The Selfish Market

Last night was the last of the Presidential Debates. Kudos to Bob Schieffer as moderator for trying to make it interesting by asking some tough questions and encouraging some actual dialog for a change. But the result was still uninspiring. Both candidates failed to address the actual issues facing the economy. When asked about how to fix things, they both espoused plans (albeit different ones) to provide financial relief to citizens. Yet this is little more than distributing Kleenex boxes and touting it as a cure for the common cold. Nobody talked at all about the credit crisis. Nobody talked about the collective crisis of faith. Why? Probably because it’s complicated, and the majority of voters, especially the ones undecided at this late date, are looking for who’s got the plan that will benefit them most. It’s easy to react to what’s on the immediate horizon and opt for what feels good in the short term. It’s a lot harder to sacrifice short term for a longer term goal. It’s harder still when that goal is a collective goal, not a personal one.

So is the root of the problem selfish people? Yes and no. It’s true that people are inherently selfish on a whole. Yet curiously, the whole economy is dependent on that. It counts on people acting independently and in their own self interest. The market is down another 300 points this morning because people are bailing from it, trying to protect themselves. If everyone stayed in, the value would not have tanked. If people could coordinate and operate as a whole for the collective good, then values would not have crashed. However, values would then also not exist. It would equate to price fixing, and this defeats the basis on which a free market is based. The result is that the market is, by definition and necessity, selfish.

Public companies exist to bolster the value of the shareholders. This is not a criticism, it’s a fact. They are required by law to operate in the interest of their stockholders. What’s in the interest of the stockholders is a larger share price and bigger dividends. This means that companies operate on the same underlying principles as the market. That is, companies are selfish.

The GOP seems to have this undying belief in the free market. It will fix everything and make our world a better place. But that flies in the face of logic. Companies are selfish. They will not operate in the best interest of the community as a whole. The result is that they cannot and will not make investments for the common good. Consider a road that is needed for a company to transport their products. It is not in the interest of any company to build that road. It is in each of their interests to have someone else build the road so that they can use it. The only way it’s to a specific company’s advantage is if they can build a private road and prevent their competitors from using it. More generally, this is true of education, health care, and other needs of the nation as a whole that are not in the best interest of any company to support. Granted, if no one does this, all companies will suffer, but there is no incentive for them to operate collectively for the common good. It’s better to play “chicken” and hope someone else steps up and does it before it’s a crisis.

This reality sort of defines the role of a functioning government. To fund investments for the common good. This includes the common good of individuals as well as common good of corporations. Is this “spreading the wealth around,” as McCain kept accusing Obama of? Yes. But let’s not confuse that with Socialism. Taxes are necessary to fund these common-good investments. Without these investments, our economy and our way of life will collapse. Our very existence is dependent on making these investments. Despite Sarah Palin’s claim to the contrary, paying taxes is absolutely patriotic. It funds our existence and our ability to survive as a country and a culture. What could be more patriotic?

There are absolutely arguments to be had about which investments fall under the umbrella of the common good and which are frivolous. But there can be no rational argument that raising taxes to fund these investments is inappropriate. There can also be no argument that we shouldn’t be taxing at rates to fund the investments we are making.

Now I can’t say with a straight face that I like paying taxes. I don’t like having to pay for gasoline either, but they are both necessary to maintaining my lifestyle. I contend though, what irks people about paying taxes is not so much the absolute dollars they pay, but the relative pain of the payment compared to everyone else. That is, most people are willing to pay their fair share, and what makes it fair is confidence that you are paying what everyone else is. This would be true of any other good as well. Nobody likes paying $4/gallon for gas, but it only really hacks you off when you find out your neighbor is only paying $3.75. When it comes to taxes, the burden is more relative pain. This is the basis of the graduated tax rate plan. It tries to even out the pain so that everyone can afford a basic quality of life. So it is damned annoying to know that the wealthy are able to game the system and pay less in taxes than I do. The tax code needs revising. Loopholes need closing. And people who make more money should pay more taxes. This is not a socialist ideology. It’s as American as baseball.

One thought on “The Selfish Market

  1. I wanted this to show somewhere on your blog too.

    This after McCain claimed in last nights debate to have not liked how negative the campaign has gone in the last two weeks. He is truely unbeliveable. And, I believe his exact words were “I don’t care about a washed up old terrorist”. Guess he was lying when he said that too. He apparently still cares a great deal. One can only hope that this is the last straw for many people and he goes down in flames in the election just to show him how low he’s really gone.

    Kim

    WASHINGTON (CNN) — Republicans launched an enormous wave of phone calls Thursday blasting Barack Obama for “having worked closely with domestic terrorist Bill Ayers,” party sources said.

    The calls are part of a $70 million last Republican push to get out the vote for John McCain on November 4, using calls, mailings and door-knocking in battleground states.

    “Hundreds of thousands” of calls are being made in at least half a dozen hard-fought states including Virginia, North Carolina and Ohio, the sources said.

    Some are recorded “robocalls,” while others are live to comply with relevant state laws. The calls are being paid for jointly by the Republican party and the McCain campaign, according to a script provided by the Republican party.

    The “robocalls” criticize Obama national security, his opposition to an Illinois measure that called for doctors to provide medical care to babies who survive botched abortions, his connection with former ’60s radical William Ayers and his response to the financial crisis.

    An Obama spokesman said the “dishonorable, dishonest” calls were a desperate move.

    “John McCain’s campaign has admitted that the economy is a losing issue for them, so he’s chosen to launch dishonorable and dishonest attacks like this,” Obama national spokesman Bill Burton said.

    The calls come a day after McCain and Obama accused each other of running negative campaigns.

    Republicans have been hammering Obama for weeks for his association with Ayers, a key figure in the Weather Underground of the Vietnam War era. The radical group took credit for a number of bombings, including of the Pentagon. A case against Ayers was thrown out of court because of misconduct by investigators. He is now an education professor in Chicago and has served on a board with Obama.

    McCain said he did not care about “an old washed-up terrorist” like Ayers Wednesday night at his debate with Obama.

    Obama condemned Ayers’ actions of 40 years ago, and said the former radical was not involved in his campaign and would not advise him as president.

    (Script of the call after the jump)

    Here is the text of the call referring to Ayers:

    “Hello. I’m calling for John McCain and the RNC (Republican National Committee) because you need to know that Barack Obama has worked closely with domestic terrorist Bill Ayres, whose organization bombed the U.S. Capitol, the Pentagon, a judge’s home and killed Americans. And Democrats will enact an extreme leftist agenda if they take control of Washington. Barack Obama and his Democratic allies lack the judgment to lead our country. This call was paid for by McCain-Palin 2008 and the Republican National Committee at 202-863-8500.”

    The only deaths positively attributed to Weathermen bombs were three members of the group itself who were killed when a bomb they were working on exploded prematurely. The Weathermen, along with the Black Panther organization, were investigated for another bombing that killed a San Francisco police officer, but that bombing remains unsolved.

    The son of a New York State supreme court justice says that the Weathermen were also responsible for a bomb at his father’s home in February 1970, basing his claim on a letter from Weather Underground member Bernadine Dohrn (Ayers’ wife) sent to the Associated Press in November promising more bombings. Investigators, however, believe that letter was referring to the bombing of a New York courthouse in October.

    The Weathermen claimed responsibility for the courthouse bombing, as they did other bombings attributed to them. No one claimed responsibility for the bombing of the judge’s home, and the the case was never solved.

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