Monday, September 08, 2008
Are there just some things the market cannot do?
Over at Brassneck I’ve been sifting through some of the themes thrown up by the state buyout/seizure of the Fanny Mae and Freddie Mac mortgage corporations in the US. As the Lex Column has noted, the US government’s balance sheet is the last one left in town. The US, home of the free market and relentless purveyor of the values of Adam Smith, doesn’t always see the market mechanism as the last word in everything. Like sport for instance.
Mick Fealty @ 03:37 PM
Mick ,
Thanks for the links interesting discussion ‘
Just a small point“The US housing market is coming apart because no one will lend a teaching assistant who earns $10,000 a year $450,00 for a house anymore.’
The operative word is ‘anymore ‘. The reason the US and other Housing markets came apart is because many financial institutions suitably ‘deregulated’ were able to do just that i.e lend people ten times their annual salary to buy a house they could not afford . The reason they (financial institutions) did so was because the market for selling houses at market prices to those who could actually afford to buy them had ‘dried ‘ up . Lending to those who could not afford to pay them back was their only option to add shareholder value and make ‘bigger ‘ profits. If this meant selling to the ‘unfortunates’ who were ‘marketed ‘ into the spider’s web of sub prime land so what ? A few years of making sales commissions of 18,000 a pop and I’ll be alright jack thank you very much .
The ‘market ‘ mechanism is at it’s most efficient when it comes to dealing with ‘tangibles’ -goods , products and some services . Left to it’s own devices in all areas it would eventually spell the end of what we call ‘democracy’. It would do so while still proclaiming it’s pro democratic values .
Posted by on Sep 08, 2008 @ 04:41 PMPoor old capitalism cannot survive on its own afterall
Posted by on Sep 08, 2008 @ 05:23 PM<a >American baseball is even exempt from Federal anti-trust legislation.</a>
http://espn.go.com/mlb/s/2001/1205/1290707.html
Posted by on Sep 08, 2008 @ 06:26 PMGF - the reason they could lend so much was that the market anticipated they would be bailed out a la Northern Rock - whereas Industry just goes under when facing market forces.Very very strange - especially in USA.
Posted by on Sep 08, 2008 @ 07:39 PMDewi ,
‘Very very strange - especially in USA.’
Only if you look at the USA from the perspective of 1980 to the present . The America prior to the 1930’s was in many respects ( in terms of equality , incomes , health care access etc etc) similar to post Reagan America . The period 1932 through circa 1979 was a ‘different ‘ America . The America that the ‘conservatives’ fondly look back on was an America was ‘made’ by the reforms brought in by the New Deal and the accompanying increase in real income of the middle and working class Americans during the period 1932 to 1979 approx . The ‘baby boomers’ were born into an America of hope . Today’s Americans are being born into ‘debt , a sense of societal decline and great deal of despair ‘.
It may not look like that from ‘here’ where many will point out that the USA is still the richest nation on Earth which it is -but it also the only developed western economy that does not have universal health care and that does not have an adequate social safety net to help those at the very bottom of the deck. This is another reason why American jails are full. In jail people know they will be fed and have a roof over their heads and won’t have to look for non existent jobs or else jobs asking for skills which they don’t have .
There is so much to ‘fix’ in American society that whoever wins will have to be ‘straight’ with the voters and ‘prioritise’ what they will do , when and how and preferably before election day .
Posted by on Sep 08, 2008 @ 08:44 PMSister Eluned just come home from America:
Two observations:
1) They are personally the most welcoming people she has ever met.
2) The racial segregation in work is astonishing.She thinks Mccain will win.
Posted by on Sep 08, 2008 @ 08:52 PMblinding ,
‘Poor old capitalism cannot survive on its own afterall’
Indeed we all need ‘competition’ to bring out the best in us :P. I’ve noticed that ever since ‘Communism ‘ disappeared Capitalism has gone from Good to Bad . Even European Social Democracy misses the ‘ideological ‘ competition .
‘Are there just some things the market cannot do?’
Health Care and Education . Not that they can’t do it -they can -but only by excluding a quarter of the population or more from decent health care and by undereducating millions of what are called the ‘poor’. No money in either of those markets -no shareholder value .
We need to look at access to decent health care as a right and access to the highest level of education also for those who are ‘academically ‘ capable .It’s in everybody’s interest - both the world of business and throughout society.
Posted by on Sep 08, 2008 @ 08:58 PMDewi,
It’s a big country. I suspect it depends where she was. Some states are solid one way or the other.
Posted by on Sep 08, 2008 @ 11:54 PM
