"Free marketers" deceive and oppress again

Large banks are buying commodity warehouses and then moving goods from one warehouse to another to increase their profits.  Apparently some international agreement allows them to do this.  Although this movement only adds a fraction of a cent to a beverage in an aluminum can, the huge number of cans used puts this cost to consumers in the hundreds of billions.  What's this about "you'll get ahead by hard work"?  I guess it is hard work to think of schemes to "deceive and oppress the public"*.

See "A Shuffle of Aluminum, but to Banks, Pure Gold", David Kocieniewski, New York Times,2013-07-20, also reprinted in Star Tribune, "Banks schemes adding hidden costs to consumers", 2013-07-20

* See "The Invisible Adam Smith"

To be or not to be a government employee

…or to have been or not to have been a government employee.

Many so-called conservatives constantly complain about government employees, especially those at lower levels who are "feeding at the public trough".  If government employees can do nothing right, why are so many Republicans clamoring to be government employees?  Or their large corporation bedfellows clamoring for government contracts?

Now we have an interesting attack from so-called liberals on former government employees who have taken jobs in large corporations.  See "EXPOSED: Fox News, BP, And Goldman Sachs Don't Want You To Know About This" http://www.upworthy.com/exposed-fox-news-bp-and-goldman-sachs-dont-want-you-to-know-about-this, Sara Critchfield, Upworthy, 2012-04-23.  The article shows overlapping circles  of government employees moving to corporate jobs, whether appointed or elected officials.  People in both parties have done this.

These moves sound fishy and maybe some are fishy.  On the other hand, if you are, say a geologist, who is most likely to hire you - an oil company.  Does every government expert in every field start out as a government employee for life?  No, they often build up credentials in corporations or academia, serve for a few years in government, often at lower pay, and then go back to a corporation or a university.

This is the problem with taking sides on political issues.  Too much is at stake to open oneself to a broader view of issues.  As a result, sound bites become the "facts" and few look at a problem thoroughly.

Beginning of the end of finance as we've come to hate it?

Today, Greg Smith is resigning as Executive Director of Goldman Sachs.  He wrote "Why I Am Leaving Goldman Sachs" for the New York Times.

The Coffee Party Facebook page provided a link to this.  I'm sorry that I can't give you a URL for it.   What struck me about many of the comments was that many seemed to equate finance and capitalism; they are not the same.  Finance is a tool of capitalism, but to mix metaphors, it has become the tail wagging the dog.  See my blog entry "Finance is not capitalism", 2012-12-07.

The repeal of Glass-Steagall put a lot of muscle into the tail, and at the time only a few saw this coming.  Sen. Byron Dorgan (D-ND) warned about this in a Senate speech in 1999.  See "Byron Dorgan's Prophetic Words", Moyers & Company, Lauren Feeney, 2012-01-27.  I recommend watching the full show: "How Big Banks are Rewriting the Rules of our Economy".

For more of the gory details of the collapse of finance, see "All the Devils are Here", by Bethany McLean and Joe Nocera.  See also my quote from the book about the plea from Wall St. for more regulation!

Customers - the forgotten element in business

"In this new era, Goldman's first duty was to its own bottom line, 
which accrued to the shareholders.  Clients were a means to that end, 
not an end in and of themselves."
- "All the Devils Are Here: The Hidden History of the Financial Crisis", Bethany McLean and Joe Nocera, p 157

The business mottos "customers first" and "the customer is always 
right" have become "shareholders first" and "the shareholders are always right."