It seems to me there is truth in what both Scat and Darkhorse say, though on the surface it might seem they are at odds. To be sure, the wealthy are not well served by too great an inequality of income. Though we like to think of the USA as a land of opportunity, opportunity is being lost as the country stumbles under mounting public debt and too generous public subsidies of the corporate world, particularly of the military industrial complex and the medical cartel. Those raised in poverty by undereducated parents have a difficult time availing themselves of what opportunities do exist. The mountain of ever increasing federal, state, and local regulations are a further barrier. And the blatant conflict of interest presented by lawyers being permitted to make laws is no help. To be saved from its worst characteristics, a capitalist economy must be tempered by free competition. But capitalists abhor competition, and they do all they can to secure their monopolies and cartels. In the case of the U.S., they have succeeded magnificently. The USA is now a nearly perfect embodiment of capitalism at its very worst. I am a capitalist, through and through, but I have enough age and experience to recognize that capitalism, like the other "-isms" can be corrupted.
"The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries." -Winston Churchill Capitalism does not work if you have all chiefs and no indians. Socialism and Communism do not work, because there is no money in it. For all its negative virtues, nobody has come up with a better economic plan for a society than capitalism.
Exactly. Even if you've clawed your way to the top, at a certain point it bites you in the ass. Ask any Mercedes owner from Jo'burg: http://www.guardian.co.uk/world/2006/mar/02/film.oscars2006 Wholly agree. I am an ardent defender of free market capitalism and spirited competition under the rule of law. But the rule of financial oligarchy is something else entirely, and directly corrosive to capitalism as we know it. To the degree we ignore the plight of the shrinking middle classes and the eating of future generations' seed corn, we invite the government to further extend its bloated hand -- and thus further grow and expand. The wet nurse slowly poisons the patient, then points to illness as reason to double the treatment.
I agree with a lot of what you're saying. Like you, I don't find myself at home as a 'liberal' or 'conservative'. However I do tend to think the banks were too big to fail. I've said it time and again the bailouts were a necessary evil. I wonder if anyone has come up with any creative ideas so we can lessen the odds of facing that kind of situation again.
I don't expect "100% of the people to be in the 1%"... only that the 100% have the OPPORTUNITY to be in the 1%... What about the other 99%? Well, there IS life outside the 1%, you know. "Let them die"? We wouldn't do that in America. However, forced "wealth redistribution" is BS. Nobody deserves a middle-class lifestyle... paid for by others.... simply because they were born. Rather, I'd like to see more of an Darwinistic environment.
outstanding points, particularly about no law preventing one from joining that 1% reality, gravity, reality, hmmm, that's 3 laws, but in reality, you're (fundamentally, and on principle) right! ohh, that last sentence, you're even more right how much of that $1 trillion in monetized debt is / are directly attributable to the horrific damage done to the US, the American people, the upsetting and debasement of the American middle class by the 8 (eight) year Bush II administration and its policies? how much?, certainly more than 3/4 of it, because he received a surplus and no 30yr T-Bond debt, and look at where we are at now, and what it is taking to stop that death spiral that that administration caused... mission accomplished...
Volcker had some ideas. They ignored him and then turfed him out of town. The odds of facing such a situation again have increased, and deliberately so. The number one lesson learned from the global financial crisis was "bigger is better." Bigger asset bases, bigger coverups, bigger bailouts, bigger risks. Also, it's not really a matter of creativity. The answers are not complicated or especially creative. It's more a matter of struggle. How do you get the mob out of the sanitation business? Multiply that problem by an order of magnitude.
In any decent society, banks are *always* too big to fail, no matter how small they actually are. Let's actually look at the underlying reason why the banks *did* fail: the repeal of the Glass Steagal act meant that putting depositors money at risk in the markets was no longer illegal. So, it happened, because 1. it was hugely profitable, 2. nobody was going to get into trouble if anything went wrong Size is completely irrelevant. To stop banks failing do 2 simple things: forbid deposit taking banks from being involved in ANY aspect of securities or commodities trading or sales, and criminally prosecute any board of directors who lets their bank become insolvent. That's it.
Size is not irrelevant by any means. The get out of jail free card is "systemic risk." There is a reason why they bailed out AIG and Citi and not the Bumbershoot Bank of Kalamazoo Kansas. As for two easy things, as Mencken observed for every complex problem there is a solution that is neat, simple and wrong.