Organizing for Success Instead of Failure

It should be clear at this point that organizing for success is not an organization that is too big to fail.

Rather than implying success, being too big to fail implies failure.

Is health care reform, for example, proposing an organization too big to fail? In other words, no matter what, the organized means, despite the ends, cannot be considered a failure and, no matter what, will be empowered.

In a free-market system, firms that profit by means that are inimical to consumer interests fail (thus the need to be "too big to fail"). Failure comes in the form of a comparative profitability or bankruptcy. Firms that are more likely to please consumers are more profitable than firms that are less pleasing. One is more empowered with pricing power than another by popular demand (a collective, democratic, empirical ontology).

Profitability is determined by demand in a free-market system, not by command of organizations too big to fail no matter what. Consumers do business with, and empower, firms because they want to, not because they have to. If, for example, demand is in reduction due to inflation and/or unemployment, consolidation provides an economy of scale to equilibriate a price to the lower demand in order to stay empowered (not fail).

Being too big to fail not only provides empowerment (profitability) without increasing demand but, instead, operates to raise prices when demand is declining. The result is general economic crises (a spiraling deflationary trend that consolidates markets even more) with the only organizations likely to be left empowered being those that are too big to fail, and that includes government.

Deflationary crises elicits a growing demand for government authority equivalent to the amount of consolidation and loss of real demand in the marketplace. Complaining that government is too big is to complain that the marketplace is too consolidated--it is organized for failure (crises) and the need for government authority (an organization equally too big and powerful to fail) to manage it, like we have now.

The public and private sectors become organizationally integrated through crises management. Eventually, according to Marxist theory, the organization evolves into state socialism from state capitalism depending on whether we choose to allow democratic processes, like free-market economics, to operate in priority, or allow for a continuous consolidation of power that eventually erupts into a catastrophic, ontological correction.

As long as the marketplace is pluralized in priority instead of being allowed to consolidate into so-called efficient economies of scale, an easily direct and verifiable accountability, as well as cost control, is most reliably and efficiently ensured with the least need for government authority.

Instead of government authority, in a free-market system the consumer relies on the empirical ontology of the alpha risk to reward and deprive in the marketplace. Consumers do not rely on a gamma-risk ontology (the dictates of an ultimate and unavoidable legal sovereign authority) that is largely out of their direct control and in the expert hands of a co-optable authoritarian regime.

Does the currently proposed health care reform organize to empower the alpha or gamma-risk ontology? If we are all too unsohpisticated to function in the marketplace like Hamiltonians and the "behavioral economists" that the current administration and congress employs say we are, then the gamma risk is in order with the free-market system (the freedom of consumers) subordinate to elite authority.

According to the Hamiltonian hypothesis that we largely operate with now, and the health care model is patterned, providing for the general welfare reduces to proper command and control, or representative government (gamma-risk management) from the top down. It is different from the Jeffersonian model of representative government in which sovereignty is empowered and exercised by natural right from the bottom up, like a free-market system operates.

The health care reform plan barely appears to achieve the Jeffersonian model because it is not patterned to fit that model. If Republicans are relied on to craft a plan, on the other hand, but having two right hands, it will likely be what we have now with modifications touted in theory to make things better, but in practice will make things worse.

Both parties subscribe to the Hamiltonian model because it requires some intellectual sophistication to realize that the Jeffersonian model is not a part of the bivariate option. Only choosing between the two Hamiltonian, Federalist-type parties is allowed by organizational design, which is no choice at all.

If we are both politically and economically organized for command and control from the top down, our form of governance is neither democratic or representative.

The Hamiltonian organizational model, like Jefferson argued at the inception of our nation, only provides a command and control means of sovereign power. It leaves the natural right of self-determination (sovereignty) the exclusive domain of a power elite, or by authoritarian means whether public or private, effectively consolidating power into a too-big-to-fail organizational ontology.

According to Jefferson, the Hamiltonian model organizes for sure failure just like the failure of monarchy. It empowers exactly what The Revolution was supposed to prevent--consolidation of power, which is essentially what being organized to be "too big to fail" is and does.

Has the Hamiltonian, top-down organizational model been a failure? Is not the bailout scheme a monument to the absurdity of rewarding failure; that the best practice for success is to organize for failure?

(The absurdity indicator has busted through the virtual meter of good reason. That must be what behavioral economists are referring to when making their stupidity-and-ignorance argument...it proceeds from the top down!)

The irrationality that surely accompanies the arrogance of an accumulated consolidation of power is sure to "trickle down" to the masses. The detriment (the failure) is sure to be fundamentally misattributed to the incomeptence of the masses. Bailing out the masses, instead of the elite, would be rewarding failure (ignorance and stupidity) which is a moral hazard.

The misattribution of failure is accepted as an empirical truth of enduring moral value because cyclical, ontological crises would not always be successfully managed into recovery without elite control. Misattribution of incompetence to the masses perpetually serves to falsely indicate the need, the demand, for elite command and control, keeping the cycle of tragedy-to-farce in perpetual, operational motion.

Breaking the cycle is at the fundament of power--the organizational modeling.

If we persist with the elitist model, we persist in empirical error.

A more fundamental pluralistic model in priority will allow us to rationally organize for success instead of failure.

"Organizing for America"

"It is time we start organizing for America," the President recently declared. It is a practical expression that affords more than hopeful inspiration. It recognizes the political-economic maelstrom we face reduces to dependance on a singularly independant variable: organization.

The Supreme Court's decision to extend the corporate's virtual freedom of speech into the realm of inalienable right pushed all sensible "hope" for an equitable co-existence with the most alienating organized force on the planet over the virtual edge.

It is naive to think the corporate is organized for inclusive, participatory ontology of purpose like democracy. It is organized to isolate, alienate, from the ontological legitimacy of democratic process. It is organized for, and empowered with, a specific purpose: to limit liability, if not a direct accountability, which has always been pushed to the very limit, and now beyond.

What the lack of accountability does not provide, the limited liability of the corporate will. Its legal status of limited liability is empowered with an organizational technique that reduces the risk of a verifiable accountability to the semantics of legal argumentation. Rather than being decided in the marketplace, accountability becomes more a function of a co-optable legislative and judicial procedure than the probability of firm and market risk.

For the analyst, the corporate creates a black box that prompts all manner of technical tools to divine market trends. Analyses often resemble a divination because of the elitist, command quality built into the corporate structure. While equity price data, for example, does not lie, and should accurately reflect the alpha-risk, regression of price and volume patterns harbor hidden variables, like direct manipulations, that suggest future trends and predictable patterns of risk. The regressions are statistically significant but inferentially flawed.

Whether alpha or beta price data, regression on upper and lower indicators includes any manipulation and may, in fact, over time, technically indicate manipulation of prices. If the objective is to falsely indicate a trend over time by manipulating the technicals, however, the risk pattern becomes an infathomable fractile reduction with an ultimate probability only known to the manipulator at any particular time, dependant only on the gamma risk.

Trends, most importantly the macro trend, can be largely determined by a systematic organizational typology. Systematic trends emerge and apply with spurious and confounding, independant variables by elite directive that phenomenologizes the level of risk.

Despite the arbitrary and capricious variations by elite directive, the hierarchical regime of corporate bureaucracy renders the pattern, direction and level of risk a relatively easy, teleological inference.

Organized consolidation into large corporates to avoid the alpha risk gains capital without actually winning what the value is supposed to represent--gaining market share by expansion of the pie, not consolidation of it. The legitimacy of the capital gained and accumulated as the private property of the investors, despite having avoided the risk rather than having gained it, is nevertheless maintained along with the naturally endowed right to use it as they see fit.

The right to use property (capital) as one sees fit being evermore extended to the corporate as a "body" with inalienable rights provides a scapegoat to which the liability is attached. The system is what is blameworthy. The system motivates action and consequence, not the people in it.

By incorporating, then, more power can be gained than a person can be held liable for. Exponentially more power can be applied than one-man-one-vote can account for by organizing into a corporate "body."

Deliberate organization of the capital into an oversized corporate bureaucracy, which includes being operationalized with government enterprise (the recent bailout, for example), maximizes effective power while minimizing accountability and potential liability.

The motive to maximize profit no matter the cost, like pollution, for example, is the result of the system...we are organized to do it. In the same way, massive unemployment, forcing mass foreclosures and negative net worth to support maximum profit margin (resisting the declining rate of profit) is a systematic, organizational problem. It is beyond the culpability of individual corporate "bodies," each with an individual natural right to property and the pursuit of happiness. (Notice how pluralism of the corporate body into "individual" legal entities with discrete articles of incorporation lends the value of legitimacy. If all the corporates consolidate into one body through mergers and acquisitions, the concept of "the body" loses pluralistic legitimacy and is considered to be an illegal trust with more power than "individuals" can possibly have. It does not, however, in the name of achieving free-market "synergies" or "networked externalities," prevent corporates from being organized to sytematically operate, including the function of government, as one body referred to as "the corporate.")

Yes, the political-economic maelstrom we face is an organizational problem. We need to organize for an easy and direct accountability that the current organization does not provide.

Easy alienation of the liability cultivates an untrustworthy environment that is likely to result in a perennial "crisis of confidence" technically indicated as "too good to be true."

Bush's tax-cut policy, for example, resurrecting the so-called supply-side economics of the Reagan administration to provide both robust economic growth with low inflation (low deficits) was too good to be true. The result, The Great Recession, was easily predictable and fully indicated well in advance.

In addition to a technically inverted yield curve, general short-term reward patterns emerged with Bush's tax cuts that did not fit an empirical regression on the long-term risk factors (high deficits with low interest rates, for example), indicating risk was being avoided, accumulated, and shifted to the system. The risk was organized into what is known as the systemic risk.

Bush's tax cuts shifted the liability from the private, corporate sector to the public sector where the legally sovereign, "We the People" reside (privatizing the reward and socializing the risk). While the benefits (assets) accrue privately, the costs (liabilities) accumulate publicly, and because it results from public policy, due process infers the distribution of costs and benefits is by the legitimate consent of the governed (the sovereign power).

While we can pin our problems on Bush's tax-cut policy, the corporate claims, at the same time, the recession will not reverse without it. What is the truth? Where is the liability?

With the liability being largely scapegoated, all that is left is the accumualted gamma risk to be managed by the Fed and Treasury with a huge budget deficit (the bureaucratic model of power and political economy).

What remains after the limited liability is a corporate waste product, an accumulated risk, to be dumped into the sovereign environment of "The People."

Like pollution, the corporate "body" is immune to the detrimental status of being a sovereign body because it is not actually a real, "organic" person. Nor can its growth--its consolidaton of power--be considered "organic." It is artificial, an "artifice" of power masquerading a massive organizational detriment (the liability) as a public good administered for the general welfare.

How can the legitimacy of the capital gained be maintained if the risk is avoided and not taken? The risk avoided then becomes the gamma risk--a systemic, organized risk that causes the need for government management and authority. Without intervention of government authority (mostly by regulatory and judicial command and control), the legitimacy fails.

In the absence of a legislative regulatory authority, the executive serves to manage the systemic risk, like President Clinton's "working group" managing the risk posed by Long Term Capital Management. While this group may have thought they had avoided the regulatory gamma risk, the risk was accumulated and organized to present as systemic risk in the future with the benefical "growth" properties of being "too big to fail." The free market failed in this case because it was allowed to consolidate (grow) into "dark markets" that are inimical to a free market system.

While the result of a deregulated and highly consolidated marketplace, replete with "synergistic" efficiencies and "networked externalities" (complex interdependencies), is the antithesis of a free market, it is still argued as the successful model of free-market capitalism. The model must be conserved lest we flirt with socialism, defeating the productive incentive of class society and expansion of the pie that allows us the freedom to choose in the marketplace. In other words, it is necessary to defeat the free market in order to preserve it? Is it paradox or a contradiction that indicates a consolidation of power into the realm of full-blown irrationality?

As long as the problem is not identified as organizational size, the solution reduces to the easy control of bivariation: choosing between either a public or private brand of authoritarianism or, more immediately, choosing between liberal or conservative, partisan ideology. The choice voters now face, for example, is being reduced to a false positive: resistance to the failure of the Democratic party is positive support for a Republican agendae by default. Rejection of one automatically realigns the electorate behind the other. In the same way, toggling between a public or private authoritarian regime conserves the macro model of consolidated power by default. The determining variable is organizational size, not partisan program variations, ideological principles, the persuasions of ponderous platitudes, or the influence of corporate money in the election process....

Organizational size determines the ability to command and control the system into a predictable and stable level of managed risk we call "the systemic risk." That risk, and the distribution of rewards, is determined by regulation of economic growth. The legitimate ontology of a free-market process is substituted with the command and control of large, bureaucratic entities organized to default into a system of rewards and deprivations. Since the distribution of risk/reward is a stable, routine task, economic expansion can be considered optimal by default of the system, or by a legitimate ontology of process like a free-market system, but without actually having it. Artfully painted red or blue, the model is effectively maintained authoritarian.

Just because an authoritarian regime effectively operates primarily from the private sector with "properly limited government" does not make it any less authoritarian or any more legitimate. The determining variable is whether the regime is authoritarian, not whether it is public or private, or both.

Since conservatives argue that business is not in business to employ people, and it is not the government's job to employ people, it certainly cannot be argued that a private sector regime is more effectively productive and economically expansive. Hard to be productive if you are unemployed.

Capitalism requires an accumulation of capital. The effect of "capital formation" is employment.

Since capital is formed (acquired) by the profit margin, employment is dependant on the margin of profit. If the profit margin is impeded, taxation for example, the supply of labor (unemployment) increases. As the profit margin increases, then, employment increases. Why is it, then, that exactly the opposite happens, resulting in crises?

Essentially, capitalism effects crises, and authoritarianism, because it does not rely on free markets to manage capital, but to acquire it.
Capitalism must cause unemployment in order to acquire (accumulate) capital. Businesses are then not investing (distributing) to employ people, but to unemploy them to "acquire" capital.
The free market must be avoided in order to accumulate capital because if markets are freely open and transparent there is a declining rate of profit that minimizes inflation and maximizes employment.

Free-market economics is the opposite of capitalism. Instead of an accumulation of value that maximizes inflation and minimizes employment, free-market economics functions with a distribution of value (pluralism) that minimizes inflation and maximies employment. Instead of the profit margin effecting employment (the lowest possible to maximize the profit), in a free-market economy, employment causes the profit margin.

Instead of a direct relationship, if the correlation between the accumulation of capital and employment is inverse, unemployment and deflationary crisis has a 100 percent probability. The probable outcome is the opposite of capitalism's purported benefit to maximize employment and economic growth. Reagan's cure for unemployment, for example, was to cause unemployment. The effect, then, was capital accumulation which is supposed to cause employment. The effect, however, was crisis. Accumulation occured on the "supply side" because there was insufficient demand--because his policies caused a deep recession. It is not the model of high productivity.

It does not do much good to produce a lot of things we cannot afford to buy. It is the productive incentive of capitalism for labor to then work harder and longer for less in order to afford the product. The higher productivity at lower cost does not, however, result in a disinflationary tendency. It is deflationary because the productivity is gained as capital in the form of an accumulated oversupply (including the labor that produced the value).

According to the capitalist theory of finance, unemployment (capital formation) causes employment. Despite being supremely illogical and a thoroughly disconfirmed hypothesis the argument is nevertheless maintained as good and verifiable reasoning. It requires the secret knowlege of the power elite to make any sense (it might make sense after being pinged on the forehead with a hammer during a secret ritual, damaging the moral capacity of the prefrontal cortex) and its currency serves to indicate the power it has accumulated at the expense of "the masses."

The knowlege we need has been empiricaly tested over time. It is encoded in our organizational memory and manifested in our current crisis. Creating wealth is not dependant on mass deprivation of The People. Continuing to maintain that it does is not the product of a secret code embedded in elite knowlege where the natural world intersects with the geometric abstraction of the mind, but the perpetration of a verifiable fraud that lacks the virtue of a moral intelligence.

Organizational size is the secret code of accumulated wealth and power. Alexander Hamilton strongly opposed Jefferson's decentralized pluralism of the nation's banking system because it would not take the "big risk" to build great things. He also knew that a central bank would provide the organizational size necessary to command and control the economy, and our nation, into a plutocracy (a power elite) with a constitutionally democratic legitimacy.

Taking the "big risk" evolved into a $500 trillion overleverage by the year 2000.

The sacrifice necessary to build great things was organized to be the burden of the masses and not the privileged elite.

Maintaining a free-market system in priority instead of building capitalism would have spread the risk (prevented the accumulation of sacrifice into social class) so that everyone benefited instead of just a privileged few.

What Thomas Jefferson strongly opposed at the inception of our nation is essentially what we have now: a strong, centrally planned governance to manage, rather than to prevent, the accumulation of risk that goes with the accumulation of reward (the gamma risk that cannot be avoided). So here we are, now looking to invest small, regional banks to manage the risk and cause employment.

The result of capital formation is not employment, but unemployment. Instead of capital financing employment, unemployment is financing capital. Instead of economic growth, the result of capitalism is the classic, cyclical crisis of overproduction: economic contraction and the consolidation of wealth and power.

Instead of economic growth, the reduction of labor costs with rising productivity gains creates an economic maelstrom. The public is left with nowhere to turn but the public sector (an organized entity that is too big to fail) to reverse the spiraling trend.

As we again struggle with low-to-no-growth despite record profits, capitalism, despite the claim, tends not to be optimally productive considering it is organized to minimize employment to form "The Capital."

If business and government do not operate to cause employment, where does productivity come from?

According to conservative theory, The Capital, not labor, causes productivity. This alienation of The Capital from labor, according to Marxist theory, is artificial; labor and capital are actually the same thing.

Capitalism organizes to accumulate The Capital to be distributed by command and control authority. Deprivation of The Capital (the theory of surplus value) has an optimal productive effect and is what makes capitalism great. It encourgages expansion of the pie by depriving it, so we always have a "deflationary" surplus of goods and services labor cannot afford to buy. It is government's job to then re-inflate the economy or, in the case of the Fed (Hamilton's central bank), to balance the amount of labor-to-capital to smooth the stochastic oscillation (the boom-and-bust accumulation and distribution) of the business cycle.

The Fed, of course, is neither a public or private enterprise, but is supposed to be an independent technical authority organized with business and government to effect optimal productive capacity through the "controlled" distribution of an accumulated capital, just as Marx predicted. Marx referred to this political-economic phase of historical ontology as "anti-socialist socialism."

By design, the alternatives, whether from the left or the right, only appear to be bivariate. It appears to reduce to a hard ontological determinism, but only if we regard ourselves as mere economic animals (homom habilis) devoid of a moral intelligence (homo sapien).

Nature does not dictate we must ontologize with an authoritarian effect.

It is entirely possible to build great things without causing the pain and suffering supposedly necessary to be productive. People are just as likely to be productive, if not more, without being deprived the full value of their production. Strikes are the result of deprivation and abuse, for example. The lack of productivity is the result of the employer looking for a free lunch that, as the capitalist comes to know very well, is not free.

Productivity, if deprived of (or alienated from) its full measure of profit, which is likely to happen in the absence of free-market mechanics (including socialism), is retributively valued.

Just as it was at the time of the American Revolution when the bourgeoise demanded they be allowed the full value of their labor and risk being converted into the king's divine right to property, the capital that has formed (the wealth accumulated, just as it was with the king) is more likely to prevent productivity than cause it.

Why be productive if the value is converted and consolidated into The Capital to be distributed by the property right of would-be kings? If the answer is, to keep from starving, then The People are being treated as mere animals to be abusively exploited by the power elite. It is not because it makes people more productive, but because it demonstrates power. It defines who is powerful (truly independent and sovereign) and who is not.

Usurpation of value and abuse of the middle class was not the right thing to do at the time of The Revolution, as the king found out when the middle class redeemed the accumulated value (the unavoidable gamma-risk ontology), and it is not the right thing to do now. The calculus is a moral intelligence that does not often obtain with the ambitions, and arrogance, of power.

Pursuit of power is an ambition that a free-market mechanism reliably organizes into the public good with minimal deprivation.

Pluralistic pursuit of power renders an ignorance of moral value the enlightened self-interest of staying in business (or staying empowered), not just making a profit that will be otherwise retributively valued. It turns the irrational fanaticism of the ambition to consolidate power, and its dystopic tendencies, into the rational pragmatism of predictive utility and renders a law of intended, rather than unintended, consequences. Power, and its pursuit, is then rendered with a genuine, built-in facility for an empirically legitimate ontology.

Last, and most important, ensuring a pluralistic pursuit of power, by providing an an easily verifiable legitimacy of the outcome with a collective ontology of process rather than a top-down teleology, prevents an accumulation of irrational arrogance.

Since being powerful means being better than everybody else, the powerful are not likely to admit being wrong. Along with being piqued, there is a benefit to be protected, like a profit margin. It is mutually reinforcing--being piqued with the skill to both gain power and keep it. Nevertheless, a stubborn, irrational accumulation of error that is likely to accumulate with power leads to a fanatical pursuit of tyranny often expressed, especially in the American experience, as the liberty to pursue happiness, or the pursuit of one's goals (teleology) to a level of incompetence (to the empirical limit of power, or failure). It is not difficult to see, then, why it is so necessary to organize into a corporate body that is too big to fail--to protect the power elite from itself. The corporate body is engineered so that it will fail safe.

Instead of allowing power, economic or political, to consolidate and be happily exercised to a massive level of incompetence, like the Great Recession, it would be of immense practical moral intelligence to organize for preventing consolidation without destroying the pursuit of anyone's happiness.

Instead of allowing the incompetence of an ever-aspiring elite to always accumulate into a zero-sum benefit--cyclically buying and selling distressed assets at a profit--that achieves an ever-higher level of incompetence (remembering that staying empowered despite being incompetent is to achieve the pinnacle of power), it is possible to organize this cycle of tragedy-to-farce into an efficient means of operationalizing ambition with the general welfare.

Ambition is an empty vessel filled with the values contained within the object of that ambition.

It is possible to turn the ambition to accumulate power into an empowered measure of competence that is not too big to fail.

If the problem as described by small businesses is access to cash, it is being deprived. Deprivation does not build wealth, it deprives it. If we are organized for deprivation, then that is the change we need.

Consolidation of industry and markets does not build wealth. It consolidates it.

If health care is to be the model of reorganization, then the Obama administration is validating a thoroughly disconfirmed hypothesis: the bigger the better. Both parties are busily in competition validating the false efficiencies of an organized economy of scale.

Whether public or private (whether the Democratic or the Republican option), organized consolidation is the problem, not the solution.

Organizing for Ontology

The change we need, that we have expected with a realignment, has to be organized. Realignment is empirically not enough. Nor is realignment logically sufficient considering it is a largely binomial (conservative) variable.

We do not need to wait for an ontology of change. We need to organize for ontology. (See the article, "Organized Ontologies: Waiting for Godot").

As we progress with an empirical ethic of thinking in the pursuit of knowlege and predicitve utility in a post-industrial age, the classic conflict between teleological and ontological truth diminshes. Induction does not exclude the deductive method of reasoning but supports it. The two methods of reasoning are not anymore in conflict than confirming the hypothesis of evolutionary development of life disproves the existence of God. It is not an inverese relationship but a directly positive one. Like Einstein observed, we are always confirming the existence of God by always trying to disprove it. The result is knowlege.

Pursuit of ontological truth supports the teleological hypothesis. Teleology is not cognitively outmoded. We have cognitively evolved to recognize it as much an article of truth (knowlege) as of faith (superstition). Ignorance becomes the only evil and responsibility becomes the probability of error in reduction of teleological possibility.

Politics and economics, as I have pointed out in previous articles, tends to lag the other natural sciences in recognizing the efficacy of embracing the empirical ethic.

The distinction between natural science and social science is false. It is intended to preserve the means for creating, rather than confirming, causal relationships and the legitimacy of power. Political-economy is especially isolated because it is infused with teleological expression afforded legal, constitutional protection.

Elit scientists that deliberately create false causal relationships are considered by their peers to be frauds. Elit business people that create false relationships, like selling CDO's both long and short at the same time, are considered shrewdly intellectual and the reward accumulated is private property that cannot be confiscated without due process of the law.

Saying, for example, a person must have a job to secure income, but businesses do not exist to employ people; or to say, for example, ensuring the welfare of the rich in priority systematically causes the fullest employment while handing out pink slips is an ignorance that is no longer an article of faith. It only exists with the force and legitimacy of a public authority, giving it the character of an ontological truth that cannot be denied. The ontology is really a gamma risk created with a character of inevitability that can be easily reduced to a teleological deduction and an article of faith rather than the force and legitimacy of a truly empirical ontology.

Someone is going to take the means of power to manage the accumulation of gamma risk, it may as well be "We The People."

Instead of opposing the conservative model with one big imposing choice that becomes painfully imperative (which is really no choice at all considering it mainly relies on an ontological, dialectical shift that conserves the elitist model), we can decide to ensure pluralism (an organized ontology for the maximum probability for freedom) in priority as the primary function of government authority. Ensuring a plurality of firms ensures the plurality of small choices necessary to apply an empirical ethic of continuous, verifiable improvement that avoids the punctuated pain of accumulated retributive value.

Maintaining a plurality of firms, rather than encouraging consolidation, allows the sanctity of privacy and property to operate toward the general welfare. Consolidation perverts that sanctity into a tyranny of tastes and preferences that demonstrates power and dictates the value of organizing private enterpise as a public utility without the distributive benefit.

Despite the need to prevent consolidation into firms that are so big they can dictate the marketplace ("too big to fail" being one, but not the only, dimension), there is still sentiment within all branches of government to allow it. Instead, allowing firms to grow "organically" is considered to be the solution, not the problem, despite the overwhelming evidence.

Slow-to-no-growth, inflation, unemployment and a dangerous accumulation of systemic risk (gamma risk) are not attributes of the general welfare. Size of the firm, despite the verifiable detriment, is still considered to be the measure of success because it is the model of "organic growth" that enables big profits with the least amount of alpha and beta risk. It is also where the legitimacy of economy-of-scale modeling gets complicated.

If the size of a firm determines the size of its profit rather than a competitive multiplicity of the marketplace (an organized ontology),
the profit then becomes a measure of the ability to command the marketplace rather than the consumer to demand it. The profit margin can then exceed the reliable measure of customer satisfaction and results in the accumulation of a retributive value. Accumulation of that value presents too-big firms with a gamma risk since the only remedy left to consumers is big-government authority.

The gamma-risk accumulation is not the cause, it is the effect of organizational size. The accumulation represents the benefit (consolidation of wealth and power) that causes crises (illiquidity, the need for government and deficit spending).

The overwhelming size of the deficit measures the size of the problem, it is not the problem itself. In other words, reducing the size of the deficit does not solve the problem (reduce the risk). The size of the deficit (the size of the firms) measures the amount of risk accumulated rather than, as the economy-of-scale argument purports, the amount of risk reduced. It is a symptom, like a fever is a symptom of a cold or flu, and we are being told relieving the fever or, alternatively, increasing the fever will cure what, metaphorically, must be the flu.

While increasing a fever (the deficit) creates an inhospitable environment for a virus, it is also likely to cause brain damage if it does not kill the host. So, continuing with the infectious disease analogy, it is best to just let the disease cycle through, kind of like we do politically and economically. However, we can "choose" to ignore the natural immunity to the disease (pluralism) and cultivate the cause (the elitist "organic" model of growth). This "organic growth" is not growth at all, but contraction--consolidation into organizations so big that they are irrational (accounting for the bad choice) and a threat to the host society being starved of the resources for a healthy, peaceful and prosperous pluralism.

With pressure from independents, the Obama administration has come up with a new slogan: "Organizing for America."

While the adminstration is at least recognizing that the problem is organizational, it still wants to support the hypothesis that the bigger firms are the more efficient they are for managing risk.

Politics is being applied to change the organized teleology rather than organize for ontology (a means of accountability in the form of a systemic risk). The "hope" is being expressed that large corporates will realign their mission (the organic telos that has been identified as beneficial "organic growth") with the ultility of the public good to reduce the gamma risk.

Large corporate conglomerates cannot reasonably expect to operate as private enterprise with the benefit of a public utility without massive risk and government support. Organizing to command the marketplace from the top down is antithetical to, the opposite of, a free-market organizational technology, and accumulates gamma risk. The legitimate utility (the benefit) of private property and enterprise is inverted: instead of production and the cost of production being demanded by the consumer from the bottom up (democracy), it is dictated from the top down in priority (trickle-down economics).

The amount of financing that did not trickle down (the amount of gamma risk) can be empirically measured by the amount being applied by government authority. It is the budget deficit. Over time, the accumulative deficit (the accumulated gamma risk) is the public debt.

The distributon of costs and benefits is the empirical, categorical evidence, the test, of legitimate power. As long as the test is organized into a micro means of resolution in which tastes and preferences are activley participated in daily practice by means of multiple choices in the marketplace (which requires the income, the distribution, to make those choices), value, including the plurality of moral values, is conserved in a legitimately non-retributive state with low (unaccumulated) gamma risk.

If, for example, a person values abortion as morally wrong, being able to do business with healthcare enterprises that do not perform abortions is highly valued. Whether anti-abortion, or not, the value is conserved yet retributed (tested) in the form of voting in the marketplace, or not, with income (discretionary spending). The discretionary value, the self-determination, including the dimension of choice essential to a moral existence, is disallowed or diminished in either case, if not dictated, if income is allowed to accumulate and consolidate.

Performing abortions is a viable enterprise if the demand is there to support it regardless of whether it is legal or not. Without the demand for it, the supply tends to be low and the price prohibitively high in a free-market environment. The consumer is much more likely to avoid the need for the service, to avoid the risk, in a free-market environment because the cost and the benefit is a readily apparent and facile calculus.

In a free-market environment, demand for a service with a highly negative value, like abortion, is also much more unlikely because it provides a much higher probability for an adequate distribution of income; and with the discretion of an adequate income, along with an added sense of responsibility, there is less probable need for the service.

If healthcare is provided as a public utility without first providing adequate income, a retributive value accumulates and is likely to present as a gamma risk with unintended consequences. People may resent being provided healthcare without adequate income to otherwise enjoy life, or may not get needed healthcare, or the care they want, because they cannot afford to pay for it, or the system will not pay for it, at any price. The public utility is, then, for the provision of the service without addressing why people cannot afford to pay for it which, contrary to the theory of free-market economics, supports the price without adequate demand. (Notice, for example, how the cost of healthcare continues to rise despite the massive decline in demand in the current deflationary macro trend.)

The Democratic plan for universal coverage did not pass muster because it does not make economic sense.

If incomes are not adequate to pay for healthcare because the wealth is too consolidated from, for example, what healthcare providers charge, and hire lobbyists to legislate in their interest if not retire and become legislators themselves, what organized power in the marketplace does the consumer have to ontologically demand the bid? The only alternative left is to command the bid by government authority (or use that authority to ensure a pluralistic ontology--free market economics--in priority, as I continously suggest).

If all that obtains is the ability to command the bid, what is left is a huge accumulation of funds retributively valued, a huge gamma-risk overhang, and an attempt to reinvent, or innovate, the perception of the risk as a public utility--to turn it into a systemic risk (like the public debt), and we all know what that does! The result is a huge tax liability that the wealthy have much more power to resist than all other classes, supporting the gamma risk.

Universal healthcare has failed because it supports the gamma risk. There is little if no resistance, on the cost or benefit side, to the distribution of income at the heart of the problem. Instead, the program largely supports the phenomenon of supply meeting demand only by the non-market dictate (the public utility) of taste and preference.

Dictating the marketplace is an emblem of power that varies directly with income and its probable accumulation, which becomes a measureable quantity of value to be retributed. When progressives (people with middle-class incomes), for example, decided that eliminating child labor was morally imperative, the families that relied on the child's income literally starved from lack of income. Instead of attacking the source of the problem--lack of income which decidely makes them less powerful, they attacked the effect--child labor. These are the same people that want to dictate tastes and preferences in the marketplace in the public interest which, again, is as much a demonstration of power (feeling powerful) with the virtue (the strength) of doing the right thing in spite of the empirical evidence (the categorical calculus of empirical values).

Keep in mind that progressive philosophy and activism emerged from the conservative element of American bivariate politics.

At the turn of the 20th Century, the Republican party bifurcated into "stand-patters" (the more conservative wing) and "progressives" (the more liberal wing of largely professional, middle-class incomes). We see then, historically, how bivariation has evolved to conserve the stakes in an organized ontology. The distribution of rewards and deprivations is conserved with "change" being operationalized into an automatic legitimacy of both disproportion and social security.

Progressivism is a conservative legacy. The struggle between liberals and conservatives is handed down to sham an elitist model of power with democratic process. It is a bifurcation into conservative and neo-conservative elements that safely conserves the distribution of power.

With just enough pluralism applied that a bivariation provides, conservativism, just as it was during the progressive era, is prevented from risking the stakes with a more equitable distribution of wealth and power (a more natural and stable distribution of gamma risk).

(Remember that gamma risk cannot be avoided. It accumulates with measures to avoid it. The correlation is direct when it is expected to be inverse: the more risk avoided the more risk accumulated. The relationship is confounding for analysts who expect a predicitive utlity to follow from what only appears to be a practical pluralistic model in the real world.)

The often bitter rivalry between what is essentially one party operates to conserve the essential category of imperative value--income. It is absolutely essential the value of class distinction be conserved so that measures like a progressive income tax to stabilize the gamma risk does not progress into a middle-class distribution of income, and power.

Within an elitist model of power, expansion of the middle class reduces class distinction to elite and non-elite. What defines the elite is the ability to dictate tastes and preferences in the marketplace and, along the way, accumulation of wealth, the income, that demonstrates and sustains the power of the ruling class.

As long as the market can decide (as long as income is adequately distributed), the virtue, the strength, of one preference over another is categorically verifiable by demand in the marketplace (income). Supply will not meet demand and choice never universally imperative if obstructed, for example, by a single payer. Not only does the price inflate, but the market, both qualitatively and quantitatively, becomes retributively valued. The disproportion is the empirical measure of power--who categorically has it (the elite), and who does not (the non-elite). People that have power seek wealth to demonstrate that power, and people that have wealth seek power to empirically confirm it if not enhance it.

There is no better way to confirm and enhance one's power than to dictate tastes and preferences in the marketplace with the deviant to be punitively taxed into the category of imperatively clean, healthy, righteous living (what progressives support and stand-patters resist with the difference, historically, being income and claiming the role of the ruling class). The moral imperative is really just a pious fraud, a scheme to accumulate income to consolidate and exercise power without obstruction or liability in the guise of righteous, authoritarian superiority (with the force and legitimacy, the primacy, of government authority).

Rather than government operating to protect the dictates of want-to-be tyrants, our constitution is designed to prevent their ascendancy to power with an inherently pluralistic organizational form. The Constitution provides for continuous application of the empirical ethic of power to be decided by democratic means, not the dictates of those who seek either wealth or power be it in the guise of providing for the public health or otherwise.

Democracy, whether the empirical proof of the popular vote is political or economic, provides the organized mechanism for applying the empirical ethic of power. Maintaining its categorical measure--the verifiable and accountable truth--of legitimate power is imperative for a peaceful and prosperous historical progression.

Empiricism, of course, challenges the old way of thinking, and in the old days when science was coming to the fore, an empiric was synonymous with a charlatan. Verifying the truth was considered to be perpetration of a fraud.

While today's conceptual modeling of political economy looks dynamic and organically pluralistic, it actually operates to reliably achieve stasis (disequilibrium) with minimal gamma risk (with a maximum legitimacy of power). Continuously trending from deflation to inflation conserves the distribution of wealth and power in a state of consolidation with an arguably plausible dynamic of legitimately pluralistic process.

The relationship between the variables of the process are complex and deliberately manipulated to be unpredictable without technical expertise. If you found the previous discussion about direct and inverse relationships to be confusing, it is a useful source of complexity. It is a variable, differential calculus that technical analysts engage to track and predict probable trends, intended to mask consequences and manufacture legitimacies, (legal justifications) for retributive values.

Complexity of the process is mistaken as evidence of pluralism, and successfully reducing the inherent alpha risk is mistaken as the reward for surviving a free market. Technical analysts then, of course, do not consider if the system is pluralistic or not. The model is assumed to be verifiably pluralistic when it is not and is a source of predictive error, with conflicted signals and indicators, easily reduced with proper analytical modeling that they are not trained to identify.

The means and ends are inverted to falsely suggest the legitimacy of the process. Instead of the means (pluralism) producing the reward, the reward (consolidation of market share) is used as the means of determining it. Self-determinism is then mistaken for the legitimate process of self-determination in which choice (the means) determines the reward (the ends).

With the ends determining the means, rather than the means determining the ends, instead of an ontology of means to ends, there is just the teleology of determined ends. It is a political, economic, and philosophical complexity that gives the inequality of rewards and deprivations a plausible propriety levergaed into legal justification.

For example, AIG says its current round of bonuses are legally binding obligations pre-dating the systemic failure the contracts were signed to compensate. Despite the materially altered circumstances, AIG averted the risk to its reward and shifted it to the accumulated, systemic, gamma risk to be managed by legal, administrative process where the reward gains plausible legal justification by due process. The probability of a reversal of fortunes is so predictably low using the elitist model that it is virtually zero in sum.

For the market analyst the results are highly stable and easily predictable until there is a discrepancy between theory and practice that is resolved with proper modeling. In the AIG example, it is the bureaucratic model.

While the bureaucratic model has both elitist and pluralist properties, with an overarching, elitist macro bias in operation, the elitist model is the better predictor with the element of pluralism retained to give the reward the "authoritative" force and legitimacy of public process. A conservative distribution of risk, despite seeming unlikely with a high populist sentiment, is not likely to fail expectation.

Recognizing the source of unexpected inversions at the fundament, the analyst is then likely to always be more dismayed than shocked by political-economic events and their ramifications, always expecting the unexpected with little expectation left to be surprised.

Whether on the left or right of the political spectrum, expecting the rewards of free-market mechanics to always default into a consolidation of power is not the logical conclusion.

Expecting pluralism to always naturally consolidate (grow) into an organized (organic) scale of efficiency to control risk is likely to always result in an efficient means of increasing the organized span of control and dystopically diminish the probability of a self-determination. A natural tendency to pluralize to achieve an efficient means of self-determination, rather than diminish it, is just as likely.

With just as much encouragement, freedom, and a truly categorical, and peaceful, legitimacy of the outcome, is just as observable as the tendency to consolidate wealth and power. Pluralism, as we progress, becomes not only more desireable but evermore imperative as well.

The strongest tendency of organizational technologies is the tendency to ontologize goals into an autonomic legitimacy of process. Pluralism is the most natural form of this process with both the means and ends of power structured in legitimate agreement.

We do not organize only to secure reliable results that agree with our goals, but we organize for ontologies that produce dependable outcomes without sacrificing the freedom to choose one's own destination.

The Politics of Risk Reduction

It is a mistake to reduce the gamma risk to how much government intervenes in the marketplace.

While the gamma is purely political risk volatility that cannot be avoided, the risk accumulates from management of economic fundamentals.

Deliberate, organized modeling for managing the alpha and beta risk volatilities causes the level of gamma risk. The more deliberately free market the economics (the more freely volatile the alpha and beta), the less the gamma risk.

The gamma risk should be applied to ensure a free-market economics in priority. Punctuated crisis events (and the need for elite risk management with dystopic tendencies) is absorbed by spreading, or pluralizing, the risk.

The means of spreading the risk rather than letting it accumulate is seminal to the current debate over budget deficits. The accumulation indicates a needed distribution from the accumulated benefit. If it is not, the gamma risk will be shifted to the future in the form of inflation, rising to a crisis proportion. The deflatonary crisis does not redcue the gamma, it increases it along with the budget deficit.

An algorythm of crisis management is locked in place and keeps us "Waiting for Godot" (a redemptive ontology that just happens and makes everything right despite the algorythm). Reduction of the gamma risk is reduced to the hopeful politics of a hopeless deliverance narrated into utopian mythapopeia that psychologically absorbs the risk.

According to the left, for example, the current crisis is the result of free-market economics. Alternatively, according to the right wing of the spectrum, the cure is the free-market economics that caused it. The ambivalence is the source of misunderstanding that supports the myth of a redemptive ontology that will diffuse the gamma risk when it reaches a critically massive proportion.

Instead, being cyclically managed, the gamma risk is conserved, recycled, in the form of a psychological affirmation rather than the confirmation of any empirical truth, hidden within the artifices of accumulated power that obstructs the practical ontology of free markets.

The mythapopeia includes the economics of the gamma risk, masking the practical ontology of self-salvation with the organized tautology of cyclical trend culminating in the ultimate power of determining the risk (the gamma risk).

Rather than waiting for salvation, ensuring the means for attaining it in the form of an accumulated gamma risk is the expression of freedom over a tyranny that only seems to be algorythmically inevitable and undaunting.

Risk Indicator Signals Support for Recovery and Resistance for Equity Values

The Obama administration's highly visible move into a nominally non-ideological policy space is manifestation of a gamma risk indicator dangerously overvalued.

The risk "bubble" (a measureable accumulation of otherwise diffused value) gives any third element outside the bivariate too much power to reduce the probability of the targeted outcome (the probable, predictable variation).

Gamma risk--the underlying risk that free-market mechanics will be modified, with the more modification yielding more accumulation of the value--is unavoidable. However, our binomial political system, instead of managing the risk to maintain a diffused value, will try to avoid it. The probability for continued accumulation is, then, still high, and this is where the investor finds reliable predictive utility--a technical indicator that cannot be manipulated into a false positive or negative. The risk is unavoidable--it is gamma.

For example, an analyst notices a popular trend for less government with the probable result (value) being an accumulation of popular sentiment for the Republican party. According to popular theory, that will reduce the gamma risk.

Rather than being reduced, however, the risk is increased, and because the risk value is unexpectedly inverted, it reaches a massive, crisis proportion.

The probability is then for realignment, but that will not reduce the gamma risk. At best, it will keep the risk from continued accumulation (like slowing job losses with a recovery package).

All along the way, the gamma risk is an easily measureable and predictable value largely ignored by the model of bivariate ideology, and it will continue to be ignored with highly predictable results.

While the popular sentiment for managing the gamma risk will retrace some of the accumulated equity value, it will be short-term because the value of the gamma risk has prior support. The value will be managed indirectly because managing it directly recognizes the risk and, especially, the source of the risk.

Indirect management means that the slope of a populist retrace will be long and slow (taking more time than a binomial party is likely to survive). Equity values will tend to dip in order to finance the recovery without inflation and reduce the excessive risk in the short term. The fundamental support the long slope provides will add volatility.

The accumulated, non-fundamental value will have to be shared, undergoing a short retrace with less funds available to push overvaluations. Consolidation of firms will occour in the dip to retrace the lost value longer term, and the gamma risk will have been conserved.

Having neither been abated or avoided, with the objective being, at this point, for government to spend less, but not too much less to avoid a double dip, the risk, and the manifest double dip, will be shifted to the future.

A current high level of excessive gamma risk bodes bad for equity valuations. A declining value is a buy signal. A rising value, sell.

Quants (whether left or right wing) fail on the accumulation of gamma-risk value because the variable must be hidden to prevent "the risk" being technically corrected into a distribution. The working hypothesis is: the more value accumulated and consolidated the less the gamma risk with an accumulation of power. The hypothsesis and the analytical models derived from it are entirely wrong and will fail a predictive utility.

Measuring the gamma risk is a measure of deviance from the free-market model of pluralism. As the risk accumulates the stability of a free-market ontology diminishes. The legitimacy of power--the means of rewards and deprivations--must be managed by an administrative elite that compounds the primary elements of power into a third analytical model: the bureaucratic model that adjusts the level of gamma risk.

For example, former treasury secretary, Paulson says there was no indication of a housing bubble. He told President Bush the risk was low when it was excessively high.

Whether prime or sub-prime, the alpha and beta risk to home equity and loan values was accumulating along with the benefit of an accumulating capital that resulted in a liquidity crisis. The gamma risk accumulated to a dangerously high level and presented as "the bailout" that avoided "the systemic risk" (the gamma risk).

The gamma risk was not avoided, it was shifted to the future where it is being politically bivariated to manage it into an alpha and beta economic measurement of risk. Market valuations will be determined by the allowable variation of the risk dependant on an easily predictable bivariation of variables punctuated by a crisis of ignorance, deliberately modeled to recurrently ignore an excessively accumulated gamma risk.