Often times it gets forgotten just why free markets are important. Free markets are the non coercive exchange of goods and services. On the contrary; every law, rule and regulation instituted by government is backed up by the threat of coercive force. What we currently live with in this country today are not free markets. There is a partnership between industry and government. A revolving door exists between the decision makers in government and the executives in the so called private industries they regulate. Time and time again we see executives leave behind their high paying jobs to go work for the government, and vice versa. It isnât long before they are making decisions bearing immense consequences for their former employers. The free market system rewards those who take prudent risks and satisfy consumer wishes. Likewise those who cannot add value to the economy or take foolish risks are punished with losses. The result is a system in which only those who can efficiently please the picky consumer grow in influence. This is the magic of the profit incentive in the free market. Enter government and this all goes out the window. There are many examples of the lines blurring between the decision makers in the public and private sector. These are just a few of the most notable examples. Perhaps most infamous is Hank Paulson who was the CEO of Goldman Sachs. Heads were scratching nationwide as to why he would leave his multi-million dollar a year income at Goldman Sachs to take a government job as Treasury Secretary. Lo and behold within a few short months of taking his post he arranges the bailout of AIG who just coincidentally happened to owe Goldman Sachs billions of dollars from credit default swaps tied to recently bankrupt Lehman brothers. Paulson is not alone in his mischief however. <a href="http://www.freemarketfan.com/">continued here:</a>
The markets in the US, and thereby the world, are under the full control of the Federal Reserve. The Ben Bernank wants consumers to feel the "wealth effect." Unfortunately, that doesn't do much good for those who cashed out their 401(k)'s to pay the mortgage. A market that goes straight up eventually comes straight down.
Doubt it. The Bernank (1) has promised he can "right any financial wrong with his money-print machine", (2) want's to prove this, even if it results in a world wide destruction of financial markets, and (2) has a very small penis. (Why can't he just buy a Corvette to assuage his mid-life crisis like most middle-aged men with a big ego... rather than destroy the world?) ALL IS AT RISK SO THAT THE BERNANK CAN DEMONSTRATE THAT HIS THEORY OF "MONEY-PUMP CAN TRIUMPH OVER ALL ECONOMIC ILLS"... History has shown, HUNDREDS OF TIMES.. this is wrong. When will we wake up and kick this asshole to the curb??
There are many examples of the lines blurring between the decision makers in the public and private sector. ----------------------- No doubt. Ceo's to use your example of Paulson and Cheney can wield the same influence whether they remain in the private sector or take a gov't job. Thye don't need to be a treasury secretary or vice president to effect change to benefit their "self-interest" or that of their previous employer. Perhaps private employee's happen to work more intelligently, rise to the top by other means than winning a popularity contest such as a Harvard "professor", hence they are sought out by career public servants for their expertise in matters of leadership, finance, etc.
ALL IS AT RISK SO THAT THE BERNANK CAN DEMONSTRATE THAT HIS THEORY OF "MONEY-PUMP CAN TRIUMPH OVER ALL ECONOMIC ILLS"... ----------------------------- But ya know.... his plan is working.
Why someone thinks that this is surprising or shocking or "new" is absolutely beyond me. It happens all the time in any regulated sector. People frequently leave the FDA for Big Pharma, the Federal Reserve for Banking, the Federal Energy Regulatory Commission for Big Oil, etc. And if you really want to come across a good example of this, feel free to look up the "roster" of former govt. officials who are now at PIMCO, including Alan Greenspan and Neil Kashkari.
Lots of things "appear to work" initially.. then ultimately catastrophically fail... like "living large on credit cards"...
The US really is starting to resemble the USSR. Huge government with too many people and corps relying on it for support.