On NFL Referees and Owner Lock-Outs I'd Like to See

From a Capitalist perspective, even CEOs are workers

It's a sign of the times that labor disputes often collapse not into strikes but owner lock-outs.  Capitalists have surely taken the upper hand. 

Or have they?

Regardless of whether workers walk off or owners lock them out, consumers still have a decisive say in these matters.  If, for instance, NFL replacement refs had performed their function without too much fan (i.e. consumer) complaint, locked-out refs would have lost their bargaining power (and perhaps their jobs) while owners would have increased profits.

Alas for the owners, NFL consumers were none too pleased with "scab" refs who seemed at times baffled by the speed of the game and subtleties of the rules.  Score one for the workers, and I'll add, Capitalism itself where the market is supposed to rule.

Sadly, it seems to me, hard-nosed Capitalist battles tend to be fought in these most trivial of pursuits- sports (don't get me wrong, I love sports, still play men's league ice hockey and really want my NHL).  By trivial I refer to the product sold, which doesn't directly add anything to national goods supply (yes there are indirect, likely not insubstantial, effects).  Consider the NHL or early season NBA.  Consumers of these products weren't starving for anything other than entertainment.

I'd love to see these hard-nosed Capitalist battles taking place in less trivial pursuits.  I'd love to see Roger Goodell named as Commissionner of the new National Banking League (NBL).  His take no prisoners and let the market sort it out approach seems to me just the sort of thing a true Capitalist (and these bankers sure love to talk about being epitomes thereof) would appreciate.

C'mon bank owners, hire someone who would really fight for YOU for you are indeed on the endangered species list.

Mr. Goodell would likely find the recent shrinkage of the NBL distressing (remember those two great teams of yore, Bear Stearns and Lehman Brothers) and would be seeking expansion, rather than contraction.  Given the harsh penalties given to New Orleans Saints' management over Bountygate, I'd love to let him sink his teeth into say, the LIBOR scandal.  Further, in the same way that Mr. Goodell has locked out players and refs, he could lock out senior bankers/traders who warn of economic collapse if their bonuses and salaries aren't paid. Heck, we could have a salary cap for bankers!

Let the market sort things out!

Goodell for NBL Commissionner!

Funny thing is, I'm pretty sure the replacement bankers would do a far better job than the replacement refs.  After all, the current bankers have botched things up far worse than the Seattle-Green Bay game, don't you think?

Oh, well, a man can dream.

Kidding aside, US financial problems are not an effect of too much capitalism, but too little- active owners seeking to maximize profits are necessary.

Romney, America's Churchill?

I have not become the King's First Minister in order to preside over the liquidation of the British Empire. Winston Churchill

I can imagine President Romney repeating some version of Churchill's view at his first State of the Union address.  "I did not get elected President to act as liquidator of the American Empire."

In Churchill's case, he likely meant what he said without realizing that liquidation was the most likely outcome following their military losses (which destroyed any sense of British superiority among the colonized) especially given Americans' anti-imperial sentiment at the time. 

A President Romney, if such proves to be the case, might not not mean what I imagine him saying and might even desire just such an outcome.  After all, Bain Capital did evidence some expertise in profiting from liquidations.  This is, of course, a serious allegation- disingenuously seeking the office of President of the United States merely to profit from empire liquidation.

Yet, judging from the now infamous (or laudatory, depending on perspective) video of Mr. Romney's unvarnished views, he seems well aware of America's precarious fiscal situation and even used the term "bankruptcy" in reference thereto as if such was a perhaps preferable certainty. It might also explain Romney's apparent inability to capitalize on the poor economy.  Like John Paulson, Romney might be betting on a crisis. 

Audience member: The debates are gonna be coming, and I hope at the right moment you can turn to President Obama, look at the American people, and say, "If you vote to reelect President Obama, you're voting to bankrupt the United States." I hope you keep that in your quiver because that's what gonna happen. And I think it's going to be very effective. Just wanted to give you that. 

Romney: Yeah, it's interesting…the former head of Goldman Sachs, John Whitehead, was also the former head of the New York Federal Reserve. And I met with him, and he said as soon as the Fed stops buying all the debt that we're issuing—which they've been doing, the Fed's buying like three-quarters of the debt that America issues. He said, once that's over, he said we're going to have a failed Treasury auction, interest rates are going to have to go up. We're living in this borrowed fantasy world, where the government keeps on borrowing money. You know, we borrow this extra trillion a year, we wonder who's loaning us the trillion? The Chinese aren't loaning us anymore. The Russians aren't loaning it to us anymore. So who's giving us the trillion? And the answer is we're just making it up. The Federal Reserve is just taking it and saying, "Here, we're giving it.' It's just made up money, and this does not augur well for our economic future.

You know, some of these things are complex enough it's not easy for people to understand, but your point of saying, bankruptcy usually concentrates the mind. Yeah, George.


Yet such an outcome is not a fait accompli (although we might well be seeing, as Churchill put it, the end of the beginning of that process).

As Alicia Munnell of the Boston Fed noted in reference to the use of the SS "Trust Fund:"

The conventional argument, and the one just alluded to, is that whether or not government saving actually occurs will depend on how the assets in the Social Security trust funds are used. If the reserves are used to finance current consumption - for example, to pay for current outlays in the rest of the budget - no real saving will occur. On the other hand, if the government alters its spending and taxing patterns to produce surpluses at the federal level - not just in the Social Security trust funds - the nation will enjoy higher saving and investment. 

That argument is basically correct. The only difficulty is that it characterizes all government spending as consumption. Clearly, the building of roads, bridges and other types of physical infrastructure is just as much an investment as the construction of any factory in the private sector. Equally important, however, is investment in human beings, because future output will depend upon having a healthy and educated work force. In other words, money spent on nutrition programs for pregnant women, on health care for poor children, and on Head Start programs will contribute just as much as physical investment to ensuring that we produce lots of income in the future.

The implication is that if we were doing a careful and serious job of assessing whether trust fund surpluses were adding to national saving, we would have to do more than look at whether the non-Social Security portion of the budget were in deficit or surplus. If the Social Security trust fund surpluses were used to finance new health or educational programs, they would be adding to future income just as surely as if they had been invested in General Motors stock.


In other words, and applying her views more broadly (including a wider range of investment options), it seems to me Americans need to choose (and soon).  Either we liquidate or we invest in making the nation much more efficient at producing and distributing the goods to whom they have been promised- in effect, making real the money "made up" by the Fed.  Neither choice will be pleasant and the latter may not be feasible given the divisive politics of today, although I have faith, should the political will be found the technology would be possible.  "Kicking the can down the road" makes the former option an eventual certainty.


Whether President Obama is the man for the latter job remains to be seen.