New Growth Incentives

Japan will create the largest commercial bank in the world on Monday, when It takes Japan’s Postal system Private. The Plan is to split the Postal system into four Companies which will eventually be separated. Pressures have been mounting for years to allow the Plunger mentality of the Corporate world to absorb the $3.03 trillion in Reserves into their manipulative policies. The Changeover will ensure that Japan will join the United States in allowing no safe haven to keep funds free from Market stress. Devotees of the Market and Rapid Profits insist on a total Armageddon, if their flow of wealth is not maintained. The Reader might reach the Opinion I oppose a too-integrated organization of the financial structure, and they would be very right. The worst hazard for the Japanese depositors, though, will undoubtedly be inability to pin responsibility for the security of their Savings on Anyone; I will assure that the good, old-fashioned Run on a Bank will live in Japan as well as Britain.

Loren Steffy presents another example of the 3-Card Monte practiced by the modern Corporate world, this time in the arena of nuclear power. The new Plants are supposed to be cheaper than the old Plant to construct, simply because of the lack of regulation in the construction effort. The Public relies on the Honor system among Corporate Contractors to assure that the places will not melt down, and this is somehow supposed to suppress electrical charges to Ratepayers. It is one of those ‘divine mysteries’ in How the new setup will bring relief to Ratepayers, when Construction Costs are almost double today than when the old Plant was constructed. Hint: Expect that Maintenance Costs will be higher by a factor of 5 upon normal Operational Running of the new Plants, simply to avoid a 3-Mile Island Scenario.

Dani Rodrik obviously lacks faith in the great Power of Markets to raise the standard of living of the Poor. Food Prices will be better when the Corporate structure assumes the distribution system, diverts about 12% of the arable land to ethanol production in their envisioned final form, and route all Food Service; and all this at only a 14% demanded Profit. Hedge Funds and Speculators have already made great strides in the effective establishment of a sound Market in the Commodities arena. The Poor will obviously gain by the interjection of Third Party monopolistic Middlemen into such a system; granting lower Prices to the rural Poor for their Product, and much higher Cost Product to the urban Poor. All the Poor will gain all the advantages of American Dieters without the need of Will Power; even American Dieters will gain added incentive from the emptier wallets they carry. lgl