Why Markets Are Miraculous

I'm browsing through a new hardback called "Why Good People Are Divided By Politics And Religion", by Jonathan Haidt.  Haidt is a psychology professor at the University of Virginia.  He also teaches Business Ethics at New York University. 

This is good stuff.  Here's a snippet called "Markets Are Miraculous", where he looks at the Libertarian mindset on a few issues:

"In 2007, David Goldhill's father was killed by an infection he caught while in the hospital.  In trying to make sense of this unnecessary death, Goldhill began to read about the American health care system, which kills about 100,000 people annually buy such accidental infections.  He learned that the death rate can be cut by two-thirds when hospitals follow a simple checklist of sanitary procedures, but most hospitals don't adopt the checklist. 

Goldhill, a businessman (and Democrat), wondered how it was possible for any organization to pass up a simple measure that yielded such massive payoffs.  In the business world, such inefficiency would soon lead to bankruptcy.  As he learned more and more about the healthcare system, he discovered just how bad things get when goods and services are provided without a properly functioning market. 

In 2009, Goldhill published a provocative essay in The Atlantic Monthly titled "How American Health Care Killed My Father".  One of his main points was the absurdity of using insurance to pay for routine purchases.  Normally we buy insurance to cover the risk of a catastrophic loss.  We enter an insurance pool with other people to spread the risk around, and we hope never to collect a penny.  We handle routine expenses ourselves, seeking out the highest quality for the lowest price.  We would never file a claim on our car insurance to pay for an oil change. 

The next time you go to the supermarket, look closely at a can of peas.  Think about all the work that went into it - the farmers, truckers, and supermarket employees, the miners and metalworkers who made the can - and think how miraculous it is that you can buy this can for under a dollar.  At every step of the way, competition among suppliers rewarded those whose innovations shaved a penny off the cost of getting that can to you.  If God is commonly thought to have created the world and then arranged it for our benefit, then the free market (and its invisible hand) is a pretty good candidate for being a god.  You can begin to understand why libertarians sometimes have a quasi-religious faith in free markets. 

Now let's do the devil's work and spread chaos throughout the marketplace.  Suppose that one day all prices are removed from all products in the supermarket.  All labels too, beyond a simple description of the contents, so you can't compare products from different companies.  You just take whatever you want, as much as you want, and you bring it up to the register.  The checkout clerk scans in your food insurance card and helps you fill out your itemized claim.  You pay a flat fee of $10.00 and go home with your groceries.  A month later you get a bill informing you that your food insurance company will pay the supermarket for most of the remaining cost, but you'll have to send in a check for an additional $15.00.  It might sound like a bargain to get a cartload of food for $25.00, but you're really paying your grocery bill every month when you fork over $2,000.00 for your food insurance premium. 

Under such a system, there is little incentive for anyone to find innovative ways to reduce the cost of food or increase its quality.  The supermarkets get paid by the insurers, and the insurers get their premiums from you.  The cost of food insurance begins to rise as supermarkets stock only the foods that net them the highest insurance payments, not the foods that deliver value to you. 

As the cost of food insurance rises, many people can no longer afford it.  Liberals (motivated by Care - you'll have to read the entire book to get that part - TWS) push for a new government program to buy food insurance for the poor and the elderly.  But once the government becomes the major purchaser of food, then success in the supermarket and food insurance industries depends primarily on maximizing yield from government payouts.  Before you know it, that can of peas costs the government $30.00, and all of us are paying 25 percent of our paychecks in taxes just to cover the cost of buying groceries for each other at hugely inflated costs. 

That, says Goldhill, is what we've done to ourselves.  as long as consumers are spared from taking price into account - that is, as long as someone else is always paying for your choices - things will get worse. 

In the U.S., 84% of our healthcare checks are written by someone else - Uncle Sam or an insurance company - TWS

We can't fix the problem by convening panels of experts to set the maximum allowable price for a can of peas.  Only a working market can bring supply, demand, and ingenuity together to provide health care at the lowest possible price.  For example, there is an open market for LASIK surgery (a kind of laser eye surgery that removes the need to wear contact lenses).  Doctors compete with one another to attract customers, and because the procedure is rarely covered by insurance, patients take price into account. 

Have you ever heard a radio ad about a doctor who will fix a broken arm better and cheaper than anyone else?  I haven't.  How about LASIK surgeons?  They advertise as much as McDonald's.  - TWS. 

Competition and innovation have driven down the price of the surgery by nearly 80 percent since it was first introduced.  (Other developed nations have had more success controlling costs, but they too face rapidly rising costs that may become fiscally ruinous.  Like America, they often lack the political will to raise taxes or cut services.) 

When libertarians talk about the miracle of "spontaneous order" that emerges when people are allowed to make their own choices (and take on the costs and benefits of those choices), the rest of us should listen.  Care and compassion sometimes motivate liberals to interfere in the working of markets, but the results can be extraordinary harm on a vast scale.  (Of course, as I said above, governments often need to intervene to correct market distortions, thereby making markets work properly. - I believe he's talking about externalities, etc. - TWS)    Liberals want to use government for so many purposes, but health care expenses are crowding out all other possibilities.  If you think your local, state, and federal governments are broke now, just wait until the baby boom generation is fully retired. 

I find it ironic that liberals generally embrace Darwin and reject "intelligent design" as the explanation for design and adaptation  in the natural world, but they don't embrace Adam Smith as the explanation for design and adaptation in the economic world.  They sometimes prefer the "intelligent design" of socialist economics, which often ends in a disaster from a utilitarian point of view. 

I can't wait to read the rest of this book. Greatness. 

World's Easiest Economics Quiz

Shirley Rubaloff - R.I.P.

Shirley Rubaloff, a co-worker of mine and one of our long-time purchasing agents, passed away a few weeks ago.  Our company owner asked us to write down our memories of Shirley and any funny stories we had so that he could give them to Shirley's family. 

Here's mine. 

When I first met Shirley Rubaloff, Brent Shaver and I were running the Jukt Micronics metal shop. Shirley was the dispatcher for Jukt’s single box truck driver. Since all of the Jukt shops were within a few blocks of each other, that one driver and a flatbed trailer towed by a pickup were usually enough to get any job done.

Sometime during one of our first major Wal-Mart rollouts, the metal shop ran low on some casters. I called Shirley in a panic, begging her to get more casters to us before we ran out.  Otherwise, the world would end. She said she’d try. Thirty minutes later, she called and said that Casters Of Fort Worth didn’t have any, their competitors didn’t have any, and that we had drained the supply in all of the west coast warehouses. She said she was working on getting a shipment to the metal shop in THREE WEEKS.

It took three Serbian welders to scrape me off the ceiling. THREE WEEKS? SHIRLEY, I’LL BE DEAD IN THREE WEEKS !!!! WHAT CAN WE DO? CAN WE GET SOME ONTO A PLANE IN CHINA ??? THREE WEEKS???

Shirley started laughing. “I’m just messing with you, Allen,” she said. “Jimmy is already on the way to your shop with them. “

When my heart rate returned to normal, I told her that I was going to get her back. I would have my revenge. Shirley was laughing like I’d never heard her laugh. I said “Shirley Rubaloff, I WILL get even with you.” She hung up the phone, still laughing.

And just like Shirley promised, Jimmy The Driver (I forget his real name) arrived at the metal shop with my casters in 30 minutes.

Jimmy was a good guy, but unfortunately for him, he worked for Shirley The Enemy. Therefore he was fair game. Jimmy made the mistake of asking me if I needed anything from Home Depot. “Yeah,” I said. “Get me 12 cans of Dehydrated Water.” Jimmy pulled his notepad out of his pocket and wrote down “12 cans of Dehydrated Water”.

Jeff Gearhardt walked by the office. I said “Hey, I’m sending Jimmy to Home Depot for some cans of Dehydrated Water. Do you need anything?”

“Yeah,” Jeff said, not missing a lick. “I need a can of grinder sparks.” (Blacksmiths and metalworkers have been sending rookies, journeymen and apprentices after containers of sparks since the Middle Ages. And we still think it’s funny.)

Jimmy dutifully wrote down “One can of grinder sparks.” Jimmy was a great driver, but he wasn’t the brightest light in the Jukt Bakery Case.

Then Fane came along. Fane is a veteran of 40 years of trucking, shipping and cussing. I asked Fane if she needed anything from Home Depot besides grinder sparks and dehydrated water- Wink-Wink, Nudge-Nudge.

Fane decided that she needed things like Rainbow Paint, Rubber Nails, a Skyhook, a glass hammer, and a metric crescent wrench. Jimmy wrote down all of it, the entire catalog of non-existent manufacturing products, and went to Home Depot. This was going to be one of the greatest Snipe Hunts of all time.

Two hours later, yes, two hours later, I got a call from Shirley. “Allen, what in the world have you done to my driver? He’s wandering around Home Depot looking for Dehydrated Water and Grinder Sparks.” We both laughed until we cried.

Shirley vowed to get back at me. Occasionally I would tease her about it, and she always promised she would get even.

A few years passed. I forgot about Shirley’s vow of revenge. Then the purchasing department got extremely busy. Shirley didn’t have time to dispatch drivers any more. She met with the owners about who should take her place supervising the drivers, taking care of maintenance and keeping up with all of their stops. The owners met with me afterwards and told me that the drivers were now mine.

I left that meeting to go work out some details with Shirley. When I went into her office, and I’ll never, ever, ever forget this, Shirley smiled at me and said “Allen, I told you I’d get even.”

Yeah. She won.

Shirley, we miss you very, very much.

On gasoline speculators driving up prices

This is BRILLIANT.  Don Boudreaux at his best:

Here’s a letter to the Programming Director at Washington, DC’s, WTOP Radio:

During this morning’s 8 o’clock hour I heard one of the most ironic lines that I’ve heard in some time. That this irony was unintentional makes it all the more telling.

Asked by your “pump patrol” reporter about rising gasoline prices, a motorist at a gasoline station noted that “My tank is actually way more than half full now. I’m topping it off because I’m sure the price will be even higher this weekend.” When your reporter then asked her “What do you think explains these rising prices?” she replied “Speculators.” Your reporter followed up with “Do you think they should be stopped?” The motorist responded immediately: “Of course! They’re criminal.”

Speculating that the price of gasoline will rise, this motorist took action today – buying gasoline that she otherwise wouldn’t have bought today – that puts upward pressure on the price of gasoline today.

Had your reporter pointed out that this motorist herself is speculating in gasoline, I wonder if this motorist would have persisted in regarding speculation as being criminal. I wonder, too, how she would react if government – heeding her advice to stop speculation – were to forcibly prevent motorists from topping off their tanks.

Sincerely,
Donald J. Boudreaux
Professor of Economics
George Mason University
Fairfax, VA 22030

And that is why I want to somehow make a lot of money and retire and go study economics at George Mason University with Don Boudreaux, Russ Roberts, Tyler Cowen and Walter Williams while they all still live and breathe and walk among us. 

The "Make The Speculators Pay" logo came from this unrelated article about the European Union trying to blame their troubles on people other than themselves.

The Democrat Party's War On Women !!!

The Democrats are promoting a Republican War On Women meme, when they should be pumping out a Republican War On Freedom, Fiscal Sanity, and Stability meme.   
From Rand Simberg:

It should be shocking, by the conventional narrative, that the White House of a “liberal” president would be a hostile work environment for women, but it is not at all a surprise to anyone familiar with the history of the Democrats and the Left, going back at least to the 1960s, when a prominent Democrat politician got a pass from the media for abandoning a young woman (possibly pregnant by him) to drown in his car. The same man went on to later fame as the top slice of bread in a “waitress sandwich,” and yet was so lionized by the Left that not that long ago, at the time of his death, a woman(!) wrote that Mary Jo Kopechne might have been happy to undergo the terror as her lungs filled with the brackish water of Martha’s Vineyard had she only known what a great legislator he would turn out to be.

To see similar hypocritical Leftist misogyny, we need only go back to the last time a Democrat was in the White House. Whenever a woman came forward with allegations of inappropriate sexual conduct by Bill Clinton, the response of the Clinton defenders, both in and out of the media, was to attack her credibility, character, and virtue. Advisor James Carville famously said of Paula Jones (the young Arkansas state employee whom Clinton as governor had his state police guard procure to his hotel room for the purpose of orally pleasuring him), “Drag $100 bills through trailer parks, there’s no telling what you’ll find.”

Evan Thomas of Newsweek dutifully complemented the slander by declaring her on national television “just some sleazy woman with big hair coming out of the trailer parks,” though he later was compelled to apologize in print. (One wonders how residents of trailer parks felt about that, but I guess empathy for them is for the little people.) When Kathleen Willey accused the president of groping her in the White House, and was physically threatened for her trouble, feminist icon and (former) scourge of sexual harassers Gloria Steinem said that it was no problem — he was entitled to a freebie, after which Cathy Young of Reason magazine reported on “the death of sexual harassment.”

Remember the outrage from NOW in response to all of this?  That's funny.  I don't either. 

It got worse. As the Paula Jones lawsuit progressed, and the president committed acts of obstruction of justice (federal felonies) by perjury and subornation of perjury through threats and bribes, the White House was prepared to go after Monica Lewinsky, the woman about whom he engaged in such obstruction. She was bribed with jobs, and urged to in turn suborn perjury from her confidante Linda Tripp, by implying threats against her family. If the incriminating blue dress hadn’t turned up, their plan was to continue to cover up and lie, and accuse Lewinsky of being a crazy stalker. The White House orchestrated the leak of the personnel files of Pentagon employee Linda Tripp, the only person in the entire fiasco who told the truth, in an attempt (sadly quite successful) to discredit her. This included a mistaken felony arrest record that had been sealed since she was a teenager. She was vilified and maligned in the media, with late-night comedians mocking her physical appearance. It’s unlikely that many of these people were either conservatives or Republicans.

Or Libertarians. 
I don't think that Lee Wrights or Gary Johnson will kill any women if elected. 

War Is A Racket, by General Smedley Butler

People have sent me snippets from Smedley Butler for years, but I've never gotten around to posting it or linking to anything he said or wrote. 

I can remember seeing a few old Baptist hymnals from the 1920's and 1930's that included responsive readings under the following header:  "Against War As An Instrument Of Foreign Policy".  At the time I read those things, it seemed strange.  The Viet Nam war was going on, and most god-fearing Baptists supported JFK, LBJ, RMN, or whoever was in charge at the time.  Almost all of the anti-war people were filthy hippies. 

There really was a fierce anti-war movement in the U.S. in the 20's and 30's, mostly as a response to the senseless slaughter of World War One.  One of the participants in that idiotic slaughter was U.S. General Smedley Butler.  Here's his Wikipedia intro:

Smedley Darlington Butler (July 30, 1881 – June 21, 1940) was a Major General in the U.S. Marine Corps, an outspoken critic of U.S. military adventurism, and at the time of his death the most decorated Marine in U.S. history.


During his 34-year career as a Marine, he participated in military actions in the Philippines, China, in Central America and the Caribbean during the Banana Wars, and France in World War I. By the end of his career, he had received 16 medals, five for heroism. He is one of 19 men to twice receive the Medal of Honor, one of three to be awarded both the Marine Corps Brevet Medal and the Medal of Honor, and the only man to be awarded the Brevet Medal and two Medals of Honor, all for separate actions.

In his 1935 book War is a Racket, he described the workings of the military-industrial complex and, after retiring from service, became a popular speaker at meetings organized by veterans, pacifists and church groups in the 1930s.

In 1934, he became involved in a controversy known as the Business Plot when he told a congressional committee that a group of wealthy industrialists were planning a military coup to overthrow Franklin D. Roosevelt. The purported plot would have had Butler leading a mass of armed veterans in a march on Washington. The individuals identified denied the existence of a plot, and the media ridiculed the allegations. The final report of the committee stated that there was evidence that such a plot existed, but no charges were ever filed. The opinion of most historians is that while planning for a coup was not very advanced, wild schemes were discussed.

Butler continued his speaking engagements in an extended tour, but in June 1940 checked himself into a naval hospital, dying a few weeks later from what was believed to be cancer. He was buried at Oaklands Cemetery in West Chester, Pennsylvania; his home has been maintained as a memorial and contains memorabilia collected during his various careers.

Here's General Butler's famous speech, the one that seems to have made his speaking career.  All I can say is....Wow.  Do things ever change? 

************

CHAPTER ONE WAR IS A RACKET

WAR is a racket. It always has been. It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.

A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small "inside" group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.

In the World War [I] a mere handful garnered the profits of the conflict. At least 21,000 new millionaires and billionaires were made in the United States during the World War. That many admitted their huge blood gains in their income tax returns. How many other war millionaires falsified their tax returns no one knows.

How many of these war millionaires shouldered a rifle? How many of them dug a trench? How many of them knew what it meant to go hungry in a rat-infested dug-out? How many of them spent sleepless, frightened nights, ducking shells and shrapnel and machine gun bullets? How many of them parried a bayonet thrust of an enemy? How many of them were wounded or killed in battle?

Out of war nations acquire additional territory, if they are victorious. They just take it. This newly acquired territory promptly is exploited by the few – the selfsame few who wrung dollars out of blood in the war. The general public shoulders the bill.

And what is this bill?

This bill renders a horrible accounting. Newly placed gravestones. Mangled bodies. Shattered minds. Broken hearts and homes. Economic instability. Depression and all its attendant miseries. Back-breaking taxation for generations and generations.

For a great many years, as a soldier, I had a suspicion that war was a racket; not until I retired to civil life did I fully realize it. Now that I see the international war clouds gathering, as they are today, I must face it and speak out.

Again they are choosing sides. France and Russia met and agreed to stand side by side. Italy and Austria hurried to make a similar agreement. Poland and Germany cast sheep's eyes at each other, forgetting for the nonce [one unique occasion], their dispute over the Polish Corridor.

The assassination of King Alexander of Jugoslavia [Yugoslavia] complicated matters. Jugoslavia and Hungary, long bitter enemies, were almost at each other's throats. Italy was ready to jump in. But France was waiting. So was Czechoslovakia. All of them are looking ahead to war. Not the people – not those who fight and pay and die – only those who foment wars and remain safely at home to profit.

There are 40,000,000 men under arms in the world today, and our statesmen and diplomats have the temerity to say that war is not in the making.

Hell's bells! Are these 40,000,000 men being trained to be dancers?

Not in Italy, to be sure. Premier Mussolini knows what they are being trained for. He, at least, is frank enough to speak out. Only the other day, Il Duce in "International Conciliation," the publication of the Carnegie Endowment for International Peace, said:

"And above all, Fascism, the more it considers and observes the future and the development of humanity quite apart from political considerations of the moment, believes neither in the possibility nor the utility of perpetual peace... War alone brings up to its highest tension all human energy and puts the stamp of nobility upon the people who have the courage to meet it."

Undoubtedly Mussolini means exactly what he says. His well-trained army, his great fleet of planes, and even his navy are ready for war – anxious for it, apparently. His recent stand at the side of Hungary in the latter's dispute with Jugoslavia showed that. And the hurried mobilization of his troops on the Austrian border after the assassination of Dollfuss showed it too. There are others in Europe too whose sabre rattling presages war, sooner or later.

Herr Hitler, with his rearming Germany and his constant demands for more and more arms, is an equal if not greater menace to peace. France only recently increased the term of military service for its youth from a year to eighteen months.

Yes, all over, nations are camping in their arms. The mad dogs of Europe are on the loose. In the Orient the maneuvering is more adroit. Back in 1904, when Russia and Japan fought, we kicked out our old friends the Russians and backed Japan. Then our very generous international bankers were financing Japan. Now the trend is to poison us against the Japanese. What does the "open door" policy to China mean to us? Our trade with China is about $90,000,000 a year. Or the Philippine Islands? We have spent about $600,000,000 in the Philippines in thirty-five years and we (our bankers and industrialists and speculators) have private investments there of less than $200,000,000.

Then, to save that China trade of about $90,000,000, or to protect these private investments of less than $200,000,000 in the Philippines, we would be all stirred up to hate Japan and go to war – a war that might well cost us tens of billions of dollars, hundreds of thousands of lives of Americans, and many more hundreds of thousands of physically maimed and mentally unbalanced men.

Of course, for this loss, there would be a compensating profit – fortunes would be made. Millions and billions of dollars would be piled up. By a few. Munitions makers. Bankers. Ship builders. Manufacturers. Meat packers. Speculators. They would fare well.

Yes, they are getting ready for another war. Why shouldn't they? It pays high dividends.

But what does it profit the men who are killed? What does it profit their mothers and sisters, their wives and their sweethearts? What does it profit their children?

What does it profit anyone except the very few to whom war means huge profits?

Yes, and what does it profit the nation?

Take our own case. Until 1898 we didn't own a bit of territory outside the mainland of North America. At that time our national debt was a little more than $1,000,000,000. Then we became "internationally minded." We forgot, or shunted aside, the advice of the Father of our country. We forgot George Washington's warning about "entangling alliances." We went to war. We acquired outside territory. At the end of the World War period, as a direct result of our fiddling in international affairs, our national debt had jumped to over $25,000,000,000. Our total favorable trade balance during the twenty-five-year period was about $24,000,000,000. Therefore, on a purely bookkeeping basis, we ran a little behind year for year, and that foreign trade might well have been ours without the wars.

It would have been far cheaper (not to say safer) for the average American who pays the bills to stay out of foreign entanglements. For a very few this racket, like bootlegging and other underworld rackets, brings fancy profits, but the cost of operations is always transferred to the people – who do not profit.

CHAPTER TWO WHO MAKES THE PROFITS?

The World War, rather our brief participation in it, has cost the United States some $52,000,000,000. Figure it out. That means $400 to every American man, woman, and child. And we haven't paid the debt yet. We are paying it, our children will pay it, and our children's children probably still will be paying the cost of that war.

The normal profits of a business concern in the United States are six, eight, ten, and sometimes twelve percent. But war-time profits – ah! that is another matter – twenty, sixty, one hundred, three hundred, and even eighteen hundred per cent – the sky is the limit. All that traffic will bear. Uncle Sam has the money. Let's get it.

Of course, it isn't put that crudely in war time. It is dressed into speeches about patriotism, love of country, and "we must all put our shoulders to the wheel," but the profits jump and leap and skyrocket – and are safely pocketed. Let's just take a few examples:

Take our friends the du Ponts, the powder people – didn't one of them testify before a Senate committee recently that their powder won the war? Or saved the world for democracy? Or something? How did they do in the war? They were a patriotic corporation. Well, the average earnings of the du Ponts for the period 1910 to 1914 were $6,000,000 a year. It wasn't much, but the du Ponts managed to get along on it. Now let's look at their average yearly profit during the war years, 1914 to 1918. Fifty-eight million dollars a year profit we find! Nearly ten times that of normal times, and the profits of normal times were pretty good. An increase in profits of more than 950 per cent.

Take one of our little steel companies that patriotically shunted aside the making of rails and girders and bridges to manufacture war materials. Well, their 1910-1914 yearly earnings averaged $6,000,000. Then came the war. And, like loyal citizens, Bethlehem Steel promptly turned to munitions making. Did their profits jump – or did they let Uncle Sam in for a bargain? Well, their 1914-1918 average was $49,000,000 a year!

Or, let's take United States Steel. The normal earnings during the five-year period prior to the war were $105,000,000 a year. Not bad. Then along came the war and up went the profits. The average yearly profit for the period 1914-1918 was $240,000,000. Not bad.

There you have some of the steel and powder earnings. Let's look at something else. A little copper, perhaps. That always does well in war times.

Anaconda, for instance. Average yearly earnings during the pre-war years 1910-1914 of $10,000,000. During the war years 1914-1918 profits leaped to $34,000,000 per year.

Or Utah Copper. Average of $5,000,000 per year during the 1910-1914 period. Jumped to an average of $21,000,000 yearly profits for the war period.

Let's group these five, with three smaller companies. The total yearly average profits of the pre-war period 1910-1914 were $137,480,000. Then along came the war. The average yearly profits for this group skyrocketed to $408,300,000.

A little increase in profits of approximately 200 per cent.

Does war pay? It paid them. But they aren't the only ones. There are still others. Let's take leather.

For the three-year period before the war the total profits of Central Leather Company were $3,500,000. That was approximately $1,167,000 a year. Well, in 1916 Central Leather returned a profit of $15,000,000, a small increase of 1,100 per cent. That's all. The General Chemical Company averaged a profit for the three years before the war of a little over $800,000 a year. Came the war, and the profits jumped to $12,000,000. a leap of 1,400 per cent.

International Nickel Company – and you can't have a war without nickel – showed an increase in profits from a mere average of $4,000,000 a year to $73,000,000 yearly. Not bad? An increase of more than 1,700 per cent.

American Sugar Refining Company averaged $2,000,000 a year for the three years before the war. In 1916 a profit of $6,000,000 was recorded.

Listen to Senate Document No. 259. The Sixty-Fifth Congress, reporting on corporate earnings and government revenues. Considering the profits of 122 meat packers, 153 cotton manufacturers, 299 garment makers, 49 steel plants, and 340 coal producers during the war. Profits under 25 per cent were exceptional. For instance the coal companies made between 100 per cent and 7,856 per cent on their capital stock during the war. The Chicago packers doubled and tripled their earnings.

And let us not forget the bankers who financed the great war. If anyone had the cream of the profits it was the bankers. Being partnerships rather than incorporated organizations, they do not have to report to stockholders. And their profits were as secret as they were immense. How the bankers made their millions and their billions I do not know, because those little secrets never become public – even before a Senate investigatory body.

But here's how some of the other patriotic industrialists and speculators chiseled their way into war profits.

Still another had the brilliant idea that colonels shouldn't ride in automobiles, nor should they even ride on horseback. One has probably seen a picture of Andy Jackson riding in a buckboard. Well, some 6,000 buckboards were sold to Uncle Sam for the use of colonels! Not one of them was used. But the buckboard manufacturer got his war profit.

The shipbuilders felt they should come in on some of it, too. They built a lot of ships that made a lot of profit. More than $3,000,000,000 worth. Some of the ships were all right. But $635,000,000 worth of them were made of wood and wouldn't float! The seams opened up – and they sank. We paid for them, though. And somebody pocketed the profits.

It has been estimated by statisticians and economists and researchers that the war cost your Uncle Sam $52,000,000,000. Of this sum, $39,000,000,000 was expended in the actual war itself. This expenditure yielded $16,000,000,000 in profits. That is how the 21,000 billionaires and millionaires got that way. This $16,000,000,000 profits is not to be sneezed at. It is quite a tidy sum. And it went to a very few.

The Senate (Nye) committee probe of the munitions industry and its wartime profits, despite its sensational disclosures, hardly has scratched the surface.

Even so, it has had some effect. The State Department has been studying "for some time" methods of keeping out of war. The War Department suddenly decides it has a wonderful plan to spring. The Administration names a committee – with the War and Navy Departments ably represented under the chairmanship of a Wall Street speculator – to limit profits in war time. To what extent isn't suggested. Hmmm. Possibly the profits of 300 and 600 and 1,600 per cent of those who turned blood into gold in the World War would be limited to some smaller figure.

Apparently, however, the plan does not call for any limitation of losses – that is, the losses of those who fight the war. As far as I have been able to ascertain there is nothing in the scheme to limit a soldier to the loss of but one eye, or one arm, or to limit his wounds to one or two or three. Or to limit the loss of life.

There is nothing in this scheme, apparently, that says not more than 12 per cent of a regiment shall be wounded in battle, or that not more than 7 per cent in a division shall be killed.

Of course, the committee cannot be bothered with such trifling matters.

You can go here to read the rest.  If this piece didn't remind you of at least a dozen parallel instances in the last twenty years, perhaps you should read more.  Sheesh. 
I wish I could've met this guy.