Saturday, October 18, 2008

Capitalism - American style - has failed

It is mind-boggling to see a headline under a picture of John McCain’s smiling face stating that he is accusing Barack Obama of “socialism.”

The (conservative republican) Bush administration is actively engaging in nationalizing (socialism) the investment banking industry as McCain speaks. The banking system is failing and the government is bailing them out. The government subsidizes industry of all sorts… farming (large industrial farming not small family farming mind you), all sorts of heavy industry through the defense department, high tech industries through NASA and defense, pharmaceutical companies, and the list goes on and on. Conservatives like McCain and Bush like to talk about “free” markets, deregulation, and letting the market decide but it is all bull. The government is bailing out their favorites instead of letting them fail as the market has decided. The government has long rigged the international market game in favor of favored market segments, the government has taken us to war and under-mined other governments in favor of particular companies and market segments. How is any of that capitalism?

How is any of that Laissez-faire?

There are plenty of folks that will scream that any attack on capitalism is an attack on “The American Way!” But capitalism and democracy are two different things. A federal republic does not require capitalism as its economic system. Our Constitution does not say anything about the sanctity of capitalism. Though it must be pointed out that our founding fathers were very concerned with property rights. Theirs in particular. The phrase “Life, Liberty and the pursuit of Happiness” was originally written “Life, Liberty, and Property.”

But they weren’t really capitalists. Many of their early political fights were divided between the agricultural, slave owning aristocrats of the south and the capitalist commercial interests of the north. They had very differing views of economic interests. Capitalism was a very new thing at that time. I don’t know if the name “capitalism” had even been given yet.

Capitalism is a market system that has been around a few hundred years only. It has its strong points. It has its weaknesses. The government is engaging in socialist action in order to try and clean up the mess they’ve made of things in the “capitalist” market place. Policy all along has not been all that much different than the mercantilism of feudal and post-feudal times. The study of economics really began in 1776 with Adam Smith’s “Wealth of Nations.” Who is to say capitalism is the best economic system? It sure doesn’t look like it right now. Two massive failures within less than one hundred years to go along with massive inequalities is not a particularly good recommendation. We haven’t been at the business of economics as a scientific endeavor for very long. Perhaps some more study and rigorous experimentation is necessary.

Let’s get real for a minute. Let’s take an honest look at our economic system and fix the problems. McCain is simply being dishonest in the heat of an electoral battle that he is obviously losing. The Bush administration is, amazingly, actually doing something right by buying a stake in the companies they are bailing out with our money. This is a form of partial socialism. I don’t know if the long term answer is a nationalized investment bank as some are calling for, and as the administration is moving us towards, but I do know that it is simple common sense that We the People should get some sort of equity (partial ownership at least) for the massive amount of money we are forking over to save the asses of a bunch of folks that ran their companies (and our economy) into the ground through overly risky, overly greedy and completely uncontrolled, unregulated practices. I know chronic horse track gamblers that manage their risks better then these guys!

This bail-out does not address the real problems in our economy. We are massively in debt. We have growing numbers of people falling below the poverty level. Growing numbers of people with no health insurance. Growing numbers of people with borderline incomes and a lowering standard of living. And a growing gap between the filthy rich few and the rest of us. Our economy is based on a shrinking commodity… oil. I’ve yet to hear anyone in power talk about a real solution to the problem. Until they do we won’t even come close to talking about or developing an economic system that truly works for everyone.

And all that is without even talking about the effects of American controlled capitalism on the rest of the world, particularly the third world that the “masters of finance” have for far too long seen as their personal resource pool… since at least the end of the Second World War and in many cases going back into the 19th century and the Monroe Doctrine. A system that abuses the rest of the world for the benefit of a few in our own is not healthy for them… or us. It leads to the desperation and violence we see in the third world (and in our own).

In addition, our government has far too often supported abusive governments in other countries in order to provide “stability” for American companies exploiting the resources of those countries. But as recent events have painfully shown the price has started to come back to us and it is far greater then allowing those countries healthy control of their own resources and economies with us having to buy those resources at a proper “free (and fair) market” price.

The American dominated and controlled economy has failed. Current actions are band-aids. It is time to face the facts and develop real solutions. The band-aids might get us through for awhile longer but it is clear that the current system is unstable, doesn’t work, and cannot be made stable without serious, fundamental revision.

It’s time. Snidely accusing your opponent of socialism while your government engages in it doesn’t help.

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