Wednesday, February 1, 2012

Regulatory Fantasyland

The following paragraph is a commentary coupled to a video on Corporations faking Blueberries in various products. My response to Mr. Adams follows his paragraph.
here is the link to the video:

1. Blueberries Faked in Cereals, Muffins, Bagels and Other Food Products - Food Investigations
MIKE ADAMS, Health Ranger - Natural News
This is the latest in the breakdown of our food supply. It shows us what comes of deregulation, and how corporations behave when they are not required to meet standards of national wellness. People like Ron Paul who want to eliminate all government regulations of the "free market," live in as fantasy world detached from actual facts. Market forces are making it harder! and harder to raise healthy children because profit comes first. Wellness is hardly a consideration.

Yes, someone is living in a fantasy world, and it isn’t Dr. Paul. It takes an extreme leap of faith to ignore the legion of examples where the big corporations have the regulators in their pockets. The big corporations do not get their power from their standing in the market place; they get their power from the use of the monopoly of power, i.e., the government, through subsidization, tax breaks, and regulations and taxation on their smaller challenging competitors who don’t have the resources as the big corporations do to get in bed with the government.

Mr. Adams makes a typical mistake of many progressives, confusing crony capitalism with the real free market variety. What we have today is crony capitalism. The corporations get their strength not so much from their market power as they do from controlling the regulatory apparatus. The big corporations have controlled the regulatory apparatus ever since the first bureaucratic inception of regulation, the establishment of the Interstate Commerce Commission. Faced with the market reality of lower prices for train tickets form Chicago to New York where there was a lot of competition, compared to Chicago to Peoria, were there was no competition, the rates were lower going from Chicago to New York than from Chicago to Peoria. So what did the FTC determine? Did they lower the rates from Chicago to Peoria? No, they raised the rates from Chicago to New York

It has been thus ever since. The powerful corporations gravitate to power to keep, maintain and expand their power. So they buy and sell Congress and get their boys in the regulatory apparatus with a perpetual revolving door. The result: the small entrepreneur who makes a better mousetrap, instead of having customers beating a path to their door, are greeted by the taxman and regulators. Remember the Tucker car and DeLorean’s too? The big boys keep the little guy out by using the powerful force of government. Has ever been so It is foolish to think it could happen any other way Who is living in the fantasy world? Me thinks it is Mr. Adams.

In a true free market, fraud would be answered in a common law court, with fully informed juries meeting out punishment and restitution. That didn’t happen under the regulatory structure a few years back when the state of Illinois sued the city of Milwaukee for polluting Lake Michigan. The case never made it to a jury because the city of Milwaukee made a motion to dismiss the case based on the fact that they were polluting within the EPA guidelines of how much they could pollute. In a free market common law court, Milwaukee would have been held accountable for the trespass of pollution.

True free market deregulation, the type that Ron Paul espouses, does not give any business a free ride to commit fraud. They would be held accountable in court. And the adverse verdict would blemish their reputation, hurting them even more in the market place. Those who try to commit fraud would then think twice the next time. As it is today under crony capitalism, the corporations know they have the bureaucrats in their back pocket. They buy their way out of accountability.

Progressives like Mr. Adams need to understand and differentiate between crony capitalism, where the government and corporations are partnered together (Mussolini called this fascism), and free market capitalism where the government does not play favorites. The market regulates through reputation, success or failure, common law court decisions, and a market regulatory apparatus such as Underwriters Laboratory, which has no government function, but does an excellent job assuring the safety of a variety of products.

Who but the most powerful, will take the reigns of the most powerful? Saying that democracy should only begs the question. Who controls the apparatus of democracy? Power corrupts and absolute power corrupts absolutely. The way to curb the power of the powerful is to restrict the entity with the most power, the entity that has a monopoly of force, that, of course is government.

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