The Invisible Finger of the Market Place


Any economists out there, or policy wonks want to weigh in on this:

Wallace put the question more directly: “You would allow the Ex-Im Bank to expire in September?”

McCarthy immediately said “Yes. Because it’s something that the private sector can be able to do.”

When I looked up the Export-Import Bank, it sounded like they provide low-interest loan insurance that helps small US manufacturers expand their markets overseas when the big banks won’t take the risk. That they also help the foreign customers to buy the US export also seems like a good thing. From what I can tell, essentially they step in where the banks won’t, and everyone wins.

That it was signed into existence by FDR also tells me that there is probably a real need for this thing, and so to have a pseudo-Ayn Rand Market analysis spouted off by one of the really dim bulbs of Wingnuttia, gives me grounds for instinctively being in favor of the Ex-Im.

Those who do not learn from history…

…are really f***ing stupid:

Example A is Teabagger Marilinda Garcia, who is a candidate for Congress from New Hampshire.

Gosh, you know, as a student of history (OK, it was one of my undergraduate majors), I kinda-sort know that the people of Jamestown did not starve to death because they lacked private property. They starved to death from because they did not grow food.

So why, you ask, did they not grow any food? They were being good little capitalists, and trying make it big in the mercantile economy by growing exotic crops to export to England (and presumably to return as rich as kings); they were not trying to grow subsistence crops.

So, you could say that Capitalism killed the Jamestown Colony, or the Invisible Hand killed them, or even that they all went Galt with greed. But you cannot say that they died from collectivism. That’s just stupid.

Ayn Rand goes shopping

Bloomberg has a long article on Sears’ implosion that is fascinating on many levels, but it held my attention on one aspect in particular: the CEO Eddie Lampert is a hedge-fund manager and fan of dirty book author Ayn Rand’s Atlas Shrugged. He based much of his disastrous decisions on her philosophy:

…Lampert runs Sears like a hedge fund portfolio, with dozens of autonomous businesses competing for his attention and money. An outspoken advocate of free-market economics and fan of the novelist Ayn Rand, he created the model because he expected the invisible hand of the market to drive better results. If the company’s leaders were told to act selfishly, he argued, they would run their divisions in a rational manner, boosting overall performance.

Instead, the divisions turned against each other—and Sears and Kmart, the overarching brands, suffered. Interviews with more than 40 former executives, many of whom sat at the highest levels of the company, paint a picture of a business that’s ravaged by infighting as its divisions battle over fewer resources. (Many declined to go on the record for a variety of reasons, including fear of angering Lampert.) Shaunak Dave, a former executive who left in 2012 and is now at sports marketing agency Revolution, says the model created a “warring tribes” culture. “If you were in a different business unit, we were in two competing companies,” he says. “Cooperation and collaboration aren’t there.”

…Only so far, Lampert’s experiment resembles a different book: The Hunger Games.

So instituting ruthless selfishness didn’t result in manna? Creating 30 separate business units (complete with executive suites, and boards of directors) competing against each other for resources didn’t make the company run better, but instead has them on a deathwatch.

But there is an upside to Lampert’s Darwinistic approach: if Sears Holdings needs to be liquidated, many of the business units could be sold off as stand-alone companies, so he’s got that working for him.

The Bloomberg article is a fascinating look at what happens when Randite philosophy meets the real world of business. We’ve seen how it works in public policy, so is there any wonder that Dorothy Parker gets the last word:

“Atlas Shrugged is not a novel to be tossed aside lightly. It should be thrown with great force.”

The body-count of laissez-faire economics

Let’s be real: the explosion at the fertilizer factory was completely preventable. If Grover Norquist and his ilk were not so busy trying to starve the beast and bathtub-drown it for the 1%, there might have been some reasonable inspections that would have at least warned people that this was likely to happen.

Instead, over the past five years, exactly six fertilizer plants have been inspected. There are many more explosions waiting to happen. How is this possible, you ask?

In the US, there are more than 170 companies making 70,000 different chemicals, totaling $750 billion revenue, and so it only seems logical that Congress funded $10.5M for inspections. You can do the math. It is beyond preposterous.

And of course, we should thank Chimpy for the miracle of self-regulation and reporting that is supposed to make up the difference.

As for Texas, well, what kind of zoning laws would allow a bomb-making plant (remember, chemical fertilizers were part of the swords to plough shares at the end of WWII, but the industry really did result from bomb making) in a populated downtown, walking distance to the hospital and elementary school, and with several senior housing facilities also in the radius of the blast?

It all adds up to a perfect storm of Ayn Rand style selfishness and greed, and now it has a body count.

Atlas Shrugged, Pt. 2

Hey guys, did you know that Atlas Shrugged 2: The Strike was released? Me Neither! And there I was making fun of it last year when they were begging people to donate money to it and asking unpaid labor to work on it. Galt, indeed.

Here’s some reviews (from Rotten Tomatoes):

“Seriously, if this is the best promotion of itself that the free market can manage, it really would benefit from the help of a Ministry of Culture or something.” — Village Voice

“A disaster as a film, Atlas also is laughable in its presentation of Rand’s ideology.” — Philadelphia Inquirer

“The determined, if questionably talented, cast and crew of Ayn Rand devotees continue to hack their way through the lionized author’s obtuse prose.” — OK Magazine

“Rand’s detractors will hate the movie as much as they do her, but her fans will be satisfied …” – Sacramento News and Review

Maybe if they added sparkly vampires to the Director’s cut…?

Anyway, it looks like it was released right before the election in November (perhaps to persuade assholes and libertarians to vote?), and according to the IMDB it is estimated to cost about $10M to make and to date it has earned $3,333,823.

The market has spoken! Please, dear God, no Part 3, which I assume is when The Speech (a 50-page screed by one character) would be spoken.

Idaho Goes Galt?

BOISE – Coeur d’Alene Sen. John Goedde, chairman of the Idaho Senate’s Education Committee, introduced legislation Tuesday to require every Idaho high school student to read Ayn Rand’s “Atlas Shrugged” and pass a test on it to graduate from high school.

When Sen. Bob Nonini, R-Coeur d’Alene, asked Goedde why he chose that particular book, Goedde said to laughter, “That book made my son a Republican.”


Sen. Cherie Buckner-Webb, D-Boise, questioned the choice of the book for a graduation requirement. “We have a wide variety of children who will be trying to graduate and reading and grasping some of these things, and their cultural context may be different,” she said.

Goedde responded, “I don’t plan on moving this forward – it was a statement.”

Nevertheless, as a formally introduced bill, the measure will be read across the desk in the Senate Wednesday morning and will receive a bill number; it will be among the bills posted on the Legislature’s website for the session and preserved in its records.

OK, it is not moving forward, but there it is.

“When I read Atlas Shrugged, and it’s been probably 30 years since I read it, but it certainly gives one a sense of personal responsibility,” Goedde said.

Like the personal responsibility to introduce legislation you have no intention of moving forward, wasting everyone’s time and money for your own personal vendettas? Congratulations, sir, you have learned the true essence of Atlas Shrugged: Fuck you, I got mine. What an assrocket.


Outsourcing the offshore, literally

This is an example of what can happen when local governments privatize public services:

Tomas Lopez, the 21-year-old lifeguard, was fired on Monday after he left his station to help a man who had been pulled out of the water in an unprotected area of Hallandale Beach. According to the Orlando Sun Sentinel, Lopez and an off-duty nurse tended to the man, a 21-year-old from Estonia, until paramedics arrived. The man—who is recovering at a local hospital—was in a “swim at your own risk” area of the beach about 1,500 feet south of the boundary lifeguards are expected to patrol.
“We are not a fire-rescue operation,” Jeff Ellis, head of company that manages the lifeguards, told the paper. “We are strictly a lifeguard organization—we limit what we do to the protected swimming zones that we’ve agreed to service.” The company has provided lifeguards for the area’s public beaches and pools since 2003.

And so the issue is?

“We have liability issues and can’t go out of the protected area,” Lopez’s supervisor, Susan Ellis, told WPTV. “What he did was his own decision. He knew the company rules and did what he thought he needed to do.”

Sweet baby Jeebus with a life preserver. Rescuing someone outside of your imaginary border could open you up to a lawsuit, while letting him drown is OK? I’d like to know what the city manager has to say about this.

“We take the safety of all visitors to our beaches very seriously,” Hallandale Beach City Manager Renee Crichton said in a statement. “Whether they are in a protected area or unprotected area, we believe aid must be rendered.”

One of the common complaints I hear from Wingnuts about Public Employees is that they say that something “is not my job.” And so here is a private sector company in charge of lifeguards saying that rescuing someone is not their job. But we probably won’t hear a single peep about that.

(The Lookout)