One More Thing

Okay, just one more thing about high finance, and then on to populism.

The original cash contract helps the farmer, but all those derivatives only help the traders. It's like the stock market. The issuing company gets money from the initial public offering (IPO), which is when it first sells new stock to the public. After that, the traders buy and sell the stock between each other, and the issuing company doesn't get a dime out of that. On the other hand, if there was no stock exchange where stocks are bought and sold between individuals, a company might have a harder time peddling its IPO to the public. The reason most people buy stock is that they expect it to go up in value so they can sell it at a profit. If there was no secondary market for the stock, people would only have the dividends to entice them to buy the IPOs, and the dividends don't usually amount to all that much. I don't know this for a fact, but I'm guessing that the commodities derivatives trading has a similar effect on the marketability of the cash commodity contracts. If that's true, it would help the farmers and their customers indirectly, by providing liquidity for their contracts.

I have heard before that Plato believed that nation states should be governed by philosopher kings. I don't know this for a fact, but I suspect that Plato being a philosopher himself had something to do with that. If Plato had been a military man, he might have favored the notion of soldier kings, don't you think? There has recently been an ad running on our local TV stations about some guy running for something, I forget what exactly, but it doesn't matter because he's not in our district anyway. What this guy says is that people should vote for him because he has no political experience. He claims that the reason this country is all screwed up is that it's being run by politicians. He says that he is a businessman who knows how to balance a budget, and his other skills include playing the accordion and shooting a crossbow. What this country needs, he says, are less politicians and more budget balancing, accordion playing, crossbow shooters like himself. (I'm not making this up!)

I don't know a lot about populism so I suppose that will be this weekend's research project. From what you have already said, I gather that it's about regular people running the country instead of the fat cats or some other special interest group. It sounds good in theory, but has it ever worked in real life? My experience at the paper mill suggests that it's difficult to persuade regular people to take on positions of authority and responsibility and, as soon as they do, the other regular people disown them in what I call the "Who do you think you are?" syndrome.

Tell me more, why don't you?