Why do you believe that the free enterprise/ capitalistic system is to blame for Wall Street and Mortgage Meltdown? a. Because you have not only been steeped in the propaganda from the school system, and the main stream media, but have accepted same. b. Your belief system can only function through the use of what little you are allowed to know, and your conclusions make sense due to this limited knowledge. Dont overlook the basic protocol of any debate: the denouement requires that we both agree on the terminology, the definition of the subject of the debate. In this case, capitalism. John Stossel show of January 14, 2010 was called Crony Capitalism. 1.Department of Energy Weatherization Boss, Office of Energy Efficiency and Renewal Swat teams will go down every block and see that every business and building is more energy efficient. This is Kathy Zoi. $16.8 billion Stimulus Fund for Green Energy development. Only one window maker is on the list of those given green stimulus funds: Serious Materials- $548, 000 But their windows are no more efficient than Pella, Anderson and Marvin. Some six times in the last year, the President and the Vice-President have visited the factories of Serious Materials, providing photo ops, and news conferences as to how efficient their product is, how they are creating green jobs and better products. Strange, according to government watchdog group Freedom Foundation of Minnesota. This group wonders why Serious merited this largesse; their question is not based on policy issue, but on conflict of interest. Ms. Zoi is the wife of Serious Materials vice-president. The American Spectator : AmSpecBlog : Conflict of Interest for Obama's Weatherization Czar a. Serious Materials first made the news when a Republic Windows and Doors in Chicago closed and laid off some 200 union workers. The workers occupied the factory and refused to leave, until they got their jobs back. Serious Materials took over the factory to great fanfare, promising to rehire the laid-off workers. The promise never materialized. The American Spectator : AmSpecBlog : Neither Extortion Nor Subsidies Keep Failing Business Afloat 2. The Big Ripoff, by Tim Carney: in a supposed free enterprise system, Congress obviates free enterprise by picking winners and loser. While promising to reform the healthcare system by reducing costs, this Congress subsidizes drug companies and forbids re-importation of prescription drugs. This is not capitalism. Amazon.com: Customer Reviews: The Big Ripoff: How Big Business and Big Government Steal Your Money a. Serious Materials is connected with the administration, a vice-president married to an administration official, and reopens a factory in Chicago, and give thousands in contributions to the administration, and hires a lobbyist and is rewarded with stimulus funds, and gets administration officials in their advertisements. b. This example of crony-capitalism is not unusual. And contrary to the term crony-capitalism, is not capitalism. 3. Lets be very clear. Capitalism in its simplest configuration is this: profit informs the amount of risk one will take, and loss informs prudence in investment. a. When government assumes the risk element, we are no longer speaking of capitalism. When Congress writes laws to pick winners and loser, that is not capitalism. b. When the steel industry contributes to politicians and hires lobbyists, and government places tariffs on foreign steel, we all pay the higher costs. Now, you may say that the United States cannot afford to lose its steel industry for national security and I may agree. Politically connected special interests influence the government to change the rules of the marketplace. This happens regularly. But this is not capitalism. c. The story of the success of Serious Materials is not a success story of capitalism. It is corrupt crony-capitalism. d. Bailouts of Wall Street, where taxpayers cover losses is not capitalism. e. Government take-over of GM as a gift to unions which support the administration is not capitalism. Russ Roberts, Professor at George Mason University, asks why bail out GM? We were told that there would be terrible ramification if it were to fail, but he asks, What is the evidence? 4. Even when companies try to behave as capitalistic enterprises, corrupt government practices make it very clear that to remain successful, they must engage in crony-capitalism. a. In 1998, Microsoft had no lobbyists, and contributed little to either party. The administration began prosecution as a monopoly, causing tremendous problems for Gates, and roiling the markets in the process. Microsoft learned its lesson. Contributions were forthcoming and now has a huge lobbying arm. This is not capitalism. 5. Big industry and big government have a thriving relationship. Sometimes this is difficult to see, as when the government seems to support legislation and regulation seemingly aimed at reeling in business excesses. But look closely. New regulations favor big industry which can afford new testing and procedures, and this effectively prevents new competitors from appearing. a. When government instituted new regulations on tobacco companies, including preventing flavored cigarettes. Bad for Philip Morris? No, it prevented smaller tobacco companies from fulfilling the new regs: Wall Street realized what was happening. Between the time the new regulations were proposed and the law passed, Philip Morris stock rose 35%. And just the law excluded mint flavor, another advantage for PM. Smoke Signals: Why a Tobacco Giant Is Backing a Tough New Antismoking Bill - TIME b. Passing a huge restriction on any lead in clothing or toys for children. Any lead, even in buttons, zippers, although there was no way for the lead to harm any child sucking on these parts. The law required testing, certifying, and creating a registry for every part of every product. And any amount of lead ended the lawful use of the product. OK for Mattel, but not for any small clothing or toy manufacturer. And Mattel lobbyists helped write the law, as did Hasbro, so it happened to conform to the lab protocols used by Mattel. No matter that charities such as Goodwill, and even garage sales and resales of used items could be legal, and lost millions. http://seattletimes.nwsource.com/html/homegarden/2009286944_zhom01toysafety.http Even the Consumer Product Safety Commission notified Congress that the Lead Law went way too far. Anne Northup: There Is No Joy in Toyland - WSJ.com.. So, before you damn capitalism for the ills extant, be sure you are speaking of capitalism.