griftopia (Photo credit: cdrummbks)
In Griftopia, Matt Taibbi tells how Mayor Daley sold the rights to Chicago’s parking meter revenues for 75 years for $1 billion when the estimate was that the revenue was worth $5 billion. Sara Paretsky, resident of Chicago and author of the V. I. Warshawski detective novels, has this to say about the deal in her novel Body Works:
“Parking has also become a source of bitterness in the city–the mayor suddenly sold street parking to a private firm, which had quadrupled the rates overnight. We all had to carry bags of quarters everywhere we went, as if we were heading for slot machines, which I guess the pay stations had become. Slot machines completely and permanently skewed in the house’s favor.”
Please keep this in mind when someone tells you that free enterprise is more efficient than government. Another target of potential profit that the corporate disciples of Adam Smith’s invisible hand have in their near-term sights is our drinking water. Not only will the big oil companies profit from fracking, their chemical discharges into the ground will eventually pollute our drinking water, driving up the price and their ultimate profits. Thus they will profit from supplying energy and decreasing the supply of potable water.
Please see Griftopia
Profile of Adam Smith (Photo credit: Wikipedia)
Free market capitalism, laissez-faire capitalism, Adam Smith’s invisible hand acting to create the greatest good for the most people does not currently exist. Without effective government regulation, competitors tend to merge to reduce competition, letting them raise prices, reduce supply and make more profit. For example, just look at the oil companies and gasoline prices at the pump. What we have now instead of free market capitalism is what I call pickpocket capitalism. Adam Smith’s invisible hand of the market is in all our pockets, stealing cash from incomes unnoticed, and almost invisibly. Sky high interest rates on credit cards and insurance policies that don’t cover the insured costs are two more examples of the invisible hand of the pickpockets of corporate America. Only effective regulation by the Federal government can protect us from them. The states are too small and diverse to do the job. The ultimate solution of course is to breakup the companies that are too big to fail until they are small enough to start competing with each other once again.
Truthout.org has an interesting companion article.
Image via Wikipedia
These are the steps that I believe are necessary to bring down gas prices and to regulate the oil industry for the benefit of all of us. It will require a concerted effort on our part to defeat the propaganda of Big Oil and force the Federal government to act despite the intense lobbying effort we can expect in opposition to these ideas. I have not included the mantra of “Drill, baby, drill” because at this time, I think that the supply is adequate. Drilling in deep water and Arctic refuges at this time is probably unnecessary. Big Oil has manipulated the supply for decades to reduce or eliminate an over-abundance of supply.
Steps required now:
- Monitor and regulate speculation in oil and gasoline on all exchanges, and between parties currently not regulated.
- Require pollution controls on all refineries in the US and expedite the construction of greenfield refineries to increase capacity to allow for accidents and unexpected bottlenecks.
- Breakup Big Oil so the competitive forces of the market are allowed to work as Adam Smith intended.
- Increase the effective tax rates on Big Oil so that the industry pays its fair share of the Federal tax burden
Please see $2 gas