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View Diary: Over the cliff I go. Not laughing. (159 comments)

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  •  If you look at who won and who lost in this (7+ / 0-)

    economy over the past 40 years you will see that the gap between rich and poor is quite wide. Yet worker productivity per worker has skyrocketed. We are turning more and more into an economy based on moving money around. And that is an economy in decline. We are becoming irrelevant. Which is OK except for the fact that people are hurting. We have seen a massive redistribution of wealth. From the poor to the rich. We have rewarded handsomely incompetence in the finance sector while punishing people who work hard and do their jobs well. The free market in our country is rewarding people who do not deserve to be rewarded for doing things they should not be rewarded for. This is hardly efficient.

    Here is what Adam Smith and every free market thinker since 1776 has missed. People in a free market cheat. They try to eliminate competition. They form cartels and monopolies. They act in ways economics does not understand or describe. hand an economist a can and ask him to open it and he will say "Assume you have a can opener". Well what if you do not have a can opener. Economics stops dead at this point. At least market economics does.

    So people make investment decisions based on assumptions and models. And when they loose the government bails them out. And then they yell at us for wanting them to pay higher taxes because according to them we are stealing their money that they earned. A bank will pay a retention bonus to a banker who lost millions because the bank can afford to replace him. This is an efficient free market?

    A big part of the national debt is caused by a shell game played by the Bush administration. part of it was lying about the true size and nature of the debt and part of it was borrowing money to lower taxes. And that is a successful business model for a company like Bain Capital. But who bails out the government when the house of cards collapses. Should it not be the ones who got us into this situation? Why do we not own every bank we bailed out? Why does a home owner owe a mortgage that the government already paid off through the bailout program? Why is anyone getting eve-cited from a house whose bank bank got bailed out? Did we not pay off those mortgages with the bailouts?

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