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A Failure of Capitalism?


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A Failure of Capitalism?

Politicians often find scapegoats for America’s economic woes. It is rare – if ever – that they point the finger at themselves. Yet, the basic cause of the current severe economic problem lies in the machinations of government.

It is clear to even a casual observer that Congress has abused its power to tax and spend. It has taxed success to subsidize failure. It has purchased votes by enacting an unending of entitlement programs, financed by taxation, foreign debt and a progressive degradation of the U.S. paper dollar.

This cynical boosting of consumption at the expense of production has resulted in the American consumer now accounting for some 70 percent of United States GDP. By consuming three times what it produces, America has become the largest debtor in history. The Administration now forecasts annual deficits of trillions of dollars for the next decade. This is all the direct responsibility of Congress.

The executive branch is also to blame. Under President Bush II, the United States entered a Global War on Terror, with a mission so ambiguous it was almost sure to bankrupt its executor. To this day, and despite campaign pledges to the contrary, President Obama continues to waste massive amounts of blood and treasure on two fatally flawed wars in Iraq and Afghanistan and on maintaining over 1,000 military installations in 135 countries abroad. No one should forget that the assumption of an international military role depleted the wealth of Rome, Great Britain and the former Soviet Union.

But at least the Republican president slashed domestic spending to compensate, right? Actually, Bush II passed cherry-picked tax cuts for special interests and spearheaded a new prescription drug program for Medicare recipients, at a cost of some $40 billion per year. This was a capstone of sorts to a century-long experiment in entitlement and intervention.

This federal spending went from a drag on the economy to a true albatross by the 1970s. After former Fed Chairman Paul Volcker and Ronald Reagan courageously bought our currency a new lease on life, Alan Greenspan was given the helm at the central bank. Colluding with Presidents Clinton and Bush II to simulate economic growth for political gain, Greenspan, and his chosen successor Ben Bernanke, unleashed a torrent of new dollars into the banking system, where they were leveraged to finance the largest asset boom in history.

We are now in the process of deleveraging from this boom. It is painful, but it represents an opportunity. A government genuinely interested in economic restructuring could be focusing on cutting spending, lowering taxes, and reducing corruption, instead of playing ‘pin the blame on the capitalists.’

Today, we are likely heading into the second wave of massive recession. There is a concerted effort by the government to blame the fallout from their schemes on the free market. You, the educated observer, should recall that the most rabid capitalists – Peter Schiff, Doug Casey, Jim Rogers, Lew Rockwell, Ron Paul – were the only opponents of the bubble economy while it was occurring. Meanwhile, those that seek to pass judgment on capitalism – Bernanke, Greenspan, Tim Geithner, Jim Cramer – celebrated the artificial boom and were shocked at the resulting bust. Why does anyone even listen to these fellows anymore?

No, this crisis is not a failure of capitalism, but the result of a sustained attack upon our capitalist system. If we allow it to be used as a pretext for more government control, we will endure a ‘lost decade’ like the 1990s in Japan.

To avoid this fate, taxes must be lowered, especially corporate rates. Instead, we are increasing taxes on businesses and individuals. The government must cease its corporate bailouts which subsidize failure at the expense of success. Instead, we are now giving away money not just to failing giants, but to reward those with less efficient vehicles – when they didn’t even ask for it.

Most importantly, the Fed must be controlled. Presently, in addition to its ‘open market operations’ that subsidize government and industry, the central bank is paying interest on the bank reserves it holds. This encourages banks, borrowing at nil percent, to lend at zero perceived risk to the Fed rather than accept the higher risk of lending to small and medium sized businesses – thus snuffing out any remaining embers of economic vitality. Meanwhile, the massive Fed-enabled borrowing by the U.S. Treasury is crowding out healthy American companies from debt markets.

It takes years to dissect the myriad ways in which the federal government cripples the economy. After all, politicians spend most of their time obscuring their true intent. Do your own research if you have the time and interest, but at the very least, do not uncritically accept the party line. Capitalism is to blame for the government’s financial crisis like a house is to blame for an arsonist setting it aflame. Congress, the Executive, and especially the Fed, have meddled in the market with impunity for thirty years. Now that the consequences – about which they were fairly warned – have brought our economy to its knees, don’t let them shift the blame.

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I have said since college that complete capitalism will be the eventual downfall of our economy. Flame all you want but the wealth distribution is separating the classes at an amazingly large rate. We probably wont ever see the absolute worst of it, but things like outsourcing jobs to maximize profits is a prime example.

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I have said since college that complete capitalism will be the eventual downfall of our economy. Flame all you want but the wealth distribution is separating the classes at an amazingly large rate. We probably wont ever see the absolute worst of it, but things like outsourcing jobs to maximize profits is a prime example.

So, having actually read the article, I see you place yourself among those who 1) created the bubble economy, 2) denied it existed, 3) were surprised when it burst, and 4) now say "see, capitalism doesn't work!"

Just checking.

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I have said since college that complete capitalism will be the eventual downfall of our economy. Flame all you want but the wealth distribution is separating the classes at an amazingly large rate. We probably wont ever see the absolute worst of it, but things like outsourcing jobs to maximize profits is a prime example.

Go NAFTA!!!11

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So, having actually read the article, I see you place yourself among those who 1) created the bubble economy, 2) denied it existed, 3) were surprised when it burst, and 4) now say "see, capitalism doesn't work!"

Just checking.

Nah, I didnt read the article. I just felt like Id come in here and give my 2 cents anyways though.

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Well, lets compare the results from the 20th century:

Capitalism: Gives birth to an Industrial Revolution that slingshots mankind ahead in every measurable way, extending life and making the largest dent in world hunger and poverty in the history of human civiliation.

Communism/Socialism: Collapsed under the weight of its own oppressive governments, but only after these governments manage to murder over 100 million of their own citizens.

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So when Fannie Mae & Freddie Mac lowered restrictions & qualifications needed to obtain a home loan, to the point that this proverbial "bubble" was destined to burst, is that considered capitalism?

No, the opposite. Capitalism would be letting the banks and loan agencies allow their prices to be determined by the market. If home loans are that cheap, GREAT. But giving someone a home loan with less than 10% down (sometimes 0%) and a mortgage more than half their monthly income, what did we expect? (the same thing we should expect in 6 months when people who couldn't afford a car payment now thought that getting $4500 off a car they couldn't afford realize they can't make payments. anyone want a good deal on a REPO?)

Capitalism may not exist in its purest form, but the more the government gets involved, the worst things tend to be. Let the Government be the regulators (and make sure they actually regulate) of the private sector, and let the consumers dictate the market function.

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^^^

Links are our friends.

http://www.adherents.com/largecom/communist_mortality.html

The former Union of Soviet Socialist Republics is the world's premier murderer. Between 1917 and 1987, the USSR murdered 65 million people. Red China comes in second place with a murder count of 35 million. If we include Cambodia, North Korea, Vietnam, Bulgaria, Romania, Yugoslavia and other socialist-communist countries, the murder toll exceeds 97 million people.

--Walter Williams

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Yeah, the moment Hitler was used as an example of a Communist/Socialist, credibility = ZERO.

Not a Communist, but definitely a Socialist. When it comes to authoritarianism, you are free to pick your poison. Actually you aren't free to, now that I think about it....

But what's the difference really? Communism, Socialism, and Fascism are all the same fundamental problem: the power is in the hands of the government and not the people.

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Using the numbers from Hitler in a Communist vs Capitalist argument doesn't fly.

The argument is that Communism doesn't work because it's fundamentally flawed. It's very foundation is corrupt, and it's government is as well. No society can work like the communist doctrine claims, and they have to suppress and murder to control them. It is inherently evil, and it's a shame when people think of evil, communism isn't thrown around with words such as Nazism.

Yeah, if I was wanting to put down Communism in a Capitalist/Communist debate, I'd throw all of that mess out there. They're thought process is pretty much exact opposite.

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Not a Communist, but definitely a Socialist. When it comes to authoritarianism, you are free to pick your poison. Actually you aren't free to, now that I think about it....

But what's the difference really? Communism, Socialism, and Fascism are all the same fundamental problem: the power is in the hands of the government and not the people.

Actually, Socialism and Communism are more geared towards worker's rights so that idea that "everything is up to the government" is trash.

The confusion is this:

Communism/Marxism declares a leader of the Proletariat and that puts more into the worker's hands. The actual goal of Marxist-communism has never been attained in practice. The idea behind it is to abolish all leadership, and govern with a commune. So the "government owns all" when speaking of Communism is a confusion.

Hitler wasn't a Socialist, as he himself declared in his book. He used that misnomer to garner support from the Germany working class after their depression. For someone to continue to use that misnomer to somehow prop up their argument against Communism or Socialism is ridiculous.

Stalism is a complete flip flop of what Marxism includes. He himself is a misnomer.

You cannot use examples of Marxist-Communism in this debate because it is yet to be put into action.

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The argument is that Communism doesn't work because it's fundamentally flawed. It's very foundation is corrupt, and it's government is as well. No society can work like the communist doctrine claims, and they have to suppress and murder to control them. It is inherently evil, and it's a shame when people think of evil, communism isn't thrown around with words such as Nazism.

Yeah, if I was wanting to put down Communism in a Capitalist/Communist debate, I'd throw all of that mess out there. They're thought process is pretty much exact opposite.

The only example of Communism you have in this is Stalism. Stalinism is something most Communists detest. He was a counter-revolutionary.

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Communism/Marxism declares a leader of the Proletariat and that puts more into the worker's hands. The actual goal of Marxist-communism has never been attained in practice. The idea behind it is to abolish all leadership, and govern with a commune. So the "government owns all" when speaking of Communism is a confusion.

It hasn't happened because it cannot. It is human nature in itself that Marxism tries to work around.

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It hasn't happened because it cannot. It is human nature in itself that Marxism tries to work around.

Proof?

We already have proof that Democracy cannot and will not work. It only results in Tyranny. It hasn't been put into place because it is met with a high amount of resistance/wars. It is a total threat to Capitalism so I'm not surprised it would meet so much opposition and rhetoric.

If you refuse to accept new ideas and even give em a shot, you may as well call yourself someone who refuses to try and evolve and find a better way.

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...and I'm sure that 65 million people murdered by the USSR and 35 million people murdered by China, if they were able to speak to us today, would tell us to "just give Marxists a chance"!

Speaking of Marxists, if conspiracy theorists out there are out to nail Obama, why dont they go after his supposed liason with FARC's second in command. A captured email from him to another FARC leader detailed a meeting in which men who claimed to be with Obama's campaign told him that Obama would win the election, and that he would be prepared to reach out to FARC after taking the office. There's no evidence whatsoever of it actually happening, or of those men actually being from Obama's campaign even if it did happen, but that would seem to be better conspiracy nutjob fodder than the birth certificate thing.

But I digress.

Yeah, let's just give Marxism a chance. Let's make a movie glorifying Che Guevara, a man so empassioned for "teh peepul!" that he shot a teenage boy in the back of the head for disagreeing with him.

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A slight example of Socialism would be direct Democracy.

Considering our current system and corruption, I don't see how this would be a bad idea. It is basically what a lot of people comprehend this Democracy to be anyways but it falls way short.

And China is still an authoritarian party.

Still no example of proper Marxist-Communism.

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Proof?

We already have proof that Democracy cannot and will not work. It only results in Tyranny. It hasn't been put into place because it is met with a high amount of resistance/wars. It is a total threat to Capitalism so I'm not surprised it would meet so much opposition and rhetoric.

If you refuse to accept new ideas and even give em a shot, you may as well call yourself someone who refuses to try and evolve and find a better way.

I refuse to accept Marxism because it directly conflicts with my personal philosophy. I believe that mankind is a heroic being, capable of great achievement when unimpeded by destruction and the threat of force. A government cannot, and will not, ever be able to assist him in that endeavour because a collective can never create, only an individual can. A government can, however, keep the peace through the force of police power. It can never enforce morality, or try to sponsor success with a gun without first trampling the human spirit.

I recognize Marxism as a method of having the threat of violence from the government rape, pillage, and steal from the human spirit in order to appease the mob. And that's BEFORE the inevitable corruption degenerates it into Communism. Again, and again, and again...

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