Sunday, October 03, 2010

Is a Depression Inevitable?

We find ourselves in a situation where capitalists and the financial industry run our country and many other countries in the world. Over the last several decades the industry has deregulated itself and reduced its tax rates to allow it too concentrate the wealth of the country in its hands. At the same time it has allowed, through globalization, labor rewards to seek a level set by the lowest wage worldwide.  In the process, it has destroyed the buying power of the great masses of the world population. To compensate, it has stimulated the demand for debt and hidden risk through the use of collaterization and derivative insurance products. This was a prescription for asset and debt bubbles and ultimate failure of the financial system, which has been prevented from collapsing totally only by the offloading of the debt onto governments.

Keynesians have viewed the rescue of the financial system, through large government expenditures, as paramount, but is it just delaying the inevitable? As long as we have the financial system running governments are we ever going to correct the problem of financial system running governments and bailing themselves out on the backs of the masses? This appears to be a question that answers itself in the negative. Keynesianism, the philosophy of the government stepping in to prop up demand as private sector demand wanes may work for normal business cycles, but does it really work to correct structural problems caused by lack of government control by the people?

A couple recent articles have shown that the incentives are all in the wrong direction, and that concentrated wealth in the hands of a few leads to control of all physical resources and inflation of commodity prices. In a recent article by Henry Blodgett in the Wall Street Journal, he demonstrates how the incentives perpetuate the problem. A recent post to The Economic Collapse blog show how commodity prices are skyrocketing. And, lately there have been reports of the buying up of agricultural land in Africa to take advantage of the rising cost of agricultural products. Where will it all end. Are the masses of the world’s population doomed to be serfs to a small percentage of wealthy capitalists? Or, is another depression necessary to wrest control of governments back from the financial industry? Pick your poison.

Sunday, September 19, 2010

The Solution to the Housing Problem

Henry George (September 2, 1839 – October 29, 1897) was an American writer, politician and political economist, who was the most influential proponent of the land value tax, also known as the "single tax" on land. He inspired the philosophy and economic ideology known as Georgism, which is that everyone owns what he or she creates, but that everything found in nature, most importantly land, belongs equally to all humanity. His most famous work is Progress and Poverty written during 1879; it is a treatise on inequality, the cyclic nature of industrial economies and possible remedies.”  (Ref: Wikipedia)

This was a good idea that could never be implemented because all the property was in private hands.

Instead of pouring taxpayer money into banks to keep them from imploding from the devalued loans on their books, why not use the money to buy the land under their homes from the property owners. The homeowner could then use the money to buy down the value of their mortgage to the value of the structure, giving them a monthly payment they could afford, thus enabling them to keep their home. The bank balance sheet problems would be relieved by these buyouts. When the economy recovers and home owners are able to afford a higher monthly payment, the government could then start charging them for the lease of the land. In this way, government revenue will increase to pay off the debts incurred to make the purchase of the land.

If this practice is continued, eventually the government will own enough revenue producing land to pay off the government debt and begin to reduce other taxes. In this way, the Henry George land based economy could be implemented over time.

The program would have a side benefit in that it would allow government to prevent or offset future recessions by reducing rents instead of increasing spending, when private spending wanes in a recession. In boom times, rents could be increased to take some steam out of asset bubbles that were developing.

The program would also limit speculation in land by banks, hedge funds, and other investors, thus slowing the development of asset bubbles and the attendant crises when they burst.

The housing and real estate markets would be stimulated because the cost of a home would only be the cost of the structure, requiring less funding on credit.

The main entities that would suffer would be banks and speculators. Now isn’t that a shame!

The Henry George economy is discussed fully in the link cited above.

Friday, September 10, 2010

The Oil Boom in North Dakota

North Dakota family and friends know all this, but it might be of interest to others. As most of you know, North Dakota is the state that has been least affected by the financial crisis, and it is in no small part due to the oil boom going on there. And, the area where I grew up is right in the center of it.  The first well drilled in North Dakota by Murex Corporation, a company started by two North Dakota residents who became petroleum engineers at North Dakota State University, was drilled right on the farm where I grew up. It was one of the first horizontal wells drilled in the Bakken formation, one of two major new formations being tapped by new oil drilling technology. The Tioga Tribune, the newspaper of the small town where I went to high school has published a pamphlet called, "The Oil Can Extra" that documents the history of Murex and presents other information on oil development in the area. There is a picture of the first Murex well in the document. The Fargo Forum, the newspaper of the largest city in North Dakota, has done a wider ranging project on the state oil industry called, “Running with Oil”.

If you have further interest, click on the links in the text.

Thursday, September 09, 2010

What is driving the stock market these days?

I’ve noticed a strong correlation between the daily changes in the Dow Jones Industrial Average (DJIA) and and the changes (against the dollar)  in high yielding currencies used in the carry trade. (The carry trade is the practice of borrowing money in a low yielding currency like the US dollar or Japanese yen and investing it in a high yielding currency.)

The correlation is not true for low yielding currencies like the Japanese yen. To see the correlations visit the following links.

Australian Dollar

New Zealand Dollar

Japanese Yen

The first two are often used on the high side of the carry trade. When these currencies follow the market up it means the dollar is depreciating against these currencies, countering a portion of the dollar gains on the stocks.

The reason this is at all of interest to investors is that, if the correlation is strong, it suggests that the market is being driven largely by very large investors like big banks, hedge funds, institutions, etc, because the great mass of small investors seldom use the carry trade. It raises a further question regarding whether the coordination of these large investors is a form of market manipulation. It would be possible for large investors with real time trading and front running tools and acting a coordinated way to move the stock market and currency market up and down to continuously skim profits from investors not so equipped. A low correlation between the carry trade currency changes and the DJIA would suggest that this is not happening.

Sunday, September 05, 2010

Eliminating Welfare and Developing a Mixed Economy

It’s been fairly well proven that both totally state controlled or totally free market economies don’t work. Why don’t we just admit it and define what roles government and free enterprise should play in the economy?

People have lost track of what the depression era programs really were. I won’t go through all the details here because they are spelled out in the government document,  Job Creation Programs of the Great Depression.  But, they were carefully thought out programs that were designed not to compete with private enterprise and had control over worker behavior far beyond just the work environment. At the beginning of the depression there was no safety net to speak of so the CCC, WPA, and PWA became the safety net. When workers can’t get work in the private sector, they are willing to settle for less freedom in their lives and lower wages to make a basic living. Conversely, if private sector jobs are available that pay higher wages and give them more freedom they will gravitate toward them. This insures that the private sector will always have a pool of available workers.

What I am proposing is that welfare and unemployment compensation be replaced with permanent versions of the depression era workfare programs and others like them. These programs would be limited to paying the minimum wage and would include government supplied health care similar to Medicare and pensions for retirees similar to Social Security. They would involve closer control over people’s lives, as was the case in the depression era workfare programs. With such a safety net, regulations on business could be relaxed, and businesses that are too big to fail now because they would jeopardize the welfare of the citizenry, could be allowed to fail. The incentive to return to the private sector would always be there due to the higher wages and greater freedom.

In prior posts here I have shown how periodic failures of our economic system, manifested by recessions, depressions, and asset and debt bubbles which collapse, are due to the imbalance of wealth and income between investors and wage earners. The broad middle class creates the demand for products and services which is needed for business to create jobs. Since business and capital sit atop the economic pyramid and decide how the fruits of productivity are allocated they periodically succeed in diverting more and more of the fruits of productivity to investors and managers and less to wage earners. This happened in the late nineteenth century, again in the first half of the twentieth century, and has now happened again in the first part of the twentyfirst century. This happens because the wealth accumulation results in a takeover of government by a wealthy oligarchy. Unless wage earners rebel, there is not much they can do about it.

If a safety net of the type I propose is put in place, any attempt to short change workers, as wealth is transferred to investors and managers, will result in more people ending up on the workfare programs and higher taxes for business and people in the private sector. The workfare workers will still be earning an income to sustain demand, but the private sector will soon see a shortage of workers. They will realize that they will need to pay their workers more to get them off  the workfare rolls and reduce their taxes. This will cause wages to rise again in the private sector allowing taxes to be cut, and rebalancing the income and wealth that is necessary for a healthy economy that is less subject to cyclical crises.

If you have further question about the workfare programs or the interaction of inequality and economic instability read the government document cited above and my prior posts on the subject.

Tuesday, July 06, 2010

Underlying Problems of the World Economy

We are in a catch 22. Economies of the world need to grow themselves out of the looming deflation that is on the horizon. But, private spending is collapsing, so public spending has to take its place until the economy is turned around. But, public spending is reaching its limits, because private sources of financing are losing confidence in governments ability to meet its obligations. Normally, what would happen under such circumstances, if the problem existing in only one country, is that the country would be forced into austerity measures, all the while being propped up by loans from outside sources such as the IMF, and by devaluation of their currency to stimulate exports,  thereby improving their economic outlook. But, this a worldwide crisis. All countries can’t devalue their currencies simultaneously, and where will the money come from to prop them up while they recover?

The underlying problem is that our productive resources, labor and capital are being employed unproductively in wars and economic endeavors that do not increase our standard of living. In the US we have shifted from an industrial economy that makes useful products to one that imports everything and all we do is sell things to one another. To add to this dilemma, our capital resources are being concentrated in the hands of fewer and fewer people, who hoard them rather than employ them productively. The broad middle class earning and spending power has stagnated as a result.

The solution will ultimately be forced upon us as the middle class is driven into poverty. We will either become more like Mexico or we’ll change our ways by reducing our expenditures for foreign wars and products that are of marginal utility and get back to basics. We will have to rebuild our industrial base and contract our financial base to balance capital with the need for capital and to employ our population productively. This will require a  more progressive tax structure like we had in the fifties, enabling workers to share in the prosperity of the country. We can either plan for this, or go the way of Mexico, where the wealth is concentrated in the hands of a few and the population flees to other countries to make ends meet.

Tuesday, June 29, 2010

Leisure World

Sometimes it helps to understand a concept by considering what would happen in the extreme. Suppose, for example, what would happen if technology allowed us to do all normal work without human interaction. The first objection to such an assumption would be that this is impossible. Some human interaction would be needed to monitor the automated system. But, let’s take that up later.

In a society, there are people that are employed or whose time must be devoted to work, and those who live off investments. Of course, those who live off investments must monitor their investments just as there must be people to monitor a fully automated system. But, again lets take that up later.

For the moment, the question is, who should reap the rewards of a fully automated system? Should all share equally in them, or do some deserve more than others. Should those with greater needs, such as people with larger medical expenses be allotted more than people without such needs? Should people who are talented and admired by people for their personal traits be  allotted more? Should people who are already wealthy get less than people who are not? These are questions that must be answered when faced with the prospect of a fully automated system.

We can now draw parallels with what is happening in the society now, that is only partially automated. As robots have taken over many of the functions that people used to perform in the automotive industry, what has happened to the people that have been displaced? And, where have the rewards of greater automation gone. Have investors received most of the rewards, or have prices of the cars gone down so consumers can participate in the rewards. Judging by the rising inequality in the last several decades,  the sustained or increased prices of automobiles, and the reduced incomes of displaced workers forced to migrate to other work, it appear investors and management have gotten the best of the deal.

Going back to our idealized automated society, obviously the people necessary to monitor the automated system must be compensated. And, investors must be compensated for the time they spend monitoring their investments. But, we have not answered any of the questions raised regarding how the rewards of automation should be shared. This is the dilemma was face in our current society and that we are not addressing. We seem content to just let the money flow to the people that are closest to the source and who control the process, namely investors and managers. Is it any wonder that wages have stagnated, capital has accumulated beyond the need for it, assets are bid up to artificially high levels, and average people are forced into debt to survive. The resulting assets and debt bubbles have burst and we are facing a collapse of whole system.

Isn’t it time to reconsider tax policy to balance the accumulation of capital with the need for it, and to address the need for a redistribution of income resulting from the rewards of automation? As we have seen, in the limit of full automation, we should all be better off, not just a few people who happen to control the process in getting to a more automated society.

Tuesday, May 18, 2010

A Project for the UN and WTO

The Kyoto environmental accords failed and little progress has been made on world poverty. The US administration is pushing cap and trade as an alternative to Kyoto and has no defined program to reduce world poverty.

Cap and trade is a corporate program, subject to market manipulation that we’ve seen in other commodity markets, and that is pushing marginal farmers into survival mode in Brazil as corporations buy up large tracts of land for it’s carbon trade potential.

Maria Cantwell has a better idea: Cap and Dividend. It would add a carbon fee on all hydrocarbon products and rebate the collected funds to individuals to compensate them for the increased prices of petroleum products. The only problem is, it’s only a national program. American consumers would continue to buy the products at the same rate  if they are compensated for the increase in price.

A better answer is an international program, where rebates would go to many people living on a dollar a day and not using any petroleum products. Such a program would fight carbon buildup while at the same time fighting poverty, a win-win for the world.

Instead of beating their heads against the wall trying to sell climate change to people who won’t get interested until it affects them, environmentalists should be working in a world forum like the UN and the WTO to sell the benefits of carbon reduction in, not only improving the environment, but reducing world poverty.

Petroleum products have a world market. Petroleum producers are multinational corporations. The world is suffering wars in the name of petroleum resources and third world countries are benefiting little from them. It’s time for an international efforts to combat climate change and world poverty in a unified program.

The Tea Party Doublethinkers

Doublethink is the ability to hold two contradictory thoughts simultaneously. The credo of the Tea Party is lower taxes and smaller government. By shrinking the structure that was designed to protect them they are committing economic suicide. The business community has been successful in duping quite a large number of people into thinking that government is the problem, but it certainly hasn’t been a problem for business. They have been successful in turning the people against the government,  while at the same time lobbying to capture the government for themselves.

Business promotes expenditures and taxation for the military industrial complex and for bailing out banks while condemning them for any purpose benefitting people. It has successfully perpetuated an inefficient private health care system that rations health care by ability to pay rather than by need for care.  And, it is trying hard to destroy Social Security and Medicare. Yet, it has been able to convince the Tea Party that the solution is to further reduce taxes and limit the government’s power to protect the people.

What is needed is to bring government back to its original mission of promoting the general welfare, and not that of business and banking. There is a reason that taxes on the highest incomes were high and regulations were strong during the most prosperous period in the country’s history. Over the last several decades regulations have been decimated and taxes on high incomes and capital have been reduced dramatically, to the point where we are again experiencing an age of robber barons while aggregate demand atrophies and wages stagnate. Unless the people in organizations like the Tea Party realize they are working against their own interests, there is little hope of correcting the problem.

Friday, May 07, 2010

An Alternative to Unemployment Payments

Fundamentally, economies thrive when everyone is engaged in productive work in the most efficient way. As disturbing forces arise to create unemployment, the most prevalent solution has been to pay unemployment benefits to workers until they can find employment. There has been no other course, since there has been no facility to employ them beyond the private sector. This is where it might pay to make a fundamental change in national policy.

The government is always engaged in funding projects to improve national infrastructure and defenses. These projects could be structured so that the pace of activities can be adjusted relatively quickly to accommodate the increase or decrease in employment needs. If a segment of the private sector is temporarily slumping, public projects could be accelerated to employ people facing layoffs in the slumping sector. Obviously, there will be mismatches in qualifications and mobility problems, but keeping people productively employed may be better than paying them to do nothing and then having to encourage them to seek other employment or forcing them off the unemployment rolls when they’ve been out of work for some time and their skills have deteriorated.

The Basic Conflict Between Balanced Budgets vs Incurring National Debt or Printing Money

Putting an economy largely in the hands of a central government or unregulated private enterprise have been shown to have different, but comparably troublesome, problems. Central government control destroys initiative and retards the accumulation of private capital that is necessary for growth.  Unregulated private enterprise concentrates wealth in the hands of a few and destroys opportunity for the broad mass of citizens. Both government and private enterprise are authoritarian in nature and take measures to advantage themselves, if checks and balances or regulations are not in place to control them.

Historically, management of economies has become complicated, particularly by the introduction of fiat currencies, making national economies issuing fiat currencies very different from local and personal economies which don’t have that power. The latter must operate under budgets which balance incomes with expenditures, while the former can simply borrow or print money with only devaluation of its currency as the controlling factor. Unless this difference is recognized, there is always a battle between forces that want to treat national economics like local or personal economics and the forces that want to use the national power to borrow or print money to counter instability. Over the years, the forces that want to balance income and expenditures have prevailed except in times of great crisis.

This is the crux of the problem we face. We have two choices, either demand austerity measures or tax increases in times of recession, in a attempt to rebalance budgets, or use the federal government’s power to borrow or print money to prop up the slumping economy.  The first hurdle we must get over is that these are real alternatives. One or the other is not the only course. And, depending on the circumstances, one or the other may be the more advantageous. We must not let preconceptions or past policies prejudice one alternative or the other.

If it can be shown that national budgets have become wasteful or bloated, programs have become obsolete, or lobbying pressures have caused expenditures to become excessive, austerity programs can be very useful. If taxes have become excessive or unbalanced among different segments of society, changes may be required. But if the country faces a crisis of instability due to natural sources or accumulated risks, austerity measures or tax policy changes may not be the best answer. When faced with reduced demand, government stimulation of demand to replace lost private demand may be a better alternative.

If the national government borrows to increase demand as a result of a reduction in private demand, it is subject to its ability to borrow and at what rate. If rates become sufficiently high it may become advantageous to simply print money and pay the price in a devalued currency. These are real alternatives that must be weighed. If a country is disadvantaged in its trade relations with the rest of the world because of the value of its currency it may be more advantageous to print money. If the rest of the world is awash with capital and borrowing can be done at a low rate it may be advantageous to borrow.

Until we can agree as a nation that we have these alternatives we will be unable to reach the best solution when confronted with recession or other forms of instability.

Friday, April 30, 2010

CompuVision is the Future


The migration of television channels like MSNBC to the internet illustrates why television will ultimately give way to CompuVision, the fusion of television and the internet. If you compare the interactive format from MSNBC on the internet above to the the linear television format, the latter pales by comparison. In the internet format you pick the shows you want see, then pick the segments that interest you, and finally click an icon to watch the segment in full screen format. You are interrupted by a commercial only when you are switching to another segment and to display ads only when you are selecting shows and segments, not when you're engrossed in watching the segment. It makes so much more sense than watching a whole show, or multiple shows, only a small portion of which you have an interest.

There will come a time when the display market will stand alone and the CompuVision unit you buy will be a combination of the current set top box/DVR and a full blown computer with a wireless keyboard, mouse, and a remote control that will look more like an iPod with touch screen input. This unit will interface with the appropriate modem/router on the input side and the large screen display unit on the output side. Peripherals such as scanners and printers will be wireless and communicate with the CompuVision unit through the router. If sufficiently fast wireless communication can be developed, the display unit could also have built-in wireless. This would completely eliminate cables. Media like DVDs could be eliminated completely with all media being streamed or downloaded over the internet. I hope I'm still around when this happens.

Monday, April 12, 2010

How to see a stock market bubble

This chart will tell you how to detect a bubble in the stock market. It's available at:
As you see, the real S & P P/E went sky high during the housing bubble. Now it's down to where it was on September 30, 2007. It's still not down to historic norms, so the current bubble is still not completely deflated. If it starts going up again, it's time to get out of the market.
This chart is not be be confused with the annualized P/E chart for the S & P. That one uses old data over the previous year to come up with the P/E so it is late on predicting both the start and end of a bubble.

Tuesday, March 16, 2010

Time for a transaction tax on derivative trades

A one percent transaction tax on derivatives trade would pay for the entire US budget. If congress wasn't being paid off by these same big banks there would be no federal budget deficit.

JPMorgan, Bank of America Corp., Goldman Sachs, Morgan Stanley and Citigroup Inc. executed 96 percent of the $293 trillion in over-the-counter derivatives trades made by the top 25 U.S. bank-holding companies and their customers as of Sept. 30, according to the Office of the Comptroller of the Currency.

Saturday, March 13, 2010

A Note About Leverage and Credit Default Swaps

Leverage is only possible if there are funds available at low interest rates, compared to what money managers think they can get somewhere else, usually involving some high risk speculation scheme. This is so only because there is too much capital available compared to the need for capital. If there were productive uses for the funds at reasonable rates why would holders of the funds being willing to lend them out at low rates to money managers who want to lever up some speculative scheme?

Our financial problems today are largely a result of money managers using leverage to increase yield at great risk, and then buying phony insurance in the form of credit default swaps (CDS) to guarantee their risky investments. Unlike real insurance, CDS don't require any reserves to pay off if the investments go bad. Also, they don't require that the purchaser own the asset being insured. So an outfit like Goldman Sachs can buy a CDS on some collateralized asset they don't own, and then proceed to drive the price of that asset down so that they can collect on the CDS.

Talk about Ponzi schemes, this one doesn't even require convincing investors to give you their money.

Tuesday, February 23, 2010

How Wealth and Income Inequality Causes Unstable Credit and Asset Price Bubbles

Income and wealth inequality is the root cause of financial instability. Capital, and the need for capital must be balanced for an economy to function stably.  

If the accumulation of capital exceeds the need for capital to fund growth, the taxes on wealth and capital gains must be increased, and that on consumption and consumer income decreased .

If consumer demand, and the attendant capital needs, outpace capital accumulation, the reverse is required. Taxes then should be shifted from capital gains to consumption and consumer income.

Over the past several decades capital accumulation has outpaced the demand for capital, largely due to reductions in top bracket tax rates and stagnation of middle class incomes. The discussion that follows shows what happens when this occurs.

Enterprises need capital to expand and take advantage of new opportunities. This allows economies to grow to accommodate increases in population and the attendant need for new jobs.

If too little capital is accumulated, growth will be curtailed. If  the effect is severe enough, sufficient growth will not be achieved to accommodate population increases and the need for additional jobs, and the standard of living will fall. 

If too much capital is accumulated, rates of return on capital drop.  As rates of return drop,  capitalists seek ways to improve them through the use of leverage or through the use of techniques to increase the demand for credit. 

If leverage is used ,  risk increases, necessitating even larger rates of return. This leads to a potentially unstable situation. So there is a limit to the amount of leverage that can be used.

As the limits of leverage are reached, investment banks and hedge funds will look for ways to stimulate demand for credit. This can be done by relaxing the standards for issuing credit, and compensating by using techniques to hide risk.

By collateralizing debt and issuing insurance on debt capitalists can be made to feel more comfortable with less secure investments. Debt issued with relaxed credit standards can be mixed with more secure debt making it harder for rating agencies to correctly assess risks. If regulation does not keep up with these measures, or decreases, the value of the collateralized assets and insurance instruments will be jeopardized.

Excess capital can also result in additional risky speculation. When returns on productive investments are low and approaching inflation levels, capitalists will be willing to take larger risks in short term speculation on valuable assets and commodities, caused prices to rise. In turn, the rise in prices creates an upward momentum in asset prices that attracts even more speculation. Such price bubbles tend to be self sustaining as more and more capitalists are willing to take advantage of the upward momentum in prices, until eventually that trend cannot be sustained and the bubbles burst.

All of these measures are driven by the need to increase returns on capital, when there is just too much capital for the real investment needs of the country. This is the situation that has developed over the last few decades largely because returns have been going more and more to capitalists while workers wages have stagnated. With stagnating wages, the demand for goods and services has not kept up with the accumulation of capital.

The stagnation of wages has been caused largely by shrinkage in the manufacturing sector, causing consumers to seek returns in the financial sector and to tap available credit to sustain consumption. This is evidenced by the excessive growth of the financial sector. At the same time, high income and capital gains tax rates have been reduced, accelerating the income and wealth gap between capitalists and middle class consumers.

Unless taxes are shifted to wealth and capital gains from consumption and consumer incomes, this increasing spread in income and wealth will continue to cause instability and the kind of financial crises we are now experiencing.

Thursday, February 18, 2010

The Free Market Myth

You hear a lot of noise from conservatives about how the free market is the be all and end all of all things good. This is far from the case when government is in bed with private industry. Here are a few cases where the free market isn't free.

1) Cell Phone Service
Every day in almost every newspaper in the country there are full page ads from cell phone companies offering essentially the same type of service with the exception that the instrument that you can use is in the exclusive domain of one company. Cell phone users are paying for all this advertising and hardware exclusivity. The price of cell phone service is outrageous compared to internet phone service. Had the government invested in the infrastructure for high speed internet service in cities and along interstate highways, mobile telephone service would have been nearly free everywhere, as it is on the internet now.

2) Cable TV
Here again we have multiple companies charging high prices for nearly identical services, where you have little choice in what is available for purchase. Services are bundled for the convenience of the supplier and investor, instead of the consumer. If you're interested in only HBO you can't get it without subscribing to a whole raft of channels you don't want. HBO now has HBO Go which allows streaming of content on the internet, but it's not available unless you pay around $100 a month for HBO and a bunch of junk you don't need from a cable company.

3) Commercial Television
We are still locked into an outdated system where programming is interrupted by commercials. Now commercial channels don't even allow you to watch the program without pasting animated advertising at the bottom of the screen during the program. If you prefer to watch the same program uninterrupted and are willing to pay for it, it's not available.

Where is the free market that is supposed to be the best way to satisfy consumer needs? It's a myth. What is sold is determined by what is best for the companies selling it. This happens because politicians are owned by corporations. Ala carte cable TV services aren't available because cable companies write the laws that control cable TV. And, cell phone companies write the laws that control mobile phone service. And, commercial TV companies write the laws for commercial TV.

Recently there have been articles in the news about building high speed internet infrastructure. Cities are looking at 100 Mbps, Google at 1000 Mbps. This is ten to one hundred times the fastest service available now. It will enable phone, data, and TV in HD over the internet. It is the future, but will it come to pass. It is unlikely, because it would deny commercial TV, cable TV and cell phone companies the profits they now make due to laws written for them.

What we have now is not capitalism. It's state capitalism. They used to call it fascism. And, people seem to be the proverbial frog in the heating water, accepting more and more intrusion into the decisions they should be making as consumers.