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Further Ideas For A New Financial System
Citadel Hedge Fund Falls 30% on Bond, Stock Losses
Paulson Signals Hedge Funds Aren’t Currently Eligible for Government Money
US hedge funds suffer heavy withdrawals
Investors pulled at least $43bn from US hedge funds in September as market turmoil led to unprecedented withdrawals, an analysis by a leading research house shows.
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Withdrawals can lead to a vicious circle in the markets, as funds sell holdings to return money to clients, depressing prices and prompting further redemptions.
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A fundraiser for a major hedge fund said the period “between now and December 1 is a sort of death march” for the industry.
The chief executive of a leading alternative investment manager said he expected the hedge fund industry to shrink by 50 per cent in coming months – with half the decline coming from withdrawals and half coming from investment losses.
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The industry, which manages close to $2,000bn, has experienced outflows during only a handful of months previously, including a small outflow in April of this year.
A $2 trillion industry will shrink by 50% to one trillion. Half of that because people want to get out of them. To pay out the hedge funds will have to sell assets they currently hold into falling markets.
That is an additional $500+ billion of asset sales still to come which guarantee that there will be no sustained rally in the stock markets at least until the end of the year and likely much longer. Instead markets will fall further for everyone, including your pension fund, because leveraged hedge funds now need to sell.
Why do we have totally unregulated hedge funds at all? Do they add value to the societies we are living in? How?
If we build a new financial system, should we do away with these? In my opinion yes. We should not have unregulated and unsupervised entities gambling with the financial systems that are supporting our real economies.
Some other still developing thoughts for a new financial system:
- Complexity prevention: Ban derivative deals except between buyers/sellers of the underlying asset. (Farmers and millers should be allowed to deal in grain derivatives …).
- Cheating society prevention: No regulated financial entity shall deal with tax-havens.
- Too big to fail prevention: Any financial entity with a balance sheet total of more than 20% of the GDP of its resident country must split into two or more independent entities.
- … (more ideas to come)
The libertarian in me hates complex regulations. There are much simpler tools available to prevent certain behavior especially between greedy parties. With regard to tax havens one can for example simply declare any financial contract with them against public policy and thereby unenforceable if front of a court. That will not prevent all dealings with them. But soon enough too many folks will get burned in such dealings and without recourse will never again get near to them.
Please add your thoughts and ideas in the comments.
Look, the answers towards building a new financial system lie in how one conceptualizes the existing problem within the current financial system. More to the point, can a fair or equitable financial system be built in a world based upon outmoded orthodox economic concepts and systems, unlimited growth, private profit devoid of externalities, unbridled militarism, etc.; a world where FDR’s “Four Freedoms” have been commodified, to be sold back to those who can afford them?
Wallerstein, in his recent homage, “Remembering Andre Gunder Frank While Thinking About The Future,”( http://www.monthlyreview.org/080630wallerstein.php) thinks not; that is to say, capitalism is dying and what exactly will arise to replace it is unresolved. Nonetheless, he reminds us, “Left agendas are actually complicated things to construct. For one thing, they are really constructed in three different time frames, which I shall call long term, medium term, and short term. Many of the arguments that pervade left discussions about left strategies confuse the three time frames, and therefore debate at cross purposes.” The long term concerns capitalism’s ultimate replacement, yet “The short term is more interesting. We all live in the short term. Everyone is concerned, indeed very concerned, about the short term. We eat, dress, work, sleep, make love, and survive in the short term. We also are happy or sad, give offense or are hurt, entertain or are entertained in the short term. The short run is what most people think of as life. And for a large number of people, perhaps even for most people, the short term is not a political phenomenon. This is probably an error in perception on the part of those who think of themselves as apolitical since in fact the pluses and minuses of our lives are very much and continuously determined by changing political realities.” Furthermore, “No movement with a middle-run left agenda will have any chance of obtaining the popular support it needs if its advocates refuse to choose the lesser evil that meets the needs and expectations of the larger populace. People live in the short run, first of all. And most people are quite “realistic” about what they need here and now. No amount of promises about the middle run will wash with most people if their needs in the short run are ignored.”
So, we must be clear, as leftists, what our ultimate goal is and what our time frame is in constructing solutions.
Secondly, debating arcane details of financial minutia and engaging in flame wars with suspected “trolls,” as exemplified in the prior financial thread, is to miss the big picture. (For the record, I thought that Vaudois behaved reasonably and asked reasonable questions, and it seems that no one was willing to concede that they didn’t understand the ins and outs of IR finance – I certainly don’t.)
We can’t solve the current problems if we don’t agree what they are. I find referring to texts to be useful here. Certainly, everything written on Counterpunch, particularly Mike Whitney and Michael Hudson, has been helpful. Then again, so has everything written by William Engdahl (essentially his next book), over the past year — Engdahl takes the contrarian position that the crisis has been pre-engineered according to an agreed upon script (crisis, reaction, solution), but other than that there is broad agreement. Tabb, in Monthly Review (http://www.monthlyreview.org/081006tabb.php), “Four Crises of the Contemporary World Capitalist System” outlines the deeper structural causes: Financialization, Imperialism, new centers of power, and resource sustainability.
The general agreement on the proximate cause, as I understand the general consensus to be, is one of solvency, not liquidity. Solvency problems can be in part be addressed by the usual remedies: allowing failure, transparency and improved reporting, nationalizing whatever cannot be allowed to fail, and re-instituting shareholder lawsuits. It has already been stated that liquidity solutions will only exacerbate short and long-term structural problems, while allowing a small cadre of “banksters” to walk away with fortunes. Walden Bello’s “A Primer on Wall Street Meltdown” (http://mrzine.monthlyreview.org/bello031008.html), concisely summarizes all of this.
Third, along with concision of solution timeframe, we must be assured that the solutions proffered help real people. Here’s John Belamy Foster, in an interview with Argentina’s Pagina/12 (http://mrzine.monthlyreview.org/foster101008.html):
Página/12: Which sort of policies should the government implement to sort out this crisis, extending beyond the financial market?
JBF: I don’t think anyone knows how to “sort out” or stop this crisis. What we are seeing is a lot of improvising while the house is falling down around us. There is no possibility of avoiding a very severe world economic crisis at this point; the object has shifted to avoiding a deep debt deflation as in the 1930s. We are facing one of the great crises in the history of capitalism; nothing this bad has been seen in advanced capitalist world in eighty years, since the Great Depression itself.
My own view is that the sole object at this point — though it is hard to imagine this in the United States at present due to the weakness of labor and of working-class organizations in general — should be to reorganize social and economic priorities to meet the needs of those at the bottom. It is a fact that the U.S. economy over decades has drastically weakened the conditions of the wider population, which is at the root of the whole problem. So addressing those conditions is the real key. But even if that were not the case, the goal of those who identify with the great majority of the population, with the working class, the propertyless, the poor, should be clear: to put the employment, food, nutrition, housing, health, education, environmental conditions of those at base of society first. This is simple humanity and justice. Why flood the financial world (which means first and foremost the rich, the near-rich, and corporations) with trillions of dollars ultimately at taxpayer expense, probably to no avail, when something might be done for the greater population? Marx said, in one of his ironic moments, that the only part of the national wealth that was held in common amongst all the people was the national debt. If the wealth is not shared, why should the public take on more debt, supporting the opulence at the top while the great majority of the people are seeing their basic conditions deteriorate? Let the system take care of itself; let us devote our public resources to the people. More good would be accomplished that way. Of course what this means is a reactivation of class struggle from below; something we haven’t really seen in the United States in a long time. I ended a lecture recently by saying that the working class in the United States could learn a lot from how class struggles have been waged in the streets in Argentina. You may think your working class has not accomplished all that much, but from our perspective things look different.
In other words, as leftists, we should be more concerned about the problems of working and non-working people, not Wall Street financiers. It is a measure of how devoid of compass the left currently is that most so-called “left” blogs are almost exclusively concerned with the health – financial and moral — of their antagonist oppressor class. (Why is their crisis more important than working peoples’? — again hijacking the agenda and already miniscule public and media debating space)
A range of reactionary solutions put forth (and lauded!) on this blog only underscores the point:
CluelessJoe (truly): ”Ban lending, at least for private people.” Not only does this consign millions who live paycheck-to-paycheck to starvation, it also denies them housing leading to mass homelessness. Worse, solutions like this reinforce fallacious MSM memes like: “The problem is people are irresponsible with money,” rather than detailing the precipitous drop in inflation adjusted take-home pay over the past forty years, combined with the catastrophic lack of emergency illness safety nets. In truth, few would screw around with their credit ratings in this country until it was the last option before the street.
B (several times): Tear down several million homes. This would only maintain an unsustainable housing bubble and keep the average mortgage payment at equally unsustainable ratios of people’s falling take-home pay. Additionally, it would be an ecological catastrophe and leave several million homeless.
The real answers are fairly obvious and pedestrian — perhaps that is why people overlook them in favor of poorly understood financial arcana. Below are a few suggestions, in relative order of importance:
· Repeal NAFTA
· Half military spending and replace it with more economically redistributive spending which meets real needs — healthcare, education, conservation, alternative power, etc.
· Institute a “Tobin,” or some other, tax on all financial transactions. This would raise hundreds of billions and prevent computerized speculation. Consumers pay tax on all of their purchases, why not investors?
· Repeal all tax cuts of the past forty years.
· Separate banking from investment again. Support community banks and localized re-industrialization.
· Increase the safety net bringing millions back into the consuming class.
Anyway, you get the idea – it’s not the arcane corporate banking supports that help ordinary people; it’s the right to a decent living, shelter, healthcare, clean and safe food water air environment, and a sustainable future. Feeding the vultures only buys into a reactionary fictitious capital FIRE framing of reality: one which is anything BUT reality-based and sustainable.
Finally, as so many have said better than I: Our real problems on this planet are holistic and intertwined (for instance, military spending affects worldwide pollution which affects arable land and agricultural harvests which affects health outcomes, etc. All parts are interconnected.), our solutions must be too! To solve isolated financial failures without a big-picture framework in one’s mind of the kind of world one is attempting to create, is only to engage in the most ineffectual kind of whack-a-mole games with life itself. Leave tinkering to the tinkerers; let them try and crazy-glue the unsustainable. The world is crying out for real architects now.
Posted by: Malooga | Oct 17 2008 0:40 utc | 14
Excellent insights and comments.
The American paradigm, always, is make it on your own or die on the trail, pardner. John Wayne, Marlboro Man, the lone cowboy. Real Americans don’t ask for help, and don’t accept it.
Sure, there’s always a sense of Murkans going forward together, but only the way a ship full of pirates and loot runs glorious before the wind, victory in hand. The abundant resources of a new continent provided endless riches for the taking, and then the tremendous economic and manufacturing strength created during WWII let us go steal riches from the whole wide world, bring that shit home, and spread it around knee deep right here, right down to the janitors and mechanics. Plenty for everybody who knows the wide end of a shovel from the other end. Voila! middle class.
Capitalism now runs into physical limits on global natural resources, and into serious economic competitors. Military adventurism has become for the first time a net expense to the empire, instead of profitable pillaging. At the same time, capitalism’s natural tendency to suck all monies up to the top and freeze them there in a very few hands has reached apogee. The shit out here isn’t even toe deep anymore. The money is in deep storage, and so the great capitalist engine of infinite debt creation has seized up.
The empire is dead.
“Long Live the Empire,” Mr. Paulson, does not address anything but the feathered nests of your pirate pals, suddenly fearful of losing any of their loot.
Just as banking, insurance, the airlines, and the auto industry are being nationalized in order to survive in any form, so will it be for the fundamentals of citizen consumers, or they won’t survive in a governable form.
Providing healthcare, education, food, fuel, and jobs to Americans will become nationalized, will become the daily business of the government, or there will be no government. No, not even a totalitarian government.
The money for looking after voting Americans will come from where it has gone to — the pockets of the ultra wealthy. It didn’t leave the planet, you know. It just needs to be shoveled out where it came from.
Does anyone in the American ruling class know the wide end of shovel from the other end? No matter. It will come to them just as Churchill predicted — “The Americans can be relied upon to do the right thing, after all other options have been tried.”
The Paulson plan of attempting to save the international ownership class so that they can proceed on their way to owning every blessed building, barn, factory and financial firm and loose stack of fiat currency there is — will mean only the fall of every government that pursues it. The system of capital accumulation into few hands has reached the point of self-destruction. It not only has to stop, it will stop, along with the global economy, and then national economies.
Once people grasp that they can ‘eat the rich’ they will do so. Once people grasp and declare that the first business of the nation — every damned day — is seeing to its own families, its own people, before any international relationships or military adventures, then a government will form along those lines.
Any government short of these concepts will have to survive, and operate, in a bunker.
Posted by: Antifa | Oct 17 2008 5:42 utc | 30
to annihilate once and for all any “consumer-society” and to bury the whole American way of life. The world isn’t a huge store where anyone can picky anything he wants. People have to face the fact that things are far and few and that scarcity rules, particularly with nearly 7 billion humans around. As the saying goes, the things you own end up owning you.
Your view of society is ultimatly neo-Malthusian, similar to various Peak-Oil “activists” who arose from the woodwork (Kunstler), having never done an activist thing before in their lives. So they rail at poor people and the plastic gee-gaws they buy while they have no problem buying the finest newest digital thigamajigs for themselves, or jetting off to Europe — all of which consume far more resources, but in a less “tacky” way. Who are “picking” anything they want: the rich, or the poor? Useless and reactionary, and socially regressive.
Most people I know buy what they need to live, and live several paychecks away from losing it all. Retired friends have watched in horror as their pensions and savings have evaporated, forcing them back into the workforce until the day they drop dead. Catastrophic illness has wiped out million dollar nest eggs and plunged the comfortable middle class into poverty.
Again, the shallowness of analysis leads to a shallowness of solution. The fact is that the US has just about successfully obliterated all genuine leftist thought.
Let’s start to address the “American was of life” locally. Capitalism creates conditions of excess labor. So, here where I live, both parties support more “smart growth” to produce more “jobs.” Leftists support billion dollar submarine building boondoggles to bring “high-paying skilled jobs.” It’s insane, unsustainable, and the powers that be won’t be happy until the entire state is paved over and collapses into a giant slum, as detailed throughout the third world by Mike Davis.
But no one organizes for a social contract, for localization, to kick out the Walmarts and Costcos, to support local farms, to support the poor, for single-payer health insurance, against NAFTA, and for supports for local industry.
Globally, if we stopped attacking the world, specifically Africa, and supported local subsistence agricultural, not GMO corporate export model agriculture (as is being implemented under the radar in shock-doctrine Sudan), there would be little starvation in the world, people would be less stressed, and birthrates would fall.
The two issues above are inexticably related, and so are the solutions.
We must ask why the more developed the world gets, the more insecure it gets. Bucky Fuller calculated that there was more than enough to go around and that production efficiencies were making it possible for people to work less, but the reverse has happened — people are now working three jobs and can’t survive. We must think deeply about why this is so. It is the result of a long series of policies pushed by the rich over the past four decades. It is no mystery. The answer is again almost trivial: rolling back those neo-liberal policies one by one.
Imagine that America stopped growing. Instead of spending 40% of your adult life paying for shelter, it could be defined as a right and provided for free. Imagine how much productive labor would then be released to provide for the poor, needy, sick, re-build infrastructure, ameliorate pollution, etc. It is all how we conceive the world.
Our solutions are limited by our vision of a sustainable relatively egalitarian world, not by the artificial “boundaries of the permissible” into which our thoughts are channeled by the omni-present spectacle corporate media. (A media which will always blame the poor for their misery and laud the rich for their “philanthropy.”)
Surely you have read Monbiot on the catastrophic global warming effects of jet travel. Why not limit all Americans to one jet trip a year, forcing the rich to walk back and forth to their seven homes?
But if you prefer to attack the life styles of poor people and call yourself a leftist, that is your right.
Posted by: Malooga | Oct 17 2008 14:06 utc | 34
Malooga @ 14
IMO, much of what you cite is generally credible. But w/all due respect, I really don’t see any of that making a difference right now. From everything I’ve seen, a crisis-generated-effort to accurately explain to US public the nuts & bolts of what’s happened has barely made it to the starting line. Mass obfuscation of cause(s)… not to mention same for extraordinary US economic & currency weakness, has drowned out a matter of fact accessment of conditions.
You quote Wallerstein as saying… “capitalism is dying and what exactly will arise to replace it is unresolved.” I’ve seen some of the better econ blogs (BIGPICTURE & NAKED CAPITALISM to name 2) go one further, saying it’s already dead.
With all due respect, I don’t think so. First of all (IMO), just as a traditional version of conservative has in practice morphed into this bizarre, neocon/libertarian/total-bull-shit narrative that distorts (or makes up) reality and hammers it home to public through media saturation (Jonah Goldberg/NRO crowd for example) while entirely ignoring reality of executed events (fraud) on behalf of those who pad their pockets. The whole Iraq thing… on every level, from Powell’s “clear and convincing evidence” to “embedded reporters” (Judy Miller) literally creating false narratives (eg. staged toppling of Sadam stature, Chalabi’s US sponsored army photo-ops, the Jessica Lynch movie “rescuing” her from evil Iraqis portrayed as keeping her prisoner/no medical treatment etc. when in fact she was exceptionally well cared for… they saved her life. And she wasn’t fighting off terrorists w/her machine gun, her gun was jammed. She wasn’t attacked, her tank crashed. On & on it goes… breathtakingly so.)
WRT current “economic crisis”, we are barely into this thing yet (at least on this side of pond) the same masquerading narratives are all over the place. Media across the country (including local “paper of record”) has printed (verifiably bullshit) explanations of how the mortgage meltdown was caused by CRA mandated loans… a complete falsehood (FOX has peddled this a lot, as has WSJ/NRO/WeeklyStandard/Limbaugh etc). Several US lawmakers have said the same in interviews and on Senate floor.
There were 2 hearings on capitol hill yesterday that covered this issue specifically:
Senate Banking Committee (Sen Dodd) here and here. Panel includes Arthur Levitt.
Sen. Harkin chaired: Agriculture, Nutrition and Forestry committee
Topic: Role of Derivatives in Current Financial Crisis
I would encourage people interested in breaking down how this unfolded in US to watch these, particularly 2nd DODD link above. In particular, I was shocked by testimony of Jim Rokakis describing (now defunct) mortgage company after mortgage company’s lending practices which, in part and on massive scale, made ALT-A & SP/VRM loans to 10’s of 1000’s who qualified for standard fixed rate loans. The deal here: originator got 3-4% commissions on the former, about 1% on the latter.
He also testified about their attempts, going back to ’05, to get action on this stuff from Ohio US attorney(s) (FED). In short, Bush faught for and SCOTUS supported the premise that FED law superseded state’s, thereby disallowing OHIO’s attempts to legislate and prosecute this stuff in process. Further, the FED’s refused to prosecute any of it, according to Rokakis, who said the FEDs had “heard nothing… no complaints from the banks” (sheesh) therefore saw no evidence of a crime.
I knew about the VRM/ALT-A loans,I didn’t know they were peddled, en-masse, in this manner.
In short, CRA had virtually nothing to do w/this (I’ve got tons of links from FED studies, 3rd party FED commisioned reports, and others). McCain has been saying on the stump all week “we know F&F caused this mess”… F&F did not cause this mess, not even close. McCain has said F&F made all these bad loans. F&F doesn’t make loans, they buy ’em from originators.
On & on it goes…
I’ve seen no reporting on these hearings anywhere… not a whisper (Maybe on The HILL?).
And while we aren’t even through the 1st phase of this thing yet and while congress/FED has appropriated approx $1.25t, the public footing this bill is not being told what caused the thing. “The niggers in inner city” they’ll blame it on to anyone who’ll listen.
Meanwhile, after receiving +/- $1.2t in last 2 weeks, yesterday’s WSJ (Section A, pg 3: “AIG Seeks to Soften Oversight” by Elizabeth Williamson) lays out very aggresive AIG lobbying efforts, both on capital hill and state legislators/regulators. From the article:
“They’re trying to reintroduce things that are superflous and get in the way of implementing (the SAFE*) act”, said Thomas Gronstal, Iowa’s superintendent of banking. “Basically, they’re just objecting to having to be regulated… I frankly thing that takes a lot of gall, given what the industry has done and what we’re trying to do.”
Beyond that, their lobbying is primarily on behalf of mortgage originators, the goal of which is to maintail -0- regulation so they can…. do the same thing all over again?
So AIG is bailed out for a $t+, and using $m(s) from that kitty to finance lobbying directed at preventing legislation to prevent this shit from happening again.
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We’re in the midst of financial crisis on unbelievably massive scale, right plum in the middle of huge presidential election. And in public, media, and pundit class… bullshit. No accessment, not determined forensic accounting… just bullshit.
Pure bullshit.
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What’s my point?
We aren’t even close to acknowledging real problems in this financial mess… self-interested parties (eg. in perpetuating these fraud cycles) w/lots of $$ and lots of media control, creating a lot of fictitious public mass/inertia which, if successful, is going to perpetuate all the causes.
Most of US public does not understand any of this, and they don’t know that they don’t understand it.
If China, Russia, Japan (etc.) decide $USD no longer worth anything and call in their Treasury (and other) bonds, US is broke… completely belly up. But until (if?) that happens, I see no evidence… -0-, that this misnamed US ENRON style capitalism is dead or even close. If anything, it looks to me like they’re already reloading for another stealth assault.
So authors you cite are intersting, maybe thoughtful… have some good (and IMO) some questionable ideas. And it’s all on the backpage of action… not even the periphery, and none of it is part of the calculus in how this will turn out (in USA at least).
I see very, very little evidence which inspires confidence we, as a nation, are going to get this right.
*SAFE Act… some backround here. In short, it’s recently passed Mortage loan oversight regulation.
(…)My own view is that the sole object at this point — though it is hard to imagine this in the United States at present due to the weakness of labor and of working-class organizations in general — should be to reorganize social and economic priorities to meet the needs of those at the bottom.
Posted by: jdmckay | Oct 17 2008 16:26 utc | 40
It is a measure of how devoid of compass the left currently is that most so-called “left” blogs are almost exclusively concerned with the health – financial and moral — of their antagonist oppressor class..
Because they are second-tier hangers on in the same system, dependent. The caviar left, etc. They have investments, hire illegal maids, and like to look at bit more original by admiring or producing higher level products (entertainment, etc.) which flew until now. Or drinking top wines (or equivalent) and being flamboyant and for ‘modern’ sexual values, radical, heh? The soft center, pandering fools…/end rant, scusi/
The labor movement has been defanged by more complex relations (laws, finance, etc.) outside their scope (footnotes skipped).. the sops thrown them – at first (from my pov), the miracle of electricity, the car, vacations (thinking France here, 1936, it was to stop the strikes..), food, even fancy, on the table 3 x day, bathrooms, towels not used by 20. Tractors. Pesticides. Instruction for girls. A choice of underwear. Frothy or plain.
The overlords, PTB, etc. provided not only spectacle, circuses, or a stable enviro, or vague random honors and stipends, favors for the Cadre Class (e.g. Ottoman empire, very roughly) – but cash on the barrel for all. Up to about 1970 that is.
‘Western world’, but in much of the o’ the so called third world ppl fell sway to the same mirages presented, the trickle down, technology, liberation from what young ppl perceive as ‘oppressive’ as James Dean drove race cars and had sexual freedom, etc.
The credit crunch (btw some Brit choco maker is commercializing some new confection under this name which attracted some attention in the Swiss press, upstaging of this kind is considered below the belt!) is but a first *upheaval* signaling a system change.
The extending of credit, and the collected interest, is built on the assumption of growth or perhaps in the recent debacle, criminal fraud pegged on the habit, the unquestioned, revered, convention of considering growth a steady parameter. Pooling of risk (or selling off sh*t paper all over the place) stems from the same thinking. The ‘real economy’ can be abstracted but it isn’t going away.
Yesterday love was such an easy game to play now I need a place to hide away… squeaks the radio.
Anyhow, not original, and Malooga made the many points above but real growth will be thin on the ground… Naturally the very concept of ‘growth’ is built on many principles, quasi-religious rules: increased profitability, productivity, stored value being ‘spent’ for yet more profit, etc.
Leftists keep mumbling about new values (that is what it comes down to, according to some), have a hard time making any headway even conceptually (I am one so I should know) though there were some grand suggestions above. Basically, their minds are on regulations, rules, sharing, collectivism, greater ‘democratic’ control, etc. all still built on the old paradigm. Malthusian, in a way. Such as: workers should be paid more so that they can buy more.. But let me not get distracted…
Posted by: Tangerine | Oct 18 2008 14:42 utc | 75
Antifa’s post at 30 I found quite uplifing.
But the enormity of the task…A concrete ex.
Health care in the US has become corporatized, let’s call it a gigantic system that functions to shift higher rewards to experts – surgeons who operate on the rich, etc.
It is also highly socialized, through Medicare and Medicaid, something Americans call a ‘right’ and not ‘communism’.. The private entities, monopolies, and once again, insurance, or ‘savings schemes’ (finance) are melded with the State who carries out redistribution at enormous cost.
The State does not substitute for the private actors, but taxes everyone to pay them. (More or less.) I think it is obvious that the medical community, in the 30s marginally, and then 50s, etc. figured this out – their expertise would garner stellar tax payer dollars. The State supports revenues to a private professional association, contra the dominant, if hypocritical, free-market rhetoric. – See Paulson plan, heh, more of the same..
The US health system does not ‘work’, the redistribution is not very effective (whatever..) It is the abysmal bottom, in terms of input/output comparisons, in the world. Of course, the input/output calcs. or rubrics are not the right ones to use. Nobody would dream of agreeing to the statement that the Average American smokes 5 cigarettes a day.
The truth of the matter is that the State supports powerful groups thru taxation, following popular demand for more ‘rights’, ‘fairness’, ‘better access’, ‘extended coverage’, ‘free emergency care’ etc.
The access to medical care has been further perverted in a dependency / slave scheme, as the employer stumps up for the health care of his workers, creating skewed relations and choking the labor market, mobility, etc.
The confusing quarrels between ‘free market’ and ‘socialist support’ cannot have any happy, decent, rational, positive, outcome.
The system is entrenched in concrete.
The only way to change it is to leave it, take on the arduous task of creating local clinics with low paid, community supported personnel. That is revolution…
Branching out, or innovation, along those lines, in the US, is often formulated as:
self-management; collectivist cooperation; creative entrepreneurship; community initiatives, homegrown efforts; etc.
Often these grass roots efforts are a step to great profits. After the frisbee throwing phase is over.
In the health care world, it always means getting creds, and then Gvmt. subsidies.
Posted by: Tangerine | Oct 18 2008 15:45 utc | 77
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