Tuesday, February 28, 2017
Corruption and Growth: A Link and a Comment
Here’s a link to one of today’s posts at Naked Capitalism.
The article is worth the read.
We first pause here to note Nobel prize winner Milton ‘Friedman’s assertion that: "there is one and only one social responsibility of business–to use it(s) resources and engage in activities designed to increase its profits,..” could be the motto of a sociopath. He does continue with the qualification: “..so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” Since, progressively, even since he wrote this in 1970, corporations have been writing the rules which define what is open and free competition, and what constitutes deception and fraud, that qualification has become quite empty.
The issue here, though, is the question: “How much of the growth in the nation’s GDP is fraudulent? How close to reality are the figures which track our nation’s economy?”
This gives one cause to wonder: Is the economy even growing at all? Or is it actually contracting? The reality of the data on
has been called into question. Why not
the data on ours?
The question is especially relevant since no bankers were ever prosecuted after the 2008 financial crisis. The fraud involved, and there was a lot, was apparently all legal. With overturning the Dodd-Frank law under Trump, clearly the incentive for fraud will increase. And if we consider the consequences of the Volkswagon emissions scandal and the Takata air bag scandal, producing more of something imaginary would seem to be preferred to the risks of producing something real.
Now, as the economy pushes the constraints of reality, accurate response to stressors is increasingly required. And this requires accurate information as to the size and nature of those stressors.
Objective reality is independent of one’s opinion of it. The “Post-Truth Trumpian Worldview” is unlikely to provide the proper responses to any future crises.