The Failure of Capitalism

Unfortunately, Capitalism is the de facto religion of America. I say this is our religion because one is pretty much considered to be un-American if you don’t believe in this economic system. It is equated with freedom itself – even though it is not freedom. To be opposed to Capitalism is to be considered a Communist in America. To be a patriotic American, one must BELIEVE.

The problem is: it doesn’t work. It’s that simple. The current collapse of the U.S. and world economy is not a one time thing – it is a recurring phenomenon in our history. Everyone knows about the Great Depression that began in 1929. But couldn’t that just be a weird coincidence? Two events don’t exactly prove that Capitalism doesn’t work, does it? No, it doesn’t. How about the Bank Panic of 1907? Would that help? That’s the one where J.P. Morgan had to use his private resources to save the entire country from financial disaster. Not enough? OK, how about the bank panic of 1893? Still not enough? How about the bank panic of 1873?  Let’s not even start with the recessions that come in between the depressions.

Even Alan Greenspan had to admit that his free market ideas were wrong and that they led to the collapse of the stock market. Yet, about half the country still worships the concept of a free market capitalist economy, refusing to see what is plain to see: American-style Capitalism is seriously flawed. As the Occupy Movement people point out, it is deliriously wonderful for about 1% of the population who own about 25% of the national wealth. It is the other 99% who suffer. The question we should be asking is this: why doesn’t Capitalism work for everyone? The answer is simple: it is literally out of control. The bankers of Wall Street control U.S. monetary policy. It almost seems that it has become a requirement these days that in order to be Secretary of the Treasury you first have to have a top position at Goldman Sachs – just so the government can be sure that you know how everything is supposed to work.

We have, in this country, a true oligarchy that cares only for the few wealthiest people in America. The one thing in America that the government feels compelled to protect is the wealth of the wealthiest. Consider the last collapse (not the one we are feeling right now – I mean the one George Bush created). What did the government save? The banks. Consider the situation in Europe now. The Euro zone is on the verge of collapse. Some countries, like Ireland, have already experienced a collapse of their economy. What was and is being saved in Europe? The banks. Why? Are these particular banks so crucial to the survival of mankind? Of course not. However, it is the extraordinarily wealthy people who own these banks who also own the governments of the major Capitalist countries.

The problem with Capitalism is that none of the wealthy Capitalists will acknowledge that it is not perfect and that it must be controlled. They hate the very idea of controls. (Good thing they’re not airline pilots.) You see, it cuts into their ability to make billions of dollars at the expense of the common man.  So…. we don’t have controls. And our economy periodically collapses. And the government saves the wealthy while letting the average citizens fend for themselves. After all, what do you expect from an oligarchy?

The time has finally come for the entire world to wake up and realize that uncontrolled Capitalism is horribly imperfect. It needs to be controlled. The wealthy people also need to be controlled. They must be prevented from grabbing control our government through bribery via lobbyists.  The governments of our “democracy” must be more democratically elected. Why is it that essentially every Senator and Congressman in our government is a millionaire? It’s because no ordinary person can afford to run for office.  We have a political system that perpetuates an oligarchy.

Capitalist greed has infected our banking system and our government to the extent that the people at the very top of government have lost touch with the people.  They only use the power of government to perpetuate their own wealth and – above all – preserve the banks. Preserve the banks at all costs, that is their mantra. That is literally their religion.

It doesn’t have to be this way. It shouldn’t be this way. The first step in fixing the problem is to nationalize all of the banks. Cut the head off of the snake. Banks should be operated only as a utility for the benefit of all citizens – so that all citizens can enjoy the fruits of Capitalism. The greedy moneylenders of America should be told to get a real job and stop being bloodsucking parasites on the 99%.

Gargantuan banks are not necessary for Capitalism to succeed. Indeed, they have been shown, time and again throughout our history, to be the cause of the failure of Capitalism. Monster banks, out of control, are an imminent danger to democracy and a free economy. History has demonstrated this time and again. So why doesn’t our government fix the problem? Because our monster banks own our government.

And that is why American Capitalism has had a history of recurring, catastrophic failures for well over 100 years.

Yet, we still believe.

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The Betrayal of America

It’s difficult to say when it began, but I am sure the seeds were planted on the very first day the Pilgrims landed at Plymouth Rock.  Surely the beliefs that allow such betrayals are contained in the essence of the Calvinist/Puritan teaching of the concept of the “elect”.  Surely such beliefs are made manifest in the wholesale slaughter of the native Americans who owned this land.  Surely such beliefs are made manifest in the enslavement of an entire race of people, all for the sake of the enrichment of private fortunes. They called America the land of opportunity. And who comes to a land of opportunity except opportunists?

Through the centuries there have been numerous examples of men who professed a love for this country and its people, and all the while they acted out of anything but love for either the country or its people.  These captains of industry and leaders of government, clever with words and even more clever with the manipulation of the populace, time and again took advantage of the people solely for the purpose of self-aggrandizement.   The use of slaves in the south, the use of child labor in the factories of the north, the ejection of native Americans from their homelands on which they had lived for over 10,000 years, are all the work of opportunists – people without a sense of honor, righteousness, or human sympathy. These people knew only greed for wealth and would say anything, do anything, and go anywhere to obtain it. As they would say, ” You gotta do what you gotta do.” And they called themselves Americans.

We should have seen it coming fifty years ago. That’s when the captains of industry began moving the manufacturing industry of America from the industrial northeast to the south in order to take advantage of the cheap labor and thus obtain even greater profits. It was an opportunity not to be missed. And over the years the northeast lost many, many thousands of jobs and once thriving manufacturing towns became empty as people left, looking for work somewhere else. Never mind that the captains of industry had been good citizens. Some had even held political office. All had claimed they were working for the good of their communities. And then they left – for the opportunity to make even more money. And what about the people left behind? Who cares?

We missed the signs, though they were obvious to see. Then it happened again, except this time the captains of industry moved their factories to other countries where the people would work for even less money – it was an opportunity, you see. And our government? Well, it was just fine with our elected officials. No need to erect tariffs to keep out the cheaply made goods that would compete with American made products. It’s competition – good for everyone. Right? But it wasn’t. Sure it was good for Wal-Mart. Sure it has been wonderful for China. But what about the American worker? What could he do now?

Ah! The government had an idea (with the help of the banking industry). The poor people could buy and flip houses! Let them become mini-Capitalists! They can make their fortune’s that way and so can the banks. And the government said, “Let it be so.” And it was.

As Americans now look at the smoking ruin that was once the American economy, there is a strong sense of betrayal. Look at the Tea Party. They are made as Hell and they aren’t going to take it any more. Sadly, they have no clue about exactly what happened to them. They just know that they don’t want to pay taxes anymore. Everywhere there is unhappiness. The government cannot be trusted. The people we elect don’t deliver. They promise to do things and then they never even attempt to do them once they are elected. Democrat or Republican – it makes no difference, because, you see, they are all opportunists in this land of opportunity.

We, the people, don’t get it. It’s not about community. It’s not about patriotism.  It’s not about helping your neighbor. It’s not about people helping people. At least those are not the concerns of our captains of industry or our captains of government. We have been betrayed, fooled, bamboozled. The Tea Party knows it. We are a nation of suckers, believing political promises and televised slogans from big business. Our Supreme Court, in its mind-boggling wisdom, has declared that corporations are like people and that they enjoy the same freedom of speech that real, living people do.  Really! So now corporations can use their billion dollar megaphones to drown out the voices of dissent from the people.  We are indeed betrayed. Our jobs have been moved overseas. Our wealthiest citizens pay almost no taxes while our poorest people are evicted from their foreclosed homes to live on the streets. Our banks have received billions of dollars from the government in order to cover their losses. Our industries have received billions of dollars from our government in order to cover their losses. All because our government and our industry leaders deliberately moved the key machinery of our economy to China, India, and the rest of the developing world – and all at the expense of the American citizen.

The people of America have been betrayed by the leaders of their industries and their elected leaders for many, many years.  And now, while the smoke still lazily drifts upward from the ruins of a devastated economy, the politicians prod the people once again. “Vote for me. Vote for me.” But Washington, don’t you see? The people are tired of your tricks, tired of your betrayals, tired of your promises that mean so little.  We know you are nothing but opportunists.

I fear that the time is near when the American people, like Estragon and Vladimir in Beckett’s Waiting for Godot, will simply not move.

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China’s Success: The Triumph of Communism?

For America’s capitalists, it is the 800 pound, unacknowledged gorilla in the room.  China has the most successful economy in the world today. Despite the current worldwide economic meltdown that has caused the worst recession in America since the Great Depression, China has not had a recession.  The great engine of the Chinese economy has chugged along, continually churning out the goods that we have all come to rely on for our everyday needs – now that, it seems, almost nothing is made in America anymore. So, does this mean that Communism is superior to Capitalism? (I can almost hear John McCain and Sarah Palin choking at the very thought – not to mention the entire Republican Party. How can we even ask the question, they would say.  Isn’t it unAmerican to even ask questions like that?  I’m sure it is in Sarah Palin’s world.)

The question, however, is a valid one. What is going on here?  If capitalism is such a great economic system and communism is such a vile system why is China on top and not the U.S.?  In case you missed it, because the U.S. press tends to ignore economic successes in China, it was announced yesterday that China now has the world’s fastest high speed train. It travels at 380 km/hour (236 mph). Even more notable, China plans to build 42 more high speed rail lines in the next three years, covering 13,000 kilometers of track (about 8,000 miles).

If that isn’t enough, consider this: China is the world leader in Green technology. Even as President Obama is talking about starting a green tech initiative, and even while he is hoping to recharge our economy by major investments in green tech, China is the world’s largest producer of wind turbines, and it is also the world’s largest market for generating power from the wind.  It has 10 gigawatts of newly installed wind power generation capacity. So how much wind power generation capacity does the U.S. have? About 1/10 of China’s capacity – not much more than a gigawatt.

China is what the U.S. was.  China is the merchant to the world these days. China is the banker to the world too.  China has demonstrated capabilities in space that rival the U.S. Apollo program.  China recently hosted the Olympic games and put on a show that amazed the world.  So – do all of these accomplishments mean that communism is a superior economic system compared to capitalism? Not necessarily.  Consider for a moment a much smaller country that also made major economic advances in the past – a country that is primarily Chinese, yet is far from being a communist country. I am referring to Singapore. As small as China is large, Singapore was once a part of Malaysia. An island state, and now an island nation, Singapore was not much more than a port city – a stopover for merchant ships plying the far east trade routes. However, that all changed with the election of former Prime Minister Lee Kuan Yew.  Lee took control of Singapore and it’s economy.  Far from being a communist, Lee was a capitalist – except that he believed in planning. For Lee, uncontrolled capitalism made no sense. Under his guidance, Singapore’s economy flourished.  Singapore is now a major hub for international finance, technology, and tourism. Lee Kuan Yew implemented a carefully drawn plan for economic growth – a plan that included strict controls on business practices (as well as lifestyles).

The lesson that can be drawn from Singapore and China then is not that communism is superior to capitalism, or that capitalism is superior to communism when we are talking about economic systems. Both can produce good results and both can produce disasters. The key to success for both China and Singapore has been intelligent, responsible government.  It doesn’t take a lot of thought to realize that intelligent design will always succeed over random chaos.  Darwinian economics of the sort advocated by the most right-wing of politicians – every man for himself and let the government just stay out of the way – is a recipe for economic disaster and chaos.  The Neanderthal economic doctrines of Bush/Cheney of  “just let ‘er rip” led to the greatest financial disaster in eighty years.  The lesson we need to learn is that non-functioning, or dysfunctional governments inevitably lead to disaster.  Intelligent, thoughtful, responsible governments lead to success.  The key is not whether the government is communist or capitalist, the key is whether the people who are in charge have intelligence, integrity, and compassion for the people of the country – all of which qualities were lacking in the Bush years.

We are not out of the woods yet. Just one look at Congress shows the problem we face. Obstructionist Republicans in Congress use every trick that can think of to stymie legislation on almost any topic – except war – they like war.  Health care reform that might bring America into the civilized world of the 21st Century is held up so that the Republican cronies in the insurance industry can continue to feed off the people. Never mind that so many people suffer and die without health insurance. Anything for a buck.  Obstructionist Republicans create a situation where almost nothing can get done in Congress and the country is unable to move forward on any major initiatives whether they are related to health or the economy. That is the principle difference between China and America.

Once upon a time we had people in Congress that honestly worked for the “good of the country”. Today, the “good of the country” is a joke. It’s not about the country, it’s about power and control and money in your pocket from whichever lobbyist has the most.  China is our largest creditor. China is our major supplier of consumer goods.  China is growing while we are stagnant.  The reason for this is not the “isms” of economic systems; the reason is intelligence and integrity in government – both of which have been in short supply in our nation’s government for far too long.

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Too Big To Fail: The Big Bank Lie

About a year ago, when it looked like the world was about to end and the economies of countries around the world were beginning to melt away like a Salvador Dali painting, the leaders of the U.S. government, i.e. President Bush and Treasury Secretary Paulson told us that we had only days, maybe only minutes, left to rescue those great bastions of Capitalism – the banks of Wall Street.  Everybody panicked. We couldn’t shovel money into the banks fast enough. If they died, we died – or so we were told anyway.

Today, the dust has settled, the banks are alive – having been given massive transfusions of life-giving money – and the people of America are left wondering: what just happened?  Here’s what happened: we were robbed by the banks.  After Lehman Brothers melted into a little puddle of red ink, there were reports that Goldman Sachs might be next.  Goldman Sachs!?!?  How could that be?  Isn’t Goldman the underlying sine qua non of American capitalism? If Goldman goes down won’t the entire country just dissolve? That’s what we were led to believe by Bush, Paulson, and their cronies.

So what happened? We (that means you and me, the American taxpayers) gave them a loan, called TARP, to keep them alive. We gave a lot of banks a lot of money because we were told we couldn’t survive without them.  They were “too big to fail”. Of course we didn’t give them our own cash, because we were also drowning in the melting economy – so we just printed the money and decided to let our descendants pay the government back through their tax bills over the coming centuries.

Here is where the big scam comes in: while Americans made a lot of stupid decisions buying houses they couldn’t afford at prices they couldn’t pay, the banks were equally – if not more – stupid because they gave us all those loans that we couldn’t pay back.  If the banks had the intelligence of a rock they would have realized that making such loans was pure folly.  They used to know that, but in their greed they put aside their knowledge as they chased the huge profits that can be made in a bubble economy.  So, what had happened was that we, the people, lost a bundle and so did the banks, but the banks got reimbursed for their losses – by us! But nobody reimbursed us! So now, not only do we owe the money we foolishly invested in overpriced houses, we are also on the hook for all the TARP money we printed because a lot of that will never be paid back.

Meanwhile, the bailed out banks – the ones we can’t live without, the ones that are too big to fail because our Capitalist economy depends on them – don’t want to play Capitalism anymore. They don’t want to lend money anymore. Instead they are hogging all their TARP money, refusing to lend money to people who need money for many purposes. In other words the big hog banks aren’t really functioning as banks anymore, which leads one to wonder why we thought they were too big to fail. In a sense they have already failed.  If they aren’t lending then they have failed in the principal purpose of a capitalist bank – making capital available. So if they have failed in their role, and yet, here we are, still alive and functioning, doesn’t that mean that they really weren’t “too big to fail” after all?  Aren’t the big hog banks proving every day that we really don’t need them after all? Isn’t this the big lie of Bush and Paulson?  Isn’t this the big lie of Wall Street?

One of the great drags on our economy now is the lack of available capital to restart businesses.  If we had simply nationalized the banks we would now have government-run banks that would be in the business of lending money to us because we would be the owners of the banks! They would sort of be like giant credit unions.  Instead, we have the Boss Hogs of Wall Street sitting on 200 billion dollars of TARP money, unwilling to do that for which we bailed them out.  The TARP bailout didn’t rescue the economy – the money we gave to the banks is still sitting in the banks, so how could it have any effect on the economy? The only thing TARP did was prove one thing: the whole Too Big To Fail story was nothing but a Big Bank Lie that only passed on the losses of the big banks to the American people.  We were duped. We were done a huge disservice by former President George Bush and former Treasury Secretary Hank Paulson, and we will be paying the price for this for generations to come.

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The Fundamental Error of the Republican Party

The leaders of the Republican Party are fond of pointing out that they are the Party of Lincoln.  Indeed, Abraham Lincoln did belong to the Republican Party, but the Grand Old Party is not what it used to be.  Once upon a time it was the champion of civil rights for enslaved Africans who were born and died on Southern plantations.  The Republican Party was a champion of the cause for human rights and equality for all.  On the other hand it was the Democratic Party that had aligned itself with the South, an alignment that persisted until President Johnson signed the Civil Rights Act of 1964, thus ensuring that Southern blacks received the rights that Abraham Lincoln had envisioned.  The point I am making here is that the Republican Party, at one time, was the party of the people, the party of the downtrodden, the party that wanted to help people who had been abused by the wealthy.

How times have changed. Today’s Republican Party is the champion, not of the suffering people at the lower end of the economic spectrum, it is the Party of Capitalism – the Party of the Wealthy.  It is this new alignment with the wealthy class of Americans that spells doom for the Republican Party, but they are blind to its coming.  Instead, they have crafted a new philosophy of self-determination, rugged individualism, every man for himself, complete freedom from governmental oversight, and absolutely minimal taxation – particularly for the wealthy.

It is an appealing philosophy for some – particularly the wealthy, i.e. the people who are at the top of the food pyramid of Capitalism.  The business owners, the bankers, the insurance people – anyone who is in a position to make a lot of money from scamming the average American citizen loves Republican philosophy. It can be summed up like this: you should be free to make as much money as possible with the least interference from government and you shouldn’t have to give a dime to the government for anything other than maintaining a strong army, navy, and air force that will protect our capitalist enterprises.  Republicans of today, unlike those of Lincoln’s time, are adamantly opposed to helping the poor in any way at all.  For them, the law of America should be “Every man for himself”.

There is, however, a fatal flaw in the philosophy of Sarah Palin and John McCain. There is a mathematics that doesn’t work in the world view of John Boehner and Mitch McConnell.  There is a lack of logic in the bluster of Rush Limbaugh, the rantings of Glenn Beck, and the befuddled musings of Lou Dobbs, the former Republican turned Independent basher of Hispanics.  The flaw in their thinking is their religious adherence to the purity of Capitalism. Why is this a flaw you might ask?  It is a flaw because, despite our nearly religious American fervor for the word itself, Capitalism is not perfect. Capitalism is not some sort of gigantic marketplace computer that always comes up with the right answer.  Capitalism, pure and simple, is more akin to the Law of the Yukon (I wonder if Sarah Palin could quote that?):

“This is the Law of the Yukon, that only the strong shall thrive;

That surely the Weak shall perish, and only the Fit survive.”

In pure Capitalism, as in the Yukon, there are a few really big winners.  There are also a whole lot of losers.  No doubt this works well for the wolves at the top of the food chain. But there is a problem for a political party that espouses extreme Capitalism, i.e. today’s Republican Party: it is inevitable that it will dwindle and diminish because eventually it will only be made up of the few who feed on the flesh of the overall population.  Uncontrolled, pure Capitalism leads to financial ruin for the majority of people.  It leads to the domination of the economy by a small number of mega-businesses, just as it leads to mega-banks that charge usurious interest rates because they can and they will not control themselves.  Ultimately, the Republican Party is doomed to become the Party of the Few.

This then is the error of today’s Republican Party. They are blind to the fact that they do not represent the vast majority of Americans.  They are blind to the fact that most Americans depend upon their government to help them make it through life, whether it is in education or health care or jobs or protection from criminals or so many other aspects of life.  It is the government that the American people turn to when in need. Yet, it is exactly this sort of government that today’s Republican Party wants to dismantle.

These people are blind.  They don’t see the inevitable lop-sided society that results from uncontrolled Capitalism, they only see the vast amounts of money that can be accumulated by the top dogs of Capitalism.  But everybody can’t win the game of Capitalism, just like everybody can’t win the game of Monopoly.  The result today is that the American people are leaving the Republican Party by the millions.

Yet the leaders of the Republican Party still don’t see their fundamental error: Pure Capitalism creates an economic pyramid, with the vast majority of people at the bottom where they will inevitably be unhappy.  These unhappy people, inevitably, will no longer identify with the Republican Party.  The Republican brand of Capitalism produces an unstable society and therefore it inevitably becomes an unstable political party.  It can never be the dominant party for very long in a democracy.  In the long run – maybe even in the fairly short run – it is doomed.

Even Glenn Beck should be able to understand that.

 

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