Letters to the Editor

Monday, August 23, 2010 at 12:27am

Shackle laissez faire capitalism

Despite admirable business success, Joe Scarlett provides no objective or philosophical support for a connection between “free markets” and “the best economic system in the world” (The City Paper, Aug. 16). Here are a few contrary facts and values.

“Wealth generation” is not the primary measure of an economy. It is the production of valued goods, services and work for a community. “Spectacular wealth” starts with the 2007 average S&P 500 CEO pay of 344 times the average worker, the highest differential by far in the world. No U.S. city ranks above 30th in international comparisons of quality of life. Most northern European nations equal or better our productivity with substantially more democratic benefit.

Regulation is not “only” an added cost of production. Regulation provides the legal framework for level playing fields as well as the political stability for economic decision making. It pays for businesses’ external costs (infrastructure, pollution, training, bailouts, unemployment insurance, etc). It requires fiduciary responsibility of financial intermediaries.

Scarlett’s “wild and crazy ideas” describe well the shadow economy that recently brought free market capitalism to its knees. His “innovations” — like exotic securities, abstruse financial modeling, reckless speculation with “other people’s money,” 30-to-one leverage, off-shore tax avoidance, and government-subsidized globalism — all contributed to successive energy, stock, tech and real estate bubbles of the past two decades.

Surely Scarlett jests in defending free market “failure … as long as we don’t violate the various laws and regulations.” Since the 1970s the captains of wealth, aided by officials of both political parties, have systematically dismantled restraints on financial extravagance. The resulting losses of jobs, homes and retirement accounts are not victimless business failures.

Apparently Scarlett has not absorbed the recent admissions that laissez faire capitalism has congenital flaws. Yet like Scarlett the Johnny-come-lately critics (Alan Greenspan, Jeff Rubin, Lawrence Summers, Alan Blinder, et al) can’t see past “immutable laws of economics and history” (Blinder). That is where alternative evidence and values would help.

Richard Posner, for example, suggests we learn from the more seasoned and productive — and less Darwinist — European capitalism. William Greider unmasks the rotten pillars of U.S. corporate capitalism: waste, consumerism, environmental destruction, militarism, subsidy, foreign labor, trade deficits and excessive inequality. Such analysis undercuts Scarlett’s mantra that regulation leads to business mediocrity. Wish that the U.S. could promote competitive industries, retain labor, and provide social unity as the Scandinavian and Northern European governments do.

Kenneth C. Winter
Nashville 37204
 

 

Filed under: City Voices
Tagged: Joe Scarlett

389 Comments on this post:

By: girliegirl on 8/23/10 at 7:22

Funny thing is.... none of those other countries have contributed to the niceties of our lives: Apple iPod, iPhones, MicroSoft, Vanderbilt Hospital (hey, I just had to throw that in there) and numerous other technical advances (Dell) of which we all rely upon daily for our very existence.

By: dargent7 on 8/23/10 at 7:28

Ok, guys...place your bets. Titans v. Cardinals.

By: govskeptic on 8/23/10 at 7:35

Here pulling for Collins to have a good night! As for changing our system of capitalism to being more like that of the European Countries, please? I would, however, really enjoy all the vacation time and benefits they dole out, but the tax burden would be a true downer.

By: gdiafante on 8/23/10 at 7:37

Dell mass produces computers, they didn't invent them.

I also don't see the backlash towards Bill Gates or Steve Jobs...most people understand that they earned it.

Now compare those two to the baffoon that was running BP...or the fat cats on Wall Street...see the difference?

By: gdiafante on 8/23/10 at 7:39

Cardinals by 25. Bud Adams flips off the team at least twice and they show Chris Johnson on the jumbo tron at least sixteen times causing mass vomiting.

By: dargent7 on 8/23/10 at 8:02

Titans 17, Cardinals 30. Or something similar in that range.

By: dargent7 on 8/23/10 at 8:05

"Dell mass produces computers"...So did Henry Ford with the Model T.
Mass production brings the costs down.
And Dells have enormous memory, large screens, dual cores.
Michael Dell deserves his billion.

By: Funditto on 8/23/10 at 8:09

Once you go Mac, you'll never go back.

By: gdiafante on 8/23/10 at 8:14

I've owned a Dell (garbage) and a Mac (Taj Mahal).

By: Funditto on 8/23/10 at 8:15

I don't recall my parents ever worrying over loosing there home if one of us became seriously ill. Nor did they worry about loosing their jobs. And I am certain, the CEO of my dad's company didn't make 100 times what he did.

By: Loner on 8/23/10 at 8:23

Good morning, Nashville!

This is an excellent rebuttal to Joe Scarlett's shallow and naive missive. Hopefully, Mr. Winter will join our discussion. The headline for this LTE is not appropriate to the letter, IMO; Mr. Winter is not suggesting
"shackling" our economy; he just wants to keep it honest.

I wonder if the LTE author is the same Ken Winter who posted this on the internet:

Politics for Neighbors
By Ken Winter
The recently formed Nashville Neighborhood Defense Fund aims to elect neighborhood-friendly leaders in Metro. It is a political action committee (PAC) for individuals who wish to work for the welfare of the small communities where we live, shop, play, worship and work. A membership event is forthcoming.

For more information, contact Ken Winter, 385-9762 or kcwinter@earthlink.net

By: gdiafante on 8/23/10 at 8:24

The problem lies with the fact that companies are hoarding billions while expecting fewer workers to produce the same output as has been expected in the past.

Meanwhile wages have become static while executive pay/bonuses continue to increase. We're not talking a few thousand dollars either, this is millions.

An executive might get $20 million yet they can't afford to give even a modest COLA increase.

By: Loner on 8/23/10 at 8:35

When you have right-wing demagogues working the airwaves 24/7 with a never-ending assault on organized labor, government regulators, government inspectors, environmentalism and legitimate taxation, one can understand where the Joe Scarletts of the world get their misinformation and antipathy. The richest, most ruthless, mad-dog capitalists own the media outlets; they use their media megaphones to disseminate and promote their selfish ideology and their hatred of government.....the ditto heads drink the kool-aid.

By: house_of_pain on 8/23/10 at 8:45

I can't stand the Mac. Way too slow for my taste.
Titans by 10. I noticed the Lions seem to be much improved. Their D looks good.

By: dargent7 on 8/23/10 at 8:59

pain: The Lions actually took to the field? Did they all have (matching) cell phones?
Who's the QB, Cutler?

By: Loner on 8/23/10 at 9:00

The venerable Lions are due.

Anyone else annoyed by the Frist ad at the top of the page? Get your cursor anywhere near that land mine and it explodes...then the clean up crew has to go in and click on the close button, to get rid of the piece of crap.

By: dargent7 on 8/23/10 at 9:03

pain: The Lions actually took to the field? Did they all have (matching) cell phones?
Who's the QB, Cutler?

By: brrrrk on 8/23/10 at 9:44

govskeptic said

"I would, however, really enjoy all the vacation time and benefits they dole out, but the tax burden would be a true downer."

The average Western European pays roughly 20% more in taxes than we do. And what do they get? Greener more vibrant economies (Germany just had the biggest increase in their economy since the last 20 years), about 6 weeks of paid vacation each year, paternity and maternity leave (usually about 6 months for the mother), a good "free" education, pensions that don't leave 25% their elderly living in poverty (they pay an average of 67% of the pensioners salary... here it's about 39% ), less poverty in general (20% of the children in this country live in poverty), good and reliable public transit, free or inexpensive access to educational facilities like museums, subsidized child care for working mothers, universal health care, generally shorter work weeks, etc. etc...... You see, they get something; they get a good ROI.

Here, rather than make the system work for everyone, we'd rather throw up our hands, say we can't make it work, and live with a system that has a lousy ROI... and in doing so, justify not paying taxes. Fine for those who go through life with their heads conveniently in the sand saying, "My worlds just fine. I'm doing well"... but not good for the people that do the majority of the hard sweaty work in this country and deserve more than having to work till they die or face a retirement living on a meager pension (if they have one at all) and Social Security.

We can do better. And everyone in this country deserves better.

By: kenwinter on 8/23/10 at 9:48

Thanks for careful reading and constructive feedback. Loner, I stick by the headline. The key is "laissez faire:" "Noninterference, esp an economic doctrine that opposes governmental involvement in commerce.." (American Heritage Dictionary). I.e., the unbridled "capitalism" of Milton Friedman, Ronald Reagan and Joe Scarlett.

I am a capitalist to the bone: fair competition, innovation, and benefits for all who contribute. The unshackled "capitalism of the last 30 years reversed the broad productivity, benefits and national strength of the post-war period.

By: Blanketnazi2 on 8/23/10 at 9:51

Nice LTE, Ken.

By: Funditto on 8/23/10 at 10:22

brrrk - I am convinced the general school of thought among Republicans and others is getting something for nothing. Period.

By: house_of_pain on 8/23/10 at 10:36

Nice pocket protector, Blanket...

By: brrrrk on 8/23/10 at 10:40

Funditto said

"brrrk - I am convinced the general school of thought among Republicans and others is getting something for nothing. Period."

True enough, but at some point (and I think we're there) you start to get exactly what you pay for... nothing for nothing. But if you already have everything you want or need (as is the case with the wealthy in this country), then why should you care? Does anyone actually believe that Rush, or Beck, or Hannity (or the rest of their ilk) care about anyone but themselves... or the country for that matter? Why should they? It wouldn't be in their best interest.

By: Loner on 8/23/10 at 11:38

Thank you,Mr.Winter for coming online and for the kind words. I see the logic in the headline, I think that the translation for "laissez faire" is "hands off", if I recall. "hands off" is not a smart way to drive a car and it is not the way to promote the general welfare or stimulate commerce, IMO.

I appreciate your community activism and I look forward to more LTE's from you, Ken. Hopefully, you will join our posting community on a regular basis.

I'm at the Java Junction, in Brockport, NY. I can't tie up the terminal. See ya later!

By: Blanketnazi2 on 8/23/10 at 11:39

thanks, house. it's from the Fall 2010 collection.

By: budlight on 8/23/10 at 11:46

Today's topic, to quote an infamous prezzidente', is "above my pay grade.

With that, we have tickets to TN/Saints game. Yummy. Hot dogs and beer and tailgating. I'm hyped.

See ya'll when a more shallow topic comes up. (a line I'm throwing to D7).

By: budlight on 8/23/10 at 11:47

s/h/s: LOL; just joshing you D7.

By: gdiafante on 8/23/10 at 11:54

Even Hayak and Friedman understood that some government involvement was necessary.

By: gdiafante on 8/23/10 at 11:58

s/h/b Hayek

By: AmyLiorate on 8/23/10 at 12:05

A refreshing new writer to the NCP LTE section. Welcome Ken!

It's great to see a good retort to another LTE. You have listed a handful of names that deserve some time spent reading on. Thanks.

One thing did bother me. You started out with:
Joe Scarlett provides no objective or philosophical support for a connection between “free markets” and “the best economic system in the world”

and then went on to say:
"2007 average S&P 500 CEO pay of 344 times the average worker"

While I certainly do value quality of life to be one of the most important aspects to take into account, and the one that is most often overlooked by our mayors and councils... but the ratio of CEO pay to average worker is not much support.

I mean that doesn't mean that we don't have a great quality of life, or that it hasn't improved steadily in the past few decades. I think we have many benefits. I look around and say "If I were to be poor in any country then I want it to be the US". A disparity between the middle class and the super rich doesn't bother me, I have more than I need and more money wouldn't make me a better person.

While we all understand the cunning nature of captains of industry it's refreshing to see more people who can follow that up with
"... officials of both political parties, have systematically dismantled restraints "
where much of the blame also lies due to the onset of the Law of Unattended Consequences.

Mr Winter, can you tell me more about European Capitalism?
What are the main things we need to change, install, or do away with here to have this form of capitalism?

By: AmyLiorate on 8/23/10 at 12:18

ack, I should have proof read that a little better and phrased a couple of things more clearly. Let me know if something isn't clear.

By: house_of_pain on 8/23/10 at 12:22

I'm a little confused, Amy...what did you mean by "fiscally kinky"?

By: gdiafante on 8/23/10 at 12:27

"A disparity between the middle class and the super rich doesn't bother me, I have more than I need and more money wouldn't make me a better person."

You completely don't understand the issue.

By: Loner on 8/23/10 at 12:37

Back home now. I just re-read Ken Winter's LTE; it is very well written. persuasive and credible, without ad hominem, invective or sarcasm. I prefer that style and approach; we have witnessed and endured lots of name-calling and mean-spirited commentary; maybe Ken's example will restore some civility to our discussions...I know that I too resort to using sarcasm and other less-than-civil language, at times. Mea culpa.

By: Captain Nemo on 8/23/10 at 1:10

Hello all. Just got home and read the letter. Mr. Winters is a welcome addition to our little group. I hope he stays and enlightens us and others to his take on capitalism.

Where are Ben and chief when there is someone with expertise on this matter?

By: Blanketnazi2 on 8/23/10 at 1:19

hiya, Nemo!

By: MamaG on 8/23/10 at 1:21

Afternoon all. I didn't even read the LTE. Sorry but, I am trying to crawl out of my empty nest funk today. So far, so good! Just wanted to say hello to you all and will check in later on this week sometime...

By: house_of_pain on 8/23/10 at 1:31

Get some fresh ink, MamaG...that should help.

By: Blanketnazi2 on 8/23/10 at 1:35

hi, Mama!

By: Captain Nemo on 8/23/10 at 1:39

Hello Blanket MamaG.

I understand were you are at Mama. It was just yesterday that I was talking to my daughter about leaving her at collage and crying all the way home thinking that it seem like yesterday that I had changed her diapers.

It took me two week to adjust to being alone, I got over it and you will too. As a matter of fact when she returned home for a visit, I can’t wait tell she leaves, but miss her at the same time.

Other empty nesters have said the same thing.

By: Loner on 8/23/10 at 2:37

My nest has never been empty, I have a 21-year old grandson living with me; the kid keeps me "hip", so to speak. Of course, my old bagle, (basset-beagle), Buddy, is a long-time family member too. Having a dog around the house is good - that way you're not just talkin' to yourself....my dog definitely understands English....if they had a canine SAT test, Buddy would be right up there on the verbal...his math sucks, however.

By: Blanketnazi2 on 8/23/10 at 2:42

Loner, my last dog learned how to spell too. It was hard to try to talk about him without him understanding what was going on.

By: Blanketnazi2 on 8/23/10 at 2:43

He figured out how to spell WALK, RIDE, VET, BALL, FOOD, DINNER, etc. It's a bitch having to spell out "stroll," "veterinarian," "tennis ball" etc.

By: house_of_pain on 8/23/10 at 3:19

We had a great dog, named Dixie(dingo mix), that could whip arse at word association...had to spell everything. She eventually figured out "b-a-t-h," and "c-o-o-k-i-e".

By: Loner on 8/23/10 at 3:20

I hear that BN. Buddy, runs for cover, if you spell out b-a-t-h.

Back to the topic of the LTE, Joe Scarlett's LTE started out with, "Our free marketplace is not perfect and never will be. But it is the most spectacular wealth-generating machine in the history of the world.'.

Actually, the most spectacular wealth-generating "machine" in the history of the world was probably the Roman republic and later the Roman Empire. The city state amassed wealth the old fashioned way, they stole it. They stole the land, enslaved the people - those that they didn't kill - and forced the slaves to work, or die. The profits - the fruits of the slave labor - were re-invested into the military, which proceeded to steal more land and enslave more people, with ever-increasing efficiency.

Of course, the churches, mosques and synagogues are also pretty good machines for generating wealth; organized religion has been in the wealth-generation business for countless millenia. Holyman, not whore, is the world's oldest profession.

The USA is so wealthy today, because we have so many natural resources and we have the technology and capital to exploit them. Our secular democracy and republican form of government, coupled with our diversity and strength of numbers, gave our forefathers, (and foremothers), a decisive edge over the competition.

America has always been and remains a land of opportunity; therein lies our strength. If opportunity is choked off, through wealth stratification, resource depletion, a calamitous war(s), oppressive laws or national bankruptcy, the wealth-generating machine will slowly grind to a halt.

By: Captain Nemo on 8/24/10 at 1:58

Good morning

Sunrise-East Irish Sea
http://pixdaus.com/pics/1253864869jNleLPj.jpg

By: Captain Nemo on 8/24/10 at 2:02

Congratulations on winning your 429 award Loner.

By: Captain Nemo on 8/24/10 at 2:35

S/H/B 420 award

By: bfra on 8/24/10 at 4:55

Mornin' Nemo! Great picture.

Great game last nite, also. Hope the Titans continue and have a great season. Traffic was terrible as usual, but worth it.

By: dargent7 on 8/24/10 at 5:53

I was certainly wrong about the Titans.
I'll stick to hores racing and dwarf tossing.