[ExI] The CC-PP game

[Techno]

On Monday, November 24, 2008 5:10 AMBillK pharos at gmail.com wrote:
> I read that Citigroup has now been nationalized (in all but name)
> by the US government.
> And I have also realized that what is going on is a new financial game
> called the CC-PP game.
>
> http://en.wikipedia.org/wiki/Commonize_costs-privatize_profits_game>

And this has become part of public choice economics.  See:

http://en.wikipedia.org/wiki/Public_choice

> So it works like this:  the rich and greedy shout freedom and liberty
> so they get freedom from regulation, so they can amass even more
> wealth. And when they go too far and the pyramid game eventually
> collapses, they can also demand that the losses get shared out among
> everybody else (but they still get to keep the wealth they accumulated
> on the way up).

Actually, it doesn't always work exactly like that.  It's not the rich per 
se, but the politically connected -- which is usually a subset of the rich. 
You might want to read up the "iron triangle":

http://en.wikipedia.org/wiki/Iron_triangle

Also, regulations are often used to help the process -- as when a firm or 
group lobbies for regulations that will harm them, but will harm rivals 
more.  E.g., Walmart lobbies for an increase in the minimum wage.  Why? 
This will cost Walmart, but the costs to its competitors will be much more 
harmful to them because they can't easily absorb the higher costs while 
Walmart can.  (This is leaving aside that it benefits workers whose 
productivity is above the minimum wage and harms those below it.  In other 
words, workers are really can't get an as high or a higher wage than the new 
minimum are now chucked out of the labor market.  This lowers competition in 
the labor market -- benefiting higher wage workers and especially union 
workers.)  For another example, see "Separation of Commercial and Investment 
Banking: The Morgans vs. The Rockefellers" at:

http://www.qjae.org/journals/qjae/pdf/qjae1_1_1.pdf

> There are now billions of taxpayers money available to help the
> millionaire bankers. But no billions for a socialized health system or
> poverty programs for the destitute, or rebuilding New Orleans, etc.
>
> Is this total insanity? Or is the whole country now being run for the
> benefit of a very few people who are already fabulously wealthy?

It's known as government.  You seem to assume that government could possibly 
benefit everyone.  It can't as the basic principle of all government --  
regardless of whether anyone explicitly acknowledges it -- is that a few 
benefit while many pay.  (Government is always a few ruling over many. 
Democratic forms of government merely disguise this fact because the many 
seem to choose their rulers -- which, in fact, is no different than slaves 
choosing their masters, which can never be themselves.)  This is the same no 
matter what style of government is adopted.  Of course, certain forms are 
less burdensome -- usually the ones that have a smaller footprint on the 
economy.  In other words, the less government does to and for us, the 
better.  However, the elites in all forms of government will always argue 
that they are helping the people and that, at worst, their gain is a 
necessary evil.

Regards,

Dan
    See "Free Market Anarchism: A Justification" at:
http://mars.superlink.net/~neptune/AnarchismJustified.html