Tuesday, January 24, 2012

Christine Lagarde is the bee's knees

Although she will most likely be viewed negatively by the world press and Wall Street due to her stark honesty, she is now a leading individual in the analysis and understanding of the world economy. She is also the managing director of the International Monetary Fund. Born in 1956, Christine Lagarde is one of those rare individuals that combines brilliance with pragmatism, which is illustrated by the fact that instead of using the IMF to trumpet a fractured world economy, she instead has very clearly illustrated its problems--namely Europe. Regardless, it would seem the IMF has found the right woman for the job--even though she probably won't make any friends on Wall Street. I think she's great.

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


Sunday, January 22, 2012

Check and Balances on Capitalism

It seems that the America political elite needed to find a way to maintain cash-flow into their coffers, and thus the Citizens United case was viewed favorably.

Now I don't necessarily agree that the political elite (who do have close ties to the moneyed) see themselves of overlords or societal masters, but recently the interests they represent belong to a shrinking margin of the nation. So even if they are not intentionally only benefiting their wealthy elite companions, they are in fact still guilty of not listening the rest of the population.

So it seems that what is happening is the the political elite have turned away from the public for support, for ideas and no longer provide service to the people. They've given up on us. And this corresponds to increased connections between the wealthy and business class with the political class. After all, they went to the same schools and often have the same acquaintances. An aristocracy is forming, and we're not in it.

Therefore, I believe that if we have a representative democracy, where "crony" capitalism is the dominant economic structure, and the influx of money into the representative democracy is encouraging the growth of an aristocracy, not to mention that aristocracies are essentially un-American and un-democratic, then the "crony" capitalism has had a negative effect on the political system, and our "crony" capitalism must be better controlled as to not create aristocracies in governance.

Thus, I have some solutions and I consider them to be checks to the capitalist system. Because if we have checks and balances in government to stop tyranny, then the same must go for capitalism. Furthermore, these checks are not regulations, they would be laws.

First, a Corporation is not a person, but rather a business entity. And though I believe that this business entity should have property rights, (to buy and sell goods and services) seeing as it is in fact property itself, I do not believe that it has personal rights--not protected under the Constitution. Therefore, Citizens United is an abomination.

Second, the the Corporate business entities should not unduly or adversely effect markets. A Corporation must not have the ability to buy or own another Corporation. This leads to a greater domination of the free market, and by default limits freedom of consumer choice in the free market. Even Adam Smith warned of the "conspiracy against the public" and by allowing Corporations to grow we have only opened the door to allowing them to have dangerous influence and set market price.

Third, the statute that declares that a Corporation must put the interests of it's shareholders ahead of all other competing interests is nullified. This frees the board of a Corporation from putting profit over people.

Fourth, limited liability is no longer in effect. When Corporations break the law, there are not merely monetarily responsible, but the guilty parties within the Corporation are personally responsible for the decisions that they make in the name of the Corporation. In egregious cases the Corporation itself is dissolved through a Corporate death penalty, assets are sold, and victims are compensated.

So finally, only through the checking of power in the capitalist system will we have the responsibility that led to sound governance. All systems need rules. After all, if we take the referees out of a sports game, it only leads to chaos. And capitalism, or more aptly the free market system, is also a game. Without rules, it will surely crumble to disaster.