Don't mislead others with things I didn't say. Fair access to capital does not mean everyone can get capital. Your second point is a flawed argument used by the current system that I have yet to explain more thoroughly. I have no qualms about capitalists lending their OWN capital subject to whatever requirements they want to impose. But I have a problem with capitalists controlling the creation of NEW capital. The problem with private control of capital creation, is just that there is no need to lend it out. These capitalists can do it all on their own. In fact this is precisely what happens. They lend the new capital out to their cronies, usually 'too big to fail' corporations. The private control of capital creation ensures that cronies and insiders always have a more favorable risk-reward proposition, unless your business invented something totally novel and even then that needs cronies' private capital guarantee. This is anti-competitive, and so anti-capitalism. The control of new capital creation should be a public utility. And as I had mentioned before, the spendings of failed businesses are the earnings of successful businesses collectively. As a result, the public institution will not get under due to underwater loans to failed businesses. Private capitalists can still participate in the lending business by competing against that public utility and among themselves. Now this is capitalism!
Indeed, but you're going off on a tangent again. We have alot more "crony capitalism" than actual capitalism at the present. As mentioned above, look no further than the huge dollars sunk into "green" investments under this administration. Many of the loans done at around 1-2% interest rates with quite a few going into default within just a few years.
Precisely. As I have mentioned, crony capitalism always ensure the cronies have a favorable risk-reward proposition compared to everyone else. How can you not perform better than the others when your loan is cheaper? Well, that is at least true in a national level. Internationally, not so much. China has totally slaughtered the US solar industry with cheap polysilicon. You never believe in a 90% fall in price, until you see it one day.
Capitalism and democracy existing in the West, excluding northern Europe are not really as claimed. The system is rather rigged by bankers controlling central banks, banks, most assets, news media, bought politicians. It is worst than any form of government, wealth and power are slowly but surely concentrated to a center.
Me.. "off on a tangent"? No. You didn't even address the topic. Suggest... (1) Read, (2) reflect, (3) only THEN, open yap.
1. Why shouldn't you be required to put a personal guarantee for a loan? 2. How would the government maintain a fair bargain between workers and productivity owners? Would that be that the government decides wages (so workers can save and accumulate capital) or would the government disperse capital by it's own whim (via taxing the rich)? There has never been a time where a middle class or poor person can become rich than now. It's not easy. It's insanely competitive. But it can happen. The growth opportunities and the low barriers to entry (created largely by technology) have allowed for this. Plus capital is far easier to attain now than ever before. If this were 1900 who would be your angel investor or venture capitalist? What about 1800? What about 1200? What about 100BC (in any civilization)?
1. That is because a good idea plus a reasonable good business model is more than enough. When you borrow money to launch your project, you are essentially spending it, and that money becomes the profits of other businesses and the wages of your staff. These other businesses and your staff get richer. But what happen if your venture fails and you can't pay back the loan? Remember that your spending is someone else's earnings? The net effect is zero. This is achievable when there is a public lending vehicle. When the lending are done by private capitalists, they can't lend without collateral because they are putting their own capital on the line. As a result, there is always a scarcity of capital for those who have the aptitude to manage it well and be productive. 2. By providing fair access to capital, as I have mentioned. Not everyone can get that capital. Those who can, need to have a good idea and a sound business plan. When capital becomes abundant, there will be more employments. If you don't like the market rate of wages, then you can come out with a good idea and a sound business plan, and become a productivity owner. An equilibrium will be reached where there will not be depressed wages, as when that happens, people will start businesses and get entrepreneurial. Fair access to capital ensures everyone has a fair try at entrepreneurship. You don't need anything too fancy. You can start something simple like a restaurant, retail etc. These are all simple yet workable business models. There is no need to tax the rich. All new capital is created out of thin air anyway as accounting entries, so let it be productive by lending them to those who deserve and need it, not mostly to cronies and big businesses.
From what I am gathering, you are suggesting the government lend money to good business ideas. Yeah. That's capitalism comrade. So instead of a bank lending you money because you are smart and have a good idea. The government will lend money to you because you are friends with the prime minister.
Think clearly first before you try to be sarcastic. You forgot that the Fed is also part of government. All new capital originates there. Public lending does not make communism. That is because market demand set the cost of capital. Just because there is public lending doesn't mean lending will be done uncontrollably. Cost of lending can get high to the extent that it will be more favorable to just be an employee instead of a business owner. Any disarray will re-adjust itself into equilibrium. Plus, the private lenders are also encouraged to compete against public lending. Private lenders will just need to be more careful, as bad loans will not be netted out. In reality, the bad loans in the book of public lending will not be netted out to be zero in exact, due to the participation of private lenders. The shortfall will need to be covered by adjusting corporate tax rate, which is another factor that controls public lending.