Corporate Welfare at the Expense of Everything Else

August 3rd, 2009

Via: Solari:

What we are watching price out through the political process is life vs. death. More specifically, the financial value of the life and death of various groups and ages of people vs. the life and death of large banks and corporations.

In a market economy, if a person’s skills become outdated, the theory is that they will be encouraged by their need to generate income to learn new skills or change.

If a large bank or corporation can no longer generate revenues to cover its operations, likewise the theory says that it will change. Management will invent new products and services, cut expenses, renegotiate with creditors through bankruptcy or shut down.

However, in a bubble, the people and the corporations and banks all avoid change by going to the government and coming up with thousands of ways to keep their operations afloat using government funds so they do not have to change– government programs, subsidies, contracts, credit, guarantees, regulations and so forth. This is why I start my case study on how the system really works with that old New Jersey street saying – “Make a law, make a business.”

Changing the laws, however, does not change the real world where fundamental productivity continues to count. So over the last twelve months, after many bubbles, there was not enough for everyone. So we made a decision to shift most, if not all, of our remaining resources to the large banks and corporations.

What this means is that if people do not need the products and services of the banks and corporations, rather than let them die, we are going to use government and central banks to simply take money from people to keep a bank or corporation alive without customers or markets.

So the institutions created to serve markets are deemed to have lives of their own that justify subsidizing them even if the markets are gone. Government can guarantee markets even when customers have no money to buy goods and services and taxpayers can not afford to pay taxes.

Big banks and corporations are guaranteed life. In addition, there is no prison or death penalty for big banks and corporations as a result of their bad behavior, including when it causes the death of people. So their life is infinite.

To pay for this we must take resources from people — with taxes, with fees, with inflation, with lower benefits and with legal and economic warfare. If they do not go along, we can send them to prison or inflict the death penalty.

Hence, an overview of a series of policies is emerging from Wall Street and Washington which is crystal clear.

People will die so that corporations and banks without retail markets, customers or purpose can live richly, although not anywhere near as richly as the invisible forces that hide behind them.

Research Credit: efs

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