The Greedy Bastard
Theory of Economics
Disclosure: I love capitalism. It’s the great engine of wealth-creation and prosperity.
Among political theories, I always favored the one enunciated by my ex-wife, Joan More: “The left wing flies the bird.” But in economic theory, there is no escaping the implicit founding maxim of capitalism: “Greedy bastards make the world go ‘round.”
I also favor the steam engine. Until James Watt, brute force had to be supplied by muscles – the muscles of horses, oxen, elephants, or humans. Steam could turn a wheel faster than a human or an ox, although it did present other problems.
As the fire got hotter and the steam gathered force, the engine would run out of control and tear itself apart.
What James Watt actually invented was not just an engine – lots of people knew how to build that – but an engine with a governor that kept the whole contraption operating within reasonable limits. Two arms were mounted on a vertical shaft – like your own arms when they’re dangling by your sides. As the shaft turned faster, centrifugal force raised the arms, gradually closing the apertures that admitted the steam.
You know how an ice skater turns much faster when she draws in her arms? That has nothing to do with it.
In economic systems, capitalism, like the steam engine, provides the power. Greed provides the steam.
Now what we need is a governor. We thought we had solved that problem with the idea of government regulation. But since politicians love money, they soon wound up in bed with greedy bastards who then co-opted the regulators, and finally they bought the government. For the past 6-1/2 years, we’ve seen how that works.
The greedy bastards achieved this conquest under the banners of Free Enterprise, Deregulation, and the Magic of Market Forces. (Magic works well if you’re the magician, not if you’re the rabbit who gets pulled out of the hat by his ears and then thrown into a cage to await the next trick,)
The ultimate battle cry was Competition, heralded as the high road to efficiency, productivity, and low prices for consumers.
Electric utilities, for example, had always been regulated. But for the past 15 years or so, state legislatures have been adopting laws – some of them drafted by Enron – to introduce competition to the electricity market. That might have worked, but the referees in this competition turned out to be the greedy bastards who were supposed to be competing, so the costs of electrical power in the “competitive” states quickly rose high above the costs in regulated states. By one calculation, competition has cost rate-payers an extra $48 billion in 25 states, most of which are now busy re-establishing regulation; and Illinois just voted to give back $1 billion of the overcharges.
We’ve all seen what deregulation can do for the airlines, and what the free market machinery of capitalism can do for health care, where several battalions of greedy bastards have installed their toll booths between you and your doctor.
The result is health care that costs twice as much as Europeans or Canadians pay, doesn’t keep us as healthy as they are, and leaves 48 million Americans without coverage.
Part of the reason is the cost of pharmaceuticals. Competition among big drug companies was supposed to take care of that, but Congress passed a Medicare drug benefit bill that prohibited Medicare from negotiating lower costs. The day the bill passed, the stocks of HMOs and drug companies went through the roof of the stock exchange, demonstrating what happens when greedy bastards are running the government.
But there’s nothing wrong with capitalism that a bit of reasonable regulation can’t fix. Here’s a good, conservative idea:
One of these days, we ought to take our government back from the greedy bastards and the corporate welfare cheaters and give capitalism a try.
Maybe even democracy.
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Although Canadians and Europeans pay less for health care than we do, this is not the reason why they are healthier. They — and practically everybody else on the face of the planet — eat and drink better stuff and less of it than we do. They also exercise more. Ever notice how U.S. offspring of lean, Asian-born parents are just as obese as the children of any other American ethnic group if they are permitted the typical diet and sedentary lifestyle of their American peers? And one doesn’t see as many fatsos in Italy, France or Spain as can be found in Anytown, USA. Clearly, our diet and lifestyle are hazardous to one’s health.
Comment by John — September 12, 2007 @ 9:11 pm
One other thing. Not all Greedy Bastards are Republicans or captains of industry (although CEO salaries these days are obscene and must be brought under control — hopefully by shareholders; by government action only if absolutely necessary). The likes of George Soros, William Jefferson, William Jefferson Clinton, John Corzine, Hollywood denizens en masse, etc. all fit the GB persona. The publicized financial records of George Soros, Warren Buffet and Ted Kennedy — all of whom are in favor of increasing taxes and retaining the estate tax — have their money protected and out of reach of the IRS through trusts, foundations or tax-free overseas accounts. Kennedy, for example, has over a half-billion dollars protected from the IRS through trusts in Jamaica, the Cayman Islands and Fiji. These GBs have access to greed enhancement practices not available to you and me.
Comment by John — September 12, 2007 @ 9:14 pm
Quite so, John, but we never said Greedy Bastards were Republicans. Greed is a big tent. In one sense, it’s universal; in the context of capitalism, the profit motive and incentives are essential. It’s the excesses we’re talking about here, We never mentioned the word “Republican,” but when it came to citing some current examples, well, they happened to be current under a Republican administration (which also happened to be whelped and reared by greedy bastards) — but you could find examples in any administration and, in the private sector, among non-profits, churches, televangelists, and environmental frauds as well as in corporate circles.
Comment by Al — September 12, 2007 @ 9:23 pm