Wednesday, March 11, 2009

Predator State

Comments on The Predator State by James Galbraith

Freedom to Shop-
Includes freedom to but and sell the livelihoods of other people. Stock market decides which companies live or die, who runs them, what direction they develop; go vt has no role in protecting investors/strategic direction of companies (industrial policy).

Free Market replaces all other freedoms- speech, association, faith, assembly, press, fear, want, science, art.

Reagan/Volker 1981- monetarism- high interest destroyed export markets for 20 years, recession destroyed home markets, dollar driven up 60%. Made industrial equipment much cheaper overseas.

Corporate democracy replaced legislative and investigative powers of congress and imperitive power of the courts. Mismanagement, deception, manipulation, fraud concealed. Private sectors set up to feast on public systems- schools, military logistis, security, social security, FEMA,

Public universal health insurance (Medicare) do not evaluate risk- save on a major cost of health insurers. Do not have to pay stockholders or meet market rate of return. Not a commodity- no competing suppliers; supply-demand doesn't fit.

Cap and trade (market)
assumes the sum of all these decentralized decisions will achieve the best results. Will actually cause economic slowdown. Global, inerdependent, asymmetrical problem can't be solved by random adjustments- driving patterns/ plant emissions- in ne part of the world.

Polite solutions have filed- inequality, pollution, education, health care, unemployment, et al. Need to get intentional and serious and plan our way out.
Development of feasible alternatives to transportation, heating, basic needs must precede or accompany end of old way. Alternative is further despoilation and nasty wars.

High wage/ low unemployment comes from raising wages. Cutting wages to remain competitive removes the motivation for high productivity and techn ological innovation, which means loss of competitiveness in the long run. This is what we are experiencing.

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