bailouts" should be limited to making the buyout and takeover of failing ones an easy business.

A for profit company, quoted (or not) in the stock exchange makes its owners or shareholders wealthy. Nothing wrong with that, we understand that it is THEIR RISK and THEIR PROFIT. Whoever has enough money to buy shares has a surplus of money; should at least be debt free, or should not depend wholly on risky shares bought on borrowed money. It is THEIR RESPONSIBILITY. The idea that it is ethical that the investor or owner "needs" my tax money, or the continued hindrance of others by the government we all pay for to survive and prosper is no better than accepting that the Mafia "needs" my extorted money; which is particularly odious if they use that money to pay henchmen that ward off competitors and prevent me from choosing.

Using the might of the government we all pay for to uphold monopolies (for example; all-sweeping patents, particularly if they drag on for more than say 10 years) or subsidizing the inefficiency (or losses) of for-profit companies is immoral; because they provide no "public" service, they provide a commodity that is paid for, fully.

It is like gambling and only raking in wins without paying any losses because they are paid for by morons like us. It's like betting on a roulette with only one color. Niiiice! I want to gamble like that, too... Would have to make an enormous effort to lose!

If a for-profit society has privileges according to it by law, it is robbing the citizen explicitly and implicitly to give money to people who already have access to a lot of it. Explicitly because tax money is being spent on enforcing unjust laws and decrees, and because tax money is being spent on them directly. Implicitly because I, the citizen, find it difficult or impossible to do what I would. Which is showing them THAT finger (original meaning: I can still draw a bow!) and giving my custom to a competitor selling a better or cheaper product.