Musings on the Free Market, and Leg-Breakers

At some point in the past, you might have said to yourself - "What is this pesky Free Market thing that everybody keeps talking about?"
If you are too lazy to actually spend the time and use the Inter-tubes, and books are way too verbose for you to bother with, you will do what pretty much everybody else does in these situations, which is
a) ask someone, or
b) go get a drink and forget the question.
Odds are that you'll do (b), but on the off-chance that you actually do ask someone, and that someone is a wee bit smarter than your average turnip, you'll find out that  Free Markets just don't work in isolation.
Huh? Whut?

Look at it this way - if Bob offers to mow your lawn for $20, and John offers to do it for $200, and promises to not break your legs, you pretty much know who gets to mow the lawn. The whole point of government, law enforcement, regualation, etc. is to ensure that the Johns of the world don't get a chance to exercise their Leg-Breaking skillz (or not exercise it, as it were!).

But what about the poor Leg-Breakers of this world?  Ever looked at the world from their perspective?  They need to make a living too, right?  So there you are, a perfectly good Leg-Breaker, plying your trade, and along comes Government saying terrible things like No Leg-Breaking, Level Playing Field, Fair Markets, No Selling Arsenic As Sugar, and other horrible stuff that keeps you awake at night and prevents you from being able to feed your kids the caviar that they so richly deserve.

The first solution to this problem is fairly straightforward - Just go ahead and co-opt the government. And the Leg-Breakers did that in spades all through the late 90s and the early part of this millennium.
Now, when the Gummint said Level Playing Field, the Leg-Breakers chuckled 'cos they knew that the Gummint was actually saying Waaaay tilted Playing Field in the Leg-Breakers favor.
Which was great, and the Leg-Breakers made a ton of money, and life was good, and there was caviar every night for their kids, and everyone slept well at night after drinking plenty of Nickel & Nickel.

But, nothing ever remains simple.The Leg-Breakers  did the math again, and said "Screw this. Why am I even bothering? I'm spending all this money on Lobbying, and Paying People Off, and Stuff. In fact, as far as I can tell, if I walk around not Breaking Leg at $200 a pop, I get the $200 now, but the Government isn't actually going to come after me for a long long time. So yeah, screw it - I'm just going to ignore the Law".

And there you are.
You end up with John Satyam, or John Madoff, or John Lehman, or John AIG, or, well, you get the point. The bottom line is, the Leg-Breakers Just Don't Care.
As far as they're concerned, its always Nike time!   (Just Do It! in case you didn't get it)

And in the end, we are left with a couple of simple questions. Take the whole Satyam thing as an example, where (to put it way too simply), Satyam made up fake financials, complete w/ non-existent money in their bank accounts, their auditors (Price-Waterhouse-Coopers) signed off on these, and the banks never complained about the fake bank-statements.  Sooo,

• Either PWC was complicit in the whole affair, in which case they should certainly hang. But, what does that mean vis-a-vis all the other companies that they audit? Are they scamming us too?
• Maybe it isn't PWC. Maybe the Banks did it. In which case, they should certainly hang. But what does that mean vis-a-vis all the other companies that use the same bank? Are they scamming us too?
• Maybe it is neither. Maybe it was just Satyam. In which case, they should certainly hang. But what does that mean vis-a-vis all the other publicly traded companies? Are they scamming us too?

Regardless of how you look at it, the whole system is out of whack.
Seriously.
And, as far as I can tell, nobody gives a shit...