"When an industry becomes necessary for the proper functioning of our society, it wields an unhealthful amount of power. Specifically, it is in the perfect position to engage in what economists call 'rent seeking.' (monopolies on 'essentials' are the dream of our modern capitalists, and healthcare and Banking are prime examples - Jess)Generally speaking, businesses earn profits in one of two basic ways. The first is by providing goods and services more productively than others and selling them at a price people are willing to pay. The second is by seeking rents.'Rent,' in the economic sense, refers broadly to any excess benefits that people and businesses receive simply because they have power over something that others need. Patents are a form of rent, as are cable-TV monopolies.For economists, rent-seeking is everywhere, and is a common way that economies go awry. Crudely speaking, productivity enhancement is good, because it makes society richer over all. Equally crudely, rent-seeking is bad, because it makes the people who are already rich even richer.Rent-seeking tends to be a force against innovation and for stagnancy, in large part because its focus is on the past — on maintaining power and influence gained long ago, often at the expense of innovation.Businesses built around rent-seeking don’t try to increase the size of the pie; they just want to make sure they get a bigger slice. (If a company doesn’t seem to care about your opinion of it as a customer, there’s a good chance that it is seeking rents.)"Adam Davidson, Wall Street Using Dodd-Frank Against Itself
The biggest problem we have is that the President and the Congress have no moral courage. If we had only a portion of the resolve to reform that led the New Deal, we would not have the threat of another financial crisis hanging over our heads.
The 'problem' is that the politicians and the regulators have been corrupted by Big Money, and their paychecks demand that they see no obvious solutions.
The stock market looks a little unsteady here, but it will take 'something' to push it into a rollover. So it in the meanwhile it can keep muddling along on light volumes and 'a six lane highway of $100 bills.'
Have a pleasant evening.
Need Little - Want Less - Love More
