This is a riff off of something the regularly-lucid dday posted over at Hullabaloo (a blog whose name always reminds me of the intro to a folk-music show from the '60's which was before my actual time, so why I have that in my mental database I do not know.) But I was meaning to say a bit more about the media and markets, and Smith's "Invisible Hand". So why not?
What has always bugged me about economics is that it's often absurdly obvious b.s. I guess because I looked at the Laffer curve as a small child (let's say I was 10--a nice round number and demonstrative of the effect of the Reagan years upon Gen-X-ers) and totally went "WTF!?! That's b.s." Which led me to suppose that much of economics as a science was b.s. Milton Freidman--massively b.s. Alan Greenspan--a super pile of Randroid b.s. You can not imagine my utter lack of sympathy for someone whose financial acumen was looked upon as dang-near god-like, and attained a sort of seniority of super-goodwill, who just recently was forced to admit, "Wow, rich people can be greedy and take advantage of deregulation--who knew?" (Um, you could've known if you shared a planet with us.)
But my bone to pick with Andrea Mitchell's hubby aside, and my contention that wherever Freidman-like market-driven anarchic capitalism prevailed represented "Epic Fail" (see: Argentina). Look at economics as physics: an entity making money will continue to make money because it has the capital to withstand competitors. An entity large enough (let's call it a "trust" and say it's a second cousin once removed from a "monopoly") becomes what we regular folk might call a "shot-caller". It can dominate the market. The market doesn't rule it--there is no invisible hand. Did you notice we're still driving automobiles fueled by gasoline after how many decades? Is it seriously the most efficient, climatically and ecomonically, way for people to get around? Still? The power of any monopoly to control the market actually stifles innovation.
There is no such thing as an enlightened self-interest. Madoff. Stanford. Ken Lay. Arthur Anderson. Worldcom, Adelphia, etc. We've known for a long time that whole business enterprises could become toxic because of over-reaching and thinking they were too big to fail. (Some entities, like Halliburton, which acquired Dressher, are not allowed to actually fail--even if they once traded really low, for purely politically-connected reasons.) Blackwater becomes Xe. Banks that get bail-outs use the money to swallow up other banks. Nero fiddles while Rome burns. Executives get golden parachutes.
In other words, even if these people placed themselves in a postion of enormous risk, they set the rules whereby they can walk away. And the media as it is, respects them for it.
I recall the "Today" piece where Linda Lay expressed the sorry idea that their Enron troubles were so bad, she even had to sell one of their houses. (Yes, I'll link to Rense--when they're right-on.) You can think about her selling shit from her household back in 2002, while you appraise your current domain for anything of ebay or Craigslist value to make an extra buck yourself--for subsistence. Her lifestyle--not subsistence.) It was sorry as all hell that she made it look like her and Kenny were suffering--but Today allowed it. I don't recall them laying the smacketh-down, and asking about the employees whose pensions were fucked. How they were doing. Line-men, even, hard-working people who climbed poles in all kinds of weather to get people's power back on. People who really worked. Dirty nails. Sprung knees. They were the people who actually "worked for" that company. Did the work that made it run. Not the market manipulators.
Markets actually don't run themselves. There is no Invisible hand in sight or out of sight. People actually operate on their own for their own reasons. Down, bear markets are actually, in part, emotionally-driven (Phil Gramm is a boor, but not a total idiot.) Jim Cramer deciding to be a voice muscularly crying in the wilderness, or Rick Santelli deciding the floor of the Chicago stock exchange is a silent majority he needs to instill a populistic flair in, is weird. They cry doom, the market listens. They drink their own milkshake, and cry because they can't drink their milkshake and have it, too.
Risk, ladies and gentlemen, is for those who can afford it. We've listened to people who were players--the shot-callers. We listened to thugs. They asked us to be a part of their unregulated racket. The answer is regulation, I'm afraid, and skepticism. It's finding a better way of valuing assets. And it's realizing that those who have the most to say--should have the most to lose when they aren't exactly Nostradamas.
This is why people who are still capital concerns should listen to Obama when he says there is a long-term benefit in investing now--I say, if you have the liquidity to do so, go for it. Me, I represent for broke people--I am not rooting for you rich s.o.b.'s to fail. I actually want you to do good. I think trickle-down is a joke, but I still know people with money run the companies that hire broke people who need jobs. But I say invest because--
From bottom there is no where to go but up.
Because saving jobs means saving people who can be productive.
Because the more people show confidence, the more we get this bummer of a recession off our backs, and start growing again. People with jobs, and opportunities, are more likely to spend than those without'em.
Losers talk about "going Galt". Fine--people who can't figure out they are only losing .04 off every dollar over $250,000 (not a lotta money--but "latte money") deserve the lost opportunities they face from opting-out of working for the recovery of our economy. Real players can tune out the noise, and bring in the funds.
You won't get that advice from cable news pundits. They are too close to money. Me, I am skeptical. I say, you don't need a CNBC man to know which way the wind is blowing, and guys like Cramer--who I think is "but indifferent honest" and has said heartfelt things, might not always be your answer to financial guidance (although broke folks could really benefit from Suze Orman, my girl will speak truth about debt and savings). But let's take away a simple lesson--
Know what you're investing in. Clearly evaluate your risk. Don't let sunshine get blown up your ass. Don't let media manipulate the market--they are there to sell soap and stocks. There is a disclaimer for a reason.