Felicia Muftic: Christmas traditions, free markets
December 22, 2011
Many of our Christmas traditions come from Europe, some coming sooner and others later. One that is only now catching on is a Christmas Market. In the old country, especially in German speaking regions, the village town square is filled with stalls selling hand-made tree ornaments, goodies, toys, and items to give as gifts when Christmas eve comes. I treasure the tree ornaments from my junior year abroad. Those markets are like our craft’s fairs and farmer’s markets with a Christmas theme. It is old fashioned, free market capitalism for which so many yearn.
Being nostalgic for the free market olden days has also become an unstated litmus test of the GOP presidential contenders and their media spokespersons. It is held up as a standard of economic good, and it will cure what ails us including high health care costs and Wall Street busts. The sound bite of the month is that the President Obama is an enemy of the free market because he supports more regulation on Wall Street and his health care reform law is a government take-over of the health care market.
I love the free market too, when it is truly free, fair, safe, and competitive. Following my European sister-in-law around the huge farmer’s market in Zagreb, Croatia this summer I saw the free market at its best. She went to her favorite vendors who usually had the best quality and turned over the tomatoes to see if there was a rotten spot or a worm hole. She picked, poked, and then bought. There must have had 20 different tomato vendors there.
Neither the health care insurance industry nor Wall Street meet standards of being free, fair, safe or competitive. It is not Obama who is the enemy of the free market system, it is some of the participants in that market who do it the most harm. The financial sector has utilized modern technology and shell game techniques to fool their customers: unsophisticated consumers and the experienced investors. The old “liars can figure and figures can lie” approach permeated the securities markets pre-2008 crash, made possible by unregulated financial instruments such as derivatives, hedge funds, and unwise lending practices. Dodd Frank Wall Street Reform brings tougher regulation and new scrutiny to those worst practices, to the howl of protest by the GOP and bankers.
Major contributors to the bubble that burst in 2008 were practices that were unfair to consumers and undermined free market choices. The least able to shop wisely in the credit market were everyday consumers who assumed that they could afford the house if the bank told them they could and were incapable of finding the worm hole in the shiny pages and fine print of documents shoved under their faces at closing. Credit card companies found imaginative ways to soak their customers. There was no place to go for a consumer to complain or someone to make lenders behave fairly.
The Consumer Protection Bureau was established in the Wall Street reform legislation to provide a solution. The GOP and Wall Street lobbyists are stonewalling appointments to the agency hoping to eventually sabotage it by putting more banker-foxes in charge of the hen house of consumer protection- all in the name of free market economics.
“Let competition of health insurance companies cross state lines and we can lower health care costs”, say the GOP, offering an alternative to Obamacare. The bad news is there is no free market. A few nation-wide health insurance companies and their subsidiaries control the market, free to collude on prices , restrict offerings and divvy up customers because they are freed from antitrust laws. That is why Obamacare establishes an open, affordable market of exchanges providing a choice of competing for profit and nonprofit private insurers, offering coverage fairer to consumers.
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