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Sociology of Corruption

Irrational Exuberance
 

Alan Greenspan couldn't understand why the stock market was going so high, which he said was "irrational exuberance." It's important to understand why stock prices were, and still are, ridiculous, because conservatives produce a lot of fraud in that area claiming that making the rich richer will cause all of the boats to rise.

The widening spread between the rich and poor took off during the nineties. It almost appears to correlate with the internet, which certainly created an avenue for wealth accumulation and expression. But it began a little before the internet came into wide-spread use.

The primary factor was deregulation, which was a key element of Reaganism. Reaganism got a slow start, because society was riding on "eighty years of liberalism gone awry." It really took Bill Clinton to institute Reaganism, because the democrats could no longer oppose the trend while a democrat president was promoting it. Getting rid of welfare "as we know it" was the most telling example.

But less visible was deregulation. Deregulation allowed public utilities to charge all they want. This result allowed "renewable energy" to take off, as utilities could pass the expense onto consumers. The more waste, fraud and abuse in the energy system, the more profit to be made, because the consumers pay for it at cost-plus, while they have nothing to say about the result.

Such expansions due to deregulation channeled more money into the richest segment of society. A less visible force was the churning of corporate ownerships. Many corporations were bought and sold several times. Each time corporate ownership changes hands, the seller has a wad a cash to spend, which mostly goes into the stock market creating "irrational exuberance." The consumers then re-pay for the corporation through increased costs for the products.

The result is money flowing from consumers to previous owners of the corporations. Massive amounts of this buying and selling of corporations occurred during the nineties, and it is still occurring. The latest example is Bayer deciding to pay $66 billion to buy Monsanto. Endless examples of such transactions have been occurring. All of the money involved flows from consumers into the hands of the previous owners of the corporations.

Deregulation was the key force which allowed such economic dislocation to occur, while many of the laws were passed during the Clinton years.
 

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