Market Demand and Collective Action

A dynamic logic occurs when market participants seek to control costs.

Mancur Olson describes "The Logic of Collective Action." When, for example, the cost of health care becomes unaffordable, due to inelasticity, and incomes are accumulated into the hands of the providers, the reduction of demand (the ability to pay) logically prompts providers to seek another source of income to achieve the moral imperative of providing health care for everyone. The imperative is categorical (universal) because the demand (the need) is relatively inelastic.

President Obama, acting on that categorical, moral imperative is set to provide universal insurance coverage (thus demonizing insurers) while providers of care are seeking to source the funds that increase the ability to pay without redistributing the accumulated income (the retributive value). That source is government, providing in the name of the moral imperative.

Objecting to this system of finance is characterized as being anti-imperative (illogical), despite that it perpetuates what is wrong with it--burgeoning costs--which is the call for the reform. The public very clearly detects the "illogic" of this action being made in the spirit of collective action toward the public good.

Offering the problem as the solution is illogical in spite of the logical imperative of providing liquidity (the ability to pay in the form of government mandate and public finance) as soon as possible.

While the "public option" may be a point of departure for actually achieving the distribution of income necessary for health care to be universally affordable, the very striking lack of measure to control the cost suggests a willingness to design policy that keeps the income in a mode of continued consolidation that does not fit the imperative.

The consumer's imperative is to control the cost; $900 billion to start does not exactly fit the imperative.

The consumer's logic is to co-op, or organize, to collectively bargain to trust bust the power of the AMA. A doctor or hospital will have to disclose prices and be subjected to a free-market legitimacy to be economically successful, as opposed to the government being co-opted to pay undisclosed prices on command, if not now, sometime in the future (perhaps after everyone goes to the public option--the Wal Mart model of doing business).

The logic of collective action to counter organized monopolistic entities, like the AMA, for a fair and equitable price is a market mechanism concommittant with the "freedom" to act. The public option defies this logic. Once the option makes collective economic sense, the incentive to merge it with the provider to command, and collect, the price that caused the option will be overwhelming.

The probability the public option will not be corrupted is very low. The logic will then be to pluralize the system for a more direct and easily verifiable democracy to control the cost. The demand, without any encumberances to the logic of this action, will then be for a free-market system.

Conservative Populist Rhetoric

The oxymoron of conservative populism is in full rhetorical swing as we assess the possible alternatives to a power structure that the vast majority are quite sure does not operate in their individual interest.

Conservative populism is to minimize the retributive value that accumulates with an accumulation of wealth and power, especially in a structured social environment that relies on a pluralistic legitimacy (like a free-market system) in which individuals collectively decide investment of the capital (what is produced) and at what price (the marginal utility, or the profit margin, that determines incomes for both consumers and producers).

An accumulation of power means that the majority of individuals have less power to determine their fate than a systematic pluralism is supposed to legitimately allow (that outcomes--distributions--are the result of "command" and not a legitimate "demand").

The demand for legitimacy by the populace is argued by conservatives as an assault on the primacy of individual liberty because it is a collective, a populist, demand. The argument is then this: if the elite (the accumulators of wealth and power) are not allowed to freely pursue life, liberty and happiness, the individual liberty being pursued by the populace will be lost. Of course, the very demand for populist action is the measure of individual liberty lost (commanded) in zero-sum to the elite (the retributive value). It is the plight of conservatives to "conserve" the illegitimate disequilibrium as the general will of the people, providing for (commanding) the general (collective) welfare instead of being defined as value misappropriated and to be retributed to the legitimate, the expected, outcome.

Moneterism, Keynesian spending programs, and pulbic-private partnerships are bureaucratically designed and ministered to at least approximate the legitimately expected outcome without retributing the full value.

While the vast majority of citizens in a populist outrage do not expect the system to be perfect, massive foreclosures, unemployment, accumulation of wealth and power to the point of global economic collapse is not a reasonable approximation of what is to be expected, despite the conservative rhetoric.

It is equally unreasonable to expect reforming, or reinventing, the system we have now to produce a better approximation of a stable, equilibriating, structure of power without ensuring the fundamental organizational elements that allow for it.

It is unreasonable, for example, to expect pluralistic, unconsolidated, fair-and-equitable results, like compensation, when we reorganize "too big to fail" (what accumulates the wealth to pay the inequity) into a public-private partnership that allows conserving the organizational size to achieve the "synergistic" (the accumulated, non-pluralistic) efficiency of an "economy of scale."

The best way to control risk-prone executive compensation is to not allow for the large-scale corporates that can pay it. The risk associated with the reward of the compensation is the effect, not the cause of the problem. The problem is organizational. Since it causes the effect, the solution can only be reasonably expected to eliminate the cause, not just reform the effect to allow for continued consolidation of industry and markets. Treating the effect (symptomatic treatment) ensures non-pluralistic, command type of outcomes that deliver short-term reward with a long-term risk that really is not a "risk" at all, but a fully predictable benefit created by the "synergy" (the efficiency) of consolidating that comes with cyclical (recessionary) trends.

It should be perfectly clear, at this point, that allowing corporates (the private sector of power) to organize to be "too big to fail," or to be tyrannical, is inimical. It should be equally clear that allowing the corporates to partner with government (the public sector of the power structure which is by definition absolute in its power with the force and legitimacy of public authority) is equally inimical. That absolute power needs to be operationalized to prevent "too big to fail" and the tyranny, and the false efficiency, it empirically verifies.

Each and every individual has the power together to command the fate of freedom we all legitimately, pluralistically, expect. It is not impossible, it is just not being allowed to happen.

A government for and by The People does not allow for the inefficiency, the tyranny, of "too big to fail" in priority, but allows for the individual to succeed in priority without having to join the dictates of the too-big consolidation of the corporate collective.

The People want to fully exercise the freedom prescribed by the Constitution, not proscribed by economic dependancy on a large, extortionate, corporate collective. The People choose freedom over feudalism, in liege to the happy pursuit of a self-defined individualism that far exceeds the value of having to join the collective identity of an ever-larger and demonstrably corrupt and incompetent corporate culture in order to succeed.

A private drone made into a public drone, or a public-private drone, is still a drone, in liege to the corporate self from the top down.

Government that ensures a free and unconsolidated marketplace in priority allows for a collective defined by a pursuit of individual happiness that is allowed to become without the limitations of an organized determinism subservient to an elite class of would-be feudal lords with the false free-market legitimacy of a consolidated capital and the false individualism of a collective corporate consciousness.

Organizing for the Conditioned Response

There are two types of behavioral responses to stimulus: reflexive and conditioned.

Reflexive is a physiological response like blinking the eye in response to an impact stimulus. Conditioned is a learned response that occurs with an event expected to correlate with the reflexive response.

Our conditined, learned, response to our current economic crisis, for example, is to regard what is recognized to be a problem to be solved as a normative cycle--the business cycle. We have a process, or procedural knowledge, of the problem that modifies our reflexive response, our behavior, with an organized learning that is operantly conditioned.

Even though the reflexive response is to retribute the value lost, the value of your work, your savings, which is being interpreted by the experts as being an arbitrary abstraction subject to loss, the conditioned response is to allow the solution to cycle into the recovery phase, creating an engram of organized memory that is associated with McCain's recent cue for recall of the memory trace by saying, "We are a nation for creating wealth, not just spreading it around."

While the diminished value is the factor of sharing the wealth, it is, however, the determining variable for solution to the problem. The organized memory trace, the conditioned response, is to allow for the problem to be applied as the solution in the form of a popular consent, or self-dtermination.

It is time for a self-determined re-cognition of the problem by reviewing it.

If the problem reoccurs, it has not been solved. If we are conditioned to believe that being subject to perennial cycles of deprivation and depreciation of our productive value instills the strength of our patriotic conviction, that is both true and false. We are likely to believe in something we had to suffer for, creating a cognitive dissonance that reinforces the conditioned response.

While the conditioned organizational response is for a top-down bailout in which The People must wait for the solution of the problem to "trickle down," despite that the theory and practice is antecedent to the recurring crisis, The People will learn that it is an effective solution even though the crisis cycles into recovery without it. Using the problem as the solution is falsely confirmed, or learned and stored in memory as knowledge. The conditioned response is mistakenly declared as empirical knowledge.

It is time to relearn, recondition, the response. Joe the Plummer is the classic condition where he expresses fear of what will free him to patriotically pursue life, liberty and happiness.

The conditioned response is to fear the real solution.

With productive capacity well in hand and soundly established into reliable organized technologies, the next step is to share the wealth it produces, which will prevent the recurring algorythm of crisis, not cause it. The natural tendency to pluralism is a threat to the consolidation of power, and that power relies heavily on the conditioned response stored in organizational memory as the experience, the knowledge, of the expected outcome.

It is time to recondition the response, and the expected outcome.

That starts with this election cycle.

Obama/Biden 2008!

"The Action Plan"

This is what the Treasury calls its plan to "infuse" the banking system with capital.

Infusion means that the capital lost and sitting idled on the sidelines, causing the liquidity crisis, is free and clear from possible recapitalization. That is a critical mistake!

The plan calls for buying non-voting shares of the banks rather than just buying worthless assets (the bad debt) which would be to subsidize the gain (the profits from the leverages) by removing the loss from their balance sheets and shifting this well-known risk (the loss) to the taxpayer.

While the markets tended to respond favorably to the plan, having at least a semblance of the needed recapitalization from the zero-sum gain (which would be to recapitulate the gain that is a loss that has caused the economic crisis), it is not enough to cause a reliquidation with the consolidated, frozen, liquidity. No, the capital consolidated and withheld to deprive our economy of the needed liquidity is being held out for terms that are favorable to preservation of that gain without compromising the zero-sum (a loss to the consolidated capital). It is significant that the shares will not be voting shares with the possibility of directing capital investment that pluralizes the marketplace.

If it is not a zero-sum game, the monopoly game in which the other players are at a loss to the winner's gain and subjected to his power, then, for the capitalist, it is not a game worth playing. He will just take his marbles and go home, which means approaching full-blown depression.

That won't happen because the stakes are too high: entire recapitulation of the capital. That could mean not only a recapitalization of the gain, but a switch in bureaucratic legitimacy for operation of the state to the organization of state socialism, antithetical to the state capitalism being afforded our current crisis.

When the practical alternative is proposed to recapitalize from the gain toward pluralizing the marketplace so that its participants are never dependent on any one, or collusive collective, of the market's suppliers (the source of consolidated capital's power), the free marketeer is characteristically dismissed as a utopian socialist just wishing for that perfect model of practical impossibility that is, ironically, largely the Jeffersonian ideal of limited need for government. Not just the absence of government, like the lack of regulation that contributed to our current economic crisis, but the NEED for it.

It is a fool's task to eliminate the operation of government without first eliminating the need!

So, what is the capitalist that discredits the operation of a deconsolidated capital, industry and markets, and the operation of government doing for us? Deflating the economy, holding us hostage to accumulated value we produce, organized to be used against us, causing crisis and deprivation, and the need for government.

Depriving The People of the full value they produce to make them dependent on the capitalist's riches hardly instills confidence in any solution to the crisis he may come up with.

Let's try investing a free and unconsolidated marketplace for a change. If it tends to consolidate because of the activities of a greedy few that do not want to be accountable to the processes of the collective will, to The People, adjust for the externality with deconsolidation in priority with the force and legitimacy of public authority. The capitalist, then, becomes the marketeer of freedom with the incentive to maximize supply to maximize profit, which is disinflationary (making life affordable for EVERYONE), instead of minimizing it for a profit (leverage finance) causing inflation, unemployment and the deflationary crisis we are in now (making life affordable for only a precious few that is the zero-sum gain from the zero-sum loss of The People).

Yes, we can have change.

It can be effective, and we can have it now!

Wishing us all the very best.

Capitulation Manipulation

The technicals indicate considerable manipulation of market prices.

The SEC ban on short sales, for example, expired yesterday and the shorts (mostly institutional hedge-fund managers of private equity) went right in to distort the markets into a capitulatory sentiment.

A market with a 1000 point intra-day swing is hardly the model of stability that short interest is supposed to provide as a public service to us all.

Short speculators argue they do the market a public service by controlling volatility and overvaluations. Pure poppycock!

Short sellers are engaged in price manipulation, and understand that manipulation of prices and markets is a crime. It distorts the market valuations, causing confusion with false signals and sudden reversals to cause fear and encourage greed.

Both fear and greed are negative sentiments. It indicates a market full of malevolent players that pretend to be benevolent free marketeers. These are the people that will consolidate your savings through market manipulation, even if it means taking a loss, and claim it was in your best interest. The loss to the manipulator is temporary. More important is the consolidation, which adds to the power, the ability, to manipulate prices and markets that is, again, a criminal activity that has the intended effect of dispossessing you and subjecting you to the consolidated power.

Thinking that the solution to the corrupt forces of consolidated power is to socialize it, alleviating consolidation with confirmed consolidation, would be counter-intuitive.

For example, the Credit Default Swap is an improperly securitized insurance instrument. In other words, the financing needed to back the securities (the insured value) is a fraud to avoid regulatory authority (the government overseer which is composed largely of the overseen). Now that the fraud has been disclosed, the government is going to buy the fake value, essentially worthless, and the fakers, the frauds, trot off with the booty. Socializing it will just afford the process the full force and legitimacy of public authority, like what we see happening now with the bailout plan.

This is not free-market economics. It is gangster capitalism! Turning it into a reliance on the very same technocratic elite that created the problem, supposedly with a free enterprise in the public interest, to be entrusted to fix it in the public interest, is fundamentally flawed.

The efficiency of the elitist model, and its legitimacy to produce the General Welfare as the collective will of The People, is disconfirmed. In order to correct for it, the model MUST BE rejected, thrown out!

The illegitimate elitist model of confirmed inefficiency must be capitulated without being manipulated into a false legitimacy of the collective will and the public good.

Ensuring free markets in priority, not the welfare of elits, will produce an easily verifiable legitimacy that is The General Welfare.

Psychology of Acting to Stabilize the Economy

It is critical to give careful attention to normative rules of rationality and problem solving here.

It is clear to all of us that we face a condition of uncertainty that is being described as a crisis of confidence in the financial, credit market.

Uncertain conditions lead to irrationality of what psychologists call an availability heuristic, or what a person is likely to verifiably and reliably know to be the problem and an appropriate solution.

For the most part, the public generally feels that problems are too complex and largely out of its hands anyway. It is exactly what an elitist form of government and model of power intends to achieve. Do not succumb to this psychological modeling in which an elitist bias is falsely described as the collective will.

When we make inferences from the available evidence, for example, we tend to reason with representative samples, like a stereotype. There is a tendency to mistake the more generally inclusive properties as being more probable than the more specific.

In the case of our economic stability, we generally infer that "We The People" is representative of macro economic decisions made by elits. While elits are included in the concept of The People, their exclusive, specific self-interest is falsely inferred to be the General Welfare because it is the result of a generally inclusive public process.

In the same way, do not judge the veracity of economic analysis in theory or practice by representative sample and similarity. Just because the wealthy argue the general health of the economy is represented by their economic well being, it is not reasonable to infer that policies and programs that promote their specific welfare is the General Welfare. It is a mistake to reason that the more inclusive property is more probable than the more specific: that passing the bailout bill is a more probable positive event because it includes the extension of credit to everyone.

It is unreasonable to infer that the harm to The People will be more inclusive and extensive if the stabilization legislation is not enacted. This is called the anchoring effect. The harm is overstated to determine the level of acceptance by suggestion of an unconfirmed hypothesis based on prior beliefs and experiences (the harm being experiencing now despite belief in the policies promised to be beneficial).

In order to reasonably assess the risk, it is necessary to determine if the expected value of the gamble is equal to the sure thing. We all tend to predictably avoid a dead loss and assess the risk as reasonable by accepting a lesser loss to avoid a sure loss. By being risk averse in a condition of high uncertainty with dire consequences, accepting the stabilization act will avoid the possibility of a sure loss and keep the possibility for a stabilization when the probable values are equal and status quo.

By intuitively miscalculating the probable odds, there is a dread factor aasociated with the unfamiliar. There is a tendency to calculate risk with the most available impression of the odds and the easiest assessment. While we all know that overextending credit leads to bankruptcy, it seems that not bailing out Wall Street will be the more harmful probable event because it would be more catastrophic.

To preserve unity and harmony of the nation toward the conservation of traditional means and ends of the power structure (the elitist model), it is necessary to instill the value of us all being in crisis together, and a process of group thinking. Critics of the stabilization act should be self-censored in the public interest so that a lack of criticism is assumed to be the collective will of a popular consent.

Instilling the sense of the necessity for a group think also minimizes the zero-sum properties of the negotiating process. It is necessary for the outcome of the stabilization act not to appear zero-sum in order for it to have proper legitimacy of public authority, avoiding the appearance of conflict resolution instead of a consent of the governed.

The perceived inequity of the stabilization act resulted in some very loud protest of The People, and there is a significant element of cognitive dissonance built into passage of the bill. Socializing either a benefit or a detriment conflicts with belief in the operation of markets, free or not. A change must be made to accomodate what is believed, or what is to be done.

The change needed here to eliminate the dissonance is to choose freedom.

Let it be a free and unconsolidated marketplace in priority.

Let it be a legitimate collective will of The People appropriately rewarding the righteous and the unrighteous toward a peaceful and prosperous body politic that the dictates of power can only crudely approximate.

Very best wishes.