Capitalism: The real cure all
- 08-27-2010, 10:33 AM
Capitalism: The real cure all
Why We Are Totally Finished
Submitted by D Sherman Okst on Sun, 27 Jun 2010
In A Nutshell: Corporatocracy Has Replaced Capitalism
Capitalism Fixes Problems & Preserves Democracy: Capitalism is what we should be relying on to fix our problems. Capitalism has it's own ecosystem, just like biology's ecosystem. An economic ecosystem that weeds out the weak, has parasites that eat the failures and new bacteria that evolves and grows replacements for that which failed. A system that keeps everything in balance.
The problem is we are no longer a capitalistic society. What we were taught in school is now utter and absolute nonsense. Capitalism is a thing of the past.
As outlined in "It's Not A Financial Crisis - It's A Stupidity Crisis", we created two back to back bubbles. The air out of the Tech Bubble was sucked up for fuel by our next stupidity crisis: The Housing Bubble.
Now, after the second Stupidity Crisis there isn't a third bubble to inflate. If we still lived in a capitalistic environment the banks and financial institutions that created loans for folks who should have remained renters and then sold those loans as investments to pensions and countries would have been cleansed by capitalism's ecosystem.
But that isn't what happened.
In a very anti-capitalistic move the government decided that stupidity and criminal activity should be rewarded. I'd say they took our money, but it is worse, we didn't have that much money. So they borrowed the money in our name. The loan has a variable rate. They borrowed so much money that our kids cosigned the loan. In fact, our kid's future kid's signed on the dotted line.
That is unequivocally immoral.
They gave that borrowed money to a bunch of morons as a reward for stupidity. Morons who created subprime loans, liar loans, no income no documentation loans and other fraudulent instruments. Morons bundled that trash, got it rated AAA and then sold these turds or weapons of mass destruction that they had the audacity to name complex financial instruments or derivatives to pension funds, countries and other "investors".
Then it all blew up.
For blowing up the world's economy this Stupidity Crisis was falsely named an Economic Crisis by CNBS and 535 morons on a hill in DC (Ron Paul and a few other fiscally responsible adults excluded). The idiots who created the mess were rewarded with a 700 billion dollar "bailout". This "bailout" was anything but a bailout and had a price tag of anything but 700 billion. The actual price tag is closer to 11 trillion and puts us on the hook for another 13-17 trillion - not counting interest.
Think about that for a second. This stupidity crisis is the equivalent of our Federal Debt which took a generations of politicians over a hundred years to wrack-up.
For anyone who still believes we live in a free country where capitalism reigns please show me one economic textbook which states that failure, and fraud get rewarded with borrowed taxpayer money. For anyone who believes we live in a democracy please show me a textbook that says the government will en-debt you and your kids and their kids to pay for a failed business. How is that democratic?
"Law of Morons": Years ago, while serving on a committee I came to a sad realization. Like gravity, there is the another invisible force which I dubbed "The Law of Morons". Put a group of very intelligent, well meaning people in a room together, put them on a committee or some governmental body that is devoid of guiding principles or merit based decision making and "The Law of Morons" will prevail. The collective IQ will drop to the smallest shoe size in the room. And hope for loafers, because collectively this body won't be able to tie anything together - not even a single shoelace.
Government Creates Problems: Basically our government is comprised of many well meaning intelligent people who for whatever reason, re-election, greed the "Law of Morons", corporate puppet strings (read: lobbyist), self interest, corporatocracy or whatever else, do nothing but create massive problems. Lack of regulation, too much regulation.
And without any uncertainty --- too much DEBT along with a deficit that will NEVER be paid.
They have failed us.
With debt and a failed capitalistic society our democracy is now at risk. Serious risk.
A democratic society requires a stable and effectively functioning economy. I trust that we and our successors at the Federal Reserve will be important contributors to that end.~ Alan Greenspan
Our deficit requires that we counterfeit "money" to service our debt payments.
Forget about GDP, it is a bogus measure cooked by the BEA (US Bureau of Economic Analysis) . GDP is so baked that it makes the folks who cooked Enron's books look like saints. Let's focus on what we take in and what we pay out. We take in about 2 trillion in taxes and other revenues. We borrow about 2 trillion of which about 1 trillion must be taken off for debt service, and we spend well over 4 trillion.
To deal with the 1.6 trillion ++ shortfall we just print/counterfeit it. This debases the value of every dollar we hold, stealing wealth from every hard working American. It causes the need for more dollars to be injected into the system, which increases the amount of taxes that Americans pay.
There are only two crimes listed in our Constitution: Treason and counterfeiting.
"Solutions Create More Problems" ~ Al Bartlett (Worked on the Manhattan Project).
Another asked, "Is there any intelligent life on earth to change our future to a sustainable one?"
Dr. Bartlett replied, "Is there any intelligent life in Washington, DC is the bigger question?"
Corporatocracy: A government that serves the interest of, and may de facto be run by corporations.
Some states have government workers who have powerful unions that influence the government's decisions. California has a massive pension mess, created in large part by government unions and elected officials who have catered to these unions.
"Too Big To Fail" is living proof that capitalism is dead. These TBTF institutions that blew up the economy in 2008 with their stupidity crisis, at the very least deserved to fail. They blew it. That is the definition of capitalism. You do well you are rewarded, you screw up you close shop. You commit fraud and you do time.
But with a Corporatocracy you have Hank Paulson - a former Goldman Sachs CEO worth about 700 million dollars who winds up becoming our past Secretary of the Treasury. There is a serious distinction between a civil servant and someone who serves a corporation, especially the last corporation he worked for. His salary was only six figures, but his benefit was that he got to cash out of his stocks and pay no taxes. He gave the morons who blew up the economy 700 billion dollars. He had another former Goldman Sachs employee disperse the funds while the current CEO of Goldman Sachs professed to be "Doing God's work."
In Summary: Our debt and our inability to revive capitalism and cut the waste in government will be our demise. Sadly, the only glimmer of hope I see is that Corporatocracy will destroy itself. I say sadly because it will destroy the average American citizen like some parasite that kills it's host.
Capitalism is dead and that is why we are totally screwed.
In Summary: My faith in the 5Gs: (G*(religious edit)d, Gold, Guns, Grub & The Government Will Continue to Screw It Up) remains strong.The Historic PES Legend
- 08-27-2010, 07:37 PM
I like the term Corporatocracy. Corporations have promoted rampant economic psychopathy. The nature of this illness means that people are unable or unwilling to learn from their mistakes (e.g. tech bubble right to the housing bubble). This is why I also have the sinking feeling that the system has to completely collapse before people in power pull their heads out of their asses.
08-28-2010, 12:06 PM
08-28-2010, 03:35 PM
08-28-2010, 03:43 PM
08-28-2010, 03:46 PM
08-28-2010, 04:46 PM
Capitalism = "The wealth generated by the many (blue collar) workers is enjoyed by the few whose agency, Wall Street, gets whatever it wants out of Washington. If it runs into resistance, it just has to open its wallet a little more and place the bets on the right candidate".
08-29-2010, 05:29 AM
08-29-2010, 06:17 AM
08-29-2010, 07:57 AM
Yo homie ! I knowz my momz lives in d projects but check out my pimp a$$ new wheelz..................THAT is part of our problem , this fantasy world we live in.
09-03-2010, 10:17 AM
09-03-2010, 02:04 PM
However, I don't think that it is of much worth to draw strong conclusions about capitalism just from what has occurred in the US recently because the outcome could have been different if there had been a few different people in positions of power or even if those people had made slightly different decisions. For example what if the US didn't go to war, what if GW didn't lower taxes for the rich, what if investment derivatives were regulated, etc.
In a utopia, all economic systems: capitalism, socialism, communism, etc are equally viable because all citizens would behave in support of maximizing social welfare. IMO it is the people, especially those in power, that make or break the economic/political system.
09-03-2010, 02:26 PM
Now we see corporations bailed out of problems which stemmed from skirting true capitalism (Community reinvestment act) by saying everyone deserves to own a home... this is just blatant emotional politicking. The lazy or unwilling do not deserve a home unless they are willing to work for it. Capitalism even allow for the unskilled to make a nice living for themselves and their family if one is willing to work for it. The idea that any corporation is to big to fail is pure political BS and any company that misuses their status in market to do so should be allowed to fail. From the ashes comes better innovation.
Government caused this crisis and stepped all over true capitalism. In the end it will be true capitalism that will save the US economy, bailouts prolong the bleeding.
To paraphrase Steve Forbes: If government run business was better than privately run business, then Communist Russia would have won the Cold War.
The Historic PES Legend
09-03-2010, 02:30 PM
09-03-2010, 02:38 PM
To say our economy has been unregulated is a red herring. now we stacked on even more regulations that will only bite us in the ass later down the road. Without allowing Capitalism to work in it's natural way, you are only setting up for failure, and people are buying into this knee jerk reactionary crap that the Government if feeding them.
Contrary to what most believe, most economists will tell you TARP was the worst idea and to do that following the Bush bailout was the pure definition of insanity.
The Historic PES Legend
09-03-2010, 03:10 PM
Individual positions on this of course will vary depending on one's class and level of benevolence. A self centric wealthy individual will of course want to maximize his worth while one who is more benevolent will not be as adverse to paying more taxes at higher incomes if it improves overall social welfare. Obviously there is no right or wrong answer.
As for Steve Forbes, if he did not add any clarification to that statement then he really needs to go back to statistics class. Firstly a sample size of one is totally irrelevant. Secondly his attempt to correlate economic systems and military success is well, lame. This is no validation for the superiority of capitalism.
09-03-2010, 03:32 PM
Capitalism is what founded the American dream, but inject illegal immigration leaching off the entitlement programs, the ability to live in America without putting in work, the abyss will grow from the Will and Will Nots. The whole Have vs. the Have Not's argument is a talking point pandering to the lower class to drum up support for more entitlement programs and election results. The whole idea of "You are poor because of someone else" is a cop out.
I come from a very poor family and somehow 2 of us paid for ourselves to go to college, and the other two sibilings got a scholar ship... get this... from private enterprise. Which by the thoughts today, they should only be metaphorically raping them for back breaking work.
Capitalism hasnt been itself in a long time, to show a time when it was real and going full blast think the industrial revolution, when the innovation led to real benefits, instead of now when the idea of becoming a doctor is not appealing when you can just as well sit on your ass and do nothign and still get by.
Steve Forbes has it dead on, capitalism breed innovation led to defeat of Russia.
The Historic PES Legend
09-03-2010, 03:38 PM
09-03-2010, 03:43 PM
09-03-2010, 03:48 PM
09-03-2010, 03:54 PM
I first looked into that when I noticed many works of art in the Museum here that depicted side effects of such things...
Yes it jumped us a ways ahead of ourselves, but it brought about wrong doings just as well as any other lifestyle had.
Capitalism breeds its own demons, you cant just limit it to greed and corruption. I cant claim to understand true capitalism, but then again I doubt it will ever come to be again so...
09-03-2010, 03:56 PM
Seriously, give the book 'Fooled by Randomness' a read. It introduces some pretty cool perspectives.
Speaking of bias, going back to Forbes... He is tremendously biased. His wealth and success is directly attributed to capitalism. If he were to denounce it, his life's work and his personal identity would plummet. Of course he is going to support it until his dying breath.
09-03-2010, 04:02 PM
I will try to check out the book, but Grad school, a one year old and my job tends to require 99% of my time. I will try to look into it.
Check out Freakonomics. It is a good book that shows everything is connected in the economy.
I said Forbes because of the quote.. but I can quote you 9000 other economist if you want, but I don't really think it adds to the convo.
The Historic PES Legend
09-03-2010, 04:05 PM
09-03-2010, 08:52 PM
One of the problems with capitalism is that there's always going to be that bottom portion of the population that gets **** on. You could say "people are lazy" "drug addicts" or "criminals" but the bottom line is that in a capitalistic society you're going to need that bottom portion of workers that get a **** wage. And it's not the bourgeoisie that push for social reform, if it was up to them there wouldn't be a minimum wage or minimal benefits.
Now we're assuming that people are too lazy to pursue a career without the social status upgrade. Maybe.
09-04-2010, 09:36 AM
Simple truth about it: Life isn't fair.
My big issue is when one part becomes too powerful. Hence the banking industry. Or when things become too greedy, like places that when they hire you, you have to work 7 days a week, non-stop, and if you call off, they fire you on the spot....Yeah a few like that here...legalized slave labor, but people HAVE to do it because they have kids to feed. And after working 7 10-12 hour days, trying to go home to their kids, they are at a huge disadvantage to try and go to school, or have recreational time, etc,etc.
I see some very intelligent people who are stuck, because they are trapped in a system of needing money, needing to work a crappy job, and trying to go to school but not making enough money to afford school and pay the rent.
Everything is about $$$. Oh I left out the medical side of this. In other countries an operation that costs maybe 30 grand here will come out to about 1200 bucks....with the same results, the same safety standards,etc,etc. Why? And pharma companies....I will pass on getting into their abuse of caputalism.
09-04-2010, 01:53 PM
Take communism for example. Theoretically it results in maximum social welfare for all but in practice, because there are no incentives for effort people don't want to work so it rarely works. Not to mention someone at the top usually milks the system. Same applies for a capitalist free market system. People can and will behave opportunistically at the expense of social welfare.
Regardless, grats on grad school. What are you taking? I can relate to the time shortage - just finished an MBA this year. At one point was working full time as well. But you can't pry yourself away from talking politics on AM can you?
09-13-2010, 01:59 PM
09-13-2010, 02:45 PM
This is a perversion of capitalism. Capitalism as an economic model, at it's core is about expansion/growth of business. If a company is publicly traded, then they have a unique responsibility to grow that business and employ more people, not to seek out bigger and bigger bonuses, while doing so on the backs of their employees and shareholders. On top of that receive more tax breaks, as a reward for greed? Let the Bush tax cuts expire, so they can share in the misery.
09-13-2010, 03:08 PM
How about we fair tax the US, get that 50% that skirts paying taxes to actually pay their share, require the federal tax to be paid at the register so illegals cant get away without contributing.
It is BS social programs that pushed us in this direction.
The Historic PES Legend
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