Economism part 2 of 2

Tbook jacket for Economism red wth black Xhis is a continuation of a really long post posted recently. I have to take the book back to the library but can’t resist sharing some more of the book before tomorrow.

Chapter 4 is titled “You get what you deserve” and encapsulates various justifications for inequality.

He starts with some stats on property and the fact that minimum wage is “below the poverty line for a family of two, let alone a family of four.” It would seem obvious, with companies making massive profits — or even small net profits — that the owner class could afford to pay more than minimum wage. Because like Chris Rock said, the fact that we have to have a minimum wage law at all means employers wouldn’t pay you at all if they could. And by gosh, they are coming after every labor law that ever was passed including or maybe especially minimum wage.

Through the “science” of economism, however, conservatives can “prove” that increasing wages will not reduce poverty, but will increase unemployment. The argument starts out flawed because employees have NO POWER TO SET WAGES unless they are in a union. Even then, employees must be willing to go on strike and try to cost an exploitive employer so much in lost profit that they will agree to pay fair wages. Being on strike requires back up funds, courage, and risk. People who were the original strikers risked their lives and were killed by POLICE for daring to demand living wages. That’s how bad American employers don’t want to pay wages: they would rather kill people that make a nickel less for themselves.

If you CHOOSE to not work for $X per hour, it is not because you value LEISURE more than a millionaire. That is absurd. More likely you can’t afford to LIVE on $X per hour so have to try to find another company to work for that pays a living wage.

Since the basic capital principle is WAGE WORK or DIE (unless you are already wealthy), people who “choose” leisure would have to be said to be choosing death. Of course, the Republicans think that that choice of wage work or die is the NATURAL order of things. Therefore, providing safety net programs like unemployment insurance only serves to enable lazy people who want to be able to “choose leisure” to do so. The horror!

“As in any market, the NATURAL price. . . is the one at which supply equals demand: the number of people willing to work for $6 per hour equals the number of jobs available at that wage. The people to the left of the supply-demand intersection — those willing to work for $6 per hour or less — have jobs. The people to the right who demand more than $6 to give up one hour of their TIME, are not employed; but this is actually a GOOD THING, because they prefer ONE HOUR OF LEISURE time to $6.* If one of them were to get a job, society would actually be worse off: either that person would be earning less than the value she places on her own time, or her employer would be paying her more than her work is worth. This is the best of all possible worlds.” (pp. 66-67)

  • This correlation is ridiculous. No one chooses no to eat or not to be able to pay rent to enjoy LEISURE TIME. Only the rich have the luxury of choice between “work” such as they call it and leisure. Neither choice would adversely impact their ability to obtain shelter or food or anything essential to contemporary living (like OMG a cell phone!) or a refrigerator).

The author (remember he doesn’t agree necessarily, he is just explaining historical economic thoughts) cites William Baumol and Alan Blinder who declared in their textbook: “a willing worker is condemned to remain unemployed because the wage she is offered is ‘too low.’ ” (p. 68)


How appropriate that they used “she” in this instance, since women invariably seem to end up collectively never earning equal pay. Again, the whole economic argument over wages ignores another vital factor: wage secrecy. If a woman cannot know the truth about how much a position has been budgeted for and so accepts a lower wage — as if earning a living was like bargaining for a used car — then she cannot become employed at a fair rate of pay because employers will always try to get workers to accept the least amount possible. They do not negotiate wages in good faith. Human resources are not on your side; their job is to screw you out of the most benefits and pay as possible. Things like arbitrary grids for starting salaries that “policy” mandates “everyone” start at the bottom. Except everyone turns out to be the women or other people who actually believe that HR wouldn’t lie to them. Master’s degee should allow you to start at least mid-grid, think again. Start at the top of the grid because of degrees and years of experience, oh no then there would be “no where for you to go” (what about the next grade up?).

Historically and currently women are paid less because of patriarchy and misogyny. This applies to equal pay, promotions, benefits, and much more. It is why women’s ideas are not taken seriously when they speak up but a man who repeats what she says (hepeating) is hailed a conquering hero.

When it comes time for promotions and raises, the boss will remember the man’s brilliant suggestion that got all the acclaim and any attempt by the woman to say, “Hey that was my idea!” is treated with derision and bitchiness one way or another.


The men, like the evil Milton Friedman, to whom we owe so much of our economic misery, have been praised to the skies for “theoretical”  economic beliefs not founded on reality or provable by any arithmetic. He (like pretty much every male economist that has gone before) ignores any aspect related to women when making his pronouncements. Indeed, no reference to many aspects of employment. Women and children were always paid less, and still are paid less, just the percentage less has changed. And because of WAGE WORK or DIE, someone will always be willing to work for less so they can live. So any theories that do not take this reality into consideration cannot be valid.

There is pay secrecy already mentioned, then there is the common practice of wage theft (like requiring someone to be on premises and kitted up before allowed to punch in, and many more ways), the general adversarial nature between an employer who has all the money and time in the world versus your rent is due in 2 weeks. Then the employers also have the cudgel of “at will” employment (discussed in previous post on this book)  so people NEVER have economic security; we can all be fired at any time for any reason or no reason at all.  Workers can’t complain about poor safety conditions, maltreatment by supervisors, or be “insubordinate” by pointing out management stupidity without fear of retaliation.

Given that there will never be 100% employment of all the people willing and able to work so to speak, the unemployed serve as a vast pool of threats to make sure you shut up, take whatever they pay you, and suffer whatever conditions the employers choose to provide. Because YOU can always be replaced.  With a WAGE WORK or DIE economy, people have NO CHOICE to hold out for a “mutually beneficial” exchange. The employers really are not the same as “buyers” and EMPLOYMENT is definitely not the same as selling products or freelance services.

The “gig” economy, meaning you are freelance and can set your own hours and work “at will” — and carry all the costs of insurance, Social Security, and so much more, as an INDIVIDUAL fails to make a convincing case as being “liberating” from steady employment.

You cannot budget uncertain income. You only have so many hours of the day to earn that income. Part-time workers experience similar problems when they are not guaranteed a minimum number of hours per week, apart from the whole no benefits etc. inflicted on part-time (mostly women) just because THEY CAN.

Milton Friedman patronizingly described the minimum wage as ‘about a clear a case as one can find of a measure the effects of which are precisely the opposite of those intended by the men of good will who support it.’ ” (p. 69)

Friedman actually believed (RIH) employers would not pay “people more money than their work is worth. . . “ but so far as I know, never addresses the fact that employers DO NOT PAY PEOPLE what their work is worth in the first place.

Friedman’s conclusion (!!!) was that minimum wage increases poverty! How convenient for the employers who want to rationalize paying people shit. He could not, of course, cite any proof that this was true.

Other conservatives took up the battle cry of we’ve got ours, you can suck it. Most notably Ronald Reagan (RIH):

“The minimum wage has caused more misery and unemployment than anything since the Great Depression.” (1980 campaign speech, p. 68)

The actual conspiracy, not imaginary, to have the conservative faction (aka wealthy) take over the United States democracy began with the Powell Memorandum and continues on today. Frighteningly close, nah the heck with it, they have already destroyed any pretense of democracy or a republic or justice or freedom (debt peonage, wage slavery). The pursuit of happiness never applied to the little people of course since clearly they never had the time or economic security. Women were actually chattel back in the day, and kept barefoot and pregnant, forbidden from any but the most menial or drudgery work and then their wages belonged to husbands.

As part of the plan, John Birch Society members and other crazy corrupt religious zealots put their money into anything and everything that would promote the conservative business interests and destroy the Democratic pinko socialist New Dealers.


Albert Coors, sitting on a fortune from his beer (had I know this I would never have drunk a drop of it back in the day), and a few cronies would hang out trying to figure out ways to stop the assault on their dominance. Coors ended up funding a conservative “think tank” (The Heritage Foundation I think (too lazy to check at the moment); the sole purpose of which wasi to put out spurious “research” papers and talking points in propaganda designed to infiltrate the minds of the susceptible and unquestioning, and give weapons to justify ripping off regular people to the advantage of businesses.

Hence, all the Chambers of Commerce, from national to the local level, are basically political machines aimed at getting government to give them tax breaks and other boons, while making sure that people get nothing as basic as a minimum wage — which has remained under attack since the New Deal and seems like with the gang of thugs in control at the federal and at a majority of state levels, we may not be able to hold on to the minimum wage for long. More now than any time in history.

Examples of the propaganda fake research institutes include the Federalist Society, bunch of conservative lawyers. A nearly certain sign that an organization is a corrupt conservative propaganda machines relates most often to the most patriotic and reverential names that harken back to the days of the Founders, when men of property ruled the country, others were worked to death or injury and discarded along with their children, and women were basically breeders for even the most drunken lout of a wife beater because they had little economic choice in their lives.

Cato, Heritage, and the Manhattan Institute have reliably attacked the minimum wage for decades, all the while emphasizing the key lesson from Economics 101: higher wages cause employers to cut jobs.” (f8) (p. 68)

These false “facts” in the conservative alternate reality are repeated constantly by speakers influenced by the “think tanks” without critique and many a columnist has built up a reputation (undeserved) for their clear understanding of economism further perpetuating the lies. Writers at The Wall Street Journal, economist Richard Vedder, is one: “If the price of something rises, people buy less of it — including labor. Thus government interferences such as minimum-wage laws lower the quantity of labor demanded.

No, it doesn’t. Saying so repeatedly will not make it true.

The author cites Tim Worstall writing for Forbes who offers a “mathematical” proof of concept. It is founded in circular, that is to say, bad “logic” and he simply REFUSES TO BELIEVE theoretical arguments that support higher minimum wage. Dude, your belief does not matter!

Another one of those patriotic killers of democracy, The American Enterprise Institute and the National Review magazine describe a minimum wage as a TAX on businesses by forcing them to pay a non-living wage for “unskilled labor.” As if the very precious minutes of our lives were worth nothing beyond the lowest possible wage. The pretense that they would only want to pay under a minimum wage for “unskilled labor” makes me laugh derisively. Just read history and you see the proof of worker exploitation at every turn.

Economists just see that exploitation as NATURAL when it is completely unnatural. The AEI or the National Review claimed, “And if there’s anything economists agree upon, it’s that if you tax something you get less of it.” (f9) (p. 69)

Well, not exactly. If you tax something, like sales tax, the business selling the product GETS THEIR FULL ASKING PRICE, not less. The sales tax goes to pay for the things for the common good. Things that businesses need too: electric grid, roads, bridges, etc. So it goes for the income tax. In this case you do get less cash in hand, but you don’t get NOTHING for the money. You get a vast military industrial complex, safe food, clean water, breathable air, national parks, and much much more. We’d all get much much more if the bastards would provide universal single payer healthcare but just like their opposition to the minimum wage, the people with money don’t want to share. Even when they have more money than can be spent in lifetimes, they would rather die than give a nickel to the common good. This also explains their persistent resistance to paying a living wage. First, they don’t have to. Second, they don’t acknowledge that even the most unskilled labor contributes more than minimum wage to any task that become the productivity that drives the economy and keeps the rich rich.


The author disputes this talking point very effectively on page 69+ citing studies that do not show an increase of unemployment when minimum wage is raised. The hateful gang of economists at the University of Chicago (Friedman et al) just keep repeating their mantra that a higher minimum wage would “make it noticeably harder for low-skilled workers to find employment,” but once again, prominence and connections and being “smart” does not make them correct.

You know, I’m inclined to think that there are no low-skilled jobs anymore anyway. People who sort recyclables have to know what they are looking at, be able to read, and be physically strong. But I am sure that that would be considered low-skill. There are almost no jobs that can be performed TODAY that can be done without literacy, unlike say, a stable hand, back in the day. Farmers sure as heck have to be skilled at math, seasons, and so many other factors, farming cannot be considered low skill. Pretty much every job requires a commute so workers have to be able to drive a car or take complex public transit and read the routes, and manage their time.

But all that is beside the point considering that PEOPLE NEED A LIVING WAGE. All the economic theories in the world cannot justify forcing people to work for less than it takes for food and shelter and utilities, and realistically in contemporary society, cell phones and television and the Internet. Plus transportation; not just to get to work but to get to the grocery stores because we are not all farmers able to grown our own food anymore, to participate in the community, to attend school, to visit family and friends, and more.


There is a disturbing trend now that “poor people” should not be burdened by owning a car. But of course, a car provides instant transportation, the most efficient, and the most economical (especially for groups of 5 for example). But the rich are seeking to ghettoize the rest of us to suck even more hours of our lives out by consigning us to slow public transit that doesn’t even go from point a to point b, or run after 10:00 at night, and so on.  My city council asserts that we cannot afford to build more ramps, but geographically speaking, transit cannot ever be adequate.

Socially speaking, we are in the Midwest so many of us live in the country or have family in the country, and regular work force people can’t afford a taxi (2 ways) to go 25 miles out to visit family. The studies I have seen place no value on our time, not even minimum wage, when calculating the cost of transit that takes 1 1/2 hours to get from my house to the doctors. ONE WAY. And they never consider that parents with several kids can all hop in a car and get going and get to their destination like a movie, and get home again without it being a full day junket, requiring bathroom breaks and meals because of the 5 or 6 hour span minimum.

Plus transit is still subsidized! And they bitch about the cost of the subsidies. I support FARE FREE transit. I mean, if you have to subsidize it so heavily anyway, why pick on the people who can least afford transit by charging them even a minimal $2.00?

The answer is the same as the hostility for the minimum wage. Conservatives don’t think people deserve a “free lunch” of any sort. I’m surprised they have allow transit subsidies since THEY don’t have to use it. Maybe they like having the rest of us off “their” roads (that we pay taxes for whether we drive a car or not). For that matter, we are subsidizing the parking ramps as well since they are built with taxpayer money. Nope, the point of INCREASING THE PRICE or charging all fees directly results in people who have the least being forced to spend a greater percentage of earned income for the necessities of life because that way we will be forced to self-ration and consume less. Even when it is something like PAYING FOR PARKING! Why did it evolve that workers have to pay for the privilege of parking in order to have a job? Not everywhere of course but often enough and persistently enough and unquestioned. So we end up working for an hour or more just to pay the parking bill for working a full day. Transit is not cheaper. In addition to paying two-way fares, there is the loss of precious time, the inability to do “chain” trips, such as work, grocery store, dentist, day care, etc. without paying a full ticket price each time plus per person if you take transit to pick up kids.


Another factor never considered is the fact that employers get to deduct the cost of paying for employee parking as a business expense but employees do not get the same break. If they pay workers more, those are still all costs of overhead and are tax deductible so it is not a direct dollar out of their profit. One dollar to a millionaire is scarcely worth picking up off the floor, but might be worth a day’s food to a minimum wage worker.

Productivity should matter to employers. However they want it without paying for it. They would rather force you to take a bus to work, getting up an hour or more early to do so, and being tired before you start your day because of it. Then they certainly don’t give a shit if you are too tired when you get home to prepare a home cooked meal (after you get in your car and drive back to a grocery store). No, they don’t consider the physical and emotional cost of the productivity needed to live life. But by gosh, they will bitch about your obesity and your failure to exercise and clim that you are not eating smart or living right and costing them more money for medical costs.

Conservatives live in denial that in a consumer based economy, paying workers more allows them to spend more money and that this stimulates economic growth. It is NOT lower taxes on people with so much money they don’t have to spend it or literally can’t spend it in their lifetime.

Because the employers do not provide any feedback to employees about how much of their productivity exceed their wages, it is difficult for employees to assert that employers could pay more an still make a high profit. Because employers don’t want to share. They want to exploit. They do not care about the common good; they only care about their good.


All this is why I support unrestricted basic income. I was startled to learn that Friedrich Hayek assumed a guaranteed minimum income would exist by now. (f20, p. 72) Milton Friedman on the other hand supported Earned Income Tax Credit, which theoretically would pay you cash if you made so little money that you deserved more than just an income tax refund. I think there were some restrictions on it though that made it not as good as it sounds on the surface. Any time you are talking tax credits there is an assumption that you earn enough money to owe taxes at all. But since this was supposed to not just zero out, but pay back additional minimum amount, it might be a little different. However, since Milton Friedman supported it, it must be bad.

The author cites some of the more scurrilous Republican candidates who, in the 2016 election, claimed to “have only the best interest of the poor at heart.” (p. 73) Marco Rubio worried that people would get paid nothing because business would replace them with machines. Ted Cruz said “the minimum wage constantly hurts the most vulnerable.”  Rand Paul declaimed the usual canard that if minimum wage is above “market wage” it “causes unemployment.” Said as if he nows that for a fact. Jeb Bush did a variation on the theme of the supply and demand claiming that the private sector can best determine wages. This is demonstrably false. And our favorite let them die Congressman, Paul Ryan, declared that higher minimum wage is “bad economics” and “will hurt the economy because it raises the price of labor.” (f22)

Oh grr, here’s a quote that makes my blood boil:

Or, as the financial commentator Barry Ritholtz put it, “raising the minimum wage works as a wealth transfer from shareholders and franchisees, to minimum wage workers.” (f26) (p. 74)

No, profits in excess of what is needed to stay in business are made on the backs of the underpaid workers. That is the real wealth transfer. Now to I think they even changed the law so that corporations have no obligation to the common good but are only beholden to maximizing SHAREHOLDER profits. These shareholders who had so much extra money to start with that they could invest it in a business and receive an UNEARNED income beyond the wages of the minimum wage workers dreams.

Unions, of course, were an early and frequent target of economism. Hayek argued that unions are bad both for workers, because “they cannot in the long run increase real wages for all wishing to work above the level that would establish itself in a free market,” and for society as a whole, because “by establishing effective monopolies in the supply of different kinds of labor, the unions will prevent competition from acting as an effective regulator of the allocation of all resources.

Monopolies are great when corporations manage it (virtually, or kind of not, given the failure to enforce the laws on the books against them). But oh, my, workers gathering together for a living wage and benefits ends up being considered a MONOPOLY? So alternate reality!

Competition is touted as the best of all possible worlds but it is not. If the competition is “I will do that job for $10” contrasted to “I will do that job for $9” then we all will perish. With globalization, this is already pitting local workers against poorer people in other countries without any labor protections or safe environments or pretty much anything just short of slave labor. The race to the bottom as it is commonly known. But it is only the bottom for workers, not for the profiteers.

Friedman, of course, opposed unions and used false economism principle to justify this aggressive position support the Orwellian named “right to work” laws. Which basically undercut the union by providing union benefits to people who do not have to pay the union dues. This works to the advantage of business and conservatives on multiple levels. First, it reduced the amount unions have that can be pooled to sustain a strike. Secondly, it reduces the amount of money unions have to try to compete with wealthy business owners to buy politicians’ votes. We haven’t been able to rely on politicians doing to right thing for the common good since FDR maybe.

Without unions, workers have no bargaining power. The reduction of union workers in the United States has contributed to that stagnation of wages and the escalation of inequality of wealth.

He lists a few stats on the differences between workers and CEOs, hedge fund managers, and financial professionals. Here is a sample from page 76:

“Since 2010, the top 0.1 percent of households have taken home, on average, ore than 10 percent of ALL INCOME in the United Sates — up from less than 3 percent in the 1970s.”

CEO compensation “has grown by more than 900 percent” while “wages for frontline employees have gone up by only 10 percent.”

“Robert Nardelli, for example, was paid more than $120 million for six years of work at Home Depot and then received a $210 million severance package when he signed in 2007, men though the company’s stock price was flat during his tenure. . . .”

“Twenty-five fund managers made at least $175 Million each, and three made more than $1 billion (f35) in 2014.”

“Surely something must be wrong with a world that pays one person more than $1 billion a year to manage other peoples’s money. (p. 77)

And we know they are doing a crap job of financial management too.


This one just kills me. Of course pay does not reflect productivity. Everyone knows the laggards and the clever sort who spend more time evading doing their job than doing the actual job would take. Some of us are held to “higher standards” which always seems to be the people who actually do the work, so we get the double whammy of doing the job plus caring plus going the extra mile AND still we (mostly women from my experience) are not judged even as equal producers as the ones who spend half their days looking busy.

The author agrees that economism that claims people are paid for their productivity or their contributions or the bottom line, whatever, do not actually get paid based on their productivity. In this section he describes some of the idiocy that results from this mantra.

“According to the principles of economism, the people raking in the big bucks are worth every penny.” (p. 77)

He cites the stomach-churning salary paid to the evil Goldman Sach’s   CEO, Lloyd Blankfein. So if he  “made $24 million in 2014, that’s because he was worth $24 million to his company.” (f9)

In a comparison to regular workers, he quotes Henry Hazlitt: “The more [an individual worker] produces, the more his services are worth to consumers, and hence to employers. And the more he is worth to employers, the more he will be paid.” (f18)

Ha ha ha ha ha ha ha. ROTFL. This has NEVER been true. The only reason employers ever pay more than they absolutely have to is by government regulations. The reason CEOs et al get paid such outrageous amounts has nothing to do with SUPPLY AND DEMAND and has everything to do with corruption, collusion, and because they can get away with it because the workers view of the CEO contributions are never considered. But hey, we are all just a bunch of ignoramuses who don’t understand high finance and economism.

The author aptly describes this contrast as a “winner-take-all reward scale” but from my point of view, such thieves are NOT WINNERS at all. They are destructive forces beyond even the days of indentured servitude because at least then you knew you were making a devil’s bargain. Of course it was not just, fair, but it was legal and that was all that mattered. Theft only counts if a law forbids it. Exploitation is “at will” for wage workers. And by gosh, they tell you how lucky you are to have a job at all at every turn just to keep you aware of their ability to fire you “at will.”

Conservative politicians repeat that your desire for a living wage makes you the “taker” when it is obvious to anyone rational that the wealthy are the true takers and always have been. Unemployment insurance is reduced, capped, and supervised so closely (at what cost!?) to make sure workers don’t luxuriate around being paid to not work. Safety nets that make it possible to live without accepting exploitation work situations are so minimal that they scarcely can be called safety nets at all anymore.

The conservatives also wage a psychological war against workers, the poor, the 99% by telling us that we are poor because we deserve to be poor. QED. We are undeserving because we are defective in some way: lazy, drug takers, women, whatever. And even if we were deserving of better breaks in life, economism explains why we are not rich and can never be rich because inequality “is the inevitable outcome of a system in which compensation is determined by the free exchange of labor. And it celebrates unequal outcomes as the best possible way to MAXIMIZE SOCIAL WELFARE.”  (p. 78)

He describes a few of the deserving CEO compensation incidences: Michael Ovitz, fired after a year at Disney, receive $140 million in severance.  The author cites former senator Phil Gramm  for declaring Ed Whitacre’s severance of $158 million from AT&T to be “an outrage” and that Whitacre was the epitome of an “exploited worker” based on the questionable assertion that he deserved even more pay because he “added billions of dollars of value” (p. 78) to the company. I don’t think he PERSONALLY did squat to add that amount of value. Given the limited actual direct involvement in any company decisions, it is as likely as not that even more could have been added to the company if all the workers were paid  A LIVING WAGE instead of providing CEOs more money than they can spend while “working” and massive severance packages — especially when they are FIRED for pity’s sake that further take assets away from the people doing the actual work.

Historical records prove “the simple principle that pay equals marginal product has little to do with how the world actually works.” The author further states, “Nowhere is this more true than in the executive suite. The idea that good CEOs are entitled to enormous rewards is based on the belief that the success or failure of a company depends on one person — what hitstorian Nancy Koehn calls the business version of the Great Man theory of history. Instead, business is a team sport: not only is it impossible to quantify a single leader’s marginal product; it’s hard even to describe it clearly. (f45)” (p. 79)

He goes on to describe how incestuous the relationship between the board and the CEOs are and how that leads them to hand over buckets of cash and perks. Among the psychological factors is the weirdly CEO and managerial staff focus on wanting to keep up with the Joneses so to speak. Our CEO makes more than your CEO as if that overpayment were somehow reflective of the relative value of their CEO and company to another. Plus the CEOs that hop around, once they attain their lofty compensation, simply ask for more at their next job.

Unlike worker bees, they already have more money than they will ever need so they truly can walk away from an unsatisfactory bump up to further compete in the “whoever has the most toys at the end, wins” game.

Can you even imagine a company bragging about paying its WORKFORCE the most money? I can’t. But why is it true for the Great Man, but not the actual people producing the wealth?

Because to pay workers excessively is seen as being a chump. It is also seen as being despicable and cruel, but only from the worker’ point of view and they don’t matter in the world of economism.

The author cites a 2001 study by Marianne Bertrand and Sendhil Mullainarthan who determined that high CEO pay primarily resulted from “dumb luck.” (p. 80)

The very sore point of Wall Street compensation also comes into question regarding the purported “connection between pay and performance” described as “murky at best.” (p. 80) Boy is that being kind. Congress just eliminated the new Consumer Protection rule that required financial managers to serve the interests of their clients over their own. Snort. As if one should even have to say that. Much less, it is of course, not provable, not enforceable, and the usual excuses of “hey, playing the market is risky business” or similar sentiments that allow the traders and banksters to make mistakes and bad bets with impunity. Win or lose, the gamblers pay a service fee. You would think people with money would have more sense than to play such a rigged game. I guess money and smart don’t go together. At the very least, when they entrust their money to someone to gamble with, there should be a penalty for bad bets if for no other reason than to prevent a cavalier attitude about playing with other people’s money.

“But because a bonus can never be negative, individual employees can generate enormous payouts on bets that turn out well while sticking shareholders with the losses on bets that go bad.” (p. 81)

This is a lesson we all learned in 2008 when companies who had to be bailed out still paid millions out in bonuses to reward people based on contract terms that were ridiculous . They also claimed that high salaries and bonuses were necessary for “staff retention” though why anyone would want to retain such staff is beyond me.

The author points out that such bonuses might be “a reward for outsmarting the markets, but they can also be the product of dumb luck — a big bet turning out right or at least not going bad before bonuses are paid.” (p. 81)

He continues this theme of chance discussing “the most lucrative segment of the financial industry” high-end asset management. This is a refined world I can’t even begin to imagine, but I can’t help but wonder, what if all that excess capital were paid to workers instead of just gambled at the casino of Wall Street, pretend making money while simply shuffling leveraged “instruments” rather than producing anything concrete or allowing 99% of workers to have sick pay and gosh, vacation days? Wouldn’t that really kick the GDP into high gear? Financial transactions like stock buybacks certainly contribute nothing.

Another thing wrong with the whole GDP calculation is the ignoring of all the billions of hours of unpaid work that women do as caregivers, housekeepers, baby makers, and more. Only WAGE WORK counts in the world of economism.

“But buying low and selling high in the secondary securities markets doesn’t produce billions of dollars’ worth of tangible output that anyone can consume. In theory, there is economic value to this type of gambling, but its benefits are hard to quantify in meaningful terms. And is some cases, profitable taking strategies might have helped to perpetuate the subprime bubble and magnify the impact of the financial crisis. . . “ (f51)

Financialization of everything (only a slight exaggeration) serves only to socialize risks and privatize profits.


The author goes on to discuss the benefits of luck further, but I think he missed a significant point about the impact of luck. “Chance favors the prepared,” is a popular saying. Harvard graduates in law or business with inherited wealth who become hedge managers are not just lucky: they are born lucky. Any number of women, for example, could have discovered quantum physics, or invented the car, or could be Mistresses of the Universe (women’s versions never come off the same as males) on Wall Street. Women and millions of other people are never given the chance to succeed much less excel, especially not in a tech start-up for example.

If university level education were considered a PUBLIC GOOD and made “free” (paid for by the collective public through taxes), the Harvard grads might discover that they are not the best and the brightest.

If the 99% were paid more than a living wage, they might be able to develop new technology or create new businesses that would benefit society and the economy. But we never get the chance because of economism.


“The idea that higher taxes discourage people from working and therefore make society worse off is probably the single most deeply entrenched tenet of economism. “ (p. 91)

Taxes are bad for the rich, they don’t really care about taxation impact on anyone else. Instead, business is all about getting INCENTIVES. That is, tax breaks in order to do something, anything. The recent competition for cities to offer up their taxpayers’ hard earned money to support a multi-billion dollar company building a new second headquarters represents this extortion perfectly. The claim is that they will bring 50,000 new jobs to town, which is exactly what economism values because WAGE WORK or DIE needs more jobs in order to keep up the private profit of corporations. So in effect, they are asking taxpayers to subsidize a new workforce of 50,000 workers who will work under grueling conditions by all accounts while they themselves are working paycheck to paycheck.

The same holds true for the economic development gang of thieves most notably real estate developers in my city. We are paying highest sales tax in the country to support “economic development” that economism assets will make us all better off eventually by increasing the tax base. Of course, this requires us giving up our money now for someone else in the future after we may well be dead, but it is FOR THE COMMON GOOD!

The ultimate lie of economism is that we pay and pay and receive no direct or indirect benefit, only higher costs, until we die but we should feel good about it because we are supporting the common good.

I would like to see the CURRENT COMMON GOOD get a piece of the action, thank you very much. Pay more than a living wage now; I don’t think we should settle for a living wage! Build affordable housing now, even if you only make 2% profit because that would be great FOR THE COMMON GOOD. Mandate ACCESSIBLE housing and implement fully accessible public places rather than the minimum you can legally get away with.

Good old Milton Friedman believed that people would actually chose to work less if they had to pay more taxes. The actual LABOR MARKET for 99% of us does not depend on incentives like lower taxes to do particular kinds of work, HIGHER PAY makes any job more “attractive” at every level.

Of course, at some points, between the too broad tax brackets, it can be true that a $1,000 raise might tip you from the 28% tax bracket to the 35% tax bracket so the entire amount would go to pay for increased taxes. This is not a problem of workers not wanting to be paid more, this is a problem of ridiculous tax ratios. Similarly, the way some social benefits are means tested, earning $1 more than the cap would mean you lose benefits. This is behind the bemoaning of social benefits as “discouraging” seeking wage work. However, once again, economism principles shoot the victim instead of recognizing the problem is the means testing, the hard line, the absurdly punitive nature of the rules, and the arbitrary and capriciousness of the policies due primarily because the conservatives are going to give anyone a “handout” over their dead bodies. All poor are undeserving poor who made bad choices, like getting sick.

Ted Cruz, that charmer, can’t do math or simply dissembles, because he advocated a flat tax of 10% on individual earned income. This sounds “fair” to anyone who can’t do math, but of course, it is not. He claims that a flat tax is good because it would not penalize people with higher taxes for earning more money.  “This means better incentives to increase output, and fewer distortions.” [Cruz] No, it really doesn’t, Ted. The benefits in percentages would go to the wealthiest: “a staggering 44 percent of Cruz’s proposed tax cuts would go to the top 1 percent. (f8) (p. 93)

The true point of taxes is not to be EQUAL which a 10% tax rate might appear to be from Ted’s point of view and others like him. But it is not because the relative difference between paying 10% on $100 income and $100,000 does not result in an EQUITABLE sharing of the tax burden. People who make the most money can afford to pay the highest taxes. Back in the day the richest people paid 91% taxes on earned income. They still had money to burn and did so.

The Republican principle of taxation, copays and deductibles, and many other social policies requires “skin in the game” by the least able to afford it. This is necessary or we would be immoral “takers” from the rich. They have God, Social Darwin, and economism to back them on this point. It is for our own good that they don’t want to pay us more money  or provide the “charity” of government assistance, like unemployment insurance or universal medical care. The author notes that tax cuts are meaningless to people who make too little money to pay them in the first place.

“The second curious pattern is the particular zeal politicians have for reducing or eliminating taxes on INVESTMENT income — money you earn by sitting around and watching your assets grow.”  (p. 93) That is, the excess wealth people have beyond basic living expenses so they can “invest” in stock markets and never risk losing their homes or a job that would leave them penniless. This income is not considered “earned” income (despite his use of “earn” in the quote); this is capital gains tax, and runs around 15%, lower than the average bracket for secretaries as was made famous by Warren Buffet’s comparison.

Because most investments are owned by the wealthy — that’s what makes them wealthy — this bias helps the rich much more than the middle class, which again seems to defy political logic.” (p. 94)

The often cited “job creators” are presented as only willing to be job creators if tax payers subsidize them by not taxing them.

“Raise taxes too much, in other words, and Steve Jobs and Steve Wozniak never build a computer in Jobs’s garage.” (p. 95)

The author is being sarcastic in the quote above.

Trigger or barf warning for the next quote.

“The adoption of supply-side ideas by Jack Kemp and then Ronald Reagan produced lasting shift in U.S. tax policy. Describing his major 1981 tax cut, which reduced the top rate from 70 percent to 50 percent, Reagan said, “We have significantly restructured [the tax system] to encourage people to work, save, and invest more.” (f15)

Note, when a majority of workers today cannot afford to save even enough for emergencies, or are frequently wiped out by root canals or worse medical expenses from what little savings they can manage, it is ludicrous to advocate saving — especially at the pathetic interest rates consumers are offered. Contrasted with the credit card balance rates of 18% and higher even though money has been cheaper than ever since the 2008 crash. They are making billions while paycheck workers struggle to pay the bills using credit because they do not make a living wage. Meanwhile the businesses raking it in are leveraging each $1 in cash from a consumer into $30 that they “loan” out for capital this meant hey spend money they don’t have. And that, in a nutshell, is why taxpayers had to bail them out in 2008.

I would love a lifestyle that allowed me to spend $30 for every dollar I earned, and then when the bills come due, have the “government” that monolithic evil hated by the Republicans, bail me out without CONSEQUENCES. No one ever went to jail! Bad president, Obama.

The author puts the whole investment thing into perspective with a very pithy remark: “At the very high end of the wealth distribution, people invest most of their money because these’s virtually nothing else they can do with it.” (p. 98)

Furthermore, despite economism assertion to the contrary, numerous studies show that “tax rates on capital gains have had little impact either on savings or on economic growth.” (f21)

A concept called “diminishing marginal utility” (p. 104) is fancy talk for the relative value of getting more stuff. He uses the example of a working mother values $100 more than it matters to Warren Buffet. This describes exactly my complaint about the job that I took at a serious cost to me personally because I believed them when they said they could not pay more only to find out they had actually budgeted more for salary. That money made a HUGE difference to my daily living options, but had zero effect on them because it wasn’t even THEIR money they were spending. They gained NOTHING from screwing me out of a higher salary, and yet they did so because they could and because that’s what employers do, right? Get the best person for the least amount of money possible.

If rich people paid more taxes (such as a suggested optimal rate of 73%), the government could “improve the lives or ordinary people, increasing the aggregate utility of society.” People would be able to live lives less stressful, less uncertain, less marginalized, and be able to enjoy higher benefits that “extra” money beyond a living wage could provide without becoming a member of the leisure class. I am talking about being able to buy a new car instead of a 10-year old used car.

The rich and the Republicans love to declare this as REDISTRIBUTION OF INCOME, alway implying an UNDESERVED wealth transfer. They never acknowledge that this means the government transfers money to the actual creators of the wealth. Nor the fact that it still leave the wealthy with more money than they know what to do with.

I would like to see the IRS do much more redistribution of income. For example, since companies have proven themselves incapable of paying equal pay for equal work, all women and people of color could automatically get a “discrimination” reimbursement to make up the difference. I haven’t worked out the practical logistics of it; it’s just a fantasy idea of making change happen.

“A government is simply a mechanism by which we organize certain aspect of society that we do not trust the private sector to look after effectively.” (p. 106)

Like medical care. Like the environment. Like fair labor practices. Like food safety. Like safe medicines. Like so much more; government is necessary because the profit motive is inherently exploitive.


Chapter 6 is on medical care, the lack of medical care, and the expense of medical and how economism results in

Healthcare in the United States fails by any measure. And, by God, the Republicans are going to make sure it keeps doing so! We do not get better quality for double the prices or other countries. We are not more healthy than other EU countries for example.  We are not all covered for medical care. Women are penalized for being women at every level of medical care, from being discounted when we say we are sick to how much pain we are in. Medical research disproportionately has focused on men as if they are the universal human standard. Even to the extent that MALE mice are used for experiments. Those pesky hormones that fluctuate in females confounds the skills of the researchers too much.

But of course, the supply and demand model applies for medical care as well. That is why we have copays and deductibles, to make it economically costly to seek medical care as if medical care were a CHOICE like buying a yacht.

“When medicine appears to the user to be a “free” good there is NO LIMIT to the amount demanded. . . . Inevitably, people who are well connected, hypochondriacs with time on their hands, and the simply persistent get an undue share.” Milton Friedman, 1975 (p. 108)

Baffled by the “well connected” a bit in that quote, but like so many conservatives, it is typical that Friedman considers sick people to all be hypochondriacs instead of actually sick. Like the assumption that people without jobs are lazy, or welfare recipients are cheaters and drug users. “Good people don’t get sick.” So if you are going to see a doctor, you must be a hypochondriac. Even worse, you expect someone else to pay for your treatments and visits and medication! The horror! Again, the risk pool concept seems to have been skipped in Econ 101.

Because economism requires everything to fit the “law” of supply and demand, the real problem is that Americans should have to pay more for medical care beyond their insurance premiums, copay and deductibles. If you make very expensive snow shovels (medical care) then fewer people will “choose” to buy them. Therefore to reduce medical expenses, people simply need to pay more and more until the “market” decides they should die because their lives are not worth the expense of medical care.

How else can the pre-Obamacare days million dollar cap per person be justified? Insurance companies decided that no one was worth more than $1,000,000 and so too bad little baby born with a heart defect, because you are going to cap out before you turn two.

The rich never have to worry about paying for medicine or medical care. Obviously, once again, they are worth it because they have money. It’s God’s will that you get cancer and can’t afford treatment. Social Darwinism proves that it simply means you are not fit to survive if you get sick. Economism says that your life is only worth what you can pay for when needing medical care.

In fact, it is almost a surprise that the health insurance industry exists given those factors. But since they are immense cash machines for billion dollar corporations, I guess they will carry on fighting to our death, denying Americans any fundamental right to medical care.


One aspect of the entire medical care or health insurance problem that never makes it to the abstractions of analysis of the process is the fact that no one can BUDGET for cancer. You never know in advance that you are going to be in a car accident and will have to pay a $2,500 deductible and more. You can’t even know what will be covered or not, much less how much something is going to be charge until they “run the insurance” to place the claim.

When someone is living paycheck to paycheck, unable to save much if anything, and then really only to have to use it for emergencies, the politicians who require copays and deductibles don’t care if that puts medical care out of reach.

Consumers of medical care are considered careless about the cost of having “unnecessary” tests or the number of doctor visits they “use” because insurance hides the true cost of everything when people “only” have to pay a portion of the amount.

Conservatives believe that we the people have a problem of “overconsumption” of health care. The high cost of medical goods and services does not seem to be a problem of extortion or corruption. Collaboration with insurance companies to fix prices and charge different amounts for different classes of people couldn’t be a problem.

When people don’t pay the full amount up front or get a bill with the full amount, they will not know or care what the actual cost of a medical test or visit costs. If a doctor charges $80 and another doctor charges $100, you the consumer are paying they assume youawill go to the cheaper doctor (unless you are rich, then you don’t care).  But if either doctor costs you only a $20 copay, then you may as well go to the expensive doctor because it doesn’t INCREASE THE PRICE for you the consumer.

This is followed up by the bizarre extrapolation that if consumers had to pay more for medical care, then medical providers will LOWER PRICES [ha ha ha ha] because of stimulated competition between service providers who MUST lower PRICES or provide more value to “consumers” aka PATIENTS.

This is wrong on so many levels. First you can tell that the economists who come up with such shit are all well-paid, insured, and live in urban areas with lots of doctors (service providers) to choose from. But in many places in the country there are few to NO service providers. Theoretically this should stimulate ambitious doctors to move to small towns so they would get all the business without competition PLUS they could charge high prices because of the lack of competition. This never happens though.

Rural health care has actually reached a crisis point because despite demand, no one cares to supply care. Patients can be made to take PERSONAL RESPONSIBILITY for their “choices” but economism has no method to mandate or incentivize service providers to provide any choices at all.

This entirely ignores a fundamental difference between snow shovels and “service providers” of medical care. All doctors are not interchangeable with only a few tweaks in style to distinguish the higher value.

The author points out that the Orwellian New Speak for this fix of the healthcare system is “consumer-driven healthcare” as if people could or would “shop around” for “superior services at lower prices.” (p. 112)

We will all “behave like discerning shoppers because [we] bear the costs of [our] decisions.” Having choices and being discerning shoppers means that businesses (doctors!) must “offer superior services at lower prices” to attract customers (patients!) (p. 112)

Ha! When I said that the concept behind the cost sharing was to make people have “skin in the game” it turns out that this was not just my assessment but economism types fully support this concept.

The idea, as Cogan, Hubbard, and Kessler put it, is that “higher copayments will give consumers more ‘skin in the game’ making them more cost-conscious and more willing to take greater control of health-care decision.” (p. 112)

Hard to believe that people can be so stupid and say this stuff in earnest with and no grasp of the implications of such policies because economism demands an INCREASE IN THE PRICE to reduce consumption. Unfortunately, people with medical problems do not have time, money, or choices about what doctor they see or the care they need.

The author notes that with economism “choice” and “competition” are not only used in the Republican’s framing of health care issues; the Democrats do it too. Bill Clinton’s insurance plan relied on presumed competition among INSURERS and the Republicans still are trying to make insurance be able to be sold nationally “to create more competition”  for consumers (patients). As if consumers can really make an accurate assessment of apples to oranges mixed bag of fine print gotchas.

The problem once again is that MEDICAL CARE does not fit the supply and demand  model, no matter how the economism true believers want to pretend it does. The fact is that insurers do NOT WANT MORE “CUSTOMERS” because people are not customers, they are patients! They will cost the insurance company money! Insurance companies only want to insure the HEALTHY “customers” not actual sick people.

Paul Ryan has had Medicare in his sights for his entire political career. He wants to turn it into a “voucher program” — not for medical care, but to BUY INSURANCE “from private companies in a competitive market.”

“Putting patients in charge of how their health care dollars are spent will force providers to compete against each other on price and quality,” [Ryan’s 2010] proposal predicted. “That’s how markets work. The customer is the ultimate guarantor of value.” (f13) (p. 116)

It is almost as if he doesn’t actually read his own proposal. If the vouchers only allow the purchase of INSURANCE then patients are NOT in control of how their health care dollars are spent.

What vouchers really do is GUARANTEE that the government (taxpayers) provide unlimited funds to insurance companies with no oversight of coverage or costs.


The author cites Kenneth Arrow, “one of the towering figures in modern economics,” in 1963 [he] wrote a canonical paper explaining why health care does not behave like a textbook market. The most obvious anomaly, he emphasized, is that we do not incur medical expense regularly. In fact, we rarely need most forms of health care. When we do need them, we need them badly, however; illness itself can be costly, both in lost income and in reduced quality of life, even before the high cost of medical treatment. Because we are not regular consumers of health care, we lack both the knowledge and the experience necessary to be smart shoppers. (pp. 117-118)

The chapter continues to discuss the consequences of these failed policies. Then he goes on to discuss the best alternative which is single payer. One of the things that aggravates me though is how so many people conflate SINGLE PAYER with Medicare. They are NOT THE SAME! It may function as a single payer, but the single payer POLICY goes beyond the payor because significantly, under single payer plans ALL THE COSTS ARE PAID. Medicare only pays 80%, has deductibles and requires copays. Not everything is covered, and you cannot be sure if something will or won’t be until you receive the service. Furthermore and significantly DENTAL is included because really, it is a MEDICAL expense. Hearing aids would be included as durable medical equipment.

The author does not simply sing the praises of single payer, but does comment on some issues that some people bring up as arguments against it. On page 127 though, he makes note of the fact that Bernie Sanders has been the principle politician to speak out in favor of single payer without reservation.

The greatest power of a worldview is to set the boundaries of what people believe is even possible.” (p. 128)

It has become increasingly obvious that the Republicans’ worldview embraces economism to the exclusion of all other possible worlds. They insist that capitalism and the market creates the best of all possible worlds despite all evidence to the contrary.

Chapter 7 covers the debacle of the housing crash in 2008. I can’t bear to go over that at all. Chapter 8 covers “free trade” which of course is anything but free in reality. Once again he mentions Senator Bernie Sanders who was right about putting the blame for the “disappearance of the American middle class”  because of “international trade deals such as the 1994 North American Free Trade Agreement (NATFTA). . . .”

There are substantial negatives about the trade deals made by corporations for corporations and implemented by their puppets in Congress. For example, trade agreements allow the corporations to sue national governments for loss of profits due to national laws. This effectively short circuits environmental protections among other things.

But that is the fine print that we citizens don’t need to worry our pretty little heads over. The politicians we elect are there to make sure we live in the best possible world — for them. We have the best democracy money can buy.

BTW here’s another good book to read. I had a chance to do a fast pass but had to take it back to the library before being able to write comments

The Best Democracy Money can Buybook jacket cartoon of man with pile of money by Greg Palast.


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