UPDATED-Soros: Current crisis equivalent to the collapse of Soviet System

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Saturday February 21, 2009 · 5:45 AM PST

2009/02/21 · 05:45

Finally, someone has articulated what I have been thinking. George Soros on Friday called the obvious:

Soros said the turbulence is actually more severe than during the Great Depression, comparing the current situation to the demise of the Soviet Union.

He also mentioned:

"We witnessed the collapse of the financial system,".... "It was placed on life support, and it's still on life support. There's no sign that we are anywhere near a bottom."

Now George Soros is someone who understands well the collapse of the Soviet system and the repressive regimes in the eastern european countries, as himself stood and fought for democracy those days any way he could.

I am not an economist, but there is one obvious question that comes to mind: Are we witnessing of the beginning of the collapse of capitalism as a system altogether? Is it possible that capitalism as a system is failing? At least in its extreme form that we have here? It is an obvious possibility that no one dares to bring up. But it is certainly a possibility. What I find interesting is that so far countries that have more of a social-democratic structure (i.e. Sweden and the rest of the Scandinavian countries, with the exception of Iceland) have been affected to a lesser degree than the US and other western countries.

I start believing that we are witnessing the collapse of extreme capitalism as a system. I also start thinking that we need real reform and this country should adopt a social-democratic direction like most of europe and especially the Scandinavian countries.

It seems that the Obama administration is trying to find fixes to stimulate the economy, but you can not stimulate the engine of a collapsing and no longer working system. I am wondering whether instead of superficial fixes he should nationalize banks, repeal the tax cuts of Bush immediately and invest much more money than the stimulus bill. We need a much more aggressive left economic policy. There is no other way to improve things but to really change the collapsing system. Trying bandages, as Obama is doing, will probably not work.

UPDATE: Here is an interesting comment from Lysias:

Is Obama America's Gorbachev?

A reformer that tries to reform a corrupt system, and in the process brings it down?

(Back in 2005, I was saying that Katrina was America's Chernobyl. I see from the opening pages of his The Predator State that James Galbraith had the same thought.)

Actually, I have been thinking the same. It is an interesting possibility.

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