Free Lunch

In 2006... China, Japan, Canada, and Mexico—accounted for 60 percent of our worldwide trade deficit of $764 billion.

In 2006 the trade deficit with China reached $232 billion. ...more than $60 per month for every man, woman and child in America. ...In 2004 when the trade deficit... was $161 billion, it was... more than the $126 billion of income taxes paid by the bottom 75% of Americans.

[P]residents of companies have gone from apologizing when they had to lay off workers to boasting of the riches... obtained through mass firings. ...[I]nvestors ...owe their wealth ...to buying companies in deals that required destroying lives and careers

Usury laws that protected consumers against rapacious lenders existed until 1978. Now they are gone because of a Supreme Court decision. ...[O]ur government has set forth onerous new rules that reward those who prey on the poor. ...These lenders, or their fronts, can now charge rates and impose penalties that were illegal, even criminal, a generation ago.

In Britain only about 18 people a year die at rail crossings. ...Even taking into account that America has five times as many people... the death rate at crossings is four times that of Britain.

At the same time that the rules have been rewritten to favor the already rich, new rules have been written that ensure harsh treatment for the poor... Coping with the foul effects of poverty costs us trillions of dollars a year... Poverty wastes minds and spirits, robbing all of us of opportunity. ...It makes us less trusting, less willing to see ourselves as one people...

In the past quarter century... new rules... have weakened and even destroyed consumer protections while increasing the power of the already powerful. ...[T]he rules affecting who wins and who loses economically have been quietly and subtly rewritten.

Throughout his writings Smith warned of the damage done when government interferes in the market by guaranteeing profits or by handing out gifts. This damage can exceed that caused when government taxes unwisely or imposes rules that needlessly obstruct commerce.

Rewriting the economic rules... in the past few decades has been done under the banner of "" and its promise that less government means more economic growth. The term itself is a misnomer. No society is free from regulation. Everything has rules...

The result? In the past 25 years, one American family in seven has sought refuge in federal bankruptcy court. Exhaustive research by Elizabeth Warren... and her associates... has proven that the vast majority of people seek refuge... after any two of three events combine: divorce, job loss, or major medical problems.

Economists have a term for situations in which someone gets rewards but has little or no incentive to avoid risk: a . ...Those who occupy the executive suite and gamble millions of dollars on the lives of others are rarely seen as engaged in morally hazardous conduct. Yet reward without risk is a form of moral hazard that blinds us to the consequences of our acts.

Martin Luther King Jr. said he had a dream that one day his four children would be judged by the content of their character, not by the color of their skin. ...Today we often value people less by their character than by the contents of their wallet. ...The pursuit of ever more financial zeros... has... produced a moral breakdown... twisting our culture and our values in ways that tear at the fabric of our society.

The impulse to increase profits can blind men to risk, especially when those at risk are strangers. Society imposes rules on corporate behavior to protect public safety in the face of baser impulses. These rules require enforcement...

Of each dollar people earned in 2005, the top 10 percent got 48.5¢... the greatest share of income pie since 1929, just before the collapsed into the Great Depression.

The government agencies, without nearly enough money to oversee safety... write superficial reports, and when it comes to accidents at rail crossings, they thoroughly investigate only 4 out of 3,000 cases.

Since the imperfect rules of the marketplace actually reward dangerous risk taking, the only thing that could prevent this lethal gamble is effective government regulation.

For the bottom 90 percent of Americans... the vast majority, annual income has been on a long, mostly downhill slide for more than three decades. ...Even with three decades of economic expansion, the vast majority has to get by on about $75 less each week than... a generation earlier...

To the addicted, money is like cocaine: Too much is never enough.

[R]ailroads are by far the most deadly form of commercial transportation in the country. ...Measure deaths by distance traveled... and trains are 52 times more deadly than trucks. Trains kill 130 people per 100 million miles traveled, compared with 2.5 deaths in big-rig truck accidents and 1.9 deaths in plane crashes.

This growing concentration of income at the top... resembles the distribution of income found in three other major countries: Brasil, Mexico, and Russia. ...They all have growing, and seemingly intractable, poverty at the bottom. ...These four countries are also societies in which adults have the right to vote, but real political power is wielded by a relatively narrow, and rich, segment of the population.

The rich and their lobbyists have taken firm control of the levers of power in Washington and state capitals while remaking the rules in their own interest. They have also imbued private organizations with the power to make rules that few outside the process understand. These same people... [are] the primary source of campaign donations that put politicians in office and keep them there.

[F]or the past quarter century, policies adopted in the name of Adam Smith... that supposedly strengthen the invisible hand guiding the market, have weighed down our economy while simultaneously stuffing the pockets of those among the rich and powerful who solicited them or... were just standing in the right place at a lucrative time. This is our story, not of one free lunch, but of the many banquets at which billions and billions of your dollars are being served to the richest among us.