Why free markets do not work

I realize that am opening myself up to many of the criticisms that are typically hurled toward progressives when speaking on this subject, but still, I persist. Even though my final conclusion on this matter may hearken to Churchill’s words about democracy, or free market capitalisms is the worst form of economy, except for all the others. In fact, there may be no other option that works well in tandem with democracy, but that is fodder for another post. I have truly mixed feelings and thoughts on this matter.

What I have been thinking about recently, and what discussions on the topic inevitably come down to is human nature. There was a time when I felt very different than I do now, but as it stands, I have very little faith that the masses are capable of making rational decisions regarding their own welfare outside of what is immediately in front of them. I believe foresight is often forgotten over years of just subsisting. So it isn’t that people (and I am primarily talking about the 80% of the global population that isn’t in the middle or upper-classes) are stupid (although I won’t discount the place ignorance plays), but more that they aren’t afforded the luxury of thinking about how their decisions today will effect their lives and the lives of their families for years to come.
Continue reading

Out of touch

This post could be about how out of touch congress is to be trying to do what they have been doing recently. Namely, trying to repeal the estate tax, shooting down an increase in the minimum wage (when adjusted for inflation, the minimum wage is 21% lower than it was in 1979.), trying to make permanent the many tax cuts they gave the rich, etc.

A couple NY Times editorials point out some of the recent Republican priorities: Comforting the Comfortable and Afflicting the Afflicted.

While they are doing all this they also apparently do not see any problem with giving themselves another pay raise.

It could have to do with the fact that the Republicans have been returning to their wealthy roots for the better part of the last 15 years and only now are people waking up to the fact that the GOP doesn’t give a damn about the middle class unless it is time for them to suck up for their votes by pandering and distracting them issues that don’t matter (immigration, gay marriage, and the like).

In a recent article titled From Class War Politics (subscription required), Paul Krugman gives us some history:

Before the 1940’s, the Republican Party relied financially on the support of a wealthy elite, and most Republican politicians firmly defended that elite’s privileges. But the rich became a lot poorer during and after World War II, while the middle class prospered. And many Republicans accommodated themselves to the new situation, accepting the legitimacy and desirability of institutions that helped limit economic inequality, such as a strongly progressive tax system. (The top rate during the Eisenhower years was 91 percent.)

And what of distractions?

But if the real source of today’s bitter partisanship is a Republican move to the right on economic issues, why have the last three elections been dominated by talk of terrorism, with a bit of religion on the side? Because a party whose economic policies favor a narrow elite needs to focus the public’s attention elsewhere. And there’s no better way to do that than accusing the other party of being unpatriotic and godless.

A new book, Polarized America : The Dance of Ideology and Unequal Riches looks to take on some of these ideas. The only problem with all of these incriminations of the right is that someone had to vote these pricks into office. And that is why the American public is ultimately to blame for allowing such a huge gap to form between the rich and the poor. Voting in the right people can go a long way towards ensuring that have a better, stronger country in years to come. That is only going to happen by raising the bottom up and making sure that the way of life for the poor is markedly improved. Anyone who thinks raising the top to higher heights will benefit society more than raising the bottom up, has some serious perspective problems – trickle-down is a lie.

There are some commentators who long for the bipartisan days of yore, and flock eagerly to any politician who looks “centrist.” But there isn’t any center in modern American politics. And the center won’t return until we have a new New Deal, and rebuild our middle class.

Check out Jon Stewart’s take on the congressional pay raise and snubbing of the working poor and what some wealthy Minnesotans have to say on the issue. Also check out FairEconomy.org and Facts about taxes that every American should know.

CSS & financial tips & tricks