Is Capitalism Doomed?

[georgephillip]

Leftwingers laying the blame for their failed policies on capitalism is the oldest gamut they have, and it's been amazingly successful for them, most recently when the lib media got their boy obama elected by ascribing the blame for the financial collapse, a consequence of government meddling in the housing market, on "capitalism".

Government meddling(Liberals and Conservatives) in the housing market played a small role in our current economic crisis which stemmed from households and financial enterprises running up excessive debts that their incomes and wealth could not pay off.

The key to that crisis was real wage stagnation since the mid-'70s.

Professor Richard Wolff explains it much better than I:

"Since the 1970s, banks, insurance companies and hedge funds invented new speculations on the rising debts of US households (asset-backed securities, credit default swaps etc.).

"Those financial speculations were even more profitable than the soaring profits of non-financial corporations that could keep their workers' real wages flat even as rising productivity delivered ever more product per worker to those corporations.

"Huge speculative profits prompted financiers to borrow in a self-reinforcing spiral ever further removed from the household debts on which it was based. When that base collapsed as millions of US workers could not longer sustain their debts, so, too, did the financial speculations built upon it."

Deficits, Debts and Deepening Crisis | Truthout

No actually, it was a lot of minority clients took out loans they couldn't service because of Fanny Mae offering a secondary market for such loans.

As for the stagnation of wages, that has to do with the disappearance of a golden era in th 1950s and 60s, when europe and japan were ruined from WWII, and india and china were still shooting themselves in the foot with backward socialism. At that time, america had an absolute majority of world manufacturing. Those times, now correctly seen as a very unusual fluke in history, are long gone, with many international competitors who will do the same work as american workers for a tenth the salary or less.

Are you talking about sub-prime loans?

"According to a recent investigation by Barron's, Fannie's biggest problem was not the subprime mortgages they bought -- it was the better quality Alt A mortgages that caused their demise:

"As Freddie Mac Chairman and CEO Richard Syron recently put it, the GSEs have been hit by a '100-year storm' in the housing market, accentuated by some higher-risk mortgages that they were forced to buy to meet government affordable-housing targets.

"The latter contention is more than disingenuous.

"A substantial portion of Fannie's and Freddie's credit losses comes from $337 billion and $237 billion, respectively, of Alt-A mortgages that the agencies imprudently bought or guaranteed in recent years to boost their market share."

The Big Picture

GSEs plunged into loans they should not have because they were losing market share to Wall Street banks.

How did the fact of Germany's and Japan's rebuilding in the 1970s affect the distribution of rising productivity gains in this country?

In Germany the richest 1% of the population received the same share of total income in the late 70s that they pocket today.(11%)

In this country the richest 1% earned about 8% of total annual income in the 70s while earning over 20% today.

 

[georgephillip]

No, but we can't subsist as a service nation. We have to produce.

Even if government supplies the jobs?

"This week marks the 75th anniversary of the Work Progress Administration, the New Deal centerpiece that helped end the Great Depression by directly creating 3.3 million jobs. As we have just experienced the steepest job losses since then, let’s take a moment to remind ourselves the economic lessons we learned from that historic program..."

Happy 75th, WPA: Its Genius Holds Lessons For Today's Jobs Crisis | OurFuture.org

 

[georgephillip]

Is Capitalism Doomed?

HUH?

Capitalism was stabbed in its heart circa 1913 when the US created a central bank and adopted a heavy graduated income tax.

Capitalism's tomb was sealed by FDR in 1935

So what the fucketh are you talking about?

.

If we return the favor circa 2013 by stabbing the Fed in the heart, does the global economy crash and burneth?

 

[georgephillip]

Leftwingers can never get their heads around the idea that the welfare of workers doesn't depend on the presence or lack of some sort of benevolence of employers, but rather the value of employees to the employers.

In the same way right wingers can't fathom what Marx meant when he argued that globalization, financial innovation run wild and redistribution of income and wealth from labor to capital would lead capitalism to self destruct.

Capitalism hasn't "self-destructed" so far, but is subject to setbacks due to government malfeasance. And the idea that the wealth created by capitalism came from a transfer from workers is pure fantasy land.

Since the richest capitalists vote with their dollars before the rest of us reach the polls, you should place the blame for governmental malfeasance where it belongs: with those capitalists who've increased their share of wealth and income over the last 40 years by bribing politicians for favorable tax treatment.

"In the United States, wealth is highly concentrated in a relatively few hands. As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers).

"In terms of financial wealth (total net worth minus the value of one's home), the top 1% of households had an even greater share: 42.7%. Table 1 and Figure 1 present further details drawn from the careful work of economist Edward N. Wolff at New York University (2010)."

Who Rules America: Wealth, Income, and Power

 

[Patrick2]

In the same way right wingers can't fathom what Marx meant when he argued that globalization, financial innovation run wild and redistribution of income and wealth from labor to capital would lead capitalism to self destruct.

Capitalism hasn't "self-destructed" so far, but is subject to setbacks due to government malfeasance. And the idea that the wealth created by capitalism came from a transfer from workers is pure fantasy land.

Since the richest capitalists vote with their dollars before the rest of us reach the polls, you should place the blame for governmental malfeasance where it belongs: with those capitalists who've increased their share of wealth and income over the last 40 years by bribing politicians for favorable tax treatment.

Looks like the people they bribed ripped them off - far and away. taxes are paid by the rich. the lowest 50% don't pay any income taxes.

 

[Patrick2]

WHO IS IT WHO GETS PREFERENTIAL TAX TREATMENT? THE RICH? THINK AGAIN, SPARKY.

 

[Charles_Main]

Leave it to Dr. Doom to ask the only question that matters.

"NEW YORK – The massive volatility and sharp equity-price correction now hitting global financial markets signal that most advanced economies are on the brink of a double-dip recession.

"A financial and economic crisis caused by too much private-sector debt and leverage led to a massive re-leveraging of the public sector in order to prevent Great Depression 2.0. But the subsequent recovery has been anemic and sub-par in most advanced economies given painful deleveraging.

"Now a combination of high oil and commodity prices, turmoil in the Middle East, Japan’s earthquake and tsunami, eurozone debt crises, and America’s fiscal problems (and now its rating downgrade) have led to a massive increase in risk aversion.

"Economically, the United States, the eurozone, the United Kingdom, and Japan are all idling.

"Even fast-growing emerging markets (China, emerging Asia, and Latin America), and export-oriented economies that rely on these markets (Germany and resource-rich Australia), are experiencing sharp slowdowns."

Is Capitalism Doomed? - Nouriel Roubini - Project Syndicate

Obviously, the solution is to cut taxes on billionaires and corporations while laying off teachers, firefighters and cops and voting Republican OR Democrat in 2012.

It's not Capitalism that is failing. Our Failures are coming from Debt Incurred for very UN Capitalist programs. The Nanny State is killing Capitalism.

we have not had a free Market in our Health Care in Decades, Stop trying to Blame Capitalism for the Problems Nanny state, Socialist Ideas are causing.

 

[georgephillip]

When you look at the housing collapse or Enron or Lehman Brothers or the banks or....well you get the picture.

With the right kind of government regulation these things never would have happened. That proves that if you get government "out of the way", you will see more of these disasters, not less.

I agree with every word in your post; yet I can't see how we will ever get the right kind of government regulation by choosing between Republican or Democrat. Any government in service to the richest 1% of its citizens can't help but produce crimes like the housing collapse, Enron and Lehman Brothers.

And I don't think we've seen their "best" work yet.

Lack of regulations had nothing to do with it.

Which of the following did?

1. Ultra low interest rates;
2. Unregulated, non-bank subprime lenders;
3. Ratings agencies slapping AAA on junk paper?

 

[georgephillip]

Capitalism hasn't "self-destructed" so far, but is subject to setbacks due to government malfeasance. And the idea that the wealth created by capitalism came from a transfer from workers is pure fantasy land.

Since the richest capitalists vote with their dollars before the rest of us reach the polls, you should place the blame for governmental malfeasance where it belongs: with those capitalists who've increased their share of wealth and income over the last 40 years by bribing politicians for favorable tax treatment.

Looks like the people they bribed ripped them off - far and away. taxes are paid by the rich. the lowest 50% don't pay any income taxes.

46.4% of households will owe no federal income tax in 2011 because the basic structure of the income tax exempts subsistence levels of income from taxation. Or maybe you and Goodhair think a couple with two children earning less than 26,400 dollars/year should pay a greater percentage of their income to the state?

Personally, I think the problem has a lot more to do with the richest 400 Americans who paid income taxes at about an 18% rate last year instead of the 40% they paid in 1960. (Before Germany and Japan rebuilt from WWII)

 

[Patrick2]

WHO IS IT WHO GETS PREFERENTIAL TAX TREATMENT? THE RICH? THINK AGAIN, SPARKY.

Hmmmmmm..........

Waitingb to hear a response about this, and just hear the crickets chirping.

chirrrrrpp.........chirrrrrpp.........chirrrrrpp.........chirrrrrpp.........chirrrrrpp.........chirrrrrpp.........chirrrrrpp.........chirrrrrpp.........chirrrrrpp.........chirrrrrpp.........

 

[bripat9643]

It's only doomed if all these countries, including ours, don't learn from the failed nanny state policies.

Codes that tax billionaires at a lower rate than their secretaries?
Oil depletion allowances?
Do you mean those failed nanny state policies?

Yes, the income tax is a nanny state policy.

 

[bripat9643]

"Under capitalism, man exploits man. Under communism, it's just the opposite." John Kenneth Galbraith

I've never heard that quote before, but it's brilliant.

Galibraith isn't the originator. He just stole it. It's an old Russian Joke.

 

[bripat9643]

In the same way right wingers can't fathom what Marx meant when he argued that globalization, financial innovation run wild and redistribution of income and wealth from labor to capital would lead capitalism to self destruct.

We "fathom" it quite well. That's why we call it "bullshit."

 

[Contumacious]

Is Capitalism Doomed?

HUH?

Capitalism was stabbed in its heart circa 1913 when the US created a central bank and adopted a heavy graduated income tax.

Capitalism's tomb was sealed by FDR in 1935

So what the fucketh are you talking about?

.

If we return the favor circa 2013 by stabbing the Fed in the heart, does the global economy crash and burneth?

Yep.

But removing a large cancerous tumor always causes inconvenience to the patient.

.

 

[dilloduck]

No, but we can't subsist as a service nation. We have to produce.

Do we have to produce things that people want and can afford to buy? You're making this pretty hard to do.

 

[georgephillip]

WHO IS IT WHO GETS PREFERENTIAL TAX TREATMENT? THE RICH? THINK AGAIN, SPARKY.

Hmmmmmm..........

Waitingb to hear a response about this, and just hear the crickets chirping.

chirrrrrpp.........chirrrrrpp.........chirrrrrpp.........chirrrrrpp.........chirrrrrpp.........chirrrrrpp.........chirrrrrpp.........chirrrrrpp.........chirrrrrpp.........chirrrrrpp.........

What do you imagine it proves?
What is "Family Market Income"?
Are you really surprised few rich parasites require food stamps or Medicaid?
Does it factor in the $13 trillion taxpayer bail out that nearly doubled the richest 5% of Americans share of returns to wealth in less than one generation?

 

[rdean]

When you look at the housing collapse or Enron or Lehman Brothers or the banks or....well you get the picture.

With the right kind of government regulation these things never would have happened. That proves that if you get government "out of the way", you will see more of these disasters, not less.

I agree with every word in your post; yet I can't see how we will ever get the right kind of government regulation by choosing between Republican or Democrat. Any government in service to the richest 1% of its citizens can't help but produce crimes like the housing collapse, Enron and Lehman Brothers.

And I don't think we've seen their "best" work yet.

Lack of regulations had nothing to do with it.

Yea, because all those businessmen are inherently honest. They would NEVER do anything unethical. In fact, it's those pesky regulations that force them to act in that manner.

Now I've heard everything.

 

[georgephillip]

It's only doomed if all these countries, including ours, don't learn from the failed nanny state policies.

Codes that tax billionaires at a lower rate than their secretaries?
Oil depletion allowances?
Do you mean those failed nanny state policies?

Yes, the income tax is a nanny state policy.

Do conservatives think taxes should be voluntary contributions to the government?
Apparently they think government should coddle tax evaders instead of prosecuting the parasites.
Why do conservatives worry more about a $5000 check to a TANF mother than some slime ball capitalist evading $500,000 in taxes?

 

[BoycottTheday]

Oh yes, good liberals never evade taxes.

 

[Avatar4321]

Capitalism is merely the natural law of economics and trade. It can't be doomed. It's what happens when no outside force interferes.