Organizing to Control Costs: Healthcare and Energy Markets

The tendency to organize into horizontally and vertically integrated, monopolistic entities to distort valuations into the realm of the irrational was strongly argued against and identified as inimical to free markets by Adam Smith, founder of classical economic theory.

Smith argues that organizing into ever larger entities consolidates power in the marketplace and creates false indicators (the irrationality). Smith's solution is to be sure capital, industry and markets are deconsolidated. The profit margin is then a more accurate measure of future expectation (the trend) that is less likely to become a failed expectation and a sudden shock (the crisis) that further consolidates the wealth and power (systemic risk management).

According to Adam Smith, it is the job of government in priority to ensure the marketplace is free and unconsolidated. That, according to his theory, will effectively manage the systemic risk we are now grappling with. The government, then, according to classical theory, is in the business of creating jobs and wealth by ensuring it in priority despite the rhetoric of neo-conservative propagandists.

Notice that there is little to no evidence of government operating to apply Smith's prescription of deconsolidation.

Healthcare relies on the "public option." Energy relies on the regulation of derivative markets, like futures, which will innovate to avoid the gamma risk. Both elicit the need for progressive taxation to keep capital from the overaccumaltion that causes a deflationary trend with inflationary, monetarist counter-measures (stagflation).

The "need" for the progressive tax is obviated by organizing for a free-market system in priority. The need for a more progressive tax code is an accurate measure of extant free-market (democratic-economic) modality: the more the economy is organized for free-market mechanics, the less need for progressive taxation to technically correct for over-accumulation (liquidity crisis, or the systemic risk).

Government has operated largely to encourage and protect the organization of consolidated entities to the point of absurdity, irrationality, we have now: economic entities that are too big to fail and paying outrageous bonuses to business elits that have clearly managed the system into what is considered an illegitimate failure by the vast majority of Americans.

(The ultimate ignominy is to pay the devil a bonus for making you miserable! Is that the ultimate con game or what? The con is systematically organized to convert and consolidate value without legal liability. The liability is purely political. It is the gamma risk with a retributive, economic value.)

Current econmic policy clearly indicates a strong tendency to support state capitalism--a command economy with private consolidation of the wealth bureaucratically managed to protect the interests of the wealthy elite in "the public interest." Just enough pluralism is allowed, like a "public option," to give the consolidation of power a popular legitimacy.

The pluralistic legitimacy is really false. It is a Hamiltonian trick that keeps being reapplied in the name of democracy and self-determination.

Despite the freedom to pursue success and fully enjoy its reward without taxation, according to the conservative argument, the accumulation of wealth and power is nevertheless endowed. It is a legitimately necessary condition endowed by the god in which We all trust. The outcome is ontological--it just "naturally" happens. Thus we have the conservative concept of the Rights of Man: the utilitarian free pursuit of happiness with a naturally endowed outcome that if technically corrected for is contrary to the natural order of things.

Any attempt to correct for the accumulation of power and wealth that causes crises is considered to be an unnatural tyranny imposed on the natural order of things. That, according to the conservative argument, is the cause of perennial, systemic crises, like the deflationary trend we are experiencing now.

Not allowing for the naturally endowed tyranny of those with the secret, elite knowledge (the noble character to rule which, as far as I can tell, is merely the capacity to be corrupt and self-seeking in the name of the public interest) is an unnatural tyranny that causes crises. It is a self-fulfilled, teleological argument masqueraded as an ontology. It is a lie, a polemic, a lawyers trick, a sanctimonious, self-serving profanity that keeps the wealth, and power, legally consolidated as an act of God. Deconsolidation, then, is considered not only illegal, but a constitutional deprivation of the Rights of Man that is fundamentally evil.

Yes, deprivation of the Rights of Man is fundamentally bad. It results in crises and all manner of humanity's inhumanity to itself. It is an illogical, irrational, condition. It is an irrationality that mirrors the Hamiltonian ontological argument.

The Hamiltonian ontology is nothing but sophistry, later in history embraced as a moral ontology (an objective, untranscendable truth to be scientifically acknowledged) "beyond good and evil," as Nietzche described it.

The power elite is fallaciuosly argued to be a breed beyond the masses with a secret knowledge that is the public good...the general welfare. Why does Goldman Sachs give exclusive information, "tips," to its most privileged clients? (Recognize that the word "privilege" is a combination of the words private and legal).

The masses can never know, then, what the public good is because...it's a secret! It is entirely antithetical to a popular (pluralistic) legitimacy. The contradiction is not reconcilable, but historically it is ontologically played out in the natural order of things in which the truth naturally prevails over the lies.

The need for a progressive tax code to correct for an over-accumulation is considered by conservatives to be inimical to the public's best interest. It is therefore necessary to hide the wealth with innovative investment vehicles that are only accessible by the wealthiest clients (the consolidated capital).

The consolidated capital cannot be progressively taxed to correct for the over-accumulation if it is hidden. It's a secret. Can't tax what you can't see. All in the public interest.

It is then up to the Ben Bernankes of the world to save us all from the ontology of ourselves; from the mindless consolidation of power beyond good and evil, armed with the philosophy that conserving, rather than preventing, what is too big to fail will "reliably" effect the crises. If the effect is predictable, the risk can be "effectively" managed and predictably trended, which is what Keynesian economics does.

If the element of uncertainty is eliminated, the systemic risk can be effectively managed to keep the patient alive while we ontologically play out the proper diagnoses.

Rather than deconsolidation, government operates to regulate and technically correct for the lack of free-market mechanics (collective, direct democratic legitimacy).

The technical corrections (the gamma risk) plagues small investor analysts with a complexity that suckers them into following trends rather than predicting them. It is a furtive, systemic racketeering (yielding a privileged--a legally secret or private--benefit) that, as small investors found out, will result in reduction (consolidation) of net worth that supports a long deflationary trend, like we have now.

Until the means of deconsolidation is applied--a progressive tax code and reinvestment to pluralize consolidated markets and entities--small investors must always be on the defensive. They must protect themselves from trends commanded and controlled by entities too large to fail by applying an effective counter-tyranny in the marketplace.

Always being opposite the big money momentum (predicting the trend) is essential for capital preservation (to keep assets from being consolidated). It is a lesson to well be learned by the Obama administration and the current congressional delegation as we watch the stimulus money being consolidated into paying state debt and overpriced medicare bills, but that its leadership is unwilling to learn, much less apply. Changing that would be change we really need.

It is important to understand that, for example, what the Obama administration is recognizing as a necessary command and control of the futures markets by regulating the purpose of its participation is to control the ability to command the deflationary trend. Understand that both the problem and the solution are the same thing--command and control, not free-market economics.

At the same time, understand that the objection to the proposed action by the CFTC to remove the buyers (the speculators) dark marketeers say is needed to make futures markets operate with optimal efficiency to hedge the risk is not in any way supported by the evidence.

Physical users of the futures markets are penalized by the mass movement of private equity and hedge funds into futures contracts, driving up their costs and deflating the economy--the consequence (the trend) in command, and "the risk" to be controlled in "the public interest" (We, the ignorant mass of The People, can't be sure what that is, of course, because it's secret, privileged, knowledge).

We cannot legitimately measure the success of managing the risk by the depreciation or appreciation of income because it all happens by the secret knowledge of elite authority. All we supposedly know is challenging that elite authority, like allegorically realizing what causes the shadows on the cave wall, is inimical to our self, the public, interest.

Medical professionals, for example, have the esoteric knowledge of what drives the unlimited cost of healthcare. Talking about what a particular medical procedure costs is an uncivil questioning of authority (questioning the legitimacy of commanding the price).

Demanding the price is considered by the elite to be an ignorant act of defying civil authority. The equilibriating effect of a democratic, free-market economics on income will destroy the natural ability of the best and the brightest to protect the public's interest. Of course, it will not. The protection will be best afforded by not impoverishing the protected.

Controlling costs will be a function of ensuring economic democracy--free-market economics--in priority. As long as the price is commanded, either by public or private means, fair value is not empirically, legitimately, verifiable for either producers or consumers.
Incomes as well are not measurably fair and equitable without ensuring a free-market economics in priority.

We often hear conservatives say it is no one's business what their income is, and conspicuous consumption distributes the wealth fairly and equitably. The crisis that ensues from overaccumulation is falsely attributed to government intervention (the gamma risk) that distorts the free market. The cure, according to conservatives, is laissez-faire.

The reason income is a desireable "secret" is because it is an empirical measure of inequity. That inequity is retributive in value that must be protected. It is a risk that must be managed to be conserved (...sshhh... that's supposed to be an analytical secret well hidden within the dirty bowels of academe where obsequious conformists fear to tread). If the value was not retributive, no one would care what your income is, and you wouldn't care if it was a secret.

Empiricism is by definition to know, not to not know. It is antithetical to the privilege of the elite and why they resist free-market, demand economics for command economy. It is why income should be secretive and should not be considered the object of public policy to distribute it by free market means or any other means, but to conserve it.

Focusing on controlling costs is to focus on incomes and the legitimacy of those incomes. Costs have less to do with the esoteric knowledge of doctors, lawyers, business professionals... than with having the organized, systematic ability to command prices, and economic trends.

Controlling costs is a function of controlling the ability to command the price (ensuring a free-market mechanism in priority).

Controlling the ability to command the price is not accomplished with the ability to command the cost, like the public option does, or like the big box-store model does in which the provider commands the price and the consumer picks the quantity, but by The People having the power, the income, to democratically demand the price and thereby legitimately control the cost unless, of course, there is some secret knowledge I am unaware of.

Ensuring in priority a free and unconsolidated marketplace is to organize to control costs, and policy focused on income, rather than reorganizing the effects like a public option, is essential to ensuring it.

Organizational Modalities Indicates Probable Trends

When investment banks reorganized into commercial bank holding companies to take the TARP funds, they traded the alpha and beta risks for the gamma risk.

Being too big to fail and the highly leveraged, unregulated organizational type indicated the probability of the Great Recession (and the gamma risk) we are now experiencing long before it presented.

At the outset of the organizational changes made to bank regulation that allowed for horizontal and vertical integration of the industry and markets (networking the externalities), political economists who raised red flags were villified by both Democrats and Republicans as anti-free-market doommongers.

These political economists were merely identifying a technical indicator, an organizational typology: consolidation of industry and markets that, by recognition of the empirical evidence, always causes (indicates) the recessionary trend (and the necessary management of the systemic risk) we are in now.

There is a very clear cause-effect relationship. Getting to the Great Recession was no random walk.

The alpha and beta risk is so well commanded and controlled in the short and intermediate term by being too big to fail that the only probable risk is gamma. Managing the gamma predicts a merger (consolidation) of public and private function into an organizational typology with predictable trend indicators.

Macro sector consolidation to manage the sytemic risk immediately indicates that too big to fail is a confirmed efficiency to be conserved. This is the leading, trend indicator suggested by organizational type.

Intervention of the gamma risk will be managed co-operatively, indicating the recessionary trend will be long and slow with public authority now in a position to take the blame for the negative effects of the trickle-down economics of a consolidated capital.

The organized modality indicates a money flow. The flow is the relative trend, the probable path, of the economy. Since the organizational type necessitates a trickle down flow, the strength or weakness of the recovery will be determined by "control" of that flow. That is what this modality is intended to do--control the gamma risk intervention and the distributional value of the accumulation.

How the accumulated value is distributed determines what balance sheets and income statements look like and when. So the organized modality not only indicates the probable strength of the macro economic trend, but the valuations of sectors and markets over time. It has a market timing determinant.

Whether from the public or private sector, or both, command of the economy from the top down will have a mean frequency of both time and money. The small investor needs to keep in mind, however, the ability to be unpredictably arbitrary and capricious is not only an emblem of power but a means of technical manipulation.

Being able to dictate what the technicals look like tends to position investors to fall for false indicators.

In the short term epspecially, small investors looking for that technical hedge on the risk are easy victims to the law of large numbers. Flash trades and large volumes at the last minute of trading can present false indications. The frequency distributions can be arbitrarily distorted till the favorable condition for the consolidation presents for execution. While the short term indicators look noisy in retrospect, the long term may present as a normal distribution.

Organized consolidation of the capital allows for this trending by directive. Goldman Sachs predicting that energy prices will retrace record levels, for example, sets up a trage. It positions investors for surprising reversals all dependant on their position at any particular time.

While the aggregate position, the threshold, that triggers an execution to consolidate the accumulated value has the appearance of being a legitimately organized process of self-determination (a pluralistic, free-market mechanics), the director is always the probable winner with the risk almost entirely eliminated. Being "free" of risk is the stock in trade of hedge funding with a large volume of capital (the law of large numbers).

The law of large numbers can also act positively from the bottom up. It is a trend the current organizational mode does not indicate occurring anytime soon but would do much to facilitate the time of recovery. The money used to drive futures contracts at the top would drive the recovery from the fundament if it were used as liquidity at the root instead of waiting for it to inadequately trickle down, with or without a gamma risk intervention. The price of energy would then be fundamentally driven, but not at a rate that delivers that magnified, exponential hedge-fund return that entails high gamma risk and indicates support of the deflationary trend. Rather, the profit on the demand pressure very simply indicates recovery.

Goldman Sachs' prediction for energy prices indicates support of the recessionary trend, largely determined by the organizational modality.

The small investor will be sure to hear big financial analysts, and pop media analysts generally, touting indications of recovery, but it is a way to position the retail investor for a trage consolidation.

Given the indicated organizational modality, the recovery will not be indicated till the retail volume has been consolidated. At that threshold, the capital has no where to go to make a profit but to finance the fundament and economic recovery. It is the classical model of capitalism in which markets are allowed to consolidate and the long wave shows a normal distribution. While the process looks "largely" normal, unfortunately this modality operates at the very highest cost to the vast majority to provide, to finance, the benefit.

Energy prices will not, then, retrace peak levels at the time of recovery as Goldman Sachs suggests. Prices will be generally deflated. The peak price of energy indicates deflation given the organizational model in operation, and will consolidate the value positioned for recovery.

Weak energy prices, and a gamma risk that controls the speculative demand--a public-private organizational modality, will signal a near-term recovery.

Peak energy prices will not be an indicator of recovery.

Surprise!

It is absolutely critical the small investor understand that market sentiment (the irratonal exuberance) is driven to absurdity by non-free-market forces.

The historical tendency to attract investment and overvalue assets to an absurdity is an organizational problem.

For example, grappling with healthcare reform, providers want to talk about everything but price. If controlling the cost is the goal, it is necessary to talk about the price, not just lifestyle choices and the accumulation of capital needed to drive technological innovation.

Talking about everything but the price rigs (organizes) the market to command it.

If, for example, consumers talk about "organizing" a healthcare co-operative, the consumer empowers a democratic organizational typology in which to demand the price in a disinflationary, free-market fashion instead of the inflationary command-model fashion that accumulates value and deflates the economy.

The determining variable is the organizational modality.

Controlling the Future(s)

Big or small, the investor is looking to predict the future. Big investors, like hedge funds and private equity firms, can control trends--a sure predictor--in spite of the technicals.

The effect, the intended result, is the small investor, the small business, the small income at the mercy of big, consolidated capital, inimical to a free-market economics.

The data generated by the small investor is easy to track by big financial firms. The technicals that the small investor relies on to divine the future are easily manipulated to create "surprising" market valuations that are based on the position of the small investor.

A "surprise" means you missed it and will not share in the wealth. Rather you will have lost value, if not directly, indirectly so that you will not properly associate the cause with the effect, the cost with the benefit, the profit with the loss.

Without a proper correlation of cause and effect there is no proper accountability. There is no legitimacy "demanded" of the outcome, the intended effect that is not supposed to be legitimately commanded.

If you are playing poker, the player that stacks the deck, deals the cards and knows what everyone in the game is holding is always likely to win with the legitimacy of the law of averages. The player in command of the game induces and accumulates a retributive value, a risk, that must be managed which includes keeping the other players in the game with a false legitimacy, like just being lucky.

If the small investor goes long, big money managers go short... and so we have the recent move to limit naked shorts by regulatory decree, for example, to defend a free-market legitimacy of the outcome.

The element of surprise also presents in the irrational valuation of derivatives, like commodity futures, which affects (supports) their "derived" equity valuations in an upward trend while demand is being reduced to support (effect) a deflationary trend. Combined with the ease of monitoring who owns what when, the small investor technically does not stand a chance.

The result of the action of this consolidated capital is, as the evidence of late clearly demonstrates, a massive reduction of net worth and further consolidation. Technical corrections for the result in posteriori by government decree (what conservatives argue is inimical to a free society and economic growth) only serves, as we see, to support the macro trend of consolidation.

For conservatives and the neo-conservative opposition, it is a win-win outcome. The allowable political choice is two types of conservatism that conserves the consolidation of wealth and power by administration of Ivy-League Hamiltonians.

Despite all the "hope" for "change we really need," the future of a consolidated capital is being technically well conserved.

Consolidated capital operates with inequity that naturally causes crisis and dispossession. The massive loss of net worth by the vast majority of Americans has been accumulated (consolidated) and used against them in futures markets to "defend" a command position and support the deflationary trend.

The consolidated value is now being prepared to be resold, distributed, at a profit. This value added will be falsely characterized as economic growth. It is a zero-sum loss (a detriment) shammed as a collective benefit (the accumulated profit). The benefit is not collective if it is accumulated, or exclusive. It must be distributed to be inclusive.

The distribution on the accumulated profit (reducing the surplus of supply that supports the deflationary trend by increasing demand) is the investment that fuels the recovery and provides the false collective benefit of providing for economic growth, which is not growth at all. It is a "recovery" (a distribution) of what had been lost in zero-sum in order to sustain the process of the business cycle in a state of disequilibrium--an inequitable distribution of income that defeats the equilibrity, and collective legitimacy, of the free-market mechanism.

The cycles provide the recurrent crisis and the business transactions necessary to consolidate wealth and power. The transactions, the buying and selling, gives the process a collective legitimacy of market mechanics. Without the demand dimension being the full determinant, however, it is a false collective legitimacy.

Where the command dimension is largely in operation, as it is now, the economy lacks a free-market legitimacy. It is necessary, then, to correct for the lack of legitimate power.

The gamma risk is operationalized with the retributive value that accumulates along with the consolidation of power (the illegitimate means to command the economy). It operates to manage the lack of demand economics--the free market, democratic dimension that provides a genuine, collective legitimacy of the process.

Technically correcting for the retributive value accumulated reduces (manages) the risk inherent to conservation of the command economy and the distribution of income that determines it.

The sacrifice of income that finances the zero-sum accumulation of value gains a collective legitimacy by operation of public process, mitigating the loss with the force and legitimacy of public authority. Without it, the legitimacy of the outcome is at severe (gamma) risk, and the means to the ends is technically corrected to manage the externality of the retributive value.

The retributive value accumulated on the current cycle is immediately about $2 trillion, which is about the value lost in net worth of the average income in the last quarter of 2008. The amount of deficit spending is quickly approaching that nominal value to correct for (mitigate) the accumulated loss to maximize conservation of the accumulated benefit. Thus we have the tension between the interjection, the demand, of the gamma risk and the imposition, the command, of the consolidated capital in a conflicted, volatile trend of deflation and inflation.

The recovery will be considered an inflationary trend by the Ivy-League managers of the consolidated capital. The result will be sustained unemployment and an aggregate effect of defending the value of the accumulation with a deflationary consequence of incurring the gamma risk (a disincentive for capital investment, being crowded out by public finance--deficit spending). The trend is thus in an almost complete command mode with capital moving into commodity futures to "hedge" against the inflating dollar by inflating the profit (the continued accumulation of income) without growth.

Administering this process of deprivation, of course, according to Hamiltonians, deserves a bonus because it provides for the public good (the sacrifice necessary for the consolidation of capital that finances the investment for economic growth).

Administration from the public sector in combination with the private sector, like the Federal Reserve, is to give the command a "demand" dimension.

The Federal Reserve saved us from financial firms that were allowed (a choice) to be too big to fail. The intended effect is coercion--extortion, racketeering--characteristic of a criminal element.

A free-market economy is supposed to be dominated by the element of choice (demand), not the element of having no choice (command). It is the very essence of freedom, or the lack of it--the legitimacy of power.

According to the Fed, we have no choice but to bail out the agents that caused the crisis and pay them bonuses to continue to use the bailout money in a manner that caused it, reinforcing the behavior because it is profitable. The consequences are fully intended to support the command structure of the economy and resist the democratic element of demand to form an elitist model of power: a bureaucratic model of power and political economy in which the public and private sectors are effectively merged to command and control, to resist, pluralistic, democratic tendencies.

If the economy is allowed to be in a demand mode, the consumer (the vast non-elite of "unbonused" if not unemployed) is the primary determinant of economic trend.

Instead, the sacrifice required to surplus the capital for investment is really being used to reward (bonus) the administration of the command mode. It is being used to conserve the consolidation of value in a neo-classical, neo-conservative manner.

The distribution by the public sector on the value accumulated is being operationally accumulated by the MBA, "bonus" bureaucrats in the private sector. The result is a stagflationary trend, keeping the economy out of a demand mode.

With each indication of recovery is a spike in energy prices. The data confirms that consumers are spending more than they make with these steep oscillations in price. (The short, sharp oscillations keep the profit high and the rate of substitution, as well as demand destruction, low, rigging the market for stagflation.) Continued erosion of net worth, and consolidation of that value, is the aggregate, intended result, always supporting the deflationary trend with a reduction of demand.

That reduction of the "demand" dimension results in a spike in bankruptcies, which has also been confirmed by the most recent data, further reducing the "choice" dimension of the economy with fewer small businesses and a reduced ability to pay, or to choose.

The unemployed sacrifice, suffering the deflationary demand reduction to provide, or finance, the benefit. The unbonused employed sacrifice as costs rise while their incomes decline, continuing to erode their net worth, financing the so-called collective benefit of consolidating the capital to achieve maximum economic efficiency (the economy of scale and networked externalities by horizontal and vertical organizational integration).

The collective benefit of the sacrifice is false. It is a zero-sum distribution. It is a loss with the vast majority of individual incomes incurring the detriment without fully participating in the benefit, rendered by a process of exclusion.

The growth, the purported benefit, is really not growth at all following negative growth with the supply having been "conserved" by the sacrifice of the excluded non-elite (the unsophisticated masses who willingly sacrifice without fully sharing in the benefit).

Conservation of the supply is critical to understanding the indirect scheme of consolidating value so that it looks legitimately unconnected and "uncommanded." This is where our Ivy-League economists tell us the value is forever lost, and not a zero-sum consolidation.

Supporting the deflationary trend by controlling the future(s), along with extracting the value by such incremental means as flash trading (which also manipulates the technical data), means the value of the existing supply is in cantango.

The value of the existing supply, because the investment to expand it is being invested to conserve it (the liquidity crisis), is realized, or consolidated, when the recovery finally includes the unemployed who must bid up a limited existing supply. The intended effect is to mitigate the cyclical decline in the rate of profit described by all classical economists; and so, neo-classically, we now hear pop analysts heralding the coming cyclical bull market with better-than-expected profits despite increasing unemployment...suprise!

Rising employment will be the fully expected (fully intended) unexpected, surprise premium (the zero-sum loss/gain) that the Ivy-League economists say does not exist.

The rate of profit is neo-clasically supported through the deflationary phase while resisting employment (demand). The inflation is not supposed to happen, classically, in the deflation phase because the demand is not there to support it.

Keynesian stagflation is the neo-classical result, allowing for profit margins that are to be unexpected without the demand (employment). It is really value that has been surplused and later consolidated so that it is not readily, immediately, clear where the profit is coming from. That inflation, that profit, is explained away as the capital formation necessary for growth, rather than the means of limiting growth (limiting demand) to increase the marginal profit.

The inflation will be deemed "fundamental." However, it will have been caused (commanded) by elite control of the economy, and that command and control will be extended to the Fed to control these "market forces" (the cyclical trend) toward a so-called collective benefit by increasing the interest rate, which supports the deflationary trend.

Increasing the interest rate is a regressive burden on incomes. People that must borrow to pay the cost of living (to demand in the marketplace) receive the debtor assignment on the public debt. By default they pay the debt held by those with the ability to buy the debt (to command in the marketplace).

Those with the greatest ability to pay are then, by legal process, those who are the exclusive beneficiaries of The People's collective sacrifice (Hamiltonianism).

The value of the recessionary trend was not lost. Consolidation of the value (the sacrifice) was just timed to appear disconnected with the benefit in the recovery phase of the cycle. That value is also expressed by conserving the ability to command who sacrifices to achieve the efficient formation of the capital.

After the sacrifice (the accumulation of the capital--the loss of net worth by the vast majority), the next phase of the business cycle is deflation. It is the phase the economy is in now.

In the deflationary phase, prices are pressured to fall due to the reduced demand (the sacrifice). Falling prices reduces the surplus, but does not eliminate it. Growth goes from negative to positive. The surplus (the sacrifice) is conserved and the process for expropriating the benefit is maintained to achieve the so-called collective benefit of so-called economic growth.

The recovery phase of the business cycle is then achieved in zero sum. The diminished surplus is replaced, not really adding supply.

Adding supply controls inflation. Disinflation provides the purchasing power necessary for sustained, positive growth, actually adding supply, improving choice, adding demand, reducing the command dimension of the economy.

Disinflation creates savings, which is turned into capital that finances growth and innovation in the pursuit of profit (the return on investment). Deflation is financed by negative growth--the sacrifice that reduces net worth in zero-sum. The value is accumulated to consolidate the wealth and power into an elitist organizational form that is to be systemically self sustaining, but not without risk of having to repay some of the benefit to its source (the retributive value).

The sacrifice necessary to keep the elitist form self-sustaining is what is currently referred to as the systemic risk. It is the risk of systematically incurring more cost than benefit with the legitimacy--the free will--of a collective process of self-determination, like a market system in which individuals choose to participate.

If by the necessity of participating in the marketplace to survive means having to be the one to sacrifice, or to be a non-elit, the pluralistic legitimacy is empirically failed. That incurs a "risk" to the value that finances the elite and conserves the surplus. There could be a "demand" for the illegitimately gained value to be retributed if it is not successfully organized, timed, and argued legitimate on the basis of economic efficiency.

The systemic risk is commanded and controlled by the elite of power through the market system and the business cycle in the name of achieving the highest economic efficiency--consolidated economies of scale that minimizes risk and maximizes the profit (the surplus of capital) for reinvestment. That organized largeness of scale also includes the co-operation of the public sector.

The non-elit participant, who pays the debt (borrowed from the surplus) and suffers the deflationary reduction of net worth that finances (conserves) the surplus, is greatful, relieved, that the value surplused is trickled down enough in the recovery phase to survive by the good grace, the noblese oblige, of the elite.

Relief of some of the sacrificial burden is systematically substituted for retribution of the accumulated value. It is just enough income to sufficiently pay down the debt, according to an arbitrary credit score, allowing for enough demand to reduce the surplus inventory (the sacrifice and the value to be retributed).

Suffering the deflatonary phase of the business cycle not only elicits an increased demand (a distribution on the accumulation) to support the value of the surplused inventory (matching demand with supply without disinflation), but solicits a demand to retribute the entire value of the sacrifice.

The demand for more participation, for more purchasing power (for more democracy), is a risk to conserving the distributional value of the system.

The systemic risk is controlled by substituting it with a gamma risk that is easily co-opted.

The latent demand elicited to retribute the value is transformed into a demand for elitist command and control. Congress responds with a technocratic delegation of extended representative authority who manage the risk without direct accountability to the electorate.

A lack of full accountability succesfully co-opts the demand for full retribution of the value into a technocracy for managing the risk and conserving the structure that commands the distribution of power and authority.

The bureaucratic model of power and political economy successfully displaces the natural demand for full retribution of equilibriating value. It is placed into the elitist realm of esoteric knowledge so that we must suffer deprivations for reasons we cannot begin to fully understand. This systemic induction of ignorance condemns us to a deductive systemic legitimacy of command and control for our own good; for the general welfare.

We are paying the people that act to reduce our net worth to continue doing it with our tax money because it is for our own good? Despite what behavioral economists say, this can only happen by force and legitimacy of public authority; by a process of command, not demand!

Critical to the cyclical command of the process is the legitimacy of the outcome: being defined as elit or not by process of surviving the business cycle, and whether you are a buyer or a seller within the recovery phase of the cycle. At this point the commanders are merely sellers in the marketplace; the commanded, merely buyers, freely engaged in the process of doing business, being retailed lost value and property.

Merely containing the elements of freedom (choosing whether to participate in the economic process or not) and market mechanics, the organized processes of consolidating capital and the business cycle is argued to be proof of a free-market system and not a command economy in operation. The necessary legitimacy is merely deduced from the elements being semantically present in the argument, not verified, or induced, from the evidence which, of course, tells quite a different story.

Timing the market (controlling the cyclical trend) is essential to the false legitimacy of a consolidated capital as a free-market system freely participated in toward a legitimate, collective outcome.

The longer the slope of the recovery phase, the more the consolidation of value and wealth looks like a "natural," undeliberate process with a free-market legitimacy of collective action.

It is necessary for the market process and the cyclical effects to appear legitimately free. The process must appear to be a product of self-determination instead of a tyrannical command and control and expropriation of ownership that can only be reacquired by borrowing from the accumulated value (being resold) by incurring a debt and the emblem of subordination.

The vast majority of Americans do not have to be slaves to the command and control, the tyranny, of a consolidated capital.

Deconsolidate it!

A highly progressive tax code and reinvestment of the capital to pluralize the marketplace without a huge debt either public or private will achieve "real" economic growth and a real freedom that conservatives argue is an evil tyranny to be resisted.

We hear all the time in pop media that the way to freedom and prosperity is the well-trodden path...the old, or conservative, way of doing things (toggling between Democrats and Republicans).

Believing the solution is the old way that always results in crisis is irrational. The only way to evade the fundamental simplicity of this truth is to convince The People they lack the elitist, secret knowledge necessary to fully understand that the best way to solve a problem is to ensure its recurrence.

The conservative argument is, then, reduced to this plausible absurdity: the problem is not really a problem at all, but a collective benefit that is erroneously perceived by the ignorant masses to be a problem because they must be made to sacrifice to achieve the general welfare.

The public good will not be achieved unless we are forced to do it, as the behavioral economists argue. So, for example, the best way to achieve the public good of providing healthcare for all is to force a public option--a simple dummy variable that will consolidate the market into no choice.

Pluralism is abandoned for the unaccountable better judgement of elite authority in which application of the irrational becomes a measure of power (success); like cutting healthcare costs by ensuring medicare doctors get a pay increase.

A free market does not tolerate the irrational. It is the consolidation of power that tolerates the irrational. It is an emblem of power to be "conserved" by its confirmed application (like toggling between dummy variables).

Consolidation is argued to be the empirical model, the natural tendency, of efficiency because the pluralistic, free-market model tends to be "irrationally exuberant." The exuberance, however, is caused by mass momentum of consolidated capital following organized economies of scale (large size of horizontal and vertical integration) in every case since the dawn of what we now call capitalism and the crises of boom and bust we needlessly experience to this day.

The free market is not the natural problem, it is the natural solution.

Free-market economics is resisted by being organized into a consolidated capital not because it does not work, but because it does.

The economic problems we look to solve are organizational. Allowing the economy to organize into economies of scale that are too big to fail is the problem, not the solution. It is nevertheless being applied as the solution in the name of The General Welfare.

While networked externalities (organized consolidation) hedged the risk and caused the formation of capital at the inception of capital markets, it "naturally" led to boom-and-bust cyclical trends--crises in which eager small investors became the willing, dispossessed dupes of consolidated wealth and power.

Two hundred years later, the small investor is still being duped into believing the wealth was lost, evaporated, not consolidated. The risk is "freely" taken, but the reward is to be found in the loss of value resold as a profit, bought with a debtor's share of the wealth. Thus was borne the credit economy and liquidity crisis we now endure as free-market economics.

The small investor must now identify where the consolidated capital moves next--where the next bubble will occur. (The bubble never really "bursts," it just "moves" around. Deflation in one area inflates another. The result is the cyclical trend.)

The system of buying and selling, the market system, is the means by which consolidation is "freely" transacted, making it look like the public needs to be saved from itself, and the conservative argument that elite command and control (consolidation) is a necessary condition to ensure the efficiency of markets. The efforts of the Obama administration are, then, perfectly rational, and consistent with conservative philosophy--a confirmed belief in the efficiency of free markets and the need to command and control its irrational exuberance (the gamma risk).

The action of the private sector to avoid the gamma risk requires being in the dark.

Hiding in the dark, the phenomenon of "dark markets," is what a free market definably is not. It is nevertheless what the dark marketeers say they are doing as long as government does not interfere with their freedom to pursue it.

A dark market is a complex maze of seemingly disconnected cause-effect relationships. It is a scheme of buy and sell transactions across market sectors and segments that includes time sequencing and quick, flash transactions that are nearly imperceptible. The more the cause of an effect cannot be detected, the less confirmable liability for illegitmate gains; specifically, gains acquired by means of rigging the market through a system of timed buy and sell transactions of various contractual classes, like options and futures contracts.

Happily hiding in the dark where dirty deeds are not clearly identifiable is the pursuit of not being accountable to either a democratic process of free-market economics or government oversight (avoiding the risk). It is a pursuit that effectively minimizes freedom, not maximizes it, which is the ultimate, Constitutional, measure of success.

As places to hide become fewer at this point, big money will move into a traditional, classical mode of consolidation of real assets, buying distressed businesses and investing in businesses that the recesson had put out of business.
Economic entities will be merged and acquired satisfying the traditional model of maximimum value that draws the most investment (a bubble). This will be a move into cyclicals and will confirm an economic recovery phase of the cycle indicated by the increased gama risk in dark financial markets and a retrace on the value of those assets to an oversold condition, gaining support more at the the fundamental. A secular bull market will then occur.

Controlling the future(s) has become the philosopher's stone of neo-classically managing the risk inherent to the consolidation of the capital. It conserves an organizational modality despite the tendencies to subject it to the risk demanded by The People in an evolving modern world of constitutional legitimacy.

Control of futures will innovate ahead of the gamma risk. Trends will be indicated not only by the path consolidated capital takes, but how it is reorganized into modalities.

Identifying organizational modes will indicate the future of trend analysis by identifying the means of not just profitably predicting the future, but commanding it; not by means of managing the risk, but by virtually eliminating it.