Laissez Faire until Liability – The New Economic Model
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Laissez Faire. Defined as allowing industry to be free from state intervention, especially restrictions in the form of tariffs and government monopolies.
The French translation literally means “let do”, but it broadly implies “let it be”, or “leave it alone.”
Laissez Faire is the champion of champions in the world of conservative and teabagger idealism. Like a free spirit, if only allowed to roam free, LF would thrive and prosper like a wild spirit animal of the plains. Excuse the embellished analogy.
Now there seems to be a new variation of this ideal. I call it “Laissez Faire until Liability” or LFUL.
The economics of this new model is that industry expects to be completely unregulated in it’s ultimate goal of maximized profits, BUT when something goes wrong, expects the full and unbridled help in the government to clean up the mess they created, beyond the most socialist of socialism.
Then when recovery gets conditions to the point that the corporation or industry can stand on their own two feet, Laissez Faire leaps forth as that idealistic creature again, galloping across the grassy corporate plains.
Government is to take a complete hands-off approach again, with no new rules or regulations to prevent a re-occurrence.
A prime example of this school of mutant economic thought was highlighted today, when Huffington Post noted that along with the official statement from the US Chamber of Commerce that the American Taxpayer should help in paying for the BP oil leak, the House Minority Leader John Boehner cosigns this call for collective responsibility.
Taxpayers should help pay for leak!
Never mind that poor pitiful BP was bringing in 2 BILLION dollars per month of profit before the leak occurred and almost that much still today. LFUL
Another prime example of this theory from the depths of economic hell is the derivative speculation and economic meltdown.
Investment bankers were quite willing to make the huge profits by leveraging enormous sums of money with 60 to 1 leverage gambles, but when the Ponzi scheme came crashing down, suddenly it’s a dire situation that requires a immediate bailout to prevent a “Global Financial Meltdown” from occurring. But when profits turn back to there outrageous normal state, suddenly it back to business as usual with hardly a rule in place to prevent it from happening again. LFUL
Another situation that hasn’t made it to the front lines but is a ticking time bomb of LFUL proportions is the Gas Mining Industry. In particular, the ones using a process called hydrofracturing to extract gas. This process uses water and a toxic witches brew of proprietary chemicals, including diesel fuel, to inject at extremely high pressure to release natural gas from shale.
What this does is release chemicals such as arsenic, hydrogen sulfide, mercury, benzene, toluene or xylene into the water table. The rivers and streams of this country are going to feel the effects of this on a grand scale.
Some of these chemicals cannot be treated out of drinking water by any of present water treatment methods available. Especially for small cities and towns.
The worst part about it is that Gas Mining Industry, especially Haliburton, back in the good ole Dick Cheney days got themselves completely exempted from the Clean Water Act. Fracking as it is sometimes called was also exempted from the 2005 Energy Policy Act.
Currently, the gas industry is the only industry granted an exemption from complying with the Safe Drinking Water Act. Cheney is the gift that just keeps on giving, isn’t he?
They do not even have to list what chemicals they are injecting into the shale and consequently the water tables.
So when the shit hits the fan, who is going to be responsible for the studies and cleanup? LFUL! LFUL! LFUL!
Fracking! Now coming to a site near you!
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Born in Los Angeles, California, Jolie is the daughter of actors Jon Voight and Marcheline Bertrand. She is the sister of actor James Haven, niece of singer-songwriter Chip Taylor, and goddaughter of actors Jacqueline Bisset and Maximilian Schell. On her father’s side, Jolie is of German and Slovak descent.`
It will always be the nature of the capitalist business cycle and state reaction to it. Capitalism is dependent upon government for its survival, with partial or even full nationalization occasionally becoming a mechanism to ensure the sustainment of private ownership of the means of production in the long run. Have a look at Weisskopf’s “Marxian crisis theory and the rate of profit in the postwar US economy” if you’re interested in something more in-depth.
Socialism for the big corporations, and capitalism for the rest of us. Just doesn’t pass the smell test, does it?
Is that a real to life Mr. Burns from The Simpsons in the thumbnail?
See, it pays to be poor. Who wants to steal the identity of someone with zip in the bank?
Randal,I discovered that when I hacked into your computer the other day. Does ALL your money go into your Dawgpound outfit?
Randal, also your computer is saying your “Smell my Japanese Fart” website subscription needs renewing on the 15th. Just trying to help…
There’s also a lot of really embarrassing stuff that Krell and I are too professional to mention.
Ya, too professional. That’s what I’m talking about!
Laissez Faire…. in personal affairs…. not so bad?
Ha, Laissez Faire in personal affairs was compromised back in the 1940’s and completely destroyed with the invention of the computer.
Reminds me of a story of two hunters in the woods. They carelessly startle a grizzly bear. One of them turns around and takes off running.The other one starts laughing and shouts, “What are you doing, a human cannot outrun a grizzly bear.” The first hunter shouts back, “I don’t need to outrun the grizzly, I just need to outrun you.”
That is how it is with privacy today. Just stay under the “radar” and hope that their hands are full, spying on everybody else. Because you certainly cannot avoid their glaze when it is turned at you.
Holy crap- fracking? It sounds like some perverted sex act I’d be writing about. Well- I guess it is, kind of- only involving industry and earth in an enema-rape scenario thunk up by the Pat Robertson Geological Society.
http://www.facebook.com/home.php?#!/pages/The-Pat-Robertson-Geological-Society/288645208011?ref=ts
Where do you find this stuff? You must do the search engine mambo. there’s a LMFAO on that…
I only use google. I just know what rocks to look under 😉
Krell rocks?
It’s just depressing as hell man,I fear for my kids future. I seriously do.
LFUL is a very accurate acronym and the bastards who benefit have absolutely no shame. Yet they are of the mentality that opposes “unearned” benefits like food stamps and welfare payments.
Fracking. Damn. Exempted-of course it is. Why wouldn’t it be? The hits just keep on coming don’t they man? Nice post.
OSO, it is depressing. These past 5 years or so, I am really starting to fear for the future my children face.
Minor Quibble:
It isn’t socialism; it’s statist capitalism. Paying for governmental loans to help a capitalist system by taxing *capital* is necessarily capitalist.
The part you’ve noticed is the “statist” bit.
A socialist economic system need not be statist in order to qualify as such (see: collectivism, see also: libertarian socialism), and since the economic power does not revolve around capital compensation or the centralization of the ownership of means of production, taxes are only necessary in situations where there are irreconcilable differences between involved service or product industries, and even then would not necessarily involve a central taxation agency such as the fed.
It wouldn’t work in a capitalist system, of course; but that’s really my point: capitalism doesn’t turn to socialism in order to support itself, it merely concentrates the power momentarily.
I suppose you can tell where my loyalties lie, though. I never claimed to be devoid of opinion in the matter. 🙂
Well technically speaking, Cory… Laissez Faire died around the American Civil war and evolved towards a Keynesian policy. But economic theory wasn’t the point of the post really. The point was, and I think I have heard this stated simpler, that profits are capitalized, losses are socialized.
If corporations are allowed to keep the rewards for risky behavior without having to shoulder the burden of failure, the whole system risks swinging to extremely volatile destructive behavior taking us all down with it.
But, thanks for the comments. I already know your passion for debate so no need for the end line caveat.
Moral hazard needs to be a factor. Big companies must be made to shoulder their own risk knowing failure is a possibility, their creditors must be made aware of it as well.