Wednesday, May 29, 2013

Crime and war profiteering are excellent for the GDP based economy!!

By using the GDP as the leading indicator of economic strength we have created a system where it is more profitable for many of the most powerful corporations not to minimize crime or war, intentionally or not. This does little or nothing to consider whether or not financial transactions are beneficial to society or not.

The result is that crime and war profiteering are excellent for the GDP based economy, based on the way most economists measure things, even though they're devastating for the vast majority of the public!!

Some of the simplest examples would be if your house is broken into and you are robbed then you have to buy stuff to replace the products that were stolen; this results in an increase in the GDP but you receive no benefit since it is a replacement expense that might not have happened if social problems were solved in the most effective manner possible and crime was reduced. If on the other hand you pay more for security systems to prevent this from happening then the GDP also increases but you have no way of knowing whether it worked or not, and it won't improve the quality of life for the majority as much as preventing the social inequities that contribute to crime in the first place.

Another simple example is that if there is an increase in availability of guns to the most violent people in society then they will be much more likely to participate in violent activity that scares the public and leads to an arms race which makes guns much more wide spread. Once there are more guns then it leads to increased crime and increased panic and more calls for more guns.

These two examples might not seem quite so clear cut to many but I have little doubt that if the details were reviewed and alternatives were considered they would prove to be legitimate claims; however until then a much more obvious example might be the private prison industry. In a government controlled system the theory is at least that they will try to rehabilitate the criminals so that they wouldn't commit more crimes. It may not always work that way but at least they try to do it. In a private prison industry, like any other industry, they want to maximize their profits and expand their business. So right off the bat they have an incentive not to rehabilitate the criminals and they make more money of they conduct more crimes and help them expand their business.

This creates an incredibly obvious conflict of interests without even studying the private prisons that have already been put in place; and when studying them it seems clear that it only gets worse.

The basic problem whether it is home security systems, prisons, guns or any other thing that might relate to crime or war instead of trying to figure out how to reduce crime in the most effective manner possible it is often assumed that an increased GDP will solve the problem or they just put much more emphasis on this without even considering whether or not it decreases crime. Measuring the success of the economy solely on the GDP without taking into consideration whether the customers get their moneys worth or is accomplishing their goals in the most effective way possible isn't designed to benefit the vast majority of the public; instead it is designed to assume that when ever money changes hands and profits for those that run major corporations increase it is beneficial even if there is little or no benefit to those that aren't getting their share of profit.

Many of these corporations make their profits when crime is high so they don't want to eliminate crime that eliminates their profits; instead they want to see crime stay high so they can continue offering a method to address it that doesn't actually work, although they attempt to make it appear as if it does. In the case of home security systems which have been widely advertised they offer perceived security for those that have their system installed but a closer review indicates their are many problems and they have had an enormous amount of complaints. Ironically people who put the stickers on their house, from ADT or any other security system, without paying for the whole system may receive as much benefit as a deterrent than the actual system. These systems are also subsidized by the local police since mainly what they do involves calling in alarms to the police and many of them turn out to be false alarms costing the tax payer money and even when they do turn out to be real alarms the police rarely get their before the burglar leaves. David Cay Johnston has written about this in his book "Free Lunch" and elaborated in an interview on the subject.

Graham Martin has done a review of their Home Security Services Terms and Conditions which clearly indicates many more problems and if you Google ADT complaints there are plenty more where that came from; but the biggest problem might be that they offer a perceived solution that gets an enormous amount of air time while real solutions that work much better don't get much if any air time.

These commercials are played over and over again on TV and they do nothing to address the social problems that contribute to crime. there are actually a large variety of contributing factors including the vast economic inequalities and violence against children that lead to escalating problems with crime and many other contributing issues that are fairly well researched but none of the best research gets much if any time on commercial TV. Instead what the vast majority of the public that relies on commercial TV gets is an enormous amount of appeals to emotions that do absolutely nothing to address many of these problems. there is a financial incentive to air these commercials that don't actually reduce crime but there isn't a financial incentive to offer solution that do address the root causes of the problem under the current system. This means that commercials for ADT are profitable and the cost of these commercials is passed on to the customer but the more effective methods of solving problems never get widespread attention; instead we receive an enormous amount of coverage from demagogues like Nancy Grace and Jane Velez-Mitchell that provide an enormous appeal to emotion but no discussion on how to find effective ways to reduce crime.

More effective researchers that have done a lot to explain how violence at an early age escalates to more violence later in life don't get much if any air time. They don't appeal to emotion; instead they encourage people to think rationally. If more people think rationally about this subject and many others they might also think rationally about all the deceptive commercials and appeals to emotion that the commercial media is profiting off of. This means they might be less likely to fall for many of these advertising scams. Rational education through commercial means doesn't have a financial incentive but deceptive scams do.

This may essentially mean that one of the the biggest, if not the biggest, crime and war profiteers is almost certainly the centralized commercial media establishment.

The vast majority of us fund the commercial media indirectly but they are almost completely unaccountable to the majority of the public; instead they answer to their share holders and their advertisers. Since the massive amount of consolidations and acquisitions led to a heavy concentration of the economic system in the hands of a relatively small percentage of the public the majority of the public has no choice when they buy some of the most basic necessitates but to finance the commercial media indirectly since the amount of money corporations spend on advertising has become a necessity, and this expense has to be passed on to the public without any accountability. This means that speech is protected much more when it has a financial incentive but the ultimate financier of the speech, consumers, have no control over it; instead the corporations that control the oligarchy system virtually monopolize speech on the commercial media while the rest of us only have a much more limited right to free speech that can only reach a much smaller percentage of the public.

A closer look indicates that crime profiteering may not be limited to the most obvious businesses although many of them might not be intentionally involved in crime profiteering the results may be the same. There are an enormous amount of business translations that lead to an enormous economic inequality and this often means that many of the poorest people in society don't have the resources they need to deal with their economic and social needs; and this often leads to increased crime although most of it is almost certainly indirect.

An enormous amount of economic activity could easily fall into this category including gambling, insurance, which is a reverse form of gambling, advertising, which is designed to convince the customer they're getting more than they actually are; and an incredibly large volume of products that are promoted that don't actually have much if any practical benefit for the customer despite an enormous amount of advertising to convince them that they're worthwhile; I have listed many of these in a previous blog about Truth in Advertising Store Now Open!!

In some cases they even backfire on the profiteers who often become the victims of the violence they indirectly instigate as a result of their business practices. One of the most blatant examples of this might be Wal-Mart as I indicated in a previous post about Wal-Mart shoplifting vigilantism gone wild? There have been an enormous amount of crimes on their property including a lot of shootings which have been listed at Wal-Mart Shootings, and a lot of shoplifting incidents and property damage that has impacted their profits. Unfortunately the worst damage in these cases have been done to low level employees, customers or even the shoplifters themselves who have often been injured or even killed in these incidents, including some that are started over petty things like underwear or even sandpaper. Wal-Mart rarely has to pay for these even when they are partially a result of their policies that almost certainly lead to increased crime. The standard operating procedure involves putting all the blame on people at the low levels. mostly the shoplifter or other perpetrators, but often the people that overreact as well with excessive force, not on the Wal-Mart executives that make many of the decisions that could dramatically reduce these incidents.

This means that Wal-Mart continues to have a financial incentive to implement policies that indirectly increase crime. they even use their marketing and stocking practices that set the stage for a dramatic mount of Black Friday riots on their property. Amazingly the blame for these riots is routinely put on the participants without much if any attention to the practices of Wal-Mart that make these much more common on their property. Not that the participants deserve some responsibility but they clearly shouldn't be completely ignoring the possibility that Wal-Mart policies are instigating these riots.

An additional amount of crime profiteering takes place at prisons, including those that are run publicly, which is still most of the, due to the fact that they already privatize many of the activities that are involved including providing products and services for the prisons that don't directly involve security or perceived justice. This includes the meals they receive and the use of phones and commissaries, which are all controlled by the government but they often give monopolies to well connected corporations who don't have to compete for their business so they charge much more money than they would in the somewhat free market elsewhere. This adds on a lot of expenses to the people that are caught up in the prison industrial cycle. It may be easy to say that this is all their own fault; but when considering the most effective way to rehabilitate people it should be more important to consider what is more effective and guaranteeing that they will never get out of debt is not the best way to rehabilitate them. As tempting as it is to say that they should pay for their crimes they can't pay what they don't have and if it only leads to more crime than it isn't working.

Furthermore if that line of logic is legitimate it should be more important to hold those guilty of white collar crime since they often do have the money to pay back a large portion of what they stole; but in practice white collar crimes often have political connections so they not only don't have to pay for their crimes but they don't even have to stop committing them and they rarely ever have to fear going to jail.

Being required to pay for their crimes is clearly something that only applies to lower classes of criminals.

Both Robert F Kennedy and Dwight D Eisenhower also raised serious questions about whether we should evaluate the US this way or divert money from eduction to weapons; a couple of these quotes were cited on my previous post about Semi-Secret Fundamentals of Economics. We no longer seem to have any high profile politicians or media people who are willing to even discuss this let alone suggest that we should find another way to judge the economy and the political establishment.

One of the most important aspects of this is the fact that the GDP based economy is also devastating the environment as well; if we provided products and services that we need in the most effective way possible and stopped wasting an enormous amount of money on things we don't need then we would save an enormous amount of money and do much less damage to the environment while shrinking the GDP. As it stands we will have to spend even more money to repair the damage being done to the environment if we keep it up or allow it to deteriorate beyond the point where we still have this option eventually.

The result is that our economic system has turned into something that probably should be considered a white collar extortion operation. Over the past thirty years the cost of advertising, lobbying, shipping products half way around the world have gone through the roof while expenses designed to benefit consumers and workers have been cut to the bone. The result is that we have to replace things much more often and the corporations are funneling all the wealth to the top with little or no benefit for the majority.

The purpose of the GDP based economy doesn't have much if anything to do with serving the best interest of the majority of the public at all; instead it is designed to make us spend much more than we should have to to buy products that really do benefit us and selling and enormous amount of products that don't provide benefit so that people who are already rich can keep taking a cut out of every thing and that cut has been skyrocketing while merchandise gets crappier due to the consolidated control of the economy and the information that people make their decisions with.

photo source

photo source

For additional information about crime profiteers see the following articles.

The Prison Industry in the United States: Big Business or a New Form of Slavery?

By the Numbers: The U.S.’s Growing For-Profit Detention Industry

U.S. Private Prison Population Grew 37 Percent Between 2002-2009 As Industry Lobbying Dollars Grew 165 Percent

Keep Private Prison Interests Out of Our Schools!

Abused inmates cannot sue Wackenhut/GEO in federal court

This Is What Happens When The Gun Industry Sees Kids As Customers

Who’s really running the NRA?

Top Dem on Gun Control Says She's Working With GOPers—But Won't Give Names or Numbers (photo source)

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