You can become wealthy by creating wealth or by appropriating wealth created by other people. When the appropriation of the wealth of others is illegal it is called theft or fraud. When it is legal, economists call it rent-seeking.
Interesting post by James Kwak on Baseline Scenario on health insurance, risk, adverse selection, asymmetric information, free markets and correlation.
Once you lose your employer-based coverage, for whatever reason, you’re in the individual market, where, you may be surprised to find, you have no right to affordable health insurance. An insurer can refuse to insure you or can charge you a premium you can’t afford because of your medical history. That’s the way a free market works: an insurer would be crazy to charge you less than the expected cost of your medical care (unless they can make it up on their healthy customers, which they can’t in the individual market).
In case somebody still believes in the efficient market theory, Goldman Sachs reported that they made money on 63 of 65 trading days during last quarter.
From Goldman Sachs 10-Q filing for Q2 2009
(page 124):
I tend to agree with Chris Martenson when he says that they are blatantly exploiting an unfair advantage at US taxpayers’ expense.
What these trading results tell us, as clearly as one could ever hope in this day and age, is that Goldman Sachs (and likely other major recipients of bailout money) is gaming the system to their benefit and everybody else’s loss.
I suppose it would be even clearer if we received individual, hand engraved notices informing us of this fact, but, for me, the presence of only 2 days of trading losses in an entire quarter is more than sufficient.
America, you are being looted, and the pirate’s name is Goldman Sachs.
In less competitive markets, firms earn excessive profits and restrict both output and employment. Such conditions create a classic “insider-outsider” conflict, where unions strive to extract a share of the rents on behalf of the “insiders” (workers in permanent employment), but at the expense of the “outsiders” (the unemployed and those in “atypical” employment). And lowering the rents arising from uncompetitive markets through product market deregulation would also ease subsequent labor market reforms. Another advantage of addressing labor market problems via the product market is that such reforms do not imply a cost for the budget—of special importance for Italy given its exceptionally weak public finances.
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