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02.20 Young climate strikers can win their fight. We must all help

02.20 Voyage to the Garbage Patch: the female sailors taking on plastic

02.19 Bees brought Bavarians together. And they have a lesson for us all

02.19 Florida is drowning. Condos are still being built. Can't humans see the writing on the wall? [Fear that Trump & Fox News incite makes us avoid unpleasant information we need to know]

02.18 Tesla big battery is holding its own in a burgeoning energy storage market

02.18 Trump administration condemned over delaying action on toxic drinking water

02.16 New experimental drug rapidly repairs age-related memory loss and improves mood

02.16 Toxic black snow covers Siberian coalmining region [0:49 video; If its killing us, stop doing it]

02.16 Renewable energy will be world's main power source by 2040, says BP [But in America's capitalistic bubble, bribed-to-be-biased media and government defy reality]

02.16 My generation trashed the planet. So I salute the children striking back

02.16 US coastal businesses hit by everyday impact of climate change, study shows

02.16 What the pesticides in our urine tell us about organic food [What does inaction tell us about capitalism and our government?]

02.14 Exposure to Glyphosate-Based Herbicides and Risk for Non-Hodgkin Lymphoma: A Meta-Analysis and Supporting Evidence [If its killing us, make it illegal]

02.14 To avoid environmental catastrophe, everything must change [Consider why this headline is laughable or confusing to many, if not most, Americans...]02.13 Study Shows Toxic Pesticide Levels in Families Dropped by 60% After One-Week Organic Diet [2:10 video; Produce and canned vegetables laced with toxic chemicals—from fertilizers and herbicides, too—must be quickly phased out to use safe organic alternatives]

02.12 Biggest offshore windfarm to start UK supply this week

02.12 Scientists Are Totally Rethinking Animal Cognition

02.12 Politicians are complicit in the killing of our insects – we will be next

News Media Matters

02.16 We Shouldn't Stick Our Heads In The Sand, But We Do It Anyway [26:46 audio; Fear like Trump & Fox News incite makes us avoid unpleasant information we need to know]

02.16 The Realized Temptations of NPR and PBS [With bribed-to-be-biased media and government, we all live in a "Truman Show"-style concentration camp]

02.15 Samantha Bee: Fox News 'soiling themselves over the Green New Deal' [video clips from Samantha Bee, Seth Meyers and Stephen Colbert]

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US Politics, Policy & 'Culture'

02.20 ‘Sustained and ongoing’ disinformation assault targets Dem presidential candidates [If you can sense them, block them!]

02.20 A Centuries-Old Idea Could Revolutionize Climate Policy

02.20 Why Bernie Sanders' radicalism can take out Trump

02.20 Why vote for Sanders when you can have Elizabeth Warren instead?

02.19 Democratic party elites silence Ilhan Omar at their peril [2:01 video]

02.19 The Political Revolution Is Back: Bernie Sanders Announces 2020 Run for President

02.18 The Green New Deal Isn’t Too Expensive. Doing Nothing Is.

02.18 With the Green New Deal, Democrats Present a Radical Proposition for Combatting Climate Change

02.18 Dictator Trump

02.18 With Americans Outraged Over Trump's 'Power Grab Based on Lies,' Nearly 250 President's Day Protests Planned Across the Country

Justice Matters

02.19 California Leads 16 States Suing to Block Trump Border Plan

02.19 Fighting pollution: Toledo residents want personhood status for Lake Erie [Hurrah!]

High Crimes?

02.20 Despite the slaughter in Yemen, Britain is still chasing arms sales [and the Great-Again-America is too...Capitalism without morality is horrible]

02.16 Elliott Abrams Defends War Crimes As Happening Back In The ’80s When Everyone Was Doing It

Economics & Corrupting-Capitalism

02.13 The Green New Deal offers radical environmental and economic change [For the survival of life on earth, capitalism must be effectively regulated or banned]

02.12 Climate and economic risks 'threaten 2008-style systemic collapse' [Willfull ignorance of Trump, Republicans, corporate-media and corporate-Democrats is steadfast, if not worsening]

02.11 Trump offers socialism for the rich, capitalism for everyone else [and the poor will die out like the insects]

02.10 Green New Deal Targets Link Between Trade Policy and Climate Change

International & Futurism

02.20 House report lays bare White House feud over Saudi nuclear push [Its hard to keep up with all the criminal crap going on...]

02.20 My grandfather was a Nazi. I’ve seen why we need the EU

02.19 Centrism isn’t the solution to the mess we’re in

02.19 Renewables need urgent investment to ease Australia's transmission bottlenecks, experts warn

02.18 Hate-Fest in Warsaw

02.18 They Used To Hold Hands Through the Wall. Now, There’s Razor Wire.

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  The Free Market Fetish

THE AMERICAN IDIOCRACY:

The Free Market Fetish

The failure to regulate financial markets has produced enormous losses to all Americans except the super-rich.

by Paul Craig Roberts
Originally published on 5 February 2010

Economic theory has been shattered because there is no longer any connection between the profits of American companies and the welfare of Americans. The profits of American companies are derived from the cheap labor in offshored locations and are at the expense of the American work force.

Former Federal Reserve chairman Alan Greenspan answered that he had placed his trust in a flawed theory when he was called before Congress to explain why he, Goldman Sachs Treasury Secretary Robert Rubin and Deputy Treasury Secretary Larry Summers, prevented Brooksley Born, head of the Commodity Futures Trading Corporation, a government regulatory agency, from doing her job of regulating over-the-counter derivatives.

The efficient markets theory is that unregulated markets are efficient and rational. According to this theory in which Greenspan placed his trust, unregulated markets produce the best possible result. Any regulatory interference worsens the outcome.

Greenspan blamed his own bad judgment on a theory. The theory, or Greenspan’s understanding of it, nevertheless still holds sway as Congress has proved impotent to re-regulate the gambling casino that is Wall Street. Clearly, the theory serves powerful interests.

But what is the truth?

The truth is that markets are a social institution. Their efficiency depends on the rules that govern the behavior of people in markets. When free market economists talk about markets deciding this or that, they are reifying a social institution and ascribing to it decision-making power. But, of course, markets do not act or make decisions. People act and make decisions, and markets reflect the decisions and actions of people.

The entire debate over regulation is misconstrued. It is not the market, an efficient social institution, which is regulated. What is regulated is the behavior of people in markets.

The entire debate over regulation is misconstrued. It is not the market, an efficient social institution, which is regulated. What is regulated is the behavior of people in markets. If you want good results from markets, good regulation of human behavior is a requirement.

The market is like a computer. Garbage in, garbage out.

If people who use markets are not regulated, they issue fraudulent financial instruments. They leverage assets with absurd amounts of debt. They market their instruments with fraudulent investment grade ratings. They deal themselves aces.

Did Greenspan not know this? Was he a victim of a theory or an enabler of greed unleashed by the absence of regulation?

The failure to regulate financial markets has produced enormous losses to all Americans except the super-rich. But the U.S. government is guilty of an even greater failure. Washington has not only permitted but also encouraged the unemployment of its citizens by enabling greed-driven corporations to send American jobs abroad in order to maximize profits for CEOs’ bonuses, shareholders, and Wall Street.

As Ralph Gomory has made clear, economic theory has been shattered because there is no longer any connection between the profits of American companies and the welfare of Americans. The profits of American companies are derived from the cheap labor in offshored locations and are at the expense of the American work force.

This dispossession of American labor has been heralded by offshoring’s pimps in the major universities as "the New Economy."

The "New Economy" is a hoax like most everything else the bought-and-paid-for-media feeds to Americans. There is no new economy. There is an unemployed economy. The headlined unemployment rate is just over 10 per cent. The real unemployment rate, as measured by the current methodology is 17 per cent. The unemployment rate as measured by the methodology of 1980 is 22 per cent.

If jobs offshoring is a benefit to America, as the hired pimps of the transnational corporations claim, why is more than one-fifth of the U.S. work force unemployed? Why does the U.S. have the largest trade deficits in world history? Why is the U.S. dollar losing value over time to other tradable currencies?

Greed, and elected representatives who are toadies to special interests, are decimating the American economy.

Greed, and elected representatives who are toadies to special interests, are decimating the American economy.

Consider President Obama’s budgets for 2010 and 2011. The combined red ink is $2.9 trillion. No one anywhere in the world has this kind of money to lend to Washington. How will these massive deficits, never before experienced on earth, be financed? They can only be financed by the Federal Reserve destroying its own balance sheet by its purchase of toxic financial instruments from the banks thereby providing the banks with cash with which to buy the Treasury’s bonds, or by the Federal Reserve itself purchasing the Treasury’s bonds by creating new money, or by another collapse in equity values that sends investors fleeing into "safe" Treasury bonds.

American power is on the precipice, about to fall. Perhaps it is a good thing. The world will be rid of bullying, of invasions of innocent countries based on blatant lies, of torture and murder of woman and children, of redistribution of income from the poor to the rich.

The criminal record accumulated by the United States makes it the least indispensable country on earth.


Paul Craig RobertsPaul Craig Roberts is an economist who served as an Assistant Secretary of the Treasury in the Reagan Administration earning fame as the "Father of Reaganomics". He is a former editor and columnist for the Wall Street Journal, Business Week, and Scripps Howard News Service. He is the author of Supply-Side Revolution: An Insider's Account of Policymaking in Washington; Alienation and the Soviet Economy: The Collapse of the Socialist Era and Meltdown: Inside the Soviet Economy, and is the co-author with Lawrence M. Stratton of The Tyranny of Good Intentions: How Prosecutors and Law Enforcement Are Trampling the Constitution in the Name of Justice.

And recently Roberts has written another book, How the Economy was Lost, just published by CounterPunch / AK Press.

This article is published in the Baltimore Chronicle with permission of the author.



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This story was published on February 6, 2010.

 

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