JANUARY/FEBRUARY 2009
Free Market Myth
Regulation is everywhere. Let’s choose who benefits.
Dean Baker
The extraordinary financial collapse of recent months has been commonly described as a testament to the failure of deregulation. The events are indeed testament to a failure—a failure of public policy. Blaming deregulation is misleading.
In general, political debates over regulation have been wrongly cast as disputes over the extent of regulation, with conservatives assumed to prefer less regulation, while liberals prefer more. In fact conservatives do not necessarily desire less regulation, nor do liberals necessarily desire more. Conservatives support regulatory structures that cause income to flow upward, while liberals support regulatory structures that promote equality. “Less” regulation does not imply greater inequality, nor is the reverse true.
Framing regulation debates in terms of more and less is not only inaccurate; it hugely biases the argument toward conservative positions by characterizing an extremely intrusive structure of, for example, patent and copyright rules, as the free market. In the realm of insurance and finance over the last two decades, calls for deregulation have been cover for rules tilted starkly toward corporate interests. And the recent change in bankruptcy law, hailed by conservatives, requires much greater government involvement in the economy.
False ideological claims have circumscribed the public debate over regulation and blinded us to the wide range of choices we can make. Without these claims, what would guide regulatory policy? What kinds of choices would we have?
* * *
Patent and copyright protection are good examples of government policies obscured in the debate. They are forms of regulation, not elements of a “free market.”
It does not matter that we call patents and copyrights “property” or even that we have a clause in the Constitution that authorizes Congress to grant patents and copyrights. Suppose autoworkers were given a property right to a job in the automobile industry, a right they could even sell. Would anyone say that this right to a job is part of the free market?
Patents and copyrights are government-granted protections designed for a specific public purpose, as stated in the Constitution: “to promote the Progress of Science and useful Arts.” But granting intellectual property rights is one of many possible mechanisms for accomplishing this important public goal. Whether patents and copyrights are the most effective mechanisms for the promotion of the arts and sciences is an empirical question. And the answer could be different depending on the specific social and economic circumstances. However, we cannot have a serious discussion of the relative merits of patents and copyrights until we recognize that these are public policies and not intrinsic features of the free market. Debates about both patent and copyright have been hugely distorted by the failure to recognize this obvious fact.
In the case of patent protection, policy disputes arise most frequently with regard to prescription drugs. If drugs were sold in a competitive market (i.e., without patent protection), the overwhelming majority of drugs would sell for just a few dollars per prescription. Wal-Mart and other major drug store chains now sell most generic drugs for less than $10 per prescription—we know these drugs can be manufactured safely and sold profitably at low prices.
The drugs available as generics are not chemically distinct from their brand-name counterparts that often sell for hundreds of dollars per prescription. The only difference is that the latter, as a group, enjoys a government-guaranteed monopoly. Patents constitute a government policy that effectively raises drug prices by several thousand percent above the free market price.
Recognizing this should be the starting point in any policy debate. The next question is whether this policy for supporting innovation is the best mechanism for financing the research and development of new drugs. It clearly is not the only one.
The government could, for example, support drug research through a prize system in which it buys drug patents and then places them in the public domain so that newly developed drugs could be manufactured and sold as generics.
When we sweep away ideology, we see that it is a debate between two regulatory strategies for keeping drug prices down.
Alternatively, the government could pay for the research upfront and make all research findings and patents fully public. It already spends $30 billion a year financing biomedical research through the National Institutes of Health, an amount almost as high as the pharmaceutical industry claims to spend on its research. NIH research is highly respected, with almost all observers agreeing that the money is, on the whole, extremely well spent. While the NIH focuses on basic research (it also does some later-stage drug research, including clinical testing), there is no obvious reason why the government could not simply double its commitment to biomedical research in order to replace the research and development currently supported by grants of patent monopolies.
But the government may wish to use a different mechanism to encourage drug development. It may choose to establish a small number of master contractors, who would then contract out the awarding of research funds so as to minimize the potential for political interference. Regardless of the structure a particular program would take, expansion of direct funding is clearly feasible.
There would also be large public benefits in addition to lowering the price of drugs to their marginal cost. Eliminating huge monopoly rents associated with drug patents would take away the incentive for drug companies to push drugs in cases where they may not be especially beneficial, or even potentially harmful. Nor would there be incentive to conceal research findings that indicate a drug’s weak performance. Furthermore, by placing all research findings in the public domain, so that scientists can quickly benefit from the research done by others, the process of drug innovation would likely accelerate.
Whether a patent-buyout system or direct public funding would be preferable to the current patent system is obviously debatable; the point is that patent is just one mechanism among many that could facilitate prescription-drug research. And it is one that involves granting monopoly rents to large drug companies.
It is important to establish that patents are a form of regulation because there are many venues in which the regulation of prescription drugs has been a major issue, with those who would see prices fall cast as opponents of the free market. For example, the ongoing push to have Medicare bargain for lower prices for drugs bought as part of its prescription drug benefit is widely viewed as interference in the free market. Even The New York Times and other highly respected media outlets often present the argument about Medicare-negotiated drug prices as a debate between proponents of free markets and of government intervention. When we sweep away ideology, we see that it is a debate between two regulatory strategies for keeping drug prices down.
* * *
There is a similar story with copyrights, although the economic waste is even larger and the enforcement measures even more perverse. In the Internet age, almost any printed or recorded material—music, movies, books, video games—can be instantly transferred anywhere in the world at almost no cost. However, rather than allowing the public to enjoy the full benefit of this technology, the government has created a dizzying array of new laws and restrictions designed to make it more difficult, and legally more risky, to pass along material that is subject to copyright protection.
As with drug patents, copyrights serve an important public purpose. They provide an incentive to produce creative and artistic work. But to protect copyright, the government has imposed an aggressive sanction regime even for seemingly minor offenses. In one case, a woman in Minnesota faced a fine of more than $200,000 for allowing people to download music from her computer. Universities have been told to police dorm rooms to ensure that students are not downloading material in violation of copyright, and they have been encouraged to conduct classes teaching that it is wrong to make unauthorized copies of copyrighted material.
The government has repeatedly prohibited the production of various types of hardware until protections could be installed to prevent the duplication of copyrighted material. It has banned the development of software that can break through copyright protections. In one case a Russian computer scientist was arrested by the FBI after a conference presentation in which he described a way to get around a form of copyright protection.
The list of extraordinary government measures that have been developed to enhance copyright protection is lengthy. Remarkably, these measures are never described as forms of government regulation. They are treated as enforcement measures necessary to protect copyright. However, just as patents are not the only way to encourage innovation, a government-granted monopoly with extensive rules and heavy-handed enforcement is not the only way to promote creativity.
A vast amount of creative and artistic work is already supported through mechanisms that do not depend on copyright protection. Private foundations are a major alternative source of support, as are the limited funds available through public programs such as the National Endowments for the Arts and Humanities. Colleges and universities are probably the largest source of funding not dependent on copyright. Professors are expected to do research and writing in addition to their teaching responsibilities.
It is easy to envision mechanisms to expand support for creative and artistic work outside the copyright regime. For example, it would be possible to design a modest tax credit for individuals who either support creative work directly or contribute to organizations that support such work. The credit could be modeled after the tax deduction for nonprofits or charities. Even a modest tax credit (e.g., $100 per person)—which taxpayers could allocate to an artist, writer, musician, or film producer of their choice—would likely be sufficient to fund almost all of the work currently supported by the copyright system.
To be fair, rarely does either side argue against regulation as such. The real issue is the structure of regulation and its impact on economic outcomes, especially income distribution.
Alternatives to copyright are feasible and probably far more efficient than the copyright system. And they would replace a gigantic array of enforcement measures that can themselves be seen as unnecessary forms of government intervention into the economy.
* * *
A final example of excessive government regulation, never discussed as such, is the bankruptcy-reform bill that passed Congress in 2005. This bill substantially strengthened the conditions imposed on people seeking bankruptcy protection, making such protection a much less attractive option.
The public debate over the bill dealt in liberal/conservative caricatures that completely misrepresented what was at stake. The liberal argument relied on sympathy for the people seeking bankruptcy; it drew on studies showing that the great majority of people seeking bankruptcy had not been spendthrifts who deliberately ran up huge credit card debts, but rather had fallen on hard times as result of job loss, medical emergencies, or family breakup. The opponents of stricter conditions argued that these people needed and deserved the break that bankruptcy allows.
The conservative argument centered on individual responsibility. No one forced anyone to take on debt; these people voluntarily chose to do so. Everyone knows that bad things can happen. Those seeking bankruptcy protection should have taken precautions.
This version of bankruptcy reform undoubtedly resonated with those inclined to accept that people succeed or fail largely as a result of their own actions, but, most importantly, it obscured the real issue that the bill addressed: to what lengths should the government go to collect unpaid bills? The party seeking the aid of the government in this story is the creditor, not the debtor.
Under the preexisting bankruptcy law, creditors could lay claim to most of the debtors’ assets and in some cases place liens on future earnings. The new law hugely expanded the creditors’ claims on future earnings. This means that the government will be far more involved in bill collection in the future than it has been in the past, possibly monitoring the wages of millions of individuals in bankruptcy who still have debts to creditors. (For those who worry about the negative incentives caused by taxation, it is worth noting that having money deducted from paychecks to pay creditors provides the same disincentive to work.)
The individual-responsibility line could have been applied just as validly to the creditors in this story as it was the debtors. Part of being a successful business involves knowing under what circumstances to extend credit. No one forced businesses to extend credit to the people who subsequently declared bankruptcy. They exercised bad judgment in extending credit to people who were not good credit risks. Why should the government step in to help businesses that fail to assess credit risk? The ideological battle around the bill was a distraction. It was an effort to get the government more actively involved in helping the banks. It’s that simple.
Other cases in which the conservative position arguably requires more government involvement in the economy than the liberal position abound. For years Ben and Jerry’s Homemade has fought attempts by state governments to ban labeling dairy products as free of recombinant bovine growth hormone. Some pressure groups associated with the dairy indutry argue that the rBGH-free label implies that bovine growth hormones are harmful, which has not been established by the Food and Drug Administration. Of course, Ben and Jerry’s Homemade is not trying to prevent its competitors from assuring the public that their ice cream is safe. It is trying to make a truthful claim about its own ice cream.
In the same vein, the Department of Agriculture (USDA) recently prohibited a meatpacker from testing its cattle for mad cow disease. The meatpacker had intended to privately test all of its cattle, whereas the USDA tests only 1 percent of cattle. But the USDA, arguing that full testing would cause the public to question the safety of other meat, moved to prevent it.
To be fair, rarely does either side argue against regulation as such. The real issue is the structure of regulation and its impact on economic outcomes, especially income distribution.
Let’s return to the financial crisis with this in mind. In the decades preceding the financial collapse, regulations designed to protect the public and to ensure the stability of the financial system were considerably weakened, but the system was (and is) quite far from being deregulated.
The key regulation that remained in place was the “too-big-to-fail” doctrine. Essentially, the banks and other financial institutions took enormous risks with an implicit guarantee that their creditors could count on the protection of the U.S. government if things went badly. For everyone except the creditors of Lehman Brothers and the preferred shareholders of Fannie Mae and Freddie Mac, this gamble proved correct.
This one-sided giveaway was not deregulation. Had those setting financial policy over the last three decades been committed to deregulation, they would have assured financial markets that financial institutions making bad investments would go out of business and that their creditors would be out of luck. The Federal Reserve Board and the Treasury would have warned that investors were acting at their own risk when they put money in Bear Stearns, AIG, and the rest.
In the context of a too-big-to-fail principle, the removal of restrictions on leverage (investment banks were allowed to leverage their capital at a ratio of forty-to-one compared to just ten-to-one for commercial banks) and the relaxation of other prudential regulation (the nominal value of credit default swaps, a new class of derivative instruments, grew to more than $70 trillion in a nearly unregulated market) essentially gave the banks a license to wager with taxpayers’ money.
Banks did exactly what economic theory predicts. They took huge risks, leveraging themselves to the hilt with questionable assets, knowing that they would gain as long as the housing bubble held up. And the banks did so with willing accomplices among pension funds, hedge funds, and other investors because these investors knew that the government would rescue them if things went badly.
Deregulation can be a principled position held by true believers in a free market. But Wall Streeters all wanted one-sided regulation that provided them with an enormous government security blanket without any costs or conditions. None of the Citigroup, Goldman Sachs, J.P. Morgan crew ever went to lobby Congress for an explicit repeal of the too-big-to-fail doctrine. And while many on Wall Street lost their jobs when the bubble burst, the tens or hundreds of millions of dollars that banking executives earned during the good times are theirs to keep. Even with the market collapse, the vast majority of them are almost certainly better off than they would have been had they done honest work over the last decade.
* * *
If the real debate is over the type rather than extent of regulation, then why is it always framed as the latter? For conservatives, the answer is obvious. Many Americans embrace the idea of free markets and hold a deep aversion to government. Faith in government ebbs and flows, even in the most liberal times. It will almost always be advantageous, then, to associate a political position with support of the free market.
It is less apparent why liberals would be so eager to accept such a disadvantageous caricature of their position. The answer requires digging a bit deeper into what their position implies about the nature of the economy and economic outcomes.
Like conservatives, liberals generally acknowledge that people get ahead as a result of their skills and hard work, with some luck thrown in. The main difference in the liberal and conservative views of the economy is that liberals are more likely to believe that many people face serious impediments to their success and do not get the same chance as people from wealthier backgrounds. Liberals are also likely to feel guilty about the difference in opportunities and therefore support political measures that will reduce the gap and help those at the bottom. However, most liberals still accept the proposition that the distribution of income is fundamentally determined by the market rather than political decisions embodied in regulations such as patents, copyrights, and bankruptcy law.
But what if we accept a view that virtually every facet of the economy is shaped by policies that could easily be altered? Investment bankers get incredibly rich because the government gives them the shelter of too-big-to-fail but doesn’t impose any serious prudential regulation in return. Bill Gates gets incredibly rich because, through copyright and patents, the government gives him a monopoly on the operating system that is (or was) used by 90 percent of the computers in the world.
Doctors are well-paid because, unlike less politically connected workers, they enjoy protection from international competition. The same is true for lawyers and other highly paid professionals. The six-figure salaries depend less on skill and hard work than on being able to structure labor markets in ways that autoworkers, textile workers, and cab drivers cannot.
Deregulation can be a principled position held by true believers in a free market. But Wall Streeters all wanted one-sided regulation that provided them with an enormous government security blanket.
There is a long list of professional licensing requirements (many of which have nothing to do with maintaining quality standards) that make it difficult for foreign professionals to work in the United States. While trade agreements such as the North American Free Trade Agreement have been designed explicitly to eliminate institutional barriers that obstruct investment in developing countries and the free flow of manufactured goods back into the United States, there has been no comparable effort to reduce or eliminate the barriers that obstruct highly educated professionals in the developing world from practicing their professions in the United States. Many ambitious professionals from the developing world do manage to overcome these barriers, but professionals in the United States still enjoy a far greater level of protection from international competition than less highly-educated workers.
* * *
The less-versus-more framing of regulation supports the premise that there is in principle an unregulated market out there and that some of us wish to rein in this unregulated market while others would leave it alone. This is consistent with the idea that large inequalities in income distribution just happen as a result of market forces. But as the above examples illustrate, no one is really talking about an unregulated market—rather we are all just talking about whom the regulation is designed to benefit. Distribution of income has never preceded the intervention of government.
The government is always present, steering the benefits in different directions depending on who is in charge. Accepting this view provides a political vantage point much better suited to the case for progressive regulation. After all, conservatives want the big hand of government in the market as well. They just want the handouts all to go to those at the top.
This expansive view of regulation puts everything up for grabs, including the six-figure salaries of many of those arguing the liberal position. Do liberals really want everyone asking if we can have the same economic benefits by removing trade barriers in physicians’ and lawyers’ services that we gain by removing barriers to clothes and cars? Liberals, too, are invested in the obfuscation that less-versus-more provides.
Even so, the catastrophe produced by the one-sided deregulation of the financial industry, coupled with a long list of regulatory failures in other areas, will almost certainly lead to a serious rethinking of regulatory policy in the years ahead. It remains to be seen whether this rethinking will go beyond the familiar debate. We know that when we emerge from the current crisis the economy will be extensively regulated. The questions is, to whose benefit?
Read other pieces in this special economics feature by Robert Pollin and Jeff Madrick.
Comments
Worse, confronted with hostile public reactions to gas at $4 a gallon, did you notice how the price simultaneously fell to $1.75 throughout the economy? It’s hard to call such managed price-fixing the “free competition” required under the Sherman Anti-trust Act (which, under court decisions, also forbids price-fixing by an oligopoly of three or four huge producers). Enforcing this law is urgently needed as a matter of national security and economic recovery.
It’s not just a matter of the price of gas. Although an alternative energy source for cars is fully available, the oil industry has continued to block a rapid transition to energy independence. Positive action to end is needed to end Big Oil’s monopolistic dominance of our energy supplies. It shouldn’t be a surprise that the oil companies seek to prolong their high profits from expensive gas (in the last quarter, Exxon profits were $38 billion). America’s economy and our national security should not longer be threatened by the selfishness of a few huge companies pretending to compete while their control of the White House guarantees their immunity from prosecution for violating anti-trust law.
Few Americans realize that technological change is probably the greatest victim of the oil industry’s power. Hydrogen, the non-polluting fuel of the future, is already feasible, as illustrated by Honda’s hydrogen-powered "CLARITY" now on the roads in California. Prototypes of GM’s hydrogen-powered “EQUINOX” are also in use, and will be in full production by 2010. Since the technology of splitting H2O into hydrogen (usable to power an electric motor) has been resolved, every auto maker in the world is developing cars powered in part or entirely by hydrogen. Yet when the media discuss alternative energy, the word hydrogen is rarely used: all we hear about in wind and solar (neither of which are likely to provide power for automobiles unless its through generating electricity). Despite GM’s VOLT (the prototype electric car), relying entirely on electric motors to power America’s vehicles would have enormous costs to our infrastructure. Moreover, given the need to reduce reliance on oil for heating homes and businesses as well as for fueling cars, solar/wind powered electricity will be more suited to filling this part of the future energy mix.
Discussion of future energy policies has been strangely limited in the mass media. Is this a surprise when our President and Vice President are so closely associated with the oil industry? Mr. Cheney’s position in Halliburton shouldn’t be forgotten. Are all America’s journalists and pundits unaware that Halliburton’s principal business is locating and drilling the wells that access oil supplies? Hasn’t anyone noticed the remark attributed to Alan Greenspan that access to Iraqi oil was the primary reason for our occupation of Iraq?
Money talks. When covering limits to current oil supplies, the media have discussed off-shore drilling and Alaskan oil shale – but almost never hydrogen (despite the investments in electric motors and ultimately hydrogen fuel cells being made by Honda, GM, and other auto makers). Are all American journalists too lazy to check the web for postings on “hydrogen”? Or is it not possible that this silence reflects the economic pressure of big business on editors and media owners?
A handful of Big Oil companies have an effective monopoly over the energy resources of our society – and their monopolistic practices (such as dropping gas prices from $4 to $1.75 a gallon in the blink of an eye) have had the effect of undercutting investment in an alternative source of energy within America’s borders. Bland discussions of “regulation” vs “free market” are irrelevant: the Sherman Anti Trust act, as interpreted by a series of Supreme Court decisions, should make Big Oil’s monopolistic behavior ILLEGAL. Fortunately, the Obama administration will make it possible to wake the Sherman Act from it’s long sleep under the Bush-Cheney Administration.
Roger D. Masters
Nelson A. Rockefeller Professor of Government Emeritus and Research Professor
Department of Government
Dartmouth College
Hanover, NH 03755
A very quick word answering your long diatribe.
I agree with you on several points you make, but I would like to chip in about some others.
The one reason why hydrogen cannot be considered as the future replacement for gas for your car is that you cannot dig a well in the ground and have hydrogen squirting out.
Though I don't doubt that hydrogen fuel cells will be refined to the point where they can be used in every car, the problem of hydrogen is double: production and storage.
The energy required to power your car with hydrogen has to be spent generating the hydrogen first. It is even worse than that: you need to spend more or less another third more energy to account for the losses in the production process.
If you burn petroleum-derived fuel to generate the hydrogen, where exactly do you save the planet or the US economy?
This is where solar, wind turbines, micro-hydro plants and so on kick in - and yes it will be to generate electricity, probably stored as hydrogen. (Other storage methods may show up on the way: supra conductive self inductances, high speed flywheels etc.)
As for the current crisis, though oil prices might have had some impact, have you heard about the housing bubble burst?
Now when you have an economic slow-down of the magnitude we are witnessing , I am not necessarily surprised to see the oil prices go down for lack of demand (economics 101).
Of course, absence of evidence is not evidence of absence and I fully agree with you about your general suspicion of price fixing. I plainly state that the observed drop in oil prices at the pump in and of itself does not prove it.
Best regards.
Please excuse my awkward English - it is not my first language.
In fact, there is no such thing as a "free" or deregulated market. Markets (based on money) are always dominated by one or more groups, almost always to the detriment of the majority who participate in them. Regardless of how well markets may advance overall prosperity, they will never do so as efficiently as moneyless cooperation has the potential to do. But more importantly, "unregulated" markets serve to ensure that the rich increase their wealth at the expense of the poor.
"Free trade" is a perfect example. It sounds great, but what it means is that rich people are free to pay the lowest prices anywhere in the globe to buy or produce what they wish--destroying middle classes and removing opportunities for real economic development from the 3rd world nations. Most economists, of course, argue that these low amounts paid to workers in the developing world are actually their keys to prosperity, since they mean better wages than were before earned in agriculture. But these economists propose a false dilemma. Lack of slightly better wages in sweatshops does not mean workers will be cursed to forever toil the fields with misery and ignorance as their reward. There is a third way: cooperation. It worked in many tribal societies who seemed to enjoy great leisure (enough to spend time on all kinds of elaborate rituals and storytelling) and even luxuries (feasts, child care networks) that the modern developing world's workers and even some in the developed world could only dream of. It also worked for the Spanish Anarchists for a few years, in more recent history.
"Fair trade", based on the idea that markets should not be oppressive, is a more subtle version of an oppressive free market in which the rich voluntarily throw some bones to the poor. The key word there is voluntarily--and that means that the poor are still at the whim of the rich.
The alternate Golden Rule is true: Those who have the gold, make the rules. Government doesn't shackle markets, markets are shackles in and of themselves. Short of abolishing markets entirely, government can shape them to be less oppressive to those without wealth, but most often, government, even when "democratically" controlled, sides with the rich and acts to further extort the poor. The sad vulnerability of democracy is that it functions only to the extent that information is able to be obtained and analyzed critically--and when schools train children to be good workers, and corporations control the information, democracy is only a facade for plutocracy.
Today we have companies raiding their workers' pension funds. Where are the prosecutors who imprisoned union heads for less?
BTW: We get more petroleum from Canada than from any place where, "people hate us."
Well, which is true? That government can help the poor, or that government will always favor the rich?
The latter of course. It's a mystery that the non-rich, and people like Mr. Rosenblum who claim to speak for them, have so much faith in the notion that government could do good by them, despite all the evidence to the contrary. I suppose government indoctrination centers, er, I mean, public schools, and the propaganda peddled by the conventional media explain that. Stephan Molyneux steps back and examines the big picture here:
http://www.youtube.com/watch?v=P772Eb63qIY&feature=PlayList&p=0629B97DDFA9C7DB&index=16
The one constant in this equation is government. The solution to this problem is less of it. It is not "pandering" to libertarians to speak of "true believers" in the free market any more than it would be pandering to physicists to speak of them being true believers in special relativity. It's not a matter of religious belief, but of understanding reality. And cooperation, as Mr. Rosenblum desires, is exactly what is possible and most in evidence in a free market (which means, a market without coercion, which is the opposite of cooperation). Any truly free society will have a full range of community models ranging from "cut-throat" competition to complete communism. The only thing missing will be one trying to impose on the other.
There is another key point that I would like to add to this theory. It seems that in the selfish nature of all living organisms, who must fight to allocate resources to themselves as a basic tenant of survival, the only way to make cooperation work as a fundamental structure is to create systems in which cooperation can be seen as the only means to achieve ones own desires. Due to the extreme perversity of contemporary media, education and by extension thought, strives toward a completely cooperative society seem nearly impossible. I posit that the only feasible means to such an end would be full disclosure of all relevant information to all the peoples of the world. The mass and forceful dissemination of knowledge in order to empower the population is the only real means of leveling society. This is not to say that this sort of action is an immediate answer, but over time I believe that this will help to shape the minds of the masses into much more rational decision makers. After all, what is an agent of free will without the knowledge to act properly?
The creation of the necessitated knowledge networks to take this type of action are always a dangerous prospect however. Those who control society in the sense we all imagine invariably will have disproportionate control. Luckily, thanks to the modern age of information technology, we have methods to deal with such corruption. Thank god (or whatever) for open source networks.
Forgive me for any errors I have made. I am a bad writer.
Also, Check out these numbers....
George Mason economist Walter Williams: The Federal Register, which lists new regulations, annually averaged 72,844 pages between 1977 and 1980. During the Reagan years, the average fell to 54,335. During the Bush I years, they rose to 59,527, to 71,590 during the Clinton years and rose to a record of 75,526 during the Bush II years. Employees in government regulatory agencies grew from 146,139 in 1980 to 238,351 in 2007, a 63 percent increase. In the banking and finance industries, regulatory spending between 1980 and 2007 almost tripled, rising from $725 million to $2.07 billion.
So here are my questions: What are we to make of congressmen, talking heads and news media people who tell us the financial meltdown is a result of deregulation and free markets? Are they ignorant, stupid or venal? What kind of assumptions do politicians and news media make about the intelligence of Americans to expect us to buy the idea that our current mess results from deregulation and free markets? I do not find that assumption flattering. --CARPE DIEM
The US provides drugs for the rest of the world. They don't come cheap, especially for rare diseases.
Also, I do not know of one technical or scientific journal that has said we can get rid of the internal combustion engine within the next 30 or 40 years. Mr Baker, what are your credentials on this issue?
I'd go a step further and say that the phrases "free market" and "free trade" are oxymorons. A market is nothing more or less than a set of restrictions on commerce. Economic transactions are dependent upon mutual trust, which is in turn dependent upon enforced rules of conduct. A set of regulations cannot logically be unregulated, deregulated or "free."
The word "trade" in "free trade" refers to commerce across national boundaries, which brings up another logical conundrum. The very nature of a national border is to be restrictive. It is part of a nation's basic sovereignty.
The coded meaning of the nonsense term "free market" is "regulations that benefit a particular business or type of business." The coded meaning of "free trade" is similar, with the added dimension of transferring national and international political power to corporate entities.
The cant about "smaller government" is similarly about a corporate directed power transfer.
You can read the whole spiel here: http://www.minorheresies.com/essays/2006/4/20/free-markets-free-trade-and-the-tooth-fairy.html
The problem won't be the hydrogen that leaks the real question is the methods that we choose to produce that hydrogen.
Currently most of the hydrogen that we manufacture also results in a fair amount of Carbon Dioxide which kind of defeats the purpose of switching to a Hydrogen based economy. Mr. Perdu does mentions the problem of using petroleum based energy to produce the hydrogen.
Free hydrogen, released in the atmosphere, can undergo an exothermic oxidation reaction, forming covalently-bonded hydroxylic acid.
An analog of Dihydrogen monoxide (DHMO), Hydroxylic acid is the prime component of acid rain, and can be found in watersheds throughout the world. It contributes to the greenhouse effect, and global warming. It accelerates corrosion and rusting of many metals. And it has been found in excised tumors of terminal cancer patients.
Atmospheric levels of Hydroxylic acid as low as 10^6 ppm are incompatible with human life. Yet, through a simple endothermic reaction, Hydroxylic acid can be fractured, to create Ozone.
Personally, I'm with Mr. Higgins on this. We should think very carefully before implementing a Hydrogen-based energy economy.
Please drop by Angry Bear if you have time. Lots going on re: Social Security. Wondering if Larry Summers is pressing the matter, or only Peterson and Walker.