David Cay Johnston -- Free lunch: how the wealthiest Americans enrich themselves at government expense (and stick you with the bill)
======================================================================================================================================


One way to view this book is as a collection of many different ways
and different sectors in which those (individuals and corporations
mostly, but also NGOs and non-profits, too) with money and the power
to influence our government at different levels use their power and
wealth to channel money to themselves and away from those with less
power, especially those who are less wealthy and less able to pay
for organized political influence.  It is also possible to read this
book looking for systemic features that infect any highly organized
society-government interaction.  We can think of the capture of
government by the rich and powerful as an attractor or a stable
state towards which all societies and government drift as they
become more advanced and more highly organized.  Given this view, a
society that does not protect itself against such drift, against
that kind of capture is foolish.

And, given this view, it might be helpful to ask whether it is
possible to identify and describe the significant features of a
society-government nexus that enables or facilitates this trend
toward capture by the rich and powerful.  If we could list those
features, would they be avoidable?  And, are there features that
might protect us from that advance toward and spiral into capture by
the rich and powerful?  If not, the only alternative seems to be to
wait until our condition is so bad and so extreme that some sort of
unstable state and cataclysmic change becomes inevitable.  That
would be a harsh alternative, for that extreme condition and its
aftermath are likely to be destructive and unpleasant.

Is a drift toward taking from the many in order to give to the few
an inevitable tendency of any large, complex system?  Perhaps not.
But, that drift might be inevitable in any system with the following
conditions: (1) the system manages and redirects money (thus
providing a potential for profit); (2) the system can be influenced
by money or by power that can be obtained through money; (3) the
system is complex enough so that the transfer of wealth can be
disguised, hidden, justified, etc; and (4) the system/government has
enforcement power (for example, the power to collect and
require/force payment of taxes).  Johnston excells at reveiling
these characteristics in our society and government and at
describing how they function.

In addition to taking from the many to give to the rich, we as a
society are also making it increasingly harder for those who start
out poor to become well-off financially. As the chapter on education
and its costs reminds, as the distribution of income and wealth is
becoming ever more skewed in the U.S., also it is becoming more
expensive to acquire the education that might enable someone to rise
above the income level into which they were born.  For all too many
in our society who cannot afford private K-through-12 eduction, our
schools do not give the preparation needed for college.  And, for so
many of those fortunate enough to become prepared, college is
becoming increasingly unaffordable, as public financial support for
our state run colleges and universities shrinks.

Perhaps a more general lesson to be learned from this book is that
if you create a system that *can* be manipulated for profit, then it
*will* be manipulated for profit.  Where unfair profits are
potentially high enough, someone will figure out how to rig or game
the system so as to gain those profits.

There are several chapters on the Enron scandal and some of its
negative effects.  That's a timely reminder (I'm writing this in
2011), because our more recent financial catastrophe (the disaster
surrounding housing, mortgage, securitization, CDS) clouds our
historical memory; it leads us to forget just how frequent these
"market anomalies" are.  These are not rare, 100-year events.  They
are common. Operating on the belief that these crises are rare, that
we can ignore them, that someone else is likely to suffer the
consequences, but not our generation, is foolish.  Wait five years
or less and we, you and I, will suffer the negative consequences.
Provide enough incentive, create a system in which the potential
profits are high enough, and some will exploit that system and will
put that system in an unstable state in doing so.  Therefore, if you
have complex a system that is not protected against capture by the
rich and powerful, and we do, then "what you see is what you get".

You will find sections in this book on: (1) how Wal-Mart and other
large retailers use government subsidies and shift their costs onto
local communities; (2) public power utilities (electric and gas) and
how they maneuver the government and their financial dealings; (3)
the efforts of rail transportation companies to avoid regulation and
inspection; (4) the health care insurance industry in the U.S. and
how it uses denial of coverage, denial of care, and denial of
payment to enhance its profits; (5) drugs and how the U.S. Congress
passed a bill to require payment of top prices for drugs while
prohibiting the negotiation for lower prices; (6) a discussion of
hedge funds and the financial industry that gives a preview of the
recent financial sector melt-down; (7) the increasing income and
wealth inequality in the U.S. and its likely negative consequences.

It's not a pleasant picture that Johnston describes.  But, remaining
oblivious to it is possibly the worst thing we can do.

05/15/2011

.. vim:ft=rst:fo+=a: