Cross-posted from The Harvard International Review.
A nation state with only entrepreneurs and no civil servants would not be efficient. It might even be destructive. Entrepreneurs think only of return on investment on activities that profit themselves and not others. Where as civil servants work for the public. A nation state without public service will never be as great as a state that also includes civil servants who work for the public by asking questions and finding answers that the entrepreneur never dreams of thinking.
This is a great essay describing the basis for and factors leading to neoclassical economic and neoliberal political ideologies.
Do free markets actually exist and is the accumulation of wealth the defining characteristic of what it means to be human?
The underlying assumptions governing neo-classical economics and its political expression in neo-liberalism are so flawed that any attempt to re-construct a market economy based on the same assumptions are bound to fail. Markets are a sub-system of society and an institutional mechanism to coordinate economic activity in a political system called capitalism. This varies across time and space depending on country specific institutions (i.e Irish capitalism is different to Finish capitalism). Markets are political constructs and cannot exist without active political re-construction. It is not possible to separate the ‘state’ from the ‘market’. Neo-classical concepts of a ‘free market’, ‘state intervention’ and ‘market failure’ are only possible if we accept the assumption that ‘markets’ are a natural phenomenon that exists free from politics. This is only possible if…
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Another good example to report on how excess Federal Reserves on bank balance sheets will be used in the coming years. Case in point, this morning’s announcement about Dish’s offer to buy Sprint: http://on.wsj.com/114IFpM via @WSJ. Both of these companies, as reported on their 2012 balance sheets, have combined long term debt of around $36B and about $9.7B in cash. See these links to verify:
Dish is offering $9B in cash plus stock that is altogether valued at $25.5B for Sprint. That $9B will probably be financed by debt (bank loans) and will add even more debt to a combined Sprint/Dish balance sheet. I doubt that there is even a small chance of not getting the green light from the SEC because there is $9B+ in cash between the two companies that can be leveraged by the banks and hedge funds thanks to fresh monthly QE injections by the Fed.
On January 22, 2013, the PBS program Frontline presented a documentary on what our American justice system has done to investigate and prosecute fraud emanating from the financial crash that began in September 2008. The documentary was titled The Untouchables. If you haven’t seen it you should. It is an excellent piece of investigative journalism by Martin Smith.
The main premise of the documentary was to uncover why there have not been any criminal cases brought against any senior Wall Street bank executives. If you say, there have been some cases brought against some individuals from Wall Street, then you would be correct. However, those cases were not for causes directly associated with the US$Trillions in wealth that were lost by US citizens and others around the world. If you’re interested, an excellent book, 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown by Simon Johnson and James Kwak, discusses the causes and who the senior executives were at the beginning of the crash.
Back in 1931, criminal kingpin Al Capone was successfully prosecuted and convicted by creative IRS investigators for tax evasion. Maybe it’s time for the USAG and states AGs to get creative also by using the RICO Act against Wall Street executives. Rather than low level investigations of individuals, a specific focus on the 13 bank ceos who met with President Obama on March 27, 2009 would go a lot further in building confidence in our financial system again. Those that can be charged under the RICO statute would face both criminal and civil penalties sufficient to hopefully deter another generation or 2 from following in their footsteps. There are 35 defined crimes in the statute and it only takes committing any 2 of those crimes to be charged with racketeering.
As an amateur in understanding the intricacies of 18 USC Chapter 96 – RACKETEER INFLUENCED AND CORRUPT ORGANIZATIONS, I can only look at sources on the internet that point to similarities in Wall Street malfeasance and fraud where the RICO Act could be applied. Here are just a few: §1343 – Wire fraud ; §1344 – Bank fraud; § 1957 – Engaging in monetary transactions in property derived from specified unlawful activity. In part, Wikipedia’s definition states that the RICO statute “…allows for the leaders of a syndicate to be tried for the crimes which they ordered others to do or assisted them…”. Everybody knows the roots of the RICO Act were to fight organized crime syndicates, but it has also been used in many other cases such as the Catholic Church’s sexual abuse scandal and Michael Milken of Drexel Burnham Lambert. Both listed in the Wikipedia link above.
The best part about RICO is that prosecutors have a 10 year window in which to bring their case to trial. This will extend any statute limitations in order pursue justice for all the lives harmed by systemic banking and financial control frauds (see William K. Black essay) before and since September 2008.
On December 6, 2012, among many things that happened that day I would like to point out two: 1) Senator Jim DeMint resigned from the US Congress and 2) Dr. Stephanie Kelton coined (pun intended) the twitter hash tag #MintTheCoin.
Former Senator DeMint’s resignation was huge news that day and #MintTheCoin made nary a blip on any media outlet except Twitter. Today, Jim DeMint is hardly talked about and #MintTheCoin is sparking a much needed national dialog on the monetary system. A fortuitous spark of inspiration by Dr. Kelton, aka @deficitowl on Twitter, has given a counterbalance to a political faction whose strategy is to hold the US Economy hostage by use of an artificially created debt ceiling.
Here is a screen capture of her original tweet:
Dr. Kelton, thanks for your clever turn of a phrase and to all the Modern Money Theory (MMT) messengers speaking truth to power about the real basis for our woeful economic state of affairs with regard to monetary operations. Also, a quick word of thanks to Dr. Joseph Firestone, writer and curator extraordinaire on facts documenting the origin and basis for the trillion dollar coin that #MintTheCoin references. Read Dr. Firestone’s excellent post “Origin and Early History of Platinum Coin Seigniorage” here.
Enlightened self-interest is what makes us human and separate from the rest of our physical universe. The enlightened part is critically important. Without it we are only ego driven, pleasure-seeking narcissists going through life mindlessly wreaking havoc on everything around us. We are not free nor do we have liberty since we are captives to a relentless pursuit of greed and selfish interest. No better than animals driven by their instincts.
Everything posted to this blog, it is hoped, will focus on illuminating ideas to solve problems from an enlightened or ethical perspective. While everyone wants the freedom to pursue their dreams individually there must be fairness and concern for all in that pursuit. Decreasing fairness leads to increasing inequality. Without social, economic, and environmental contracts in a philosophical sense that are based on fairness and concern for all then we are not good stewards of the abundance provided to all of us who live on this earth.