by frog
This poster says all that needs to be said about just how efficient “free” markets are at separating hard working taxpayers from their money:
The efficiency with which the financial markets (and now the real economy) are fleecing the taxpayers to pay for their own excesses is astounding. Now our government is saying that in order to prevent collapse, we need more of the same policies that got us here in the first place.
I am convinced. The “free” market really is efficient! 
Published in Economy, Work, & Welfare by frog on Wed, December 10th, 2008
Tags: automakers, efficiency, market, US
on the trolls and those who are unable to keep on topic
The efficiency of which free markets are you talking about Frog? Not that I think free markets are a good system, but your point is pretty void and invalid.
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Dear oh dear you redgreens really are the pits – everyone knows full well that we’re in the shit right now NOT because of the free market but because lowlife politicians can not stop interfering in it for their own corrupt, selfish, career motivated and ideological ends.
If we had carried on with the 80s reforms into the 90s and 00s we’d be sitting so pretty now the world would envy us. Instead politicians went back to their comfortable self serving settees. They let people borrow against house price inflation and called it a “thriving” economy. What a sick joke you cant see your lovely left and far left wing politicians are the cause of the problem, toady. They caused it but we the taxpayer now have to fix it, while they pretend they are blameless. Filthy sickos.
Redgreens satand for 100% state ownership and control so the politicains cna be corrupty with impunity. Pull the other one when you guys whinge that you are pro NZ business frog.
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Frog
what part of this is the freemarket. It it was free, the company would die. Bailing them out is socialism.
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Hard to tell if this is tongue in cheek or not, but if not then it’s load of bollocks. Why wouldn’t you try and get a loan from the government if your business (operating in semi-free market) was going under? Even a libertarian would probably do so, because it’s about what’s best for the company, nothing else.
Cool poster though.
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StephenR Says:
December 10th, 2008 at 3:49 pm
> Why wouldn’t you try and get a loan from the government if your business (operating in semi-free market) was going under?
you would try to, but in a country run on free-market principles, they wouldn’t give you one. The US is not a Free-Market economy – it has elements of free market principles mixed with elements of corporate welfare, plus some bits of social democracy and Christian Fundamentalism, so long as they don’t interfere with the corporate welfarism.
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“Welcome to the United States of Uhmerica; We took the best of the free-market, the best of protectionism, and the best of socialism and we gave it to Canada. Here all you get are the worst aspects of the free-market, the worst aspects of protectionism, and the worst aspects of socialism; now bend-over and take it”
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I love this, the left scream about bailouts when the true right wingers like me want to see GM, Chrysler and Ford fail if they cannot respond to the market.
As pointed out by others you chaps on the left would be screaming if three million people were put out of work because of the predatory nature of the UAW.
Actually a part of me would almost enjoy that, the union greed is what drove the big three to this point, sure the fact that they make crap cars has something to do with it but the overriding issue is the cost of production which is at least $2000 more per car simply because of the demands made by the UAW.
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Slightly off topic but…..
The silence is deafening from the Greens at the latest statement from the Obama Messiah about his grand plan to spend big on infrastructure.
The Obama Messiah plans to build lots and lots of roads and bridges.
Are new roads and bridges only bad when George Bush builds them?
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I really hope this is tounge in cheak frog, because if not it doesnt say much about your intelligence that you blame free markets for the government taking $34billion of taxpayer money and giving it to failing companies in order to save jobs. That socialist agenda is being lead by the democrats and if you oppose it then maybe you need to come out and attack the democrats.
I think you will find that the three leading proponents of this bailout (other then the big 3 CEO’s) are Barrack Obama, Harry Reid and Nancy Pelosi.
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How on earth is this an example of an efficent free market. Its corporates lookign for government intervention.
The inefficient Detroit automakers should be left to die. Thats what a real efficient free market would do.
The bailout is quasi fascist (in the real sense of the word)… As Big bro said, the bailout is being driven by unions pushing for job security at the expense of taxpayers money.
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As noted in the comments of the Boing Boing blog where I first saw this:
“They’re all capitalists until the chips are down.”
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No, bailing them out is corporate welfare, the dark side of “neoliberal” enterprise. Socialism deals in delivering a hand-up to people, not companies
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Free markets, as supported by ACT, let failing companies fail and better, more efficient ones replace them.
Governments, as supported by the Greens, bail out failing companies using taxpayers money.
I guess you’ll be joining ACT now frog?
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The free market economy is not perfect but what kind of system do you want to replace it with?
Every other system tried is less free and less efficient.
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I don’t think frog was making any momentous statement for/against free market economys. I think he/she/it was just playing with words and efficiencies.
And yes I agree if those were NZ companies I think the Greens would be supporting a bail-out, thats a lot of jobs we’re talking about and it would be a hard industry to re-enter. Funny how corporate welfare to some is protecting jobs to others.
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Yes, everyone, it is tonuge in cheek! My sole statement here is that those that preach the loudest about free markets are the very ones who line up for handouts when the chips are down.
My quip about efficient free markets is that in fact they are not efficient at all. You just pay up later when the bubble bursts rather than up front. Either way, the so called free market is not an efficient allocator of resources nor an adequate assessor of risk, both of which the free market ideologues claim it to be.
As for the unions causing the big three to die, I say bollocks. Toyota is doing just fine in the US with unionised labour. It’s the bloody minded management that lives and works with 19th century ideals, not the unions that are the problem.
My real complaint about the free market ideologues is not the theoretical notion of free trade, etc, which is as pure an ideal as communism and just as unrealistic. No, for me it is the fact that most free market ideologues confuse freedom with license. It is corporates that drive the license agenda and conflate it with the word freedom.
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Oh, and yes, I agree with Obama’s statement that the US allowing the big three to fail “is not an option”. It is just the irony of the free marketeers desperately seeking corporate welfare that I find so amusing, like the poster.
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frog Says:
December 10th, 2008 at 7:11 pm
> Oh, and yes, I agree with Obama’s statement that the US allowing the big three to fail “is not an option”.
I’m ambivalent about it. On the one hand, there are a lot of jobs dependent on these factories, and a lot of people whose health insurance and pension plans are with these companies, because that was their only option when they worked for them.
On the other hand, I’m worried that it is just a subsidy to companies with poor corporate structures who use poorly designed factories to make cars that are not particularly reliable, fuel-efficient or fuel-efficient, and will just help them to continue to make cars badly.
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Frog you are being mischievous at best when you compare Toyota to the US big three.
For a start Toyota build cars that people actually want to buy but that is not the issue here.
It is a statement of fact that all of the Japanese manufactures are NOT on the same deal as those negotiated by the UAW with the big three, what annoys me is that for you to suggest this would mean that you are either stupid (and the evidence shows clearly that you are not) or this is just another of your anti USA rants, indeed it brings into question all of your claims that you are not anti USA when you peddle such blatant untruths.
As I have posted previously there are many reasons that the American car market is facing crisis and not all of it can be sheeted home to the UAW, however the fact remains that the VAST majority of the problem is caused by the predatory nature of that same union and their belief that neither the federal government or the companies themselves would ever be allowed to fail, simply put the UAW have financially raped the American auto makes AND the American tax payer.
Personally I believe that the big three should be left to sink or swim for no other reason that it would cause the union movement in the USA to re think its carnivorous tactics.
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Thank’s for your great article. It’s very useful to me
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If Free Marketers think the government should bail out the auto industry, then they aren’t Free Marketers and should go join the Green Party.
Just because people used to claim to be Free Market supporters now support handouts from the government, doesn’t mean the Free Market has failed. In fact it demonstrates how effective the free market can be when applied properly.
If the the free market only applied when people were making money (aka ‘getting fat’) and every time someone lost the government bailed them out, then I wouldn’t support the free market because that is a ridiculous idea.
But, it is the kind of ‘free market’ that you seem to support.
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anyone else find it ironic that BB says that the US auto manufacturers produce cars that no-one wants to buy, when he has previously sung the praises of their cars and in fact said that he drives one and takes pride in driving one?
is this a flip flop from BB? does he now drive a Prius?
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stuey
While I did state that the evidence proves Frog to be far from an idiot that conclusion clearly does not apply to you.
NEVER have I said that (Modern) American cars are anything but rubbish, yes I used to drive a Hummer but I can assure you that was due to a business deal and more to do with the fact that it drives the climate change con men (and women eredwen) crazy.
I am well and truly over that little phase in life and I got sick of the bloody thing breaking down, no doubt the new owner is making some rural repair shop deliriously happy with its weekly appointment.
Interesting that you mention the Prius, lets just pretend that I was one of the lemmings conned into accepting the climate change fable, the very last vehicle I would ever own would be a Prius given that it will use more energy in its lifetime than a Hummer.
So no Stuey, the last vehicle on earth I would ever own would be a Prius, at the moment my vehicle of choice is a good old fashioned diesel Ute and given that our family has just increased by one more rescue dog I figured that four dogs was just a few to many to be carting around in a car.
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- “the so called free market is not an efficient allocator of resources nor an adequate assessor of risk”
But this is just like saying that neither of us can run faster than the bear. The point is that I only have to run faster that you.
Nobody has ever claimed that markets are perfectly efficient, or anything like it. What’s important, though, is that it is vastly more efficient than the central planning alternative.
- “My real complaint about the free market ideologues…”
Yes, idealogues. There can be no other word for people who recognise that the free market is the greatest alleviator of poverty in the entire history of the world, as well as being the only “system” compatible with individual liberty.
How blinkered can those “idealogues” be? How could anyone in their right mind reject your corrupt statism and coerced collectivism?
As for the corporate welfare, it is the predictable and inevitable consequence of allowing the state to rob one group in order to benefit another – the very cornerstone of socialism.
The more power the left grants to the state, the more businesses, unions and hosts of other well organised special interest groups find it profitable to spend resources buying favours and influence.
So don’t mock free marketeers for what’s happening. Blame yourself. You created this vampire state to do your bidding, yet seem surprised and angry when it is inevitably co-opted by countless others also seeking to enjoy the benefits of state coercion.
It is, in short, entirely the fault of people like you.
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If i may quote;
And shuffle it up alittle;
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Opps, I probally should of substituted “Capitalism” instead of “the free market” as the free-market is yet to be tryed in any dedicated manner.
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Bail out: left
Let ‘em crash: right
So, which side are you supporting, Frog?
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Thanks Ice for putting it so succinctly!
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quoting Wat Dabney
“…for people who recognise that the free market is the greatest alleviator of poverty in the entire history of the world, as well as being the only “system” compatible with individual liberty.”
that’s a point of view that not all people agree with. does the capitalism of today produce more individual liberty while people are working longer hours to pay ever-increasing bills?
perhaps the coerced collectivism is actually being manufactured by advertising and the companies with delusions of grandeur. the fact banks and car companies can be bankrolled by government doesn’t necessarily demonise a “cornerstone of socialism”. it demonises the govt which approves the money transfer and the people who bankroll those in power. which, perhaps, is not the general collective.
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big bro Said:
>
Are new roads and bridges only bad when George Bush builds them?
>
Not at all BB, they are also bad when New Zealand’s National led government builds them
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bb
your 7:46
RIGHT ON!
(I do miss my ’76 Impala wagon – I could throw a mattress in the back, put the 3 kids to sleep there and the missus and I could watch Star Wars in the Drive-In
Happy Daze!
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The reason the big 3 are struggling to much is because the market isn’t free. They are under intense government regulations. Also, the government backs the union that makes them pay an average salary of double their foreign competitors. High operating costs due to the union and regulation standards is what is hurting them. If the market was really free, they wouldn’t have these challenges.
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IceBaby Says:
December 10th, 2008 at 10:46 pm
> Bail out: left
> Let ‘em crash: right
There is a third possibility, which is what Labour did with Air New Zealand – bail them out but take an overwhelming ownership stake in return. This way you keep the company going and save some people’s jobs, but because the government now owns the extra equity, you haven’t bailed out the investors who deserved to lose money for making poor investment decisions, so that market incentive still functions.
There’s also a fourth approach, often used by governments that call them selves right-wing. This is to bail out big companies that get into trouble, but let the small ones crash and burn.
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kahikatea Says:
December 10th, 2008 at 7:31 pm
> On the other hand, I’m worried that it is just a subsidy to companies with poor corporate structures who use poorly designed factories to make cars that are not particularly reliable, fuel-efficient or fuel-efficient,
I means to say ‘fuel-efficient or SPACE-EFFICIENT’
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Henry Ford was an admirer of National Socialism. It seems America is finally delivering what Ford wanted.
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As a Green and an economics geek I’ll take the challenge
Owen McShane Said:
It does depend on what you mean by “free” and “efficient”. Too complex to get into here but I’ll make some quick points: “Freedom of/to” is one sort of freedom. “Freedom of speech” Freedom to roam” etcetera are all good freedoms. But there is “freedom from” also. Freedom from hunger. Freedom from poverty etcetera. These are also good freedoms that matter too. In a “free” market if you have no market power and are essentially surplus you starve. Now that is efficient!
As for efficiency, I define it to be maximising return over effort. But that is *not* what economic efficiency is.
But I favour a mixed economy. There are parts of the economy that work well with free(ish) markets. The classic example is the supply of fruits and vegetables into cities when there is no famine. Interestingly the system is starting to break down right now and we are moving to central planning. (Albeit private).
There are sectors of the economy that work best with central planning. The natural monopolies are the classic examples here. Water reticulation, electricity generation and supply. Also capital expensive and socially vital services like the health system.
There is no way that anybody with half a brain can contend that markets (free or otherwise) can form long term plans. Therefore market systems tend to ossify over time. There is also a tendency for power to concentrate in markets. Hence there is a real role for the state in long term planning (like the Taiwanese do) . There is also a role for the state in dealing with economic power inequalities.
In fact if the state does not protect the weak from the strong, is there any justification for it?
peace
W
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bliss. The problem is that you assume a natural monopoly is a bad thing.
An artificial monopoly, created by the government, is bad because it would be more efficient if it weren’t a monopoly.
A natural monopoly is good, because it has naturally become a monopoly meaning that the market has determined that that is the most efficient way it should be run.
Your water and electricity examples are perfect. Governments create monopolies in these areas because they assume that they would be monopolies if privitised and that an artificial government monopoly is better than a natural monopoly.
But a natural monopoly is better than a government monopoly.
A natural monopoly has no current competition but it can get competition in the future if market conditions change.
A government monopoly has no competition either current or future, because the government has banned people from entering that market.
So if we privitised water and electricity, we would probably get a monopoly, that isn’t neccersarily bad. If private companies abused that position too much, it would encourage innovation and investment into alternative sources to compete against the monopoly (ie: small scale household water collection and power generation).
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frog…here is the answer:
The government can’t take tax off you (to fund the bailout) if you are not paying any tax.
How to avoid paying tax??
Each and every one of us greenies needs to start up a business that generates some product or service that benefits the planet.
The tax we would normally pay would be written off to tax.
We have to get smart and be as good a capitalist as the next guy (the ones mentioned above who build sh**y cars).
If they can do it, we can too.
They scrapped the EV1, but I am certain the time has come for us to be innovative and build our own newfangled green technology.
Tax rebates for inventors!!
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petermcc
The problem is that you assume that an unregulated monopoly is going to allow innovation and investment in alternative sources… which shows only that your ideology neglects the way such markets ACTUALLY work.
Economist wannabes really should get out into the wide world and try to understand the nature of the human reaction to power.
The only control we’ve ever managed (and that imperfectly) was to distribute power to people and run things democratically. Your idea of control is to give total power to those who happen to be the lucky owners of the resource and let the rest of us “invent” ways to get around their greed with methods that invariably are less efficient to start with.
Thanks for your contribution. It makes a good contrast to the relative sanity and realism of us Greens.
*That should cause someone to spill their coffee.
BJ
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And the problem with your ideology is that it assume the only way anyone could come in to such a position is through luck.
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In support of petermcc: Edison’s company invented the electric light bulb to get aroung the monopoly on streetlighting held by gas companies.
In support of bj: Standard Oil
Combined: Union Pacific.
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Frog said
“Toyota is doing just fine in the US with unionised labour.”
Its not the union in general but the specfic contract deals. The average worker one of the big 3 has a total compensation of 73.20/hour. Toyota is only 48.00/hour. This is a huge difference.
Source :http://www.wikinvest.com/stock/General_Motors_(GM)/Bears/Average_Hourly_compensation_the_highest_amongst_competitors
Frog also said
“Oh, and yes, I agree with Obama’s statement that the US allowing the big three to fail “is not an option”. It is just the irony of the free marketeers desperately seeking corporate welfare that I find so amusing, like the poster.”
The term fail is a scare tactic. They could file for chapter 11. How come the airline industry is allowed to file for chapter 11 but when the auto industry wants to we have to bail them out?? Here is the answer because if they were to file for Chapter 11, then they would be able to renegoiate their contract with the union. Our democratic polititians don’t want to see that because the unions line their campaign fund. They gave over 1 billion to Obama. I am not anti-union. I am anti-corrupt government backed and protected union.
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And the problem with your ideology is that it assume the only way anyone could come in to such a position is through luck
Hardly. It also requires a boatload of work. However, the identity of the person who profits from or makes the innovation IS ALSO a matter of luck within the group that troubles itself to work on it.
Finally I have yet to see explained, why other people must suffer the tyranny of the monopolist until SOMEONE finally invents a new way to do things that gets his greedy mitts out of their pockets. This situation is not one that responds in some guaranteed way, or in a predictable time, to correct the theft from everyone that the monopolist is able to maintain. You cannot dictate the pace of invention.
I abhor the excess of “success” awarded the lucky ones… while others who work no less hard, are forced to pay for coming second in the sweepstakes. I abhor the ideal of Marx as well, for equality of rights does not require equality of abilities. People who move things forward have to be rewarded, not treated the same as everyone else. It is the EXCESSIVE nature of what happens in this and other pretend-capitalist, money dominated societies that gets my goat.
Monopolies, when regulated and managed by governments, don’t do so awfully badly. Your beef with AT&T would be what exactly? Their profits were limited? Their market control was absolute, Bell Labs was one of the most productive industrial development groups in the history of the species.
Kevyn – Edison and his company would have invented electric light bulbs anyway. Look at his history. To assert that it was the gas company monopoly that drove him to invent doesn’t seem to be supported by a closer examination. The monopoly MAY have adjusted priorities, but I don’t think it caused the company to develop the bulb. Edison wanted electricity to do everything, and to generate it cheaply, and sell it to make a buck, and he had patents on a raft of stuff and effective monopoly beckoned him with the siren song of limitless wealth and unfettered power as well. .
The robber-barons of the late 19th century were not a great goodness.
Some imagine that the country would not have progressed as far and as fast… though no evidence for that assertion exists. Focusing only on the economics and politics of the day ignores significant “externalities” . The system is complex.
BJ
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