Saturday, August 24, 2013

Return of the Pink Unicorn

What a free market looks like
As I mentioned in a recent post about the deleterious effects of income inequality, free markets are exceedingly rare. This is important because the illusion of free markets informs so much policy-making with regard to the economy. Actually, "informs" is not the right word, since this unchecked assumption is at the heart of so many damaging policies.

As recently reported on the BBC, stocks fell briefly this week when minutes of a U.S. Federal Reserve meeting were released. This body meets periodically to set interest rates and to schedule the sale of U.S. debt instruments. Economists and investors spend an extraordinary amount of their time leading up to each meeting trying to figure out not only what the Fed will do, but also how it will impact markets, and how impacted markets will impact other markets, and so on.

The price of "freely traded" stocks are therefore influenced by fiscal policy, which in turn is the outcome of a political process. The value of money itself is similarly subject to policy decisions -- even the value of money in countries that have no power to set the policies. Even hints about upcoming decisions in Washington sent stocks tumbling in emerging markets in Asia -- billions of dollars lost in a single day because of possible changes in the way markets were to be manipulated.

Essential assumptions may be introduced at the beginning of a course on microeconomics, and they might just apply somewhere -- as in the land of the pink unicorns -- but the limiting nature of the assumptions is rarely scrutinized in mainstream discussions of finance, economics, or trade. The degree to which trading conditions are manipulated on the real Planet Earth is made very clear in the final scenes of the extraordinary documentary Black Gold, which take place at a World Trade Organization meeting in Cancun. In this film about coffee, we see that trade negotiations held in heavily fortified conference centers are structured to continue favoring the rich, while the U.S. trade representative sneers at negotiators from the global periphery for attempting to take a stand on behalf of poor farmers. This disdainful attitude has been shared by trade officials of both major parties at least since the first Clinton administration, because liberals and conservatives alike know that "American prosperity" could not take place in a completely free market.

Whew! Just made it!
Image: PennLive
Former Texas Governor Anne Richards is widely credited with saying that George Bush the Elder was "born on third base and thought he hit a triple." She did not actually say this -- though fellow Texan Barry Switzer did, and many people think further fellow Texan Jim Hightower did -- but it would have been true of either of the Presidents Bush, as it was of candidate Romney: all were born into incredible privilege, created and maintained for them by others, and thought that they had done most of the achieving on their own.

But here is the rub: it is also true for most residents of wealthy countries. To believe otherwise is pure fantasy.

No comments:

Post a Comment

Thanks for your comment and your interest in my blog. I will approve your comment as soon as possible. I had to activate comment moderation because of commercial spam; I welcome debate of any ideas I present, but this will not be a platform for dubious commercial messages.

Blog Ideas

coffee (19) geography (16) climate change (13) musica (9) Texas (8) education (8) Brazil (7) Mexico (7) migration (7) Massachusetts (6) US-Mexico (6) borderlands (6) deBlij04 (6) cultural geography (5) fair trade (5) food (5) geographic education (5) immigration (5) nicaragua (5) Arizona (4) climate justice (4) deBlij05 (4) music (4) politics (4) water (4) Bolivia (3) Boston (3) GEOG332 (3) GEOG381 (3) Managua (3) Obama (3) Safina (3) border (3) cartography (3) drought (3) libraries (3) pesticides (3) trade (3) unemployment (3) Alaska (2) Amazon (2) Bridgewater (2) Canada (2) Chiapas (2) China (2) EarthView (2) Economy (2) Environment (2) GEOG130 (2) Google Maps (2) Government (2) Hawaii (2) India (2) Lexington (2) Maldives (2) NPR (2) National Monuments (2) National Parks (2) Religion (2) Rio Grande (2) Taunton River Wild and Scenic (2) Tex-Mex (2) The View from Lazy Point (2) United States (2) Venezuela (2) africa (2) censorship (2) central america (2) chocolate (2) deBlij07 (2) deforestation (2) education reform (2) employment (2) environmental geography (2) film (2) global warming (2) islands (2) land protection (2) librarians (2) maps (2) organic (2) peak oil (2) refugees (2) sense of place (2) soccer (2) suburban sprawl (2) television (2) water rights (2) whales (2) ACROSS Lexington (1) Accents (1) Adam at Home (1) Alice (1) Alt.Latina (1) American Hustle (1) April (1) Association of american Geographers (1) Audubon (1) Aunt Hatch's Lane (1) BSU (1) Baby Boomers (1) Banda Aceh (1) Bay Circuit Trial (1) Bechtel (1) Beleza Tropical (1) Belize (1) Beloit College (1) Ben Linder Cafe (1) Bet The Farm (1) Bhopal (1) Bikeway (1) Bill Gates (1) Bill Moyers (1) Boeing 777 (1) Brazilian (1) Brazilianization (1) Bridge (1) British Columbia (1) Bus Fare (1) Bush (1) California (1) Cambridge (1) Cape Cod Bay (1) Carl Stafina (1) Catholic (1) Ceuta (1) Chalice (1) Chipko (1) Citgo (1) Climate risks (1) Cochabamba (1) Colonialism (1) Common Core (1) Commuter (1) Computers (1) Cuba (1) Cups and Summits (1) Dallas (1) David Byrne (1) Delaware Valley (1) Dunkin Donuts (1) EPA (1) Earth Day (1) Earth View (1) Easton (1) Elizabeth Warren (1) Emilia Laime (1) English-only (1) Environmental History (1) Ethiopia (1) Euphrates (1) European Union (1) Evo Morales (1) FIFA (1) Fades Out (1) Farms (1) Food Trade (1) Frederick Kaufman (1) French press (1) Fresh Pond Mall (1) GEOG 332 (1) GEOG 441 (1) Garden of Gethsemane (1) Gas wells (1) General Motors (1) Gini Coefficient (1) Girl in the Cafe (1) Google (1) Gordon Hempton (1) Gravina Island Bridge (1) Great Molasses Flood (1) Guy Lombardo (1) Hawks (1) Heart (1) Higher Education (1) History (1) Holyhok Lewisville (1) Homogenous (1) How Food Stopped Being Food (1) Hugo Chavez (1) IMF (1) Iditarod (1) Imperial Valley (1) Income Inequality (1) Indonesia (1) Iraq (1) Irish (1) Japan (1) Junot Diaz (1) Ketchikan (1) Key West (1) Kindergarden Students (1) King Corn (1) Kiribati (1) Latin America (1) Limbaugh (1) Love Canal (1) Luddite (1) M*A*S*H (1) MCAS (1) MacArthur Genius (1) Maersk (1) Malaysia (1) Malaysian Air Flight 370 (1) Manu Chao (1) Map (1) Marblehead (1) Mary Robinson Foundation (1) Maryland (1) Massachusetts Bay Colony (1) Math (1) Maxguide (1) May (1) Maya (1) Mayan (1) Mayan Gold (1) Mbala (1) McDonald's (1) Melilla (1) Mexicans (1) Michael Pollan (1) Michelle Obama (1) Micronesia (1) Military (1) Military Dictatorship (1) Minuteman Trail (1) Mongolia (1) Monsanto (1) Montana (1) Morocco (1) Mount Auburn Cemetery (1) Mozambique (1) Muslim (1) Nantucket (1) National Education Regime (1) Native Americans (1) New Bedford (1) New Hampshire (1) New York City (1) New York Times (1) No Child Left Behind Act (1) Norquist (1) North Africa (1) Nuts (1) Oaxaca (1) Occupeligo (1) Occypy (1) Oklahoma City (1) Oppression (1) PARCC (1) Pakistan (1) Pascal's Wager (1) Peanut (1) Pearson Regime (1) Philadelphia (1) Philippines (1) Pink Unicorns (1) Poland (1) Portuguese (1) Protest (1) Public Education (1) Puebla (1) Puritans (1) Quest University (1) Rachel Carson (1) Reading (1) Republican (1) Retro Report (1) Robert Reich (1) Rock Legend (1) Ronald Reagan (1) Rondonia (1) SEXCoffee (1) Safety (1) Samoza (1) Sandino (1) Sara Vowell (1) Save the Children (1) Scotch (1) Scotland (1) Seinfeld (1) Senegal (1) Sergio Mendes (1) Severin (1) Sharrod (1) Silent Spring (1) Sinatra (1) Slope (1) Somalia (1) Sombra (1) Sonora (1) Sonoran desert (1) Sonoran hot dog (1) South America (1) Spain (1) Stairway to Heaven (1) Storm (1) Suare Inch of Silence (1) Sumatra (1) Swamp (1) Tacloban (1) The Amazon (1) The Amazon Trail (1) Tigris (1) Tucson (1) Tufts (1) U.S Federal Reserve (1) U.S Government (1) U.S. economy (1) USDA (1) USLE Formula (1) Uganda (1) Unfamiliar Fishes (1) Union Carbide (1) Vacation (1) Vexillology (1) Vietnam (1) ViralNova (1) WNYC Data News (1) Wall Street (1) Walsenburg (1) Walt Disney (1) Walt and El Grupo (1) Ward's Berry Farm (1) West (1) Whaling (1) Winter Storm Saturn (1) Wisconsin (1) World Bank (1) Xingu (1) YouTube (1) agriculture (1) anthropocene (1) antitrust (1) aspen (1) aviation (1) banned books (1) bark beetle (1) bean (1) bicycle (1) bicycling (1) bike sharing (1) binary (1) biodiversity (1) bioneers (1) books (1) boston globe (1) cacao (1) cafe (1) campaign (1) campus (1) cantonville (1) cape verde (1) capitals (1) carbon dioxide (1) carbon offsets (1) carioca (1) cash (1) cashews (1) census (1) chemex (1) chemistry (1) chronology (1) churrasco (1) coffee grounds (1) coffee hell (1) coffee prices (1) college (1) compost (1) computerized test (1) congress (1) conservation commission (1) corn (1) corporations (1) countries (1) cubicle (1) deBlij06 (1) deBlij08 (1) death (1) deficit (1) dictatorship (1) distracted learning (1) distraction (1) drug war (1) earth (1) economic diversification (1) economic geography (1) election (1) embargo (1) energy (1) enhanced greenhouse effect (1) environmentalist (1) ethnomusicology (1) exremism (1) failed states (1) farming (1) financial crisis (1) football (1) forestry (1) forro (1) fracking (1) free market (1) free trade (1) fuel economy (1) garden (1) genocide (1) geography education (1) geography games (1) geography of chocolate (1) geography of food (1) geologic time (1) geotechnology (1) gerrymandering (1) global pizza (1) globe (1) green chemistry (1) guatemala (1) high-frutcose (1) home values (1) hospitality (1) housing (1) illegal aliens (1) income (1) interfaith (1) journalism (1) kitchen garden (1) labor (1) language (1) libertarianism (1) library (1) lingusitics (1) little rock (1) llorona; musica (1) maple syrup (1) mapping (1) medical (1) mental maps (1) microstates (1) mining (1) monopoly (1) municipal government (1) nautical (1) neoclassical economics (1) new england (1) newseum (1) newspapers (1) noise pollution (1) pandas (1) petroleum (1) piracy (1) pirates (1) poison ivy (1) police (1) political geography (1) provincial government (1) proxy variables (1) public diplomacy (1) rabbi (1) racism (1) real food cafe (1) remittances (1) resistance (1) respect (1) rigoberta menchu (1) rios montt (1) romance (1) roya (1) runways (1) russia (1) satellites (1) science (1) sea level (1) selva negra (1) sertao (1) sertão (1) sex (1) sex and coffee (1) simple (1) sin (1) solar (1) solar roasting (1) south africa (1) sovereignty (1) species loss (1) sporcle (1) sports (1) state government (1) sustainability (1) taxes (1) tea party (1) teaching (1) textile (1) texting (1) training (1) transect; Mercator (1) travel (1) triple-deckers (1) tsunami (1) utopia (1) vermont (1) vice (1) video (1) wall (1) water resources (1) water vapor (1) whiskey (1) whisky (1) widget (1) wifi (1) wild fire (1) wildlife corridor (1) wto (1)