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The Other Things Adam Smith Said,
This review is from: Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill) (Hardcover)One thing you can expect when you open a book by David Cay Johnston is narrative that reads like a drama unfolding except that the plot is present-day America and the story is how the wealthy are getting richer at the expense of the middle class. Hence the title "Free Lunch," where the wealthy steal it with government approval, are paid to take it or get it free, courtesy of the same who hands the bill over to us.
At the very beginning, Johnston explains what the invisible hand of Adam Smith means, for the benefit of those who know it and for those who only think they do--of which there are more than enough of the latter. Smith postulated that a free market economy creates competition that serves the common good but, (and here's the kicker), does not work if government provides them bounty (subsidies), or allows them to collude to keep prices high. He also stated that there would be enterprises that would operate to seek bounties only, the equivalent of modern corporate welfare.
Johnston provides chapter after fascinating chapter of how government at all levels offers break after break which is consistently picked up by Average Joe Taxpayer. Such "bounties" include:
· Misuse of eminent domain, which is supposed to mean appropriating land for the common good such as a new highway or airport. Now it is used to support developers who wish to profit at the expense of the homeowner.
· Tax breaks. Not only do companies such as Wal-Mart, Cabela, or Bass Pro insist on property tax breaks that decimate the local economy rather than improve it, but they might even insist on keeping the sales tax. Communities may not see a return on their investment for decades.
· Government intervention in the form of legislation that may even benefit large companies at the expense of the citizen such as "free-market" energy as espoused by Ken Lay that eventually cost Californians exorbitant charges for no additional electricity generated.
· Kids who take student loans are finding out that what they thought was a loan at six percent suddenly became eighteen percent guaranteeing that they will pay far more than they borrowed for years to come, and the lender is guaranteed no risk.
· Our government is also lavishing subsidies onto for-profit health care companies that consistently look for ways to deny claims. No subsidies go to nonprofit health systems even though studies show they offer superior care. (Adam Smith also said: "What improves the circumstances of the greater part can never be regarded as an inconveniency to the whole").
· The grand prize, which is our current administration in the form of George W. Bush who sponsored a drug plan for seniors that was worked on (behind closed doors) by Billy Tauzin (R), Max Baucus (D), and John Breaux (D). These "representatives of the people" guaranteed that Adam Smith's dictum of seeking the lowest possible price would be ignored. Their bill guaranteed that our government would not be allowed to negotiate the price of drugs for its citizens even though it would make purchases in bulk.
In each of the above, there has not only been collusion by companies and industries, but also a feckless government that has given its blessing with collusion of its own, subsidies, and bluster of threats to investigate wrong-doing, with investigations that never quite materialize.
Having read his previous work "Perfectly Legal" I was eager to get my hands on this book, and I was not disappointed. In twenty-seven chapters that span the length of less than 300 pages, you will discover how industry and government have actually worked to first deceive, then gouge the average hard-working taxpayer. Any one of these chapters is a revelation that made me open this book at every opportunity.
This is the kind of book you can be sorry that it comes to an end, and also be glad that it does (because it is too painful).
If this book cannot stir the most politically apathetic into action, nothing will.
Maybe they'll just have to see the bill first.
"Perfectly Legal" by David Cay Johnston
"The Conscience of a Liberal" by Paul Krugman
"Sicko" (DVD) by Michael Moore
"The Broken Branch: How Congress Is Failing America and How to Get It Back on Track (Institutions of American Democracy)"
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Showing 1-10 of 36 posts in this discussion
Initial post: Feb 7, 2008 12:32:14 PM PST
[Deleted by Amazon on Nov 30, 2009 11:07:29 PM PST]
Posted on Feb 8, 2008 8:56:48 PM PST
"· The grand prize, which is our current administration in the form of George W. Bush who sponsored a drug plan for seniors that was worked on (behind closed doors) by Billy Tauzin (R), Max Baucus (D), and John Breaux (D). These "representatives of the people" guaranteed that Adam Smith's dictum of seeking the lowest possible price would be ignored. Their bill guaranteed that our government would not be allowed to negotiate the price of drugs for its citizens even though it would make purchases in bulk."
I totally agree. Bush's supposed drug plan is a sham (hey I rhymed). Funny how it's OK to get the lowest price for tinker toys and yo-yo's by getting them made in China, but we can't get discounted drugs from Canada? Sounds like a selective free market (it's a joke to even really call it that) to benefit the few at the expense of the many.
" Misuse of eminent domain, which is supposed to mean appropriating land for the common good such as a new highway or airport. Now it is used to support developers who wish to profit at the expense of the homeowner."
I heard Justice Souter (one of the supreme court justices who validated this use of eminent domain in his decision) actually had some property ceased for this purpose. If this is true, I say BRAVO!!! Would you like some JUST dessert with your humble pie justice Souter? Needless to say I have heard he has gone on record to have reconsidered his former position. Funny how having it happen to you makes you change your mind huh?
"for taxes, I'm all for lowering taxes--mine! I'm sick of learning that some of the richest oil companies are actually paying less in income taxes than I am, or that a millionaire is paying a lower rate of income taxes than I am. He has benefitted far more from this society than I have, so he can pay a greater percentage from receiving a greater share of the bounty."
You might be surprised to hear that I agree with you here. The system is made to benefit the few (the rich) at the expense of the many (working class, prolectariat, whatever you want to call them). Big business doesn't need HUGE TAX BREAKS.... With the way the laws are set up now companies pay a third or less of the taxes (if all income were equal) than individuals do. This is (for lack of a better term) CRAP... The government should not be in the business of screwing the people to make their rich friends richer (and thus bringing in more campaign money for themselves). These financial incentives from big government also lead to the collapse of small business (who actually pay more taxes and are thus more than likely destined to fail). This will do nothing but eventually destroy our economy and lead to another recession. But hey, at least George W's friends will get rich. ....
See buddy, I'm a conservative. I'm not stupid. As a matter of fact I actually consider most Republicans anti-conservative. Which is why old John McCain (like Bush before him) has no chance of getting my vote. Of course Hillary won't get it either, but that's a story for another day.
In reply to an earlier post on Feb 9, 2008 5:10:49 AM PST
[Deleted by Amazon on Nov 30, 2009 11:29:35 PM PST]
In reply to an earlier post on Feb 9, 2008 11:03:59 AM PST
I'll vote, usually for a third party candidate that has no chance to win. Some say I throw my vote away. I feel that I'm only throwing my vote away if I vote for the lessor of two evils; as opposed to voting for the individual I feel will actually work to correct this sinking ship. By the way thank you for your service in the military.
In reply to an earlier post on Feb 9, 2008 11:39:07 AM PST
[Deleted by Amazon on Nov 30, 2009 11:06:29 PM PST]
In reply to an earlier post on Feb 10, 2008 3:41:12 PM PST
James E. Egolf says:
The above is an interesing dialogue. The pharmacy situation is amusing. The feds said Canadian drugs were not safe, but the Canadians bought these drugs from the U.S. and marketed them at a much lower cost.
Posted on Feb 10, 2008 4:21:14 PM PST
I just got through watching a documentary called Maxed Out. I did a review as well. I think you'll really like this one. Plus I would love to see you do a review on it (if you haven't seen and done one on it already).
Posted on Feb 11, 2008 12:07:53 AM PST
[Deleted by Amazon on Mar 2, 2008 9:40:43 AM PST]
In reply to an earlier post on Feb 11, 2008 12:10:02 AM PST
[Deleted by Amazon on Feb 15, 2008 10:23:29 AM PST]
In reply to an earlier post on Feb 11, 2008 12:23:23 AM PST
[Deleted by Amazon on Feb 15, 2008 10:24:31 AM PST]