Monday, September 22, 2008

Monday Madness [Free Market Myths]

¡Hola! Everybody…
There’s been a lot of gnashing of teeth, tearing of clothes and hand-wringing over the fat cats cluster fuck resulting in a global financial meltdown.

I have yet to hear one talking head question the validity of bailing out the Wall St. Welfare Queens! Everyone agrees that this must be done for the good of everybody. Mention even thinking about bailing those who will lose their homes and people will get a razor sharp hair up their collective arses.

If it were a middle class couple, or [gasp!] a black single mother being helped, there would be hell to pay (complete with bonfire) and cries of Socialism! and Government Interference! by the likes of McCain and the rest of the corporate bootlickers. The very same talking heads would be waxing poetic over the “free market” and how we shouldn’t interfere with the “sound principles” of our market.


How is this not socialism for the corporate elite? A SEVEN-HUNDRED BILLION DOLLAR CHECK WITH NO OVERSIGHT?!!

* * *

-=[ The Free Market Isn’t Free ]=-

“Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.”

-- John McCain, 2008

McCain, like his conservative peers, idolize the so-called “free market.” You hear it all the time from them: “Leave it to the market.” Health care: Leave it to the market. Social Security: Leave it to the market Minimum wage: Leave it to the market!

There is no “free market.” It doesn’t exist. As McCain’s own reversal recently, conservatives know it’s myth and they understand that government regulation of and participation in the market can be beneficial. The current financial collapse, brought upon by deregulation and lax oversight is a case in point. However, this isn’t new; conservatives send a large percentage of the federal budget year after year to private defense companies, shifting public wealth to private owners, for example.

We have spent about a trillion dollars in the Mess in Mesopotamia and now we’re going to spend close to that bailing out the Welfare Queens in three-piece suits. I have a better idea on how we could such money. In fact, I’m pretty sure we all could come up with better ideas on how to spend our money (health care, education, etc.).

What if we took a trillion dollars and help small businesses instead?!!

Let’s look at some facts:

Small businesses (defined as businesses with fewer than five hundred employees) accounts for about half of our GPD (gross domestic product).

Small businesses have generated 60 to 80 percent of net new jobs annually for the last decade. Looking at the most recent data small firms accounted for all of the net new jobs. Yup, all of them. Some large businesses grew, of course, but that growth was undermined by large businesses that laid off workers.

Nearly half of all small businesses, 49 percent, as of August 2007 had experienced no employee turnover during the twelve previous months. None.

Thousands of new businesses are founded in the United States each year, and over the last decade, the rate of new venture formation has increased.

Due in part to downsizing at large firms and rapid technological advancement, the trend toward more new business start-ups is likely to continue.

There’s a flip side, however:

Between 20 and 30 percent of new start-ups close during the first year of existence.

So what do we have so far? Well, here’s a sector of the economy that accounts for half the wealth and most of our job growth. Due to the increasing challenges and opportunities in our modern, “global” world, our economy will need this sector to expand, despite the fact that it is subject to a high rate of failure.

With a trillion dollars, we could have the largest pool of venture capital in the world -- perhaps in the history of humankind.

The average solo start-up in America these days needs only $6,000 to get off the ground. Even in businesses started by a group of people, the average required is just $20,000.

In theory, we could fund more than 50 million new businesses. Unlike the current financial bailout, we would have to put some restrictions in place. We can’t have crackpots like my brother-in-law walking off the job to follow a hair-brained scheme. So, sure, you would have to put in some of your own money into it. You’ve got to have a sound business plan written down. But if we’re going to bail out fat cats that have bungled billions of dollars, why isn’t just as valid to consider supporting the American entrepreneurial spirit for those with a good plan and sound head on their shoulders?



PS: Much of above was shamelessly stolen from the book, What We Could Have Done with the Money, by Rob Simpson. Check it out for more ideas on how to spend a trillion dollars (click here)

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