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Capitalism is the best system of moving goods, producing wealth, and supporting a vibrant economy that we've yet devised. It's not just that the ability to earn direct personal benefit from work is more closely aligned with basic human psychology than other systems, the competitiveness inherent in capitalism leads to more innovation, more opportunity, more capacity to support growth. Socialism might be an ideal economic system for angels, but capitalism works very well for human beings, thank you very much.

It just doesn't seem to work for very long.

The rules that drive economics are not nearly so inviolable as the second law of thermodynamics (which itself has far more limitations than most people realize). In economics, you don't need Maxwell's Demon to provide "hot spots" of wealth. Such accumulations occur naturally, and arise spontaneously from the rules of the game. For example, resource monopolies pop up with regularity and once built are often easy to maintain. In an ideal world, these monopolies are situated so that they in turn are dependent on resources that limit their sway. We don't live in that world.

Unless an outside force (let's call it... government) steps in with regularity, market economies don't just become ugly. They become failures.

In capitalism, the wealthy tend to get wealthier. Like gravity wells in space, they distort the system, allowing them to suck in more and more capital, building accumulations from which less and less escapes. Only by implementing hard rules on the system can you reverse that trend. Most governments and pretty well all economists (including Adam Smith) have understood that perfectly well.

But thirty years ago, we started playing a different game. Whether you call it Chicago School, supply side, voodoo, or simply awful, we began instituting rules that didn't just fail to thwart these distortions in the market, we encouraged them. We swallowed a philosophy that said staggering piles of wealth were necessary to the health of the system. That rewarding the few would benefit the many.

There was never any evidence to support this contention. Not every theory in supply side economics was written on the back of a napkin, but even those that were not were scribbled on great mounds of conjecture. Altogether the ideas behind this school of economics carry less weight than a gravy stain.

Unfortunately, that's not true in Washington, where the wealthy have been able to use their accumulated power to see that the system encourages rather than corrects, the increasingly out of balance system. Because of this, thirty years of supply side economics has done more damage to our nation than every socialist, communist, or anarchist who ever lived. It's done what none of them could ever do. It's brought capitalism to the brink of failure.

That's where we are, on the brink. The wealthy have made a meal of the nation's economy. They've raided the larder. They've devoured the seed crop. Now they are searching for crumbs.

Take housing. The collapse brought on by speculative trading of mortgage derivatives left many Americans unable to afford their homes and flooded the market with foreclosures. However, in many of those areas where the foreclosures were most common, would-be home buyers have observed a strange phenomenon. Despite what should be a glut of houses on the market, prices on the homes actually put up for sale remain high. Real estate agents in many of the same markets complain that they are actually seeing a shortage of homes greater than when home sales were at their highest. Also, banks are forcing homebuyers to jump so many hurdles in the name of security, that they are often unable to make an offer in time to win a home. As a result, many Americans who are employed and have good credit, are still not able to find a house after months or years of searching. That might not be what you would expect from a perusal of classic economics texts, but it is what you would expect in our current system.

How can this be possible? It's possible because the same banks that homeowners must depend on to secure a loan are in direct competition with them. Hedge fund managers in the investment arms of banks are snatching up homes indiscriminately, buying them in bulk lots that swallow up potential homes by the hundreds and simply take them off the market. Why do this? Because, as institutions empowered to make money through almost any form of speculation, investment banks can optimize the availability of homes to maximize what they can bring in from rentals, sales, and long term holding. Not selling you a home is often a better bet. Bulk buys of homes allow banks to manipulate the housing market to their benefit across whole cities for a span of years. Why should they do anything else? It's not as if there's a barrier in place to separate banks that provide loans from banks that create speculative instruments. We took care of that.

What's happening with banks is just a part of the wealth shift that's taken place over the last thirty years. A shift that's allowed a fraction of a fraction of a percent of the population to control so much capital, that this financial black hole stands a very good chance of simply ripping the system apart.

It's a monopoly on everything.

In this monopoly, you have nothing that they want. You own nothing that they value. You make nothing they desire. Your knowledge, your experience, your willingness to work... mean nothing. There are cheaper hands available. They see no issue with holding out until you give up on a decent wage, on decent working conditions, on a decent life. You want financial institutions to think long term? They are. They're thinking that, long term, you'll give them anything they want in exchange for almost nothing at all.

Supply-side economics doesn't grow the economy, it concentrates it. We knew that from the start. Actually, so did Republicans. They just figured they could distract everyone long enough to vacuum the crumbs.

Sadly, they may be right. One thing is sure, we won't stay on the brink. The system as it is now is not sustainable, not even in the short term.

Originally posted to Daily Kos on Sun Dec 16, 2012 at 06:00 AM PST.

Also republished by Keynesian Kossacks.

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Comment Preferences

  •  I hear feudalism is nice... (112+ / 0-)

    It's not very good at growing the economy, or fueling innovation, or building much of anything.  However, if you've already mopped up the last crumbs and are only concerned to holding on to what you have, it's just peachy.

  •  So.. what happens next? (13+ / 0-)

    Given that nothing appears to be stopping the capitalism juggernaut, at least not any time soon, what do you see as the next phase of this train wreck?

    •  Eventually we're going to have to make changes (19+ / 0-)

      to the system.  Either through peacful change or the way the French did it with the guillotine.  

      That's why I don't understand our Republican "Patriots".  They allow the Country to be torn apart in the name of "Free Markets" (even though we all know it's just that they've just been bought off by the bankers).

      Is it patriotic to let these corporate whores ship our entire manufacturing base overseas, leaving our country jobless?  No, it's just government by the rich for the rich.  

      We need change, fast.

    •  This is how it works (31+ / 0-)

      Our economy is fundamentally driven by consumption. Which requires not just the financial ability to consume, but the desire (or need) as well. As wealth becomes increasingly concentrated in a few hands, the ability to consume likewise becomes increasingly concentrated. The wealthy, even though they may buy, mansions, and Ferraris, and jets, and yachts use the vast majority of their wealth to invest, not to consume. If they don't see demand for the consumption of goods and services, they invest in things like real estate and gold, not in the kinds of business which produce jobs.

      From a purely economic theory perspective (not human cost) , this is not necessarily a cause of overall economic catastrophe. What is a cause, however, is that the wealthy don't have the desire (or need) to consume the amount of goods and services required to sustain the economy of a nation with a population of over 300 million. Unchecked wealth concentration leads to recession, followed by depression, followed by.... well, you get the idea. This is why many economists say that FDR's 'new deal' actually saved capitalism, from itself.

      In short, any Gov't policy which directs wealth from landing only in the concentrated hands of the few, and in to the consuming hands of the many, are stimulative by their very nature.

    •  War is always a safe guess. n/t (2+ / 0-)
      Recommended by:
      happymisanthropy, a2nite
    •  The Republican Party is destroying itself (3+ / 0-)
      Recommended by:
      Quantumlogic, a2nite, Ahianne

      in response to the threats from demographic trends and generational shifts. This will decouple its kleptocratic policies from the current support they get from racists, bigots, and misogynists. There should be a few years in which Progressive policies can be put in place before the rich figure out some other set of lies to recruit some other set of Useless Idiots to their cause. Among the most necessary of those policies are

      • Electoral reform, to outlaw gerrymandering and voter suppression. Congress has explicit power in the Constitution to do this for Federal elections.
      • Education reform, to restore civics, among other things, to the classroom, and to teach some real economics.
      • Major regulation, including breaking up the big banks.

      This has all happened before, in the implosion of the Federalist Party, the original Party of No during eight years of Thomas Jefferson's Presidency. This was followed by the Era of Good Feeling, a period of one-party rule under President Monroe, before the Democratic party rent itself into multiple factions, including the Southern slaveowners, the Northern manufacturers, farmers, workers, and others, and settled down to Whigs vs Democrats for a time.

      America—We built that!

      by Mokurai on Sun Dec 16, 2012 at 10:16:33 AM PST

      [ Parent ]

      •  1 real problem with that analogy: (0+ / 0-)

        The Federalists were not seeking to destroy the US government (and send us back to feudalism along the way.) In fact, they wanted the opposite--a stronger federal government than the various state governments. The Republicans not only support the wealthy, but they also oppose the federal government, which is a very different thing.

        "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

        by bryduck on Mon Dec 17, 2012 at 08:55:45 AM PST

        [ Parent ]

  •  Bingo! (42+ / 0-)
    It's a monopoly on everything.

    In this monopoly, you have nothing that they want. You own nothing that they value. You make nothing they desire. Your knowledge, your experience, your willingness to work... mean nothing. There are cheaper hands available. They see no issue with holding out until you give up on a decent wage, on decent working conditions, on a decent life. You want financial institutions to think long term? They are. They're thinking that, long term, you'll give them anything they want in exchange for almost nothing at all.

    And thus we become commodities in the hands of citizen corporations.

    "No special skill, no standard attitude, no technology, and no organization - no matter how valuable - can safely replace thought itself."

    by xaxnar on Sun Dec 16, 2012 at 06:11:42 AM PST

    •  And the stores are still full. (25+ / 0-)

      That's why I hate to go shopping. (Well actually I've always hated shopping). But anyway I see the stores are full, no empty shelves. I see stores that are full closing, for lack of customers. I see millions if not billions of potential customers world wide. But they have no money. And the system is designed to give them as little money as possible. They don't deserve it or something. It is madness. Total lunacy.

      We're fools whether we dance or not, so we might as well dance.

      by PowWowPollock on Sun Dec 16, 2012 at 06:26:01 AM PST

      [ Parent ]

      •  Main streets throughout America (4+ / 0-)

        Are dead.  Boarded up. Vacant eyesores. They've been replaced by malls and "super" stores...

        Local dollars get sucked out of the local economy and into the Walton's family fortune.

        A standing army is like a standing member. It's an excellent assurance of domestic tranquility, but a dangerous temptation to foreign adventure. Elbridge Gerry - Constitutional Convention (1787)

        by No Exit on Sun Dec 16, 2012 at 08:49:10 AM PST

        [ Parent ]

        •  Isn't Walmart a vertical intergrated monopoly? (1+ / 0-)
          Recommended by:
          Ahianne

          Under the Sherman-Clayton Antitrust Act?

          To Goldman Sachs in according to their desires, From us in accordance with the IRS.

          by Bluehawk on Sun Dec 16, 2012 at 09:14:00 AM PST

          [ Parent ]

          •  I don't know. I do know they are a cancer (1+ / 0-)
            Recommended by:
            VigilantLiberal

            That afflicts its host.

            A standing army is like a standing member. It's an excellent assurance of domestic tranquility, but a dangerous temptation to foreign adventure. Elbridge Gerry - Constitutional Convention (1787)

            by No Exit on Sun Dec 16, 2012 at 10:01:45 AM PST

            [ Parent ]

          •  No. What would make you think they are? (0+ / 0-)

            The most important way to protect the environment is not to have more than one child.

            by nextstep on Sun Dec 16, 2012 at 02:16:09 PM PST

            [ Parent ]

            •  Perhaps the way they (0+ / 0-)

              actually are one in all but name. Let's say you are a wholesaler, or manufacturer. When Wal-Mart becomes your retail outlet, they demand so much out of you that you are forced to drop all of your other businesses so you can fill their orders. Once that happens, Wal-mart owns your operation; they set your prices for you and there's nothing you can do about it, because all of your former retail outlets have all gone under in the meantime.

              "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

              by bryduck on Mon Dec 17, 2012 at 09:00:13 AM PST

              [ Parent ]

              •  Except for vendors providing Walmart a house brand (0+ / 0-)

                manufacturers distribute through multiple retail outlets.

                What you describe is not vertical integration.

                Walmart as the largest US retail store still only has less than 12% of US retail sales.  While their share in some markets will certainly be higher,  their strength is the market where consumers seek the lowest possible price for themselves - so what Walmart does is consistent with what their customers want.

                Based upon Walmart's financials, on average when a person spend $100 at Walmart, Walmart's average profit is $3.58 - at the same time the customer probably saved more than $3.58 by shopping there compared to their alternatives.

                The most important way to protect the environment is not to have more than one child.

                by nextstep on Mon Dec 17, 2012 at 12:29:40 PM PST

                [ Parent ]

                •  As I said, the way Walmart (0+ / 0-)

                  does their biz, it is vertically integrated without their having to actually own the manufacturers and wholesalers. You might want to read up on how Walmart ends up monopolizing their manufacturers' and wholesalers' operations. The upstream companies are forced to cancel their non-Walmart biz to keep up with Walmart demands until they have none left other than Walmart. Yes, the manufacturers and wholesalers have to initially sign off on taking on Walmart as a retailer. But if they are public entities and do not take on biz that would radically increase their sales, the managers can be sued by the shareholders for breaching their fiduciary responsibilities.

                  "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

                  by bryduck on Mon Dec 17, 2012 at 12:49:12 PM PST

                  [ Parent ]

                  •  There is no higher risk to a business from (0+ / 0-)

                    investor lawsuits for declining low or no profit, high revenue business. If anything, taking that business increases that risk.

                    The only businesses that should be supplying retailers like Walmart are those that have brand power that allows them to have some pricing power so the business is profitably attractive, or a business that can be a lowest cost producer.

                    Businesses that are neither will get into trouble if their business is based on Walmart or Costco type retailers.

                    The most important way to protect the environment is not to have more than one child.

                    by nextstep on Mon Dec 17, 2012 at 02:38:18 PM PST

                    [ Parent ]

                •  Addendum. (0+ / 0-)

                  "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

                  by bryduck on Mon Dec 17, 2012 at 12:52:49 PM PST

                  [ Parent ]

    •  we're not exactly commodities (2+ / 0-)

      because we're not worth anything. Or, well, next to nothing.

      A thousand Sharkeys are invading a thousand Shires every day across our country.--James Wells

      by SouthernLiberalinMD on Sun Dec 16, 2012 at 07:46:55 AM PST

      [ Parent ]

  •  Some insights from Socrates (36+ / 0-)

    Socrates: First, shouldn't we explain how a democracy becomes an oligarchy?

    Adeimantus: Yes

    Socrates: The crucial step is that the rich figure out how to manipulate politics so the laws benefit them instead of the public.

    Adeimantus: So it seems.

    Plato, Republic, 550d (author's translation)

    So begins the excellent book by Keith Quincy.

    "Worse Than You Think: The Real Economy Hidden Beneath Washington's Rigged Statistics, And Where To Go from Here."

  •  easily stopped (20+ / 0-)

    We need countervailing powers--capital--labor--government--consumers.  Since capital starts out with the most money, it needs to be regulated on political matters--Citizens United must be overturned.

    Most other abuses can be contained by the old tax codes--capital gains after 18 months--and high top rates.  Both encourage the CEOs to look long term.  One final suggestion--a tax on stock transactions to curb many of Wall Street's abuses.  Notice how all the above helps eliminate deficits.

    Apres Bush, le deluge.

    by melvynny on Sun Dec 16, 2012 at 06:18:32 AM PST

  •  My son, who lives in a mobile home (46+ / 0-)

    with his wife and 3 children, tried to buy a foreclosed home, made a full offer, but it was snatched up by a flipper who paid cash.

    The wealthy are still winning the home market game. First, crash it, and take our homes, then buy them cheap and sell them back to us.

    What a racket.

    Yeah, we won. Now, let's kick some progressive ass!

    by cyeko on Sun Dec 16, 2012 at 06:19:32 AM PST

    •  Who is the flipper going to sell it to? (1+ / 0-)
      Recommended by:
      Killer of Sacred Cows

      (-5.50,-6.67): Left Libertarian
      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

      by Sparhawk on Sun Dec 16, 2012 at 06:37:54 AM PST

      [ Parent ]

      •  Contract for deed (19+ / 0-)

        Flippers can remarket the home as  a "rent to own", or on contract for deed (CD).   A big payment, known as a balloon, or a payoff date just a few years away often ends up with the investor getting the house back, because the buyer still cannot raise the money or qualify for a loan.  The buyer, meanwhile, has taken care of the house, paid the taxes, insurance etc plus a nice interest rate.

        The investor has the contract-for-deed buyer at a great disadvantage.  In most states the CD buyer can be evicted just like a renter.

        I'm not against CD sales.   I bought my first home on CD and fixed it up over five years.    

        There are many very legitimate sales that are accomplished with a CD, and many very legitimate reasons why a seller would accept CD terms.    If the buyer is reliable, the seller gets interest on the loan, and the buyer gets a good deal on a house that might need work.

        But, in an unregulated market where the buyers are blocked from mortgages and have to deal with unscrupulous real estate investment trusts (REIT), they have little choice but to accept their fate.    As sumner so elequontly describes, the buyer has nothing that the REIT wants.

        Religion gives men the strength to do what should not be done.

        by bobtmn on Sun Dec 16, 2012 at 06:56:22 AM PST

        [ Parent ]

      •  They'll rent those homes out... (0+ / 0-)

        ...for a while before flipping them.

        Right now, the prices in most of the country are such that the rental income stream represents a pretty good return on investment, which means it is not a problem to the investors to hold on to those houses for several years.

        Political Compass: -6.75, -3.08

        by TexasTom on Sun Dec 16, 2012 at 09:06:40 AM PST

        [ Parent ]

    •  This is a built in feature of our money system (0+ / 0-)

      Almost all of our money is based on debt.
      http://www.dailykos.com/...

      Consumers are saddled with debt. Bubbles grow and then burst and then consumers loose their assets when they can't continue to payoff their debt. And those with money, the rich, banks clean up by buying for pennies on the dollar. The whole process is a designed to shift money to the wealthy.

  •  Nice summation of where we are, (7+ / 0-)

    Mark, now, what's to be done?

    "Fascism is attracting the dregs of humanity- people with a slovenly biography - sadists, mental freaks, traitors." - ILYA EHRENBURG

    by durrati on Sun Dec 16, 2012 at 06:21:07 AM PST

  •  If nothing else, its well organized (23+ / 0-)
    “The work ethic is not a traditional value. It is a Johnny-come-lately idea. In ancient times, work was considered a disgrace inflicted on those who had failed to amass a nest egg through imperial conquest, profitable marriage, or in forms of organized looting
        Barbara Ehrenreich

    White-collar conservatives flashing down the street, pointing their plastic finger at me..

    by BOHICA on Sun Dec 16, 2012 at 06:22:43 AM PST

  •  Business corruption (11+ / 0-)

    A company can subvert the competition that ensures a capitalist system by monopolies, collusion, dumping, etc, but I can call it corruption when they do. It may be their job to make as much money as possible, but I consider it their duty to serve a purpose to society.

  •  What happens to people who have no (10+ / 0-)

    economic value (as consumers) to capitalist-controlled power structures? They are discarded.
    That’s when it gets ugly.

  •  Stumped by the title (1+ / 0-)
    Recommended by:
    DRo

    What does "Whos' mouses" mean?

  •  Free markets are self-defeating (21+ / 0-)

    An inherent negative dynamic of capitalism is that the benefits of free and competitive markets are at odds with the behaviors of the suppliers in those markets. Suppliers desire to eliminate any competition, to seek a monopoly. No competitive business desires balance and the evenly spread power assumed by competitive market theory. They instead desire imbalance and concentrated market power. In short, free markets are self-defeating without government regulation to sustain them and their benefits for society.

    The voting public swallowed supply side poison with a smile because of the charisma of the man most visibly pushing it, Ronald Reagan. Providing evidence that many of us respond to personality, not policy.

    •  Hence Mixed Economies. (0+ / 0-)

      Well-regulated commerce.

      The Class, Terror and Climate Wars are indivisible and the short-term outcome will affect the planet for centuries. -WiA "When you triangulate everything, you can't even roll downhill..." - PhilJD

      by Words In Action on Sun Dec 16, 2012 at 08:45:45 AM PST

      [ Parent ]

    •  Positive versus Negative Feedback (3+ / 0-)
      Recommended by:
      ATinNM, vemito, billlaurelMD

      In engineering terms, positive feedback tends to reinforce a trend -- which is a bad thing.  The most familiar example of this is the loud squeal from audio feedback through a PA system.  Another good example is the infamous film of "Galloping Gertie" (the original Tacoma Narrows Bridge) shaking itself to pieces.  

      Unregulated capitalism seems to have massive amounts of positive feedback, reinforcing trends in ways that are often harmful and destabilizing.  That's why finance deregulation has led to so many asset bubbles, and has required repeated bailouts.  That's also why we're seeing increased concentration of wealthy.

      Those at the top like that positive feedback because they just see those trends continuing.  What they don't seem to want to take into account is that it's ultimately self-defeating.  Because that positive feedback in the economic system means that the economy will ultimately do what "Galloping Gertie" did, which is to break up and collapse.

      And that's why we need negative feedback in the system -- negative feedback which must come from government regulation and laws.  As an engineer, where I'm most familiar with negative feedback is in amplifier design -- applying negative feedback reduces distortion of the signal being amplified, but does so at the expense of lowering the overall gain of the amplifier.  In other words, what comes out is cleaner, but not as powerful as it would be without the negative feedback.  Apply to much negative feedback and you get no gain at all -- in other words, the amplifier no longer works as an amplifier.  So the trick is to find the right balance.

      So what's that mean in economic terms?  Too little negative feedback (regulation) means an unstable economy that will ultimately self-destruct -- but in the meantime, there are opportunities for quick (and large) profits.  If the government works to stablize the system through the negative feedback of regulation, those opportunities for quick profit will be reduced, but the system will become far more stable.

      Now it is possible to take it to far, smothering the economy with excessive regulation -- the net result being like that amplifier with too much negative feedback that no longer works as an amplifier.  But despite the howls of outrage from the conservatives, we are very, very far from that point right now -- so the urgent need is for more regulation, not for less.

      Political Compass: -6.75, -3.08

      by TexasTom on Sun Dec 16, 2012 at 09:19:31 AM PST

      [ Parent ]

    •  The phrase "free market" is essentially (1+ / 0-)
      Recommended by:
      billlaurelMD

      meaningless, except to the extent that it is a lie, and the market is made very, very restricted and very, very expensive for most of us. ^_^

      There is the unregulated Laissez-Faire market beloved of many among the rich and among those who suppose that they can get rich by abusing it, and the competitive market in which no economic entity (corporation, partnership, individual) has excessive economic power, whether that is the power to set prices, the power to exclude others from the market, the power to acquire economic information and prevent others from getting it, or any other. While Perfect Competition is unattainable, markets work measurably better with each step toward it.

      America—We built that!

      by Mokurai on Sun Dec 16, 2012 at 10:57:46 AM PST

      [ Parent ]

  •  Capitalism may be coming to its end. (3+ / 0-)

    I find Morris Berman very persuasive:  http://www.counterpunch.org/...  In fact, on the record, as it were, I hope so.

    Acceleration is a thrill, but velocity gets you there

    by CarolinNJ on Sun Dec 16, 2012 at 06:34:16 AM PST

    •  Vision of an alternative economy ... (3+ / 0-)
      Recommended by:
      No Exit, TexasTom, Mokurai

      I agree that there are huge problems with the system as it currently exists.  But, I am yet to read a compelling model of what comes next.  Perhaps, it's not something that an be neatly defined but rather we will need a series of small scale experiments to find out what may work.  I seen some interesting experiments in "time sharing" as an alternative approach to money.  

      "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

      by noofsh on Sun Dec 16, 2012 at 08:06:55 AM PST

      [ Parent ]

      •  As important, (1+ / 0-)
        Recommended by:
        billlaurelMD

        I am yet to read a compelling description of the transition to what comes next.

        Personally, I think a million or two people permanently camped in D.C. until we get the substantive change we need is not only the shortest but only route, but the appetite for the masses to endure ever-greater exploitation seems far from being sated.

        The Class, Terror and Climate Wars are indivisible and the short-term outcome will affect the planet for centuries. -WiA "When you triangulate everything, you can't even roll downhill..." - PhilJD

        by Words In Action on Sun Dec 16, 2012 at 08:49:02 AM PST

        [ Parent ]

      •  Berman makes the point that no one knows what will (0+ / 0-)

        replace capitalism and I think tinkering to "correct" the problems is useless.  Capitalism is a spent force.  Past its sell-by but still staggering along until something recognizably viable settles into place.  The governing class at all levels in this country hasn't a clue.  Needs a clean broom top to bottom, not a corner left unswept.  For some years now they have been the supporters and enablers, extenders, of the system--because it serves them, as they see it, so well.

        Acceleration is a thrill, but velocity gets you there

        by CarolinNJ on Sun Dec 16, 2012 at 02:01:50 PM PST

        [ Parent ]

  •  Of course, being a contrarian... (4+ / 0-)

    ...it's hard for me to put the entire economic situation up to banks and rich people alone.

    Automation is a driver of job loss, and it tends to skew income distribution and employment. Instead of having a few medium skilled workers doing a job, you replace them with a fraction of a highly skilled robot designer/programmer, and a fractional worker that's just there to keep the machine running.

    Even "upper level" jobs like law and medicine are falling victim to this phenomenon as a lot of their work involves looking stuff up and poring through documents, something good computer programs can do easily. So you either make it to be a high powered lawyer with computers doing your bidding, or you can't find a law job.

    And the housing market: I find it hard to believe that there is massive, industry-wide collusion here. All of these hedge funds that are supposedly buying up massive numbers of (depreciating, must be upkept) housing must sell them at some point, perhaps taking a loss. Meanwhile for all the time they are keeping housing off the market, they are responsible for taxes and upkeep. What a deal.

    I suspect that a more salient issue is that there are not a lot of credit-worthy borrowers these days with saved money and secure(ish) jobs, and with a questionable economy that could go south at any time, banks are unwilling to lend. The problems will generally solve themselves given time.

    But the automation issue is something we may have to deal with (not sure how). I suspect in the future there is going to be a general market pressure for less kids who are educated more highly. The days of needing large numbers of laborers (or people at all) are over or at least drifting to a close.

    (-5.50,-6.67): Left Libertarian
    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

    by Sparhawk on Sun Dec 16, 2012 at 06:36:12 AM PST

    •  But none of this requires the rich to get richer (5+ / 0-)

      Cooperatives work as the capitalists. We don't need to have rich people stealing from workers.

      Hey, hey, NRA, how many kids did you kill today?

      by freelunch on Sun Dec 16, 2012 at 06:52:51 AM PST

      [ Parent ]

      •  Cooperatives can work maybe (1+ / 0-)
        Recommended by:
        AaronInSanDiego

        But the problem is that you always need dynamic managerial types to actually run the business, and cooperatives are subject to automation and outsourcing same as anyone.

        Who decides when it's necessary to lay off the janitor, or automate some process, etc?

        Inevitably, you get into situations where some part of the organization isn't pulling its weight, whether it's a person or a division or whatever. How does a worker cooperative deal with that?

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Sun Dec 16, 2012 at 09:23:07 AM PST

        [ Parent ]

    •  If one can't look (9+ / 0-)

      beyond the status quo, and visualize a different way of organizing our society, we are trapped here.

      Big money has corrupted our government.

      Big banks use massive computers to trade fraudulent derivatives at lightning speed. This is a method of trading not available to most people.

      The housing market was gamed on purpose, for quick profit. You can't ignore the recent fines paid by the banks for housing fraud, and massive illegal stealing by the banks goes unpunished, due to the corruption noted above.

      There is no evidence that automation has anything to do with American job loss. What does? "Fair trade agreements" that pay LARGE corporations rewards for moving jobs overseas.

      I find the above comment by sparhak misleading and wrong headed.  

      Things are more the way they are today than they ever were before. -Jimmy Flynn

      by onionjim on Sun Dec 16, 2012 at 06:59:26 AM PST

      [ Parent ]

      •  Unfortunately, those fines have been factored (2+ / 0-)
        Recommended by:
        NoMoreLies, No Exit

        in as part of the cost of doing business. It's the time-value of money. If I know not paying for something lets me keep the money a little longer, and I can make more doing with it what I want, and pay the fine later, and the fine is less than I can make using the money, then I have still made a profit.

        Forty years ago, when I finally went back to school and finished my college education, I switched majors from liberal arts to business. I had to take entry level accounting and economics courses. It was right when the Chicago School style economics and Enron accounting was in its nacent phase. I distinctly remember the economics professor praising the head of a large company for the tactic of slippery accounting to avoid taxes, because the interest on the unpaid taxes was going to be 3%. And he knew that he could use that same money and earn 6% on it, thus making a profit of 3%. Is that legal? Yes. But legality is often the lowest hurdle.

        Left completely out of consideration is whether this was ethical, professional and/or moral. This mindset often dismisses the spirit of the law, and deals only with the letter of the law. When there is no effective penalty, there is only more profit, the behavior has only 'positive' consequences. There is no incentive to change.

      •  Many people never question (3+ / 0-)

        why things are the way they are.

        They just assume certain conditions are inviolable and fixed, and there 's no way no how no possibiity of trying something different or thinking about something differently.

        Those peope are the ones who say--there's absolutely nothing we can do about offshoring jobs, it's here to stay, get used to it, etc.

        The banks have a stranglehold on the political process. Mike Whitney

        by dfarrah on Sun Dec 16, 2012 at 07:40:59 AM PST

        [ Parent ]

      •  I would rec just for: (2+ / 0-)
        Recommended by:
        No Exit, onionjim
        If one can't look beyond the status quo, and visualize a different way of organizing our society, we are trapped here.

        I do believe that automation has hurt industries like automotive. But mainly, jobs have been moved where labor is cheaper.

        •  And this causes anger in the working class (0+ / 0-)

          It used to be that we imported cheap labor, and that was the cause of much anger in the lower and middle classes (very few here are old enough to remember the economic-driven bigotry of NINA and the like).

          These days, rather than bringing low-wage employees to America, we send the factories to the low-wage workers.  Same system, different tactic.  And the result is anger and in some cases bigotry in the working class.

          I'm not certain that there is a solution.

      •  Wrong wording (1+ / 0-)
        Recommended by:
        onionjim

        "Fair trade" means paying growers a fair rate for coffee beans, cocoa, and other products. You mean "Free Trade agreements" like NAFTA, which are commonly neither free nor fair.

        America—We built that!

        by Mokurai on Sun Dec 16, 2012 at 11:14:17 AM PST

        [ Parent ]

    •  Guaranteed income. (3+ / 0-)

      Sorry that I just made your head explode with a non-capitalistic notion  [or am I ?]

      Guaranteed Income - Jeremy Rifkin

      The investors can and do rent the properties.

      And who is 'creditworthy' nowadays?  Even the banks aren't creditworthy, but they had no problem getting bailouts.

      The banks have a stranglehold on the political process. Mike Whitney

      by dfarrah on Sun Dec 16, 2012 at 07:35:49 AM PST

      [ Parent ]

      •  I oppose bailouts (0+ / 0-)

        All bailouts, all the time, for anyone from the smallest household to Citibank itself. All institutions need to be run in a solvent manner or be destroyed.

        And I realize I have a reputation on here, but I would not necessarily be opposed to a guaranteed income. The devil is in the details, though. How do you know your guaranteed income won't just drive inflation and leave the recipients in the same place? And are you going to have a global minimum income? Are US people more deserving of a high living standard than people elsewhere? The resources to allow everyone (7 billion) to live at US living standards don't exist. How do we arbitrate competing needs for resources?

        I think things are going to have to be different, but I don't know exactly how just yet.

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Sun Dec 16, 2012 at 08:41:01 AM PST

        [ Parent ]

        •  Obviously I mean (0+ / 0-)

          "Go bankrupt" more than "be destroyed".

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Sun Dec 16, 2012 at 09:12:11 AM PST

          [ Parent ]

        •  Your question about resources (0+ / 0-)

          has already been answered by the decisions made by policy makers and people with power.  They are the wrong decisions, but nevertheless, the decisions have been made.  So, we need different people with power who can make different decisons for a change.

          At some point, somebody has got to make a decision to try something else and see if it works, just like we used to when we implemented policies or invented things.  

          We already have a guaranteed income of sorts, don't we, with the earned income tax credit?  Couldn't we do more of that for starters?  

          The banks have a stranglehold on the political process. Mike Whitney

          by dfarrah on Sun Dec 16, 2012 at 03:44:30 PM PST

          [ Parent ]

    •  burger machines that make 360 of them an hour (1+ / 0-)
      Recommended by:
      SpecialKinFlag

        This will limit the workers at Mickey D's in time. Read about these machines in an industrial magazine.

    •  I don't have a problem with automation (0+ / 0-)

      as long as the increasingly productive workers get their share of the increased profits, and can then support workers in other industries with their purchases. As when Henry Ford invented the automobile production line and paid his workers more than anybody else, in order to get the best workers who could make the line even more productive, and could also afford to buy Ford cars.

      What the US economy did overall from the New Deal until Reagan, when owners and management were able to grab all of the increases for themselves.

      This goes back to the later Henry Ford who threatened to shut down Ford Motors completely rather than sign a contract with the UAW.

      Production is not a zero-sum game. As workers become more productive and better paid, they look to buy a wider range of products and more industries spring up. We need policies that support the workers in organizing, in getting their share, in retraining where necessary, in educating their children, and so on. Not policies that support ripping them off.

      America—We built that!

      by Mokurai on Sun Dec 16, 2012 at 11:10:17 AM PST

      [ Parent ]

  •  One of the best diaries I have read here, (15+ / 0-)

    thank you.  So well written, what more can be said.  You are a gem that I hope receives the light necessary to shine fractally and beautifully.

    "Too often we enjoy the comfort of opinion without the discomfort of thought." - John F. Kennedy -7.8., -6.6

    by helpImdrowning on Sun Dec 16, 2012 at 06:36:25 AM PST

  •  Competition and Capitalism are not synonymous (12+ / 0-)

    You can have competition with a non-Capitalist economy. You need a fair and equitable means to make capital available to anyone with the experience and vision to create. Capitalism is a flawed idea from the start. We need a system based on rules that provides broad-based opportunity. People will create even if the reward does not include fabulous concentration of wealth. You would be able to crate a business based on a new idea for a product or service and take it to it's logical conclusion. At some point the business would have to be run in the public interest and the Principles could only take a limited amount of wealth out of the company. Each business would have to compete in the market place for the best product at the best price. Outsourcing would be out, since that is not in the public interest, and hiding money offshore would be out. Most of the profits would be returned to the workers, creating a vibrant broad based consumer market.

    To this engineer, Capitalism is fatally flawed. There is no reason to put up with a system that is massively unfair and unstable. We have the means to reach the goal of meaningful employment and a sharing of the wealth. The fact that so many are unemployed or underemployed, when we have the infrastructure and technology to fix that, is damning on it's own. Why would a democracy not be run for the good of the most number of people?

    •  How about automation (0+ / 0-)

      Is that also 'not in the public interest?'

      We should outlaw making new and better machines because someone's job might be displaced by it?

      (-5.50,-6.67): Left Libertarian
      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

      by Sparhawk on Sun Dec 16, 2012 at 06:43:14 AM PST

      [ Parent ]

      •  Automation is good for the economy (5+ / 0-)

        It may be slightly disruptive, but automation is not the cause of our ever decreasing equality.

        Hey, hey, NRA, how many kids did you kill today?

        by freelunch on Sun Dec 16, 2012 at 06:53:40 AM PST

        [ Parent ]

        •  With no other systems in place... (1+ / 0-)
          Recommended by:
          No Exit

          ...to do something about all the now-redundant people, what's the game plan?

          For example, Amazon is investing heavily in robotics. People in their warehouses that used to have crappy jobs will now have no jobs. Is this rich Amazon shareholders "taking" from their workers? How can this not be contributing to inequality?

          (-5.50,-6.67): Left Libertarian
          Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

          by Sparhawk on Sun Dec 16, 2012 at 07:01:12 AM PST

          [ Parent ]

          •  Put such systems in place (7+ / 0-)

            Why should people be unemployed?

            There are many things that need to be done for society, that are not considered "economic" so we steal from the commons.

            Everyone who wants a job who cannot find one in the private sector should be offered a job in the public sector for no less than $12.50/hour plus health coverage.

            There is much to do. Don't stop it from happening because it doesn't fit our blind fidelity to the past.

            Hey, hey, NRA, how many kids did you kill today?

            by freelunch on Sun Dec 16, 2012 at 07:05:51 AM PST

            [ Parent ]

            •  What you are describing *is* such a system (0+ / 0-)

              But it's a welfare system, nothing more. There is no such thing as 'work that's not economic' to me, that statement is silly.

              So you're proposing to hire people for make-work jobs that no one really needs done (because if they did, someone would pay for it). The one group that might need those jobs to be done are similarly economically displaced people without the ability to pay.

              Your solution might work and be a good welfare scheme. But that's what it is, just dressed up differently.

              (-5.50,-6.67): Left Libertarian
              Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

              by Sparhawk on Sun Dec 16, 2012 at 07:15:34 AM PST

              [ Parent ]

              •  Well, then (1+ / 0-)
                Recommended by:
                freelunch

                what do you suggest we do?

                Kill them all off?  Maybe they should all be enslaved and housed in the keep.

                Here, look at something different for a change:

                Jerem Rifkin - The End of Work

                The banks have a stranglehold on the political process. Mike Whitney

                by dfarrah on Sun Dec 16, 2012 at 07:46:11 AM PST

                [ Parent ]

              •  Not make-work, real work, necessary work (4+ / 0-)

                Work that has been ignored up to this point.

                What's wrong with improving the general welfare? Why dismiss useful work as welfare?

                I am proposing that people who do not have jobs be given jobs that are useful and necessary to improve society. I am not proposing that we just hire people to dig holes and fill them in. I am not proposing that we start a war to keep people busy.

                What's wrong with paying people to help the elderly or the infirm or others who need help? What's wrong with improving parks and roads and cities?

                We need a bigger public sector because our private sector has failed us.

                Hey, hey, NRA, how many kids did you kill today?

                by freelunch on Sun Dec 16, 2012 at 07:47:42 AM PST

                [ Parent ]

              •  There is a huge amount of work (1+ / 0-)
                Recommended by:
                stormicats

                that needs to be done to mitigate and adapt to climate change, including green and built infrastructure. Putting together what we need to get off fossil fuels such as a nationwide crash renewable energy infrastructure and electrified rail, aka the steel interstate, ecological restoration projects that are needed to conserve  soil, water, and absorb greenhouse gases. A lot of these are very labor intensive. If the private sector, which has thus far failed to think about solving these problems, won't lead, then it is high time for the government to do it. A revved up modernized WPA and CCC.

                Trickle Down Economics 101: They get the golden parachute, we get the golden shower.

                by NoMoreLies on Sun Dec 16, 2012 at 08:38:39 AM PST

                [ Parent ]

              •  Not welfare -- neglected infrastructure (1+ / 0-)
                Recommended by:
                RattleTheSnake

                Why should South Korea have broadband access anywhere in their country and people in the suburbs of Milwaukee -- let alone, say, rural Mississippi -- don't?

                Why isn't every city in the United States investing in downlighting to cut down on energy consumption and light pollution?

                Why are there no open restrooms in public parks?  Why have we allowed glorious parks and greenspaces to become neglected?  Why are we not planting trees -- or vegetable gardens -- on every urban lot that's been vacant for more than a year?

                Why are our bridges crumbling, our roads staying potholed for years on end, sidewalks broken or absent in places that really need them?

                Why are there bike lanes all over Europe, but in so few cities in the United States that the places that have them use them as a selling point to attract new residents?

                FDR's CCC and WPA built lasting infrastructure that still stands over 80 years later.  Things we take for granted:  bridges, tunnels, parks, trails, electricity, water and sewage systems.  The things that are crumbling now.  It was seen as "make-work" back then, too -- and only later did we realize that FDR revolutionized living in America for all time.  

                We could use a little "make-work" like that today.  Convert all public buildings to solar hot water and power, for starters.  Add in upgrading all the plumbing to dual-flush -- the office I used to work in saved 40% of their water bill just by doing that and using motion sensors on the faucets.

                Rebuild bridges, sidewalks, build bike lanes, staff public parks or at least provide regular repairs and custodial services.  

                Provide incentives to upgrade homes to solar, replace old toilets, even build gardens -- and offer displaced workers the training to help people do this.

                Build and staff greenhouses in urban food deserts, to provide year-round fresh produce where currently, they get the dregs of the warehouses at gourmet prices.  No wonder some elementary school kids can't correctly identify a tomato, potato, broccoli, eggplant, cabbage and so on.  Some of them have never seen them outside of picture books before.

                The needs we have in this country are ENORMOUS.  We have people who have been out of work for so long their skills are not just rusty, they're obsolete.  Surely there must be some geniuses out there who can figure out a way to put these two things together!

                Whatever the cost of our libraries, the price is cheap compared to that of an ignorant nation -- Walter Cronkite

                by stormicats on Sun Dec 16, 2012 at 09:19:37 AM PST

                [ Parent ]

              •  I'm not convinced it would necessarily be a (1+ / 0-)
                Recommended by:
                Sparhawk

                "Welfare" system in the sense I think you mean; ie. busy work pretextually providing the means of subsistence.

                But, you are 100% right that there will be a lot of redundant of people and we will need to rethink the nature and purpose of our self government.  It's gonna be a long road to travel...

                A standing army is like a standing member. It's an excellent assurance of domestic tranquility, but a dangerous temptation to foreign adventure. Elbridge Gerry - Constitutional Convention (1787)

                by No Exit on Sun Dec 16, 2012 at 09:29:05 AM PST

                [ Parent ]

              •  Work that is not considered economic (1+ / 0-)
                Recommended by:
                RattleTheSnake

                is very different from work that is really not economic. Infrastructure and education are the leading examples in current US politics.

                America—We built that!

                by Mokurai on Sun Dec 16, 2012 at 11:27:15 AM PST

                [ Parent ]

        •  Um, Krugman might not agree (2+ / 0-)
          Recommended by:
          stormicats, TexasTom

          He recently wrote several very interesting blog posts on the promise/threat of automation.

          See this one in particular (and the ones surrounding it). He revives a 1932 mathematical model to show that technological improvements in productivity can in some cases lead to declining wages, which is pretty much what we've seen (wages as a share of total income are in a steepening downward trend).

          In the postwar decades, wages tracked increasing productivity almost exactly, leading to a doubling of incomes and a generation of shared prosperity. Since then (starting in the mid-70s), productivity has continued to climb, but wages have gone up only slightly (nominally 20%, but when adjusted for things like hours worked, only about 5%). Meanwhile, incomes at the top end (the people who own the robots) have tripled.

          Krugman admits that he himself was blindsided by this owners-and-their-robots-vs-workers conflict, but has proclaimed it a crucial issue in need of much more attention.

          What is valued is practiced. What is not valued is not practiced. -- Plato

          by RobLewis on Sun Dec 16, 2012 at 09:12:18 AM PST

          [ Parent ]

          •  Krugman's arguments carry greater weight... (2+ / 0-)
            Recommended by:
            RobLewis, Mokurai

            ...because this is an issue that he has reconsidered and is changing his views on.  Historically, he didn't believe that automation led to increased inequality, but is now finding evidence that has forced him to consider the possibility that it is one of the drivers in increasing inequality.

            That said, I think that there's a regulatory issue in play here, too.  Appropriate regulation in terms of standard working hours, overtime rules, and minimum wage could do much to spread the benefits of automation more widely.  Consider these possible outcomes from automating a factory:
            1.  More output from the same number of people (increased profits for owners, nothing for the workers).
            2.  The same output from fewer people (increased profits for owners, nothing for the workers).
            3.  The same output from fewer people, who get more pay as a result of increased productivity (increased profits for owners, some works come out ahead while others lose)
            4.  The same output from the same number of people, who are now working fewer hours (workers get more leisure time)
            To some degree, laws and regulation can dictate how the actual outcome balances between these three possibilities.

            Political Compass: -6.75, -3.08

            by TexasTom on Sun Dec 16, 2012 at 09:26:27 AM PST

            [ Parent ]

      •  Automation plus economic expansion (1+ / 0-)
        Recommended by:
        freelunch

        Automation means that you can produce more goods with less labor. This should mean that everyone gets to enjoy a higher standard of living assuming that those displaced by automation are now producing other goods and services. Automation is only a problem because Capitalism is fatally flawed as we have no public policy of creating additional opportunities, both for employment and for a greater standard of living. Ultimately, if we survive as a species we will need all of the labor that we can get to build a sustainable civilization. Relying on Capitalism to do it on its own is shear fantasy.

    •  Who would start such a company? (3+ / 0-)

      It is a LOT of work to start a company.   I am talking about 80 hour weeks, sometimes for years.    Anybody who goes through this and produces something of value to society deserves to get wealthy, in the old fashioned view of that term.  

      When I was growing up, we lived in a $10,000 house.   The wealthy people in town live in $100,000 houses.   There may have been a few $250,000 homes.    Nobody had  million dollar houses, and the wealthy worked just as hard to make 10 times more than average as they would have to make 10000 times more.

      Being angry at the concentration of wealth is valid, but condemning the system that created that wealth is foolish.   If you start a collective or a coop that wants to spread wealth equally, you will end up with lots of meetings and arguments about fairness, and creative hard workers will leave for other opportunities.

      Religion gives men the strength to do what should not be done.

      by bobtmn on Sun Dec 16, 2012 at 07:24:13 AM PST

      [ Parent ]

      •  Really? (0+ / 0-)

        Yet collectives/ coops do exist in this country and are excellent models for democratic work places.  Approximately 50 percent of Argentina's business is coops.  Yet you think they are undesirable?  I don't argue that all business should be cooperative but it should be a larger component of our work force.  Coops can to a large extent make up for the loss of union based jobs.

        "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

        by noofsh on Sun Dec 16, 2012 at 08:49:38 AM PST

        [ Parent ]

        •  It's not the idea of a coop that's (3+ / 0-)
          Recommended by:
          stormicats, TexasTom, bobtmn

          unworkable, it's the implementation of the purest forms.
          The most idealist of them do tend to fail, in part because they substitute the unfairness of excessively unfair concentration of wealth with excessively unfair distribution of wealth. Accommodations for differing abilities, duties and efforts have to be accounted for, as does the value of people's time and money, which unfettered, pure adherence to consensus tends to de-value. I believe there are intentional communities and ecovillages that are getting close to the right middle ground and we should take our models from them.

          All you have to do is think about what it is takes for someone to put a significant amount of their money into something. It begins with a belief that it will not be squandered. The same goes for one' time. Initially, people are willing to be generous and have faith that it will come to meaningful, observable, demonstrable good. Easier said than done, especially if the community has significant numbers who do not value money or time...

          The Class, Terror and Climate Wars are indivisible and the short-term outcome will affect the planet for centuries. -WiA "When you triangulate everything, you can't even roll downhill..." - PhilJD

          by Words In Action on Sun Dec 16, 2012 at 09:15:54 AM PST

          [ Parent ]

    •  Time sharing (0+ / 0-)

      Let me put an idea out there.  What if your compensation was credits to get some product / service instead of money.  If you got rid of money, you would get rid of financial capitalism.  Yet you still have competition, creativity, etc...

      This is not as far fetched as it seems.  Time exchanges have been setup throughout the country.

      Maybe it will change how we think about economics.

      "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

      by noofsh on Sun Dec 16, 2012 at 08:30:34 AM PST

      [ Parent ]

      •  That's a step in the right direction. (0+ / 0-)

        Their also needs to be some index of the value of different tasks. Not like the unfair market we have today. But not like the unfair market in which everyone gets paid the same thing regardless of skill or responsibility.

        The other is how you value financial investments in the community. Again, not like the unfair market we have today. But not in manner that disrespects how hard it is to come by. Some intentional communities treat these all as loans. So some recognition is given to the value of capital without creating or meeting expectations for windfall profits.

        The Class, Terror and Climate Wars are indivisible and the short-term outcome will affect the planet for centuries. -WiA "When you triangulate everything, you can't even roll downhill..." - PhilJD

        by Words In Action on Sun Dec 16, 2012 at 09:22:24 AM PST

        [ Parent ]

      •  That's just another word for money (2+ / 0-)
        Recommended by:
        bobtmn, RattleTheSnake

        Because that's all that money is -- markers that can be used to obtain products or services.

        You wouldn't be getting rid of money -- you'd just be renaming it.  We'd have "credits" instead of "dollars", but the net effect would be the same.

        Political Compass: -6.75, -3.08

        by TexasTom on Sun Dec 16, 2012 at 09:28:39 AM PST

        [ Parent ]

    •  It is vitally necessary to hire overseas (0+ / 0-)

      for the health of the global economy. Although in the short term this looks like a race to the bottom, in the longer term every low-wage country with no labor protections turns within a few decades into a much healthier economy with a much healthier political system, and starts sending even more work to even poorer countries, while the wealthier countries benefit from an ever wider range of ever less expensive products.

      This will continue until there are no poor countries left in Asia and Africa. In spite of appearances, this process is well under way almost everywhere except North Korea and the poorest countries still mired in civil wars such as Yemen, Chad, and Congo. Well, Haiti since the earthquake, Cuba under the embargo...But well over a hundred countries are making good progress.

      What this world needs, and will eventually achieve, is a good labor shortage.

      And in the meantime, it needs the US to go Progressive, and to support its own workers with sane labor laws, sane regulation of business, and in fact sanity in general.

      America—We built that!

      by Mokurai on Sun Dec 16, 2012 at 11:25:17 AM PST

      [ Parent ]

  •  I think most banks are still doing plain old (2+ / 0-)

    ordinary banking--taking in deposits and making loans, maybe with a sideline in fairly vanilla investment management. But we have a few giant banks for which that apparently isn't even close to generating enough profit. They are involved as the diary says in all kinds of speculation. And even they occasionally fall victim to it, for example Credit Suisse, which was taken to the cleaners by one of its own traders. That this level and kind of speculation needs to be reined in should be obvious, but there is still a lot of resistance to regulation, and Dodd-Frank may not accomplish enough of it.

    •  Regulation is meaningless if there is not (2+ / 0-)
      Recommended by:
      Egalitare, NoMoreLies

      the will to enforce it. Remember Brooksley Born, 7th Chairman of the Commodity Futures Trading Commission, who wanted to regulate derivitives, and got run out of town? http://en.wikipedia.org/...

    •  Even local banks do it (0+ / 0-)

      We had one here in Columbus, indiana, Irwin Union Bank and Trust, that destroyed itself in the housing bubble.

      In the Savings and Loan debacle, over a thousand bankers were prosecuted, and more than 800 went to prison. This time, nothing. I consider that and the refusal to go after the Bush-era war criminals to be by a wide margin the greatest of Barack Obama's sins. Even with that, of course, he is vastly better than the alternative.

      America—We built that!

      by Mokurai on Sun Dec 16, 2012 at 11:45:20 AM PST

      [ Parent ]

  •  Memo to Greedy (3+ / 0-)

    should first start with politicians themselves.  Many are owned by the CEO's of major corporations.  They've forgotten the people of this nation. The very ones who scream against big government are the ones who created a NEED for one. It's not there "just in case".
    The middle class has been the main supporter of consumerism. Busting up unions, outsourcing jobs, creating trade agreements that serve that special, teeny percent of our population and deregulating Wall Street all put more money in a few pockets and none in many.  The middle class is clinging to life.
    Mark Cuban wrote an article in September in which he talked about Wall Street.   The traders are robbing this country by engaging in trades that are ignored by the politicians who are owned.
    Mark Cuban is a millionaire. If HE is concerned, I'm in panic. The Glass-Steagull Act which heavily regulated Wall Street needs to be brought back.

    Bush watched the banks grow inflation and did nothing. He was SO kind by bailing them out with our tax money. I lived in Phoenix and watched houses sell overnight for triple what they were worth and knew this had a very bad ending. It did.

    Those against big government are the ones who created a NEED for one.  They can't have it both ways.

    Grover Norquist is a boil on the right butt cheek of humanity.

    by bluebuckeyewmn on Sun Dec 16, 2012 at 06:44:14 AM PST

  •  The common good doesn't register to capitalists (6+ / 0-)

    until it’s too late (i.e. until they extracted all economic value from the general public, which is really their long-term plan anyway). That's why they must be taxed and regulated.

  •  Best front page item in a long time (13+ / 0-)

    It's quite accurate. Foreclosed homes are being snapped up en mass by institutional investors as rental properties, in the hope that a generation of serfs will deliver the final crumbs.

    The answer to all this is... I have to take a serious breath here... unions. I've never been a champion of organized labor, but I am now. Our population, the citizenry, needs a tool to fight back against corporatization.

    Every day's another chance to stick it to the man. - dls

    by The Raven on Sun Dec 16, 2012 at 06:55:37 AM PST

    •  Glad you're finally seeing the light (1+ / 0-)
      Recommended by:
      SpecialKinFlag

      re: unions.

      The banks have a stranglehold on the political process. Mike Whitney

      by dfarrah on Sun Dec 16, 2012 at 07:47:53 AM PST

      [ Parent ]

    •  Maybe that's why we see such a sudden, (2+ / 0-)
      Recommended by:
      Words In Action, No Exit

      determined fight against them.  They're all scared shitless that we may revive them, and demand better wages and benefits.  Demonize them now, before they get stronger.

      •  It is somewhat strange that the dying gasps (0+ / 0-)

        of the racist, bigoted, misogynistic, kleptocratic wings of the Republican Party should be

        • the War on Women
        • the War on Workers
        • the War on Immigrants
        • the War on Taxes
        • the War on Communism and Terrorism
        • the War on Drugs
        • the War on Voters
        • the War on Science

        Not so strange that they are doing those things, which they have been doing for a long time, but that they have nothing whatsoever left other than war. There was a time when Republicans had policies.

        America—We built that!

        by Mokurai on Sun Dec 16, 2012 at 11:55:48 AM PST

        [ Parent ]

  •  A related (or identical) thought (2+ / 0-)

    It's one I had when George W. Bush talked about the ownership society. In capitalism, capital is what's valued the most. So if a capitalist society doesn't overtly take steps to make sure other things are valued too, the result will be a concentration of capital like the one we're seeing now. It's an ownership society, alright; one in which a relatively few people and businesses pretty much own everyone and everything else.

  •  YOU LOST ME- with the first sentence (1+ / 0-)
    Recommended by:
    dfarrah
    Capitalism is the best system of moving goods, producing wealth, and supporting a vibrant economy that we've yet devised.
    Really? says who? the wealthy class?

    The above statement cannot be made with any sort of certitude or credibility-- because no other system has been tried long term-- unless one wants to go back to hunter-gatherer time, prior to capitalism being invented.

    Communism certainly has not been truly put to the test since in cases like the old Soviet Union and with Cuba, corrupt statism was the result of their respective revolutions. That's hardly what Marx and Engels had in mind.

    Apparently you've not noticed the recent rise in child poverty in our nation, and the poverty level in general. our food banks have been operating at over capacity for years now. the wealth gap between rich and poor in our nation is larger than ever. and so forth.

    "A civilization which does not provide young people with a way to earn a living is pretty poor". Eleanor Roosevelt

    by Superpole on Sun Dec 16, 2012 at 06:56:09 AM PST

    •  Best = Most successful (2+ / 0-)
      Recommended by:
      Superpole, Aquarius40

      It's not best in other senses.

      Hey, hey, NRA, how many kids did you kill today?

      by freelunch on Sun Dec 16, 2012 at 07:06:43 AM PST

      [ Parent ]

      •  Right (0+ / 0-)

        The current system truly only works for a small percentage of people: the wealthy class. it's marginal, if not outright abusive for the rest of the people.

        "A civilization which does not provide young people with a way to earn a living is pretty poor". Eleanor Roosevelt

        by Superpole on Sun Dec 16, 2012 at 07:23:52 AM PST

        [ Parent ]

    •  Equating socialism with collectivism (0+ / 0-)

      This is a common mistake.  People who talk about capitalism versus socialism really fail to grasp that socialism isn't an economic system per se.

      "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

      by noofsh on Sun Dec 16, 2012 at 07:29:50 AM PST

      [ Parent ]

    •  Not Laissez-Faire capitalism (0+ / 0-)

      And especially not faith-based Market Fundamentalist Supply Side Voodoo Capitalism.

      Regulated capitalism. New Deal and Postwar US capitalism. European Social Democratic capitalism. Asian Tigers capitalism. Chinese Communist capitalism. All have been vastly productive. In the versions where workers get anything like a fair share, unlike the US since Reagan, the greatest engines of shared prosperity ever.

      We do not need to get rid of corporations, banks, and capital markets. We need to require them to behave as honest, responsible citizens, at least as much as anybody else. We need to repeal the fantasies of Market Fundamentalism, and re-institute Keynesian stimulus and the rest of reality-based economics.

      Nobody has demonstrated a viable alternative. No Marx/Engels/Lenin/whoever Socialist country built anything resembling Communism as described by Utopian Marxists. Imperialist Mercantilism before that was also a dismal failure. What else has been tried?

      America—We built that!

      by Mokurai on Sun Dec 16, 2012 at 12:10:13 PM PST

      [ Parent ]

  •  Greed (5+ / 0-)

    Capitalism appeals to greed.

    Greed will do most anything in the name of money, including producing goods that harm the consumers and constant efforts to hide and lie about it. This leads to one industry after another whose only goal is money. We see it in our food, medicine, energy, finance, etc. And our guns and military war machine. And our politics.

    Marx is right. A capitalist would sell the saw to chop down the last tree in a society where trees are the only industry.

    Capitalism may be good at some things, but it will destroy us.

    PBO is doing a competent job, but he needs to be more liberal.

    by jimgilliamv2 on Sun Dec 16, 2012 at 06:58:55 AM PST

    •  The one place where that actually happened (0+ / 0-)

      was Easter Island, for pure religious bragging rights. Nothing to do with capitalism, but entirely similar in motive, as Thorstein Veblen explained in detail in The Theory of the Leisure Class, and Jared Diamond in Collapse: How Societies Choose to Fail or Succeed.

      Greed for status trumps even greed for money.

      America—We built that!

      by Mokurai on Sun Dec 16, 2012 at 12:17:26 PM PST

      [ Parent ]

  •  I had long suspected that (3+ / 0-)

    the housing bubble was manufactured to allow the capture of physical resources by the international cartels

  •  So u still think capitalism can be tamed? (2+ / 0-)
    Recommended by:
    dfarrah, stormicats

    Please!  You start out by saying socialism is for angels.  Perhaps you fail to understand that you just made a compelling argument for democratic socialism.  How else can workers gain any control of their lives in a system that you admit does not care about them?  Democratic socialism is all about bringing democracy to the work place.  Worker cooperatives is just one example.  Workers in cooperatives don't outsource their jobs to cheap labor.  They don't cut benefits just so fat cats can get bigger bonuses.

    "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

    by noofsh on Sun Dec 16, 2012 at 07:05:55 AM PST

  •  Free Enterprise does not exist. (2+ / 0-)
    Recommended by:
    jabney, Words In Action

    Collectivism does not work.  The benefits cannot be spread equally.   I know this from personal experience with worker coops in the 70's.   We had a thriving business going, but the younger newer members did not want to sacrifice any current income in order to build a long term successful business.

    People need to be rewarded personally for their own efforts and risks.  Both big corporations and unions take this incentive away.    Together, they can completely block new entrants to the market.

    Originally, corporations had to demonstrate a public purpose, and their lifespan was limited to 40 years, a normal working lifespan of a human.

    "We" will not be able to take down the corporate power as it exists, but we could work to establish a different kind of corporation, and then try to do business with them.    

    Religion gives men the strength to do what should not be done.

    by bobtmn on Sun Dec 16, 2012 at 07:11:37 AM PST

    •  And it never will .. because people aren't angels! (0+ / 0-)

      That's the mistake the author makes from the start of this journal.  In fact, capitalism would work IF people were angels.  But they are not so they scheme and use politics to distort the system.  In fact, democratic socialism is the more realistic system because it acknowledges that people will always seem undue advantage.  Therefore, the best way to deal with that is to create equality in the work place.  Worker owned cooperatives is an example of equality in the work place yet I wouldn't call it collectivism.  It's a variation on capitalism that curbs the excesses.

      "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

      by noofsh on Sun Dec 16, 2012 at 07:33:27 AM PST

      [ Parent ]

    •  Re: A Different Kind of Corporation (2+ / 0-)
      Recommended by:
      Words In Action, Mokurai

      I wrote a semi-tongue-in-cheek, semi-serious diary called, "Corporation Liberation Front" and point #3 was:

      Basic-structure autonomy. The Corporation Liberation Front supports the right of the corporation to choose between following a stakeholder/covenant model and a shareholder/exploitive model. Stakeholder/covenant corporations renounce personhood, are restricted to a two digit multiple of top CEO pay over the lowest actual paid employee, and are allowed to consider things such as stakeholder interests and Iriquois-standard 7-generations impact before considering current quarterly profits.
      While point # 3 didn't get any votes in the "Chances of happening first" poll attached to the diary, that may have been because the poll option below the point # 3 option was, "Ice skating in Hell."

      best,

      john

      Strange that a harp of thousand strings should keep in tune so long

      by jabney on Sun Dec 16, 2012 at 07:44:46 AM PST

      [ Parent ]

    •  Consumer cooperatives generally work better (1+ / 0-)
      Recommended by:
      Words In Action

      Mutual insurance companies, credit unions and retail consumer coops like REI do work. There are also many large, long-standing producer coops in the agricultural sector.

      Unions do not take personal rewards away, ask the NFLPA or Hollywood actors or almost anyone else who is a union member. That is one of the lies that corporations have been spewing for decades to allow them to steal the fruits of your work.

      Hey, hey, NRA, how many kids did you kill today?

      by freelunch on Sun Dec 16, 2012 at 07:52:41 AM PST

      [ Parent ]

      •  We need more of them (1+ / 0-)
        Recommended by:
        freelunch

        This is one area that our government has ignored. I like to see them extend loans to coops to get them started.

        "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

        by noofsh on Sun Dec 16, 2012 at 08:54:39 AM PST

        [ Parent ]

        •  I would like to see the policy that the US (1+ / 0-)
          Recommended by:
          freelunch

          imposed on Germany after WW II: mandatory union membership in industry-wide, not craft-based, unions. Then management does not get to pit one union against another.

          In just the same way that the US occupation created a national health plan for Iraq.

          The needs were obvious, even to military planners with no prior experience in economics and government.

          America—We built that!

          by Mokurai on Sun Dec 16, 2012 at 12:23:20 PM PST

          [ Parent ]

          •  What does "industry wide" mean? (0+ / 0-)

            Are car manufacturers an industry?   Are the repair shops in the same industry?   How about motorcycle makers?  Are they in it too?    Small engine manufacturers - lawn mower an boat motors.

            Airplane motors? Train motorsmakers?

            When does an industry stop?

            Religion gives men the strength to do what should not be done.

            by bobtmn on Sun Dec 16, 2012 at 01:43:24 PM PST

            [ Parent ]

  •  I'd like to see the conglomerates broken up, (3+ / 0-)
    Recommended by:
    Farlfoto, NoMoreLies, Words In Action

    beginning with the media.

    "The human eye is a wonderful device. With a little effort, it can fail to see even the most glaring injustice." Richard K. Morgan

    by sceptical observer on Sun Dec 16, 2012 at 07:16:44 AM PST

    •  This is an example (2+ / 0-)
      Recommended by:
      NoMoreLies, Words In Action

      http://www.rawstory.com/...

      The New America Foundation is calling on Congress to push the Justice Department on the question of whether major beer producers like Anheuser-Busch InBev are violating antitrust law, reported the National Monitor.

      -snip

      Taken together, Anheuser-Busch Inbev and MillerCoors control about 80 percent of the beer market in the United States, according to the foundation.

      A new report from New America claims that market consolidation will ultimately drive microbreweries and craft beer out of the market, reported ABC News.

      "The human eye is a wonderful device. With a little effort, it can fail to see even the most glaring injustice." Richard K. Morgan

      by sceptical observer on Sun Dec 16, 2012 at 07:42:58 AM PST

      [ Parent ]

    •  I would settle for just Rush Limbaugh being broken (2+ / 0-)

      up.  

      •  I wouldn't settle for that, but (0+ / 0-)

        like that old joke about what you call 1000 lawyers at the bottom of the ocean, it would be a good start.
        (Btw, I am not anti-lawyer; I do not condone aquatic violence against attorneys.)

        "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

        by bryduck on Mon Dec 17, 2012 at 09:09:45 AM PST

        [ Parent ]

  •  Capitalism = Best System? (4+ / 0-)

    Unnnh ...

    Best by what measure? It might be the best at extracting productivity and wealth out of the many for the benefit of the few.

    But the political/economic systems that are most decent to the largest number of people are all, in our age, mixed systems of capitalism and socialism.

    Capitalism is good at creating incentives for work. Its good for economic growth -- measured in various ways -- and for innovation.

    But remember that none of these things are virtues in themselves. Growth is only good when there is a public benefit to it. Innovation is worthless if it only makes the rich richer.

    "I'll believe that corporations are people when I see Rick Perry execute one."

    by bink on Sun Dec 16, 2012 at 07:17:48 AM PST

  •  Excellent commentary (2+ / 0-)
    Recommended by:
    Words In Action, No Exit

    And all too true!

    "Republicans have been fleeced and exploited and lied to by a conservative entertainment complex." - David Frum

    by Glinda on Sun Dec 16, 2012 at 07:23:59 AM PST

  •  The entire premise of this diary is ludicrous (0+ / 0-)

    Dear Mark:
    Your entire introductory paragraph is nothing but a giant, capitalistic platitude with no foundation in objectivity or facts. Or, perhaps you, like so many other Americans are just so thoroughly and totally programmed and conditioned that you are unable to see exactly how ludicrous your opening praise of capitalism is. Even though you qualify it in your second paragraph, this particular kossack takes exception to everything you've stated in the opening lede of this article.

    First of all, instead of making a blanket generalization about capitalism allegedly being the “best system” of moving products, producing wealth supporting a vibrant economy, could you be so kind as to provide one iota of evidence to support this ludicrous tripe?

    There are many, many, many, many examples of better systems than capitalism. Have you even considered the possibility that there are other countries in this world? Such as, oh, lets say...Germany, for instance. It is not a capitalistic economy. Though it does have some capitalistic practices, it is, in fact, a socialist country, with a very highly regulated and controlled economy. And one of the most effective economies on the globe in terms of not only moving goods, producing wealth and vibrant economy but, just as importantly, in treating its citizens with a level of dignity that acknowledges that basics such as a roof over your head and a job are essential ingredients in a civilized society.

    There are many other examples.

    Your blanket generalization that capitalism is the “best” system is simply ridiculous...on its face.

    Sincerely,
    A reality-based kossack

    (P.S. The diary's recommended and tip has been provided even though this is so far removed from reality as to seem laughable to any serious-minded, objective person; however, it's recommended because it is a widely accept belief (and only a belief, predicated, like most religious, on pure subjective, non-objective preferences as opposed to any kind of objective reality).)

    •  oh, and by the way... (0+ / 0-)

      ...if you want proof positive that capitalism is, in fact, one of the dumbest and least effective economic systems on the planet, you need look no further than capitalism's key proponents...Adam Smith...who predicated his entire theory on the assumption that the "free-enterprise" system of capitalism has a built-in "invisible hand" that would required companies and corporations doing business to "self-regulate."

      Well...we've seen, time after time, that that "invisible hand" of "self-regulation" is just a giant, ludicrous, idiotic belief with not basis in reality or fact since there is overwhelming proof that the capitalistic system has no concern whatsoever about "self-regulating" itself.

      •  Ah, I see that you have bought into the lies (0+ / 0-)

        of the Market Fundamentalists about Adam Smith, who had some of the nastiest things to say about Laissez-Faire and businessmen in general ever penned. Let's start with

        Everything for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind.
        He was vehemently pro-worker and anti-management in their disputes, and vehemently pro-public on the baleful influence of business on politics.

        The Invisible Hand is an observation that in uncoerced markets supply and demand result in an efficient allocation of resources that no human planner could have managed. It does not take away from the facts that Smith also emphasized, that the poor, in particular, are heavily coerced, and that extracting economic favors from governments is also economic coercion and also has seriously bad consequences.

        Among all economists before him, Karl Marx had the highest regard for Smith. (Marx gave an excellent diagnosis, but a quack prescription, on a par with most of both economics and medicine at the time.)

        America—We built that!

        by Mokurai on Sun Dec 16, 2012 at 12:37:59 PM PST

        [ Parent ]

    •  The idea that socialism and capitalism (3+ / 0-)

      are two completely separate and unreconcilable economic systems is simply ludicrous. There are no pure capitalist systems and there are no pure socialist systems. All economies are a mix of the two, to one extent and in one form or another, including Germany's and the US's. Are Siemens, BMW, Mercedes and Krups state (or EU)-owned companies, as opposed to state (or EU)-regulated ones? Does Germany (or the EU) mandate what specific products they can make and sell, where and how? No? Then how is that socialism? From what non-individual sources does Germany collect its tax revenues? Is it all or mostly from state-owned companies, or privately-owned ones?

      Capitalism and socialism not only can coexist, they MUST coexist, to exist at all.

      "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

      by kovie on Sun Dec 16, 2012 at 07:50:14 AM PST

      [ Parent ]

      •  so...it's equally ludicrous (0+ / 0-)

        to blindly accept the notion that capitalism is "the best system," especially without citing any facts to back it up, correct?

        •  For what it's best at, capitalism is the best (2+ / 0-)
          Recommended by:
          Killer of Sacred Cows, No Exit

          system. That might sound like a tautology, but it's arguably better at producing certain kinds of products and services than socialism. Has socialism ever produced, on a mass scale, a good and cheap phone, TV or laptop? A car or bike? Nice clothes? Gourmet cheese or pastries? I'm sure that socialism COULD produce these things, but not efficiently or well.

          Where socialism comes in is in producing goods and services the public wants or needs that can't be produced efficiently and affordably by capitalism, or in regulating or supplementing capitalism's weaknesses, such as its tendency to exploit labor or abandon certain markets. E.g. those "cheap" phones or TVs often come at the expense of wage slaves in Asian countries.

          Neither system can succeed on its own. Both are great if not "best" at some things, not so much on other things. Both are necessary subelements of a broader mixed economic model that requires both to function well.

          And btw, this is not a new concept. Alexander Hamilton introduced the concept of the public-private (i.e. socialist-capitalist) venture back in the 1790's. I'm pretty sure that people like Robert Morris and Adam Smith advocated for such as well. In fact modern capitalism, which can be roughly traced to the 14th century, has always depended on much government intervention in the form of investment capital and charters for corporations and ventures.

          Capitalism, like socialism, cannot stand on their own, so I agree that to call either "best" as a standalone economic system is a bit silly. But at what they're each best at, they do tend to be best at.

          "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

          by kovie on Sun Dec 16, 2012 at 08:21:08 AM PST

          [ Parent ]

          •  agreed.... (0+ / 0-)

            ...but the most appalling thing of all to me is how so many otherwise seemingly intelligent people seem so willing to overlook this whole idiotic notion of the "invisible hand of self-regulation" which is the premise of capitalism and which has been proven again and again and again...to not exist.

            •  It's the premise of ONE interpretation and model (2+ / 0-)

              of capitalism, that the evidence clearly rejects as self-evidently ridiculous. The idea that ANY complex artificial system or device can regulate itself is simply ludicrous. Sports have to have rules and referees to succeed. Farms have to be managed to thrive. Cars have all sorts of complex regulatory devices and systems that allow its primary devices and systems to function properly, e.g. lubrication and cooling systems, and both have to be regularly maintained and properly treated to function. And so on. Economies are vastly more complex than any of these, and thus clearly need regulation and oversight.

              People who claim otherwise--which the diarist did not--are simply not serious people, and don't know what they're talking about.

              "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

              by kovie on Sun Dec 16, 2012 at 08:34:08 AM PST

              [ Parent ]

              •  it is the ESSENCE of capitalism... (0+ / 0-)

                ...that the system will, in and of itself, result in a form of self-regulation. It is the very core of the entire capitalistic belief system. And it has been proven false...again and again and again.

          •  Ummm you are confusing two things (2+ / 0-)

            Socialism is not the same as communism.  The way is see it socialism is not an economic system at all,  it is a set of policies superimposed on capitalism to make a society more fair.  A socialistic set of policies guarantee access to health care, education, housing.  But those policies do not eliminate competition even in these core areas.  Instead, they regulate core areas to make sure that no one is priced out of the necessities of life.

            "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

            by noofsh on Sun Dec 16, 2012 at 08:41:27 AM PST

            [ Parent ]

            •  There are degrees (2+ / 0-)

              A "pure" socialist system would be one where the state produces and provides ALL goods and services that are bought and sold (people could still retain the right to produce them for their own personal use), and owns and controls all the means of production. Which, I suppose, is communism. But such a system can't work, as has been proven repeatedly. Just as "pure" capitalism can't work, as has been proven repeatedly. So whatever we call it and whatever we call the relationship (i.e. "mixed" vs. "superimposed"), only a mix of the two can possibly work, as has been the case for centuries.

              "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

              by kovie on Sun Dec 16, 2012 at 08:52:02 AM PST

              [ Parent ]

          •  HG Wells interviewed Stalin during the great (1+ / 0-)
            Recommended by:
            kovie

            Depression in the US and he makes many of the same points you make.  It's a fascinating interview available online.

            At one point he notes that stalin's Russia and fdr's American society were converging...

            A standing army is like a standing member. It's an excellent assurance of domestic tranquility, but a dangerous temptation to foreign adventure. Elbridge Gerry - Constitutional Convention (1787)

            by No Exit on Sun Dec 16, 2012 at 09:49:21 AM PST

            [ Parent ]

          •  actually, Soviet Communism produced (0+ / 0-)

            excellent pastries, for those who could afford them, but only because they inherited the traditions of the pre-Revolutionary Russian aristocracy, imported from Vienna and Paris.

            Capitalism is not a system in anything like the way that Marxist/Leninist/Stalinist Soviet Communism was.  Particular versions of capitalism in particular countries in particular periods have been spectacularly successful at creating individual wealth and even general prosperity, and others spectacularly disastrous.

            Chinese Communist capitalism is one of the most interesting cases, not least because it is spreading among more than a billion people as fast as the government can build railroad and phone networks westward, construct power plants, and institute village elections. When the entire population can participate both in economics and government (even with the expected restrictions starting out), there will be vast consequences, much bigger than anything we have seen so far.

            America—We built that!

            by Mokurai on Sun Dec 16, 2012 at 12:47:20 PM PST

            [ Parent ]

  •  You drew me in with the Grinch (1+ / 0-)
    Recommended by:
    Killer of Sacred Cows

    and kept me with the prose. Very well done :).

    My econ teacher in high school only really focused on supply side, he was a big fan. Every other type of economics he disparaged, and I don't remember him teaching any other theory of capitalism. I knew he was wrong even then, and that was back in 87-88. He didn't like me then, but he didn't dare flunk me for my democratic/pro-Clinton papers. Mostly because he knew my father.

    "Madness! Total and complete madness! This never would've happened if the humans hadn't started fighting one another!" Londo Mollari

    by FloridaSNMOM on Sun Dec 16, 2012 at 07:30:57 AM PST

  •  Panic of 1907, meet the Great Depression (3+ / 0-)

    I often wonder - and believe to be true - that we really just prevented the Panic of 1907, and the Great Depression II is yet to come. The Great Recession was a crisis mitigated by policy response only to a point just short of the disaster needed for real transformation. Of course, Obama is no FDR either, inviting the Wall Street mafiosi to help craft policy in continuity wth Paulson-Bush rather than inviting their hatred.

  •  Please read Shock Doctrine by Naomi Klein (7+ / 0-)

    The super powerful corporatist folks have 3 primary goals that they've been advancing globally for decades; privatization, deregulation and the shredding of social spending efforts.

    They will advance these objections by any means available. No man-made or natural disaster will hinder this effort. On the contrary, disasters create the opportunities to implement Hayek's and Friedman's fondest dreams.

    It's insane, it's brutal, it devastates the non-elite classes. That's even partially the point. But, they call it freedom.

    See Indonesia, Chile, Argentina, Thatcherite Britain, New Orleans, post 9/11 USA, post Tsunami Asia, Iraq, etc. etc. etc.

  •  Capitalism is an idiot savant (3+ / 0-)

    A useful idiot savant, perhaps, but an idiot nonetheless, needing our constant monitoring and control lest it go and do something stupid and destructive, as idiots are wont to do from time to time.

    Farm animals are useful things, providing us with food and I suppose in some cases companionship (hey get your mind out of the gutter, I mean nice, clean animal companionship), but you don't let them just run around wild. You fence them in, sometimes coop, stable or corral them, medicate them, feed them, clean them, nurture them, keep them from hurting each other, etc. In return, they give you want you want out of them, and little more.

    Why should it be any different with capitalism, which is really just another kind of animal? Hell, as that great lover of all things capitalism once famously said:

    Any farmer will tell you that certain animals run around and are unpleasant, but when they've been fixed, then they are happy and sedate.
    Can we not similarly "fix" capitalism? I.e. regulate it back into submission.

    "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

    by kovie on Sun Dec 16, 2012 at 07:39:54 AM PST

  •  Wealth caps (5+ / 0-)

    One easy way to stop this concentration is to institute wealth caps. Say $250 to $500 million. Once you hit that mark, you'e cut off and can no longer charge for your labors or make money from your "investments." You can't even put the money in interest earning CDs or bank accounts. All your subsequent economic activity must subtract from the principal.

    A cap would still promote innovation, because for most normal people, $500 million is an inconceivable sum. You could spend $10 million a year for 50 years before you run out.

    It also prevents economic absurdities like Mitt Romney who "earns" $50,000 per day doing absolutely squat, while a huge portion of the country has to work an entire year to earn the same amount.

  •  If allowed to go on long enough the tumbrels will (2+ / 0-)

    role.  Probably much faster than in 18th century Paris.

  •  Supply-side doesnt grow the econ it concentrate it (3+ / 0-)

    Is a great buzz line

    -1.63/ -1.49 "Speaking truth to power" (with snark of course)!

    by dopper0189 on Sun Dec 16, 2012 at 07:45:19 AM PST

  •  I have no answers. (1+ / 0-)
    Recommended by:
    Killer of Sacred Cows

    Hell, I have no longer have any questions.  All I have left is the 21st century version of R & R:  Rage & Resignation.  

    Live so that when your children think of fairness, caring and integrity, they think of you. H. Jackson Brown, Jr.

    by Ellen Columbo on Sun Dec 16, 2012 at 07:47:31 AM PST

  •  There's a joke going around Russia these days (8+ / 0-)

    "Everything the Communists told us about Communism was an absolute lie."

    "Unfortunately everything they told us about Capitalism turned out to be true."

    If the pilot's good, see, I mean if he's reeeally sharp, he can barrel that baby in so low... oh you oughta see it sometime. It's a sight. A big plane like a '52... varrrooom! Its jet exhaust... frying chickens in the barnyard!

    by Major Kong on Sun Dec 16, 2012 at 07:59:40 AM PST

    •  LOL ... I like that one (2+ / 0-)

      Capitalism is a mess.  I have no doubt it's the best mess we thought of so far.  But inherent in it's core principles may be it's undoing.  The most glaring problem is that of unlimited growth.  That just seems unlikely given the limits of natural resources.

      "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

      by noofsh on Sun Dec 16, 2012 at 08:09:44 AM PST

      [ Parent ]

  •  Billionaires are essentially Hoarders (5+ / 0-)

    There should be a requirement that if you amass wealth greater than let's say, $10 Million, that you need to take that wealth in hard currency and store it in your own home.

    Then the super wealthy would realize that they are no different than the lady with 200 cats, or the hoarder whose house is packed from floor to ceiling with jars of human excrement.

  •  I will be with the "Angels" (1+ / 0-)
    Recommended by:
    Killer of Sacred Cows

    Anything is better than this....

    My current battle cry, if only in my own head, is " I am Ob$olete, not obsolete",
     and "Will NOT work for food"

    "I took a walk around the world, To ease my troubled mind. I left my body laying somewhere In the sands of time" Kryptonite 3 doors Down

    by farmerchuck on Sun Dec 16, 2012 at 08:29:06 AM PST

  •  Does my aged memory serve me well enuf... (0+ / 0-)

    ...2 B accurate in saying that wasn't it the Chinese who developed the supplier next door 2 the user concept?

  •  It all comes down to politics (1+ / 0-)
    Recommended by:
    Killer of Sacred Cows

    and, as Tip O'Neil said, all politics is local.  I think we may be at a political juncture that would allow us to abandon the supply side nonsense and to move back to the style of economics and politics of the 1940s to 1980s except for the sad fact that our Congress was effectively stolen from us in the 2010 debacle.  That disaster was unfortunately timed concurrently with reapportionment of most congressional as well as state legislative districts nationally, which gave the plutocrats an opportunity to poison our system of representative democracy for the rest of the decade.  In order to align our political institutions with the positive political trends we see developing, we somehow have to get around that problem.  That means sustained political organizing at the state and local level together with some degree of patience about the results.  This is boring I admit:  Our people have to learn to vote, vote consistently, and vote down the ticket.  We have to win state houses all across the country, and gradually, maybe sooner than we think, the Congress will follow.

    •  Allowing politicians to (2+ / 0-)
      Recommended by:
      Killer of Sacred Cows, Mokurai

      choose their own voters is the root of many problems. Letting a major political party run an unabashed, nationwide propaganda network is another issue.

      Canada refuses to allow Fox to poison their political discourse while calling it news. What are we waiting for?

      "A lie is not the other side of a story; it's just a lie."

      by happy camper on Sun Dec 16, 2012 at 09:11:01 AM PST

      [ Parent ]

  •  Not helping: the "fair share" argument (4+ / 0-)

    We always hear that the rich should "pay their fair share" of taxes.

    That's not going to do it, as explained here.

    We need to stop the concentration of wealth, not because it's "unfair" but because it threatens our society, our economy, and our democracy. Fairness be damned.

    What is valued is practiced. What is not valued is not practiced. -- Plato

    by RobLewis on Sun Dec 16, 2012 at 08:46:22 AM PST

  •  The solution lies in the power to tax. (1+ / 0-)
    Recommended by:
    Killer of Sacred Cows

    Boehner would move heaven and earth to prevent tax rates from going up, because he realizes that tax rates are the only way to reign in the excesses of the rich.

    We need to raise taxes on upper incomes until the trend is reversed, until the gap between the uber wealthy and the median wage earner starts to shrink. This might require marginal rates that are unthinkable by today's (but not by historical) standards. It would require treating all income equally. It would require a truly confiscatory estate tax.

    Government should become the job creator of last resort. These jobs need not be make-work. Hire more teachers. Subsidize higher education. Improve our infrastructure. Build wind turbines and give them to a citizen's cooperative. Invest in basic research. All of these projects would be of great benefit to the economy.

    But there is more that needs to be done. We need high tariffs on goods produced by slave labor. We need to protect and expand the union movement.

    We need Congressional reform. I would reform Congress in the following ways:

    1 - Do away with lobbying. Define it as bribery. If you want to influence legislation, then post your information on the internet.

    2 - Require, as a condition of taking the Congressional oath, all congresscritters  to reduce their household net worth to, say, $5,000,000 by suitable charitable donations if necessary.

    3 - Exempt congresscritters from all income taxes. They make the rules; don't tempt them enrich themselves.

    4 - Pay congresscritters on their performance. For example, peg their salary at a multiple of the median household income. Maybe a bonus or penalty for the unemployment rate.

    OK, this sort of system is not likely to happen in the near future, but we should begin to think of ways to make Congress more responsive to the well-being of their constituents rather than their own.

    Note to Boehner and McConnell: "You don't need a weatherman to know which way the wind blows." --Bob Dylan-- (-7.25, -6.21)

    by Tim DeLaney on Sun Dec 16, 2012 at 08:53:46 AM PST

  •  On the Playing Field of Capitalism (2+ / 0-)

    All the refs are bought and paid for.

    We will never have the elite, smart people on our side. - Rick Santorum

    by easong on Sun Dec 16, 2012 at 08:57:23 AM PST

  •  Like we have capitalism any more. (2+ / 0-)

    Bernanke just committed to $1 trillion of QE next year.  Bank socialism seems to be working just fine for them.

  •  We don't have regulated capitalism (2+ / 0-)

    we have a monopoly system where one company gets bigger and then buys up the competition. And government seems unable to stop it.

    Capitalism says: "Build a better mousetrap and the world will beat a path to your door."

    In our system, if you build that better mousetrap a big company, who makes a crappy mousetrap, made in China and sold at Wal*Mart for pennies, will beat a path to your door, buy your company and bury your technology - they don't want to make your better mousetrap, they want to ensure NO ONE ever sees it.

    I wonder why, when the right and the corporations talk about creativity and competition, they don't want to engage in it. Regulate them. Then let the companies use their brains and  creativity to win in the marketplace.

    Competition breeds creativity. Good wins, the bad loses.  

    Isn’t it ironic to think that man might determine his own future by something so seemingly trivial as the choice of an insect spray. ~ Rachel Carson, Silent Spring ~

    by MA Liberal on Sun Dec 16, 2012 at 09:07:18 AM PST

  •  The problem isn't capitalism so much as the (0+ / 0-)

    inevitable market distortions that get introduced by government. Is your buggy whip factory being hurt by those new fangled automobiles? Lobby Congress to give you a subsidy. Can't produce sugar as cheaply as Caribean countries? Ask Congress to impose import quotas.

    Interest groups have an infinite capacity to rationalize the tilts they want to put on the playing field and politicians have an insatiable desire for campaign funds from them.

    •  Yet without government intervention (0+ / 0-)

      the most ruthless corner every market and destroy competition...

      The Class, Terror and Climate Wars are indivisible and the short-term outcome will affect the planet for centuries. -WiA "When you triangulate everything, you can't even roll downhill..." - PhilJD

      by Words In Action on Sun Dec 16, 2012 at 09:39:15 AM PST

      [ Parent ]

  •  The default economic system of patriarchy (2+ / 0-)
    Recommended by:
    Egalitare, Villabolo

    is feudalism.

    Capitalism was just a period of transition between different sets of feudal lords.

    Unless... we end patriarchy itself.

  •  The thermodynamics analogies (1+ / 0-)
    Recommended by:
    Egalitare

    are most welcome. Thanks!

  •  "financial black hole (0+ / 0-)

    stands a very good chance of simply ripping the system apart". Or perhaps, collapsing on itself from it's inherently unstable structure.

  •  We need to pay attention to PBO's next (0+ / 0-)

    Treasury Sec. Geithner was a disaster & now he's leaving. Today's NYT has a great editorial on the subject.
     

    The task now is to revive growth and create jobs, and for that Mr. Obama needs a secretary who will champion and execute an agenda in which the interests of Wall Street give way, at long last, to the public need for broad and shared prosperity.
    It is a very insightful piece that carefully details what we need.

    Warren is neither a Clintonesque triangulator nor an Obamaesque conciliator. She is a throwback to a more combative progressive tradition, and her candidacy is a test of whether that approach can still appeal to voters.-J. Toobin "New Yorker"

    by chuck utzman on Sun Dec 16, 2012 at 02:43:28 PM PST

  •  Capitalism can't be trusted to the wealthy (0+ / 0-)

    They will screw it up every time. Because of their compulsive obsessive hoarding they can't understand that money is made to be circulated, not hoarded.

    It's like the people that have stacks of things in their homes, but it's money that the wealthy are collecting.

    Stop the circulation of money = stopping capitalism

    Women create the entire labor force. ---------------------------------------------------------------------------------------- Sympathy is the strongest instinct in human nature. - Charles Darwin

    by splashy on Thu Dec 20, 2012 at 02:28:02 AM PST

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