Wednesday, November 3, 2010

What's so free about the market?

In case any of you had any lingering suspicions that there actually exists anything close to a free market in the United States, that produces anything even resembling a level playing field for all participants (Giants and Lilliputians alike) think again. Here's a little excerpt from the Wall Street Journal article about General Motors that link goes to:
Now it turns out, according to documents filed with federal regulators, the revamping left the car maker with another boost as it prepares to return to the stock market. It won't have to pay $45.4 billion in taxes on future profits.

The tax benefit stems from so-called tax-loss carry-forwards and other provisions, which allow companies to use losses in prior years and costs related to pensions and other expenses to shield profits from U.S. taxes for up to 20 years. In GM's case, the losses stem from years prior to when GM entered bankruptcy.
Whether or not a "free market" could produce ideal circumstances for supply and demand to determine fair pricing on all things from wages to food (a suspect and highly debatable point even in the abstract), we may never know. Ideology, rage, and protest aside (all of which are in the ascension these days), there is no free market extant. Unless we work to mitigate the inequities in the system, meaning in clear language, remove the barriers to competition on the merits of a company's technology or services, rather than any number of pre-existing advantages, there is no high ground on either side of the debate.

I wonder if any of the changes in Washington will allow leaders to step up to the plate, swing, and crack the ball high and over the fence. Only time shall tell.

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