Fetters

The economist Joseph Stiglitz has written an amazingly crappy book entitled Freefall.   Here are some excerpts:

For a quarter century, certain free market doctrines have prevailed:  Free and unfettered markets are efficient; if they make mistakes, they quickly correct them.  (page xi)

One might have thought that with the crisis of 2008, the debate over … – the notion that unfettered markets by themselves can ensure economic prosperity and growth – would be over (page xiii)

…many who observed the long expansion of the world economy during the era of deregulation concluded that unfettered markets worked… (page xx)

Many countries may conclude not simply that unfettered capitalism, American-style, has failed… (page 225)

…that does not mean that the unfettered price system itself is efficient. (page 273)

And many are increasingly convinced that the free and unfettered market ideals America seems to hold are ideals to run from rather than embrace.  ( page 223)

It is simply impossible for an economist, or any rational person for that matter, to look at the American economy and conclude that it can be described accurately as unfettered free market capitalism.  Therefore I do not know what I can logically conclude except that Joseph Stiglitz is a shameless liar whose lies are designed to serve our rulers, from whom I believe he has derived a significant portion of his income.

Let’s start with a simple fact:  In an unfettered free market economy the government does NOT give a monopoly on the creation (i.e. counterfeiting) of paper money to a government-chartered central bank (e.g. the Federal Reserve Bank of the U.S.).

And now, just for fun, let’s have a little look at one of the millions of regulations that governments impose on financial institutions in our supposedly “unfettered free market” economy.  This regulation happens to be one that the rulers of Texas impose on life insurance companies.  If this rule is something you think we’d see in an unfettered, deregulated financial system then you and I did not grow up on the same planet.  (Read this entire rule carefully!  Ignorance of the Law is no excuse!)

§ 1105.012. PROGRESSION OF CASH SURRENDER VALUES.

(a)   This section applies only to a policy issued on or after January 1, 1985.
(b)  Any cash surrender value available under a policy to which this section applies on default in the payment of a premium due on any policy anniversary must be in an amount that does not differ by more than two-tenths of one percent of the amount of insurance, if the insurance is uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years, from the sum of:
(1)  the greater of:
(A)  zero;  or
(B)  the basic cash value as determined under Subsection (c);  and
(2)  the present value of any existing paid-up additions minus the amount of any indebtedness to the company under the policy.
(c)  The basic cash value must be equal to the present value, on the applicable policy anniversary, of the future guaranteed benefits that would have been available under the policy, excluding any existing paid-up additions and before deduction of any indebtedness to the company, had there not been a default, less the then present value of the nonforfeiture factors specified by Subsection (d) corresponding to premiums that would have become due on and after that anniversary.  The effects on the basic cash value of supplemental life insurance or annuity benefits or of family coverage, as described by Section 1105.007 or 1105.151, as applicable, must be the same as the effects specified by Section 1105.007 or 1105.151, as applicable, on the cash surrender values determined under the applicable section.
(d)  The nonforfeiture factor for each policy year must be an amount equal to a percentage of the adjusted premium for the policy year, as computed under Section 1105.052 or 1105.151, as applicable.  That percentage must:
(1)  be the same percentage for each policy year between the second policy anniversary and the later of:
(A)  the fifth policy anniversary;  or
(B)  the first policy anniversary at which there is available under the policy a cash surrender value in an amount, before including any paid-up additions and before deducting any indebtedness, of at least two-tenths of one percent of:
(i)  the amount of insurance, if the insurance is uniform in amount;  or
(ii)  the average amount of insurance at the beginning of each of the first 10 policy years;  and
(2)  be such that each percentage after the later of the policy anniversaries specified by Subdivision (1) applies to at least five consecutive policy years.
(e)  Notwithstanding Subsection (d), the basic cash value may not be less than the value that would be obtained if the adjusted premiums for the policy, as computed under Section 1105.052 or 1105.151, as applicable, were substituted for the nonforfeiture factors in the computation of the basic cash value.
(f)  In this section:
(1)  an adjusted premium or present value for a particular policy must be computed on the same mortality and interest bases as those used to demonstrate that the policy complies with the other sections of this chapter;  and
(2)  the cash surrender values must include any endowment benefits available under the policy.
(g)  The amount of any cash surrender value available other than on default in payment of a premium due on a policy anniversary, and the amount of any paid-up nonforfeiture benefits available under the policy on default in the payment of a premium, must be determined in a manner consistent with the manner specified by Section 1105.004, 1105.007, 1105.008, 1105.009, 1105. 010, 1105.011, or Subchapter B to determine the analogous minimum amount.  The amounts of any cash surrender value or paid-up nonforfeiture benefits granted in connection with additional benefits, such as those listed in Section 1105.011(b), must comply with the principles of this section.

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