What’s Free Market Capitalism Done for Us Lately?

I was struck by something in this Paul Waldman column, quoting Washington Governor Jay Inslee, about shortages of medical supplies:

Inslee noted that he recently asked the CEO of a private company that is manufacturing the transport medium for tests if it could ramp up production with double shifts.

“She said, ‘Well, maybe — we have to find a way to finance that,’” Inslee told me. This surprised him, because it seems like something the federal government should already be communicating with such manufacturers about.

It struck me that if the law of supply and demand is that compelling, why wouldn’t the manufacturer step up and start double shifts without being asked? Clearly the demand is there. But apparently, in this situation, people making the component parts of the much-needed coronavirus tests can’t or won’t crank up production without government intervention.

Here’s another example:

One major problem is that the federal government’s haphazard approach has created a vast mismatch in availability among disparate parts needed to make testing possible.

For instance, Inslee noted, the state has unused testing capacity right now in large part because it lacks one thing: the swabs needed to take samples.

“It seems ridiculous that the United States can’t produce enough swabs to solve this problem,” Inslee told me. “I have 50 or 60 long-term care facilities that have infections in them that we literally have not been able to do the testing we want of remaining residents and staff.”

Yeah, that’s ridiculous. No question. I can understand that it takes time and money to tool up to produce ventilators, but swabs? I thought that the all-powerful and perfect Free Market just automatically adjusts to produce whatever the public wants. It’s like magic, right? (She said, snarkily.) In this case, the market is government, but why wouldn’t the government’s money be as good as the private sector’s?

See also U.S. federal stockpile of medical protective gear is almost empty as coronavirus spreads.

In the case of tests, we’re going to be needing them for a long, long time. Assuming the virus is contained and the number of new cases begins to recede, we can’t just all stampede back to work and out to restaurants and ball parks without starting the spread up again. We’ll need to test the heck out of everybody and isolate the infected to get back to anything approximating normal, at least until there’s a vaccine. Which likely won’t be until some time next spring, if then.

Some local officials are disappointed the federal government will end funding for coronavirus testing sites this Friday. In a few places those sites will close as a result. This as criticism continues that not enough testing is available.

Yep, you heard that right. Trump expects states to pick up the tab and pay for their own tests, in spite of the fact that states have to live within budgets and a lot of them probably have no money to pay for tests unless they take money out of other parts of the budget that have already been cut to the bone. Ironically, red states will be hurt the worst, but Trumpers are too dim to realize that.

And, of course, the Trump Administration is defunding testing now. Trump says states should get their own stuff and only rely on the federal government as a “last resort.” It’s been “last resort” time for a few weeks now.

So, in spite of the fact that there’s a big, honking, life-or-death need for tests — and more hospitals, and more ventilators, and more PPE, and a lot of other stuff — the Free Market appears helpless to do anything about it, because it’s not clear where the money is coming from to pay for it. And there is no part of private, for-profit industry set up to provide for public health on this scale, including our famous for-profit health care system.

The glorious and holy Free Market may be really good at giving us all the toasters and DVD players we want (although not, apparently, toilet paper in a pinch), there’s a lot it can’t do. It doesn’t build hospitals in rural areas, for example, because there’s no profit in it. Not everything people really truly need can be produced at a profit. Let’s not even get started on the inability of the Free Market to provide universal health care, or even consistent and affordable health care for anybody but the very wealthy.

By relying on business models that don’t apply to the role of government and refusing to deploy the resources and authorities of the federal government, Trump and his enablers have pretty much screwed the nation. But this failure is more than just Trump, and it’s been a long time coming. See something I wrote back in bleeping 2009, The U.S. as a Failed State.

To add insult to injury, Reuters reports that George Laffer is speaking up about what the U.S. needs to do to get its economy moving again. Y’all are going to love this

Tax non-profits. Cut the pay of public officials and professors. Give businesses and workers who manage to hold on to their jobs a payroll tax holiday to the end of the year.

What about the extra aid funneled to newly jobless workers by the $2.3 trillion fiscal rescue package? Such government spending, Laffer told Reuters in an interview, will only serve to deepen the downturn and slow the recovery.

“If you tax people who work and you pay people who don’t work, you will get less people working,” Laffer said. “If you make it more unattractive to be unemployed, then there’s an incentive to go look for another job faster.”

Think this is too crazy?

Laffer’s unconventional plan isn’t just an academic exercise. First of all, he says he has presented it to his contacts at the White House. They include presidential economic advisor Larry Kudlow, who considers Laffer a mentor.

Laffer is also being floated in influential right-wing circles as a good candidate to head a proposed new industry task force aimed at re-opening the U.S. economy as soon as possible. “Bring in the minds like Art Laffer,” Sean Hannity, the Fox News host said April 6 of the proposed task force.

Needless to say, if the Trump Administrations listens to this moron while millions are out of work because there are no bleeping jobs, we’ll be facing mass hardship, a breakdown in civil order, and possibly a genuine depression.

If the Glorious and Holy Free Market were as capable as righties believe it is to respond to our every need, we wouldn’t be having this conversation.

3 thoughts on “What’s Free Market Capitalism Done for Us Lately?

  1. If his mendacious curve hasn't caused indeteminable misery over the last 40+ years, "Laffer's Curve" would be 'lafferable!'*

    As Karl Marx basically said, unfettered capitalism will eat itself – and people.  And right now, "free-range** capitalism" is done with most of its 5- course meal, and is ready for the dessert presentation.

    Post-tRUMP Plague, we are probably headed for a major recession.  Maybe even a major depression! 

    We as a country will have to come to a decision:  Do we continue with free-market capitalism?  Ok, we've already been told that health insurance will go up around 40%.  IN THE MIDDLE OF A RE/DE-PRESSION ?!?  Who the feckin' hell will be able to afford it?  And that may mean, in reality, a 90 or 100 percent increase – maybe more.

    Post-tRUMP Plague, we seriously need to drop the idiotic stigma against Socialism.  We're already most if the way to it.  Social Security, Medicsre, Medicaid, SNAP, School Lunch programs, Aid to Dependent Children (Families), etc…

    The part that are missing, are higher taxes on the rich, their businesses, stock transactions in some circumstances, and – ready for a MAJOR contraversy? – taxes on politicized churches.  And still more taxes***.  Use some European models for taxes and health care!

    One thing is sure: We can't keep going the way we're going.  Not as one nation.  But that's s conversation for another day.

    *Bad joke.


    ***For working on slowing-down/altering climate change, the other existential threat with "Free-Market Capitalism!"

  2. Allow me to quote from something I'm writing:

    In 2006, (Bush era) the Department of Health and Human Services recognized a need in the event of a pandemic – ventilators. The stockpile wasn't sufficient for a large-scale health threat – about 70,000 units. Ventilators on the market run about ten thousand dollars each – building an emergency stockpile was prohibitively expensive. By 2008, (Obama era) HHS established the specifications for an emergency ventilator with a price tag of $3000 and began a search for a manufacturer who could develop one. A California company was selected – the government put up millions in development. In 2011, prototypes were tested by the CDC. Production was to begin in 2013, BUT…. The company (Newport) was purchased by a major medical device manufacturer (Covidien) who demanded more than $3000, the agreed price. Covidien, as it turned out, made expensive ventilators. According to the NY Times:

    “Government officials and executives at rival ventilator companies said they suspected that Covidien had acquired Newport to prevent it from building a cheaper product….”

    In 2014, after delivering zero ventilators, Covidien wanted out of the contract – a request which the government granted. After a search, a for a new maker (Phillips) was selected to develop a ventilator, (yeah, we'd already paid to develop one.) which Plillips named Trilogy Evo, which was approved by the FDA in 2019. (Trump era) Production of the $3000 ventilator may begin in 2020 but Phillips is currently (in the midst of COVD-19) only selling more expensive versions of the Trilogy ventilator on the commercial (hospital) market.

    If someone you know died in the peak of the pandemic, there's a good chance lack of respirators was a factor. The federal government was addressing the need (or trying through three administrations.) The free market was capable of filling the order but greed delayed production (twelve years and counting.) Corporations sacrificed citizens on the altar of profitability."

    Look at the sequence – The government recognizes a need, ventilators or an aircraft carrier. They write the specs and put out an RFP – Request for Proposal. The government invites companies to bid on filling the order. The government funds the research and development which the free market does. Then when it comes to filling the order the private sector holds the order hostage unless the price meets the profit level the free market believes they can extort from government. In the military this shows up as cost overruns – with ventilators, the free market developed a prototype but held off on filling the order, IMO until the federal government was willing to bump up the price.

    You and I know that this kind of chicanery doesn't happen when it's the free market dealing with itself. There are deadlines and penalty clauses. Why not include those when negotiating with the "free market"? The clue, and I'm speculating based on what I've seen, the people who negotiate contracts for the federal government retire after 20 years with the government to FAR more lucrative jobs as "consultants" with the very companies who got sweetheart deals. 

    Am I offering a paranoid conspiracy theory? The revolving door between the military industrial complex and people from the pentagon is an obscene joke. The top dog with Bureau of Prisons retired to go to work for the biggest private prison firm. The Postmaster General (a decade back) went to work for Netflix after the video company got a deal which many questioned. Everybody in any kind of procurement seems to be on the take.

    Solution: End the revolving door for Congress so they can't take corporate money before, during and after a term of service. I'm talking about putting all their deals and jobs under a microscope for a decade after they leave office. Any attempt to conceal money would be a ticket to jail. As soon as Congress can't take money, they will plug every hole where rats in government want to take the bribes Congress no longer can.

    I know, I'm a broken record on the subject. But I'm right.




  3. Free market capitalism has done what it needs to do, instill in people lessons on buyer beware.  It just is not doing it well enough.  Right now Trump is selling American Trump Plague testing products getting free air time on the morning talk shows to do it.  It is the same old same old sales line of best in the world, every other country's envy, available everywhere, yadah, yadah, yadah.  That is Trump-speak for you are going to get so screwed buying this one, if you can even find one to buy. 

    In the Nixon days, we would say to each other, I would never buy a used car or war from that man.  We openly called him Tricky Dick.  Trump does not even get a tricky title.  If he is selling it you can be most assured the product is junk.  No trick needed, just another big lie.  When has he even admitted once that he has spouted misinformation or made less than a perfect phone call?  He touts his intuition, saying "I just have a feeling" like he has some kind of magic power of playing a hunch.  If your a big enough succor to think he has hunch power ask yourself this – would he have left a trail of bankruptcies like a slug on a pilgrimage if this was close to the truth?  If that does not convince you then it is possible that  "the succor born every minute" is you.  


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