Low taxes can mean low profits

The Boeing 737 Dreamliner has been grounded by the FAA until several of the recent problems can be fixed.

First question: if private business can do so much right, why is there so much wrong with the 737?
At least, nobody's been seriously injured or killed yet.

The answer is that it is a complex endeavor.  Thousands must work together to get everything just right.  What was missed because certain tests or calculations weren't checked one more time?  One commentator wrote that the FAA inspectors were overwhelmed by the innovations.

This last gets me to taxes and profits.

To have skilled up-to-date inspectors, we need to train them continuously.  If we don't budget for continuous training, the inspectors won't be able to keep up with changes.  If the inspectors can't keep up with changes, then the inspected companies might miss something.  If the inspected companies miss something, then the new products might fail in some way that reduces those companies' profits.  Sort of "for want of a nail…"

Also think of government inspectors as independent auditors.  They are a second set of eyes that sees things that the people directly involved might miss.  Large companies don't blink at paying millions for audits but they seem to balk at paying taxes for government "auditors"; auditors that might save them millions.

But to have skilled designers and skilled inspectors, we have to have a robust education system, going all the way back to pre-school.  If we don't pay enough taxes to have such a robust education system that produces a very large number of skilled adults, then we can't create the innovations that lead to larger profits.

All things are connected - "Home", movie script by Ted Perry.  See "All Things Are Connected".

Socialism or needed regulation, they ain't the same thing

It seems every where one turns, there are cries that Obama is a socialist, that the country is becoming socialist, and on and on ad nauseum.

One, do many of these people even know what socialism is?  In short, it often means state ownership of the means of production.  Is any major party candidate calling for government takeover of all companies?  I haven't heard of any.  Is it co-operatives?  Could be, but they are operated by their members, not the government.  For a more complex discussion of socialism, see the Wikipedia entry on socialism.

Two, are those orchestrating the cries of socialism those who want no government regulation unless it is to their benefit.  Is it polluters who cry socialism when they are called to task?  Is it those who cut corners on safety of workers or consumers?  Is it those who would cheat customers or not provide customers with sufficient information?

Considering the sources of the orchestration, I would say its those who want to operate without any government regulation at all.  They don't want to pay taxes for all the public goods they depend on, including an educated work force and an infra-structure of highways, water, and sewer.

In short, they want to privatize profit but socialize losses or costs.

Ironically, Adam Smith, the guru of so-called free-marketers, and many of the writers of the U.S. Constitution called for regulation in varying degrees.

Flea markets are the only true free markets, sort of

Many are calling for free markets without any idea of what free markets really are. Free markets are not large corporations unencumbered by government regulation.

Flea markets and farmers' markets are better approximations of true free markets. Why is this?

A flea market has many buyers and sellers, although some sellers might think there are not enough buyers.

Buyers and sellers are free to enter and leave the flea market. Of course, sellers may have to apply for limited space and it will take a bit of time to pack up to leave the flea market.

Buyers and sellers have all the information they need to make a decision to buy or sell. The buyers can pick up the goods and even give them a small test. Sellers accepting only cash generally can assume the bills are good.

There are few externalities from a flea market. There could be lots of trash to be picked up. Some products sold may be defective and injure somebody.

Can you think of any other economic activity that even gets close to the free market standard set by flea markets and farmers' markets?

See also http://en.wikipedia.org/wiki/Free_market

Free enterprise: Free to do what, kill us?

In the name of short-term profits, is free enterprise free to kill us long term?

One of the complaints of "free marketers" is government interference.  But who else but government is going to protect us from the carcinogens that free enterprise dumps into our environment?

For a summary, watch the trailer of "Living Downstream" based on Sandra Steingraber's book "Living Downstream: An Ecologists Personal Investigation of Cancer and the Environment".