Free Market, the invisible hand, Market Cycles

Free Market, the invisible hand, Market Cycles
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Let us take the Interstate Highway as an example. If someone proposes let us have a Free Interstate Highway that can regulate itself, you can realize how dangerous such a proposal will be - A highway without lanes, no speed limits no police to monitor...What will happen to all the cars against the strong and powerful SUV s and Trucks in such a highway!
An Economic Highway without regulations and monitors - so called Free Market is dominated dangerously by the rich and powerful that smash average middle income workers in the form of job cuts, no job guarantees, ever demanding uncomfortable work environment and unfair advantage. Hence there should be strong regulations to control everyone and especially the Trucks and SUV s in an Economic Highway!
Proponents for low taxes for the rich claim that if low taxes are given for the rich, they will invest the extra money in business which in turn create employment. This is a conspiracy played by the rich lobbyists'. Why should a person that has say $10 Million ($100,000,000) look upon the extra say $2Million (Or even a richer person that has say $1 Billion -$1000,000,000 look upon the extra say $10Million) that he/she receives from low taxes to reinvest? Should he/she have $1010,000,000 instead of $1000,000,000 to invest in a Business to generate employment? This is a game played by the rich lobbies so when they get low taxes they invest (as a gamble) in the process create some employment and project through NEWS MEDIA that low taxes to the rich is good for the Economy but when the taxes are increased for the rich (though a rich individual may have $500Million instead of $900Million because of the high tax of say $400Million) the rich is not ready to invest part of the $500Million still he/she has! The rich hold to it and want unemployment to go high (as the rich are least affected by unemployment) which will cause unrest among the remaining (middle class and poor) population and will not VOTE for the government (generally Democrats in US) that increased taxes for the rich as the common population do not see increase in jobs from private companies/investments'. In order to prevent this conspiracy from the rich lobby Government employment should be good percent (say 50%)
of the job market. If Government employment has a good percent of the job market the rich lobbyist cannot play their game - 'low taxes for rich creates more employment' hence they advocate small government!

Also to prevent Black money and unpaid Tax money to come out to circulation (which is the essence of a sound economy) the currencys' base color should be changed every 25 years and the old currency should be invalidated. (For e.g. the US Dollar has a base color of green after 25 years the US Dollar should have a base color of say Blue and the green Dollar should be invalidated. A 3 year overlap period should be given for everyone to convert their green money to blue money through Banks with proper IRS documents. After another 25 years the blue money should be changed to say red money and so forth (After a 150 year cycle the same color can be brought in). In this way unpaid tax money, money hidden for long time, useless un-circulated money, counterfeit etc can be reduced to a great extent.
Note: Crooks will always find new ways to evade tax and hide excess money. New techniques like this should be adopted to beat the new ways crooks invent to evade tax and hide excess money. This is one of the reason to have the dynamic Constitution as proposed in the Dynamic Constitution section.


A free market that operates on demand and supply ironically does not incorporate high profit-low price and vice-verse dynamics (But it operates one way - Low Profits leads to increased prices but high profits DOES NOT lead to low prices - The excess profits are pocketed by CEO s and few top players). This is shown again and again in e.g. were Insurance companies, Banks, Oil Companies making $40,000,000,000 profit every year during the profitable years. This is another reason to have regulation. Mere competition will not improve service nor reduce prices. Only health competition with regulation and monitors/watchdogs will improve service and reduce prices and prevent companies from dying (because of unhealthy competition that happens in the US now).
Like how average income and mean income for individuals was proposed as a measure (base) for tax calculations and income limits for CEO, the average income and mean income, average profit and mean profit of every sector of Business (Say Commercial Bank, Personal Banking Banks, Oil Companies, Insurance Companies, Pharmaceuticals, Retail Chain stores, Car Manufacturing etc) should be used as a mechanism to dynamically (based on regulation and monitors) lower prices by certain formula.

For e.g. Profit by sector for Extra Large Companies
Oil Sector by Oil Chain stores - Profit $40Billions/year
Insurance Companies - Profit $45Billions/year
Commercial Banks - Profit $45Billions/year
Retail store Chains - Profit $50Billions/year
Car Manufacturing - Profit $20Billions/year
House Building - Profit $10Billions/year
Technology - Profit $15Billions/year
...
In the example of 7 sectors we have taken the average profit comes to $32Billions/year.
So the companies that have more than $32Billion profit/year should either pay a special tax to bring their profit to $32Billion or lower their prices, for the next year, by an amount to target the average profit value.

Note: This special tax can be like a special tax credit (similar to the proposal given under personal income tax for the extreme rich) so that the amount given in excess can be obtained during years of loss (rainy days).

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Where is the free market in modern Economy?
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Before mass manufacturing the manufacturer and consumer came face-to-face in a market and product/service was rendered through a negotiation process and the outcome was based on supply and demand and so a real free market existed but with the current economy with huge manufacturer and suppliers the actual manufacture and consumer do not have a direct change for negotiation. E.g. If you want to fill gas for your car you do not go to a gas station and ask if you can get a gallon for $1.5 instead of $2.00 not do you go to Walmart and get ask if you can buy a Shirt for 3$ instead of $7 so the actual negotiation for a supply/demand/necessity has disappeared hence the free market does not exist. The current market is driven by a group of suppliers (say Shell, BP, Exxon Mobile in gas), (say Walmart, Target, K-Mart in retail), (say CitiBank, Bank of America, Wells Fargo in Banking) etc and the actual consumer DOES NOT HAVE ANY NEGOTIATION POWER but the business lobby has cleverly covered this truth as competition is way for free market and regulation as a killer of free market! In reality with the regulation removed and the consumer having NO NEGOTIATING POWER it is a market controlled by large suppliers! So you can know the natural outcome of this is high interest rate, low paying jobs, high prices. With the current mass manufacturing and chain store/supplier Economy as the end consumer is out of the negotiating picture only regulation and strong consumer protection power and transparency (in accounting, profit, revenue, income etc) can ensure a real free market!

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-Suresh