The Nature of Unregulated Capitalism

 

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American Capitalism: Economic Dysfunction
If You Think Our Economic System Is Fair And Just, Or The Best There Is, You Might Want To Think Again After Reviewing A Few Facts

When 10% of America Controls All The Wealth, Is That Good For All?
Worse Yet, The Top 1% Are Even Richer, But A Mere 0.00013029037979808572%, the 403 Billionaires of The US, Are The Richest of All And They Call The Shots.

NewsFocus, by Tim Watts 092809

Is It Time To Reform Capitalism Too?

With far-right conservatives doing their best to rail against the perils of socialism, let us intellectually weigh the merits of arguably the most dangerous economic system to man and society, capitalism.

  • Capitalism consumes wealth and places it with the capitalist/investor. It takes from the poor and middle class and gives it to the rich.
  • 10% of Americans are the wealthiest. This is a tremendous disparity, one which feeds upon and takes economic advantage over the other 90% of Americans.
  • 1% control most of the overall wealth. This is a dangerous and obscene number when one realizes the amount of outrageous wealth in the hands of only a few.

Capitalism, as we know it, is a system fraught with greed, which favors the rich more than it serves the middle and lower class. Our economic system is the polar opposite of the Robin Hood mentality, for it is the overall stealing from the poor and giving to the rich.

A Strong System?

For anyone to categorically state that our capitalist system is the best there is would be naive at best. Our vaunted and oft heralded system of capitalism has collapsed into complete ruin twice now in less than 80 years, in 1929 and 2008.

Think about that. Twice!

(This does not include the massive recession of the 70s either, since it pales in comparison to the great depression and our current worldwide economic plight.)

Again, our precious system of capitalism has collapsed twice now in less than 80 years. Less than the span of one human lifetime.

Why do you suppose this is?

Our version of capitalism has few checks and balances to make it work for everyone. It only benefits those of the ultra wealthy, making it a very fragile system with a limited duration of stability. Unregulated or unchecked capitalism is quite simply a free for all for the wealthy elite and the unscrupulous rich in our world.

A Marketed Misperception: Capitalism Good, Socialism Evil

We have been sold a bill of goods, to keep this unfair game from changing. We have been preconditioned not to look elsewhere because other economic systems are evil, or so we have been led to believe. Let's get one thing straight, evil comes from man, not an ethereal system. Capitalism, socialism, or even communism could work well, if run by altruistic and benevolent people. It is man and his greed that screws up the equation.

We've all been indoctrinated from an early age to believe that socialism is a bad and evil thing. It has been in the corporate and private sector's best interest to get us all to think that way so that we fully and openly embrace capitalism as a good thing, to keep us from ever entertaining any potentially better economic systems that work for all of mankind.

It would seem the ultra-wealthy of this country are having it both ways, robbing us blind and jeopardizing our economy through criminal financial dealings and then robbing us once again by expecting huge bailouts.

Please believe me, I'm not here to knock capitalism as much as I am writing to set the record straight on the misperceptions of capitalism versus socialism. Capitalism can be a good thing, when it has checks and balances to keep it from being overly greedy and bleeding a society dry of its wealth. We have no such system in place for capitalism, so just maybe we need some reform for this too.

We have all been brainwashed to associate "socialism" with Stalin and the old Russia. It is a word that has been marketed to us all, so that we think our capitalism is better. Socialism is the antithesis of capitalism. The term socialism is actually a derivation of the word society. Socialism is all about caring for the many, not just the upper class.

Socialism Is Freeloading?

A common complaint echoed loudly by right wing conservatives and the wealthy is how poor people rip off the system, expecting a free ride from welfare. This is an extremely ignorant statement to make when you understand a few simple facts.

First off, yes, there probably are a few indolent among us who, for whatever reason, wish to live a meager existence off the government rather than seek gainful employment. The vast majority of the lower class do not wish to be poor, but simply do not know how to get themselves out of poverty or simply cannot catch a break to save their life. No one wants to be poor.

A majority of the rich are often born into wealth without ever having to lift a finger towards real labor, inheriting their vast fortunes through family. Others have gained the bulk of their wealth through overpriced services or goods, taking advantage of a seriously flawed capitalistic system that allowed them to rape and pillage the pocketbooks of their fellow man. Many of the rich, such as bankers, Wall Street brokers or corporate executives, unscrupulously stole their fortunes by having access to vast banking accounts or paying themselves overpriced salaries and yearly mega-bonuses for little or no work ever done on their own. Very few of the wealthy ever earned their fortune by saving from an honest day's work or offering reasonably priced services and goods. True, some have been fortunate enough to be in the right place at the right time, whether through gifted talent, invention or stumbling onto valuable natural resources, but for the most part the old saying, "behind every great fortune there is a great crime," is more prevalent than not.

Another key point that the wealthy seem to always miss is that they could not exist in the world without the middle and lower classes who form the labor backbone of our country and who hold the real purchasing power of a capitalist economy. So when those that consider themselves higher than thou look down on those of lesser financial means, complaining that they are getting a free ride from welfare, it is galling to witness their arrogant ignorance.

What about corporate welfare? Helloooo?

Is Socialism Only For The Wealthy?

Bailouts are socialism. Republicans will kick and scream about the evils of socialism, yet they overlook their own unbridled hypocrisy of continually running to the American taxpayer to bail them out for their high crimes in our financial markets and the banking industry.

The Bush administration paid out nearly a trillion dollars in subsidies and bailouts in 2008. Likewise, the new Obama administration also paid out a trillion dollars in 2009 to continue the bailouts for the rich. It would seem the ultra-wealthy of this country are having it both ways, robbing us blind and jeopardizing our economy through criminal financial dealings and then robbing us once again by expecting huge bailouts. One has to wonder if this hasn't been a carefully orchestrated ruse, purposefully engineered to game the American taxpayer. History now shows they have done it to us twice, in less than 80 years.

Welfare for the rich and corporate wealthy far exceeds the welfare fraud perpetrated by a few of those genuinely in need of government assistance. We are one of the wealthiest nations on the earth, spending trillions of dollars on defense, yet we grouse about caring for those among us who, for whatever reason, are less fortunate than the rest.

Welfare for the poor in this country dwarfs corporate welfare by an overwhelming margin. The financial advantages enjoyed by the wealthy far outweigh and eclipse the welfare paid to the poor. Tax shelters and write-offs for the rich account for more money than that which is paid to the few who would defraud our welfare system.

For the record, most people on welfare do not want to be associated with government assistance. A great many people on welfare are there in large part due to our corrupt version of capitalism that has forced them into a life of poverty. Some will take issue with that statement, but they would be sorely remiss in understanding how our system can actually hold people down under bad capitalism.

An Unfair Balance

Nearly two-thirds of U.S. companies and 68% of foreign corporations do not pay federal income taxes, according to a congressional report in August 2008. The Government Accountability Office (GAO) examined samples of corporate tax returns filed between 1998 and 2005. In that time period, an annual average of 1.3 million U.S. companies and 39,000 foreign companies doing business in the United States paid no income taxes - despite having a combined $2.5 trillion in revenue.

These corporate free loaders burden our tax-paid infrastructure by wearing down our roads with their massive delivery trucks, yet they essentially leave it up to us to pay the bill for our nation's highways and roads. They burden us with environmental pollution, but expect the American taxpayer to clean up after them for their repeated and disastrous offenses. They fight for our retail patronage as well as our tax money, then reap the benefits of wealth, yet pay no taxes back into a rigged system that is forced back upon the middle and lower classes, leaving us to pay for everything. Where is the fairness in that?

"We the People" set up government to protect us from ourselves, from those who would take advantage of and exploit society. The wealthy were most certainly one of the major entities that people feared the most...

Under the Bush II regime, the wealthiest 1% of Americans were given the tax breaks, but rather than investing their extra savings back into society, they simply kept their tax break and grew far richer. So much for the vaunted trickle-down theory and the misguided notion of Reaganomics.

Our Capitalism Is Really Fascism

When you get right down to it, our capitalism is essentially fascism, since the corporate elite rule over us. It's hard to parse that statement any other way. PACs and corporate lobbyists have stolen the people's right to representation by our elected leaders. Our political system has been usurped by capitalism.

This piece is not attempting to say one economic system is better than another, however, it is intended to make the point that our system of unregulated capitalism, a system with few checks and balances, is arguably the worst for mankind. It creates disparity of wealth, it generates poor people, it holds back the evolution of society by way of patents, and it fosters war through material and economic greed.

The wealthy and corporate elite absolutely love our unchecked capitalism as it is, because they are the clear winners from this abhorrent greed based system. As the system continues to grow out of balance, more poor people are created, a portion of society desperate for money. These people will literally work for anything, minimum wage or even less, in order to keep food on their tables. Essentially, a slave class is created to work in the factories and sweatshops, giving corporate business a cheap labor force, all the while the rich grow wealthier. It's a win-win for the elite.

Again, I'm not trying to trash capitalism as much as I am trying to set the record straight on its true nature, as it currently stands. Ours is an undeniably corrupt system of unchecked capitalism, with very few safeguards in place to protect the middle and lower classes. Capitalism can be a good thing for all, if these safeguards are put in place for a fair society. Capitalism should not be like the Parker Bothers game of Monopoly, where one winner takes all, bankrupting the other players along the way. Where is the social value in that?

But Capitalism Encourages Competition

As mentioned in a previous article regarding the misperceptions of socialism... competition does not always produce the best product.

Like it or not, it's true in many instances.

Once goods and services reach an equilibrium among competitors, the only thing left is two options. One is to either add more to the goods or service, thus driving the cost up. (Seldom does the price ever go lower.)

The other option is to lower the cost for those same goods and services, but that takes a cut out of the bottom line, the ol' profit margin.

If the profit margin begins to look less rosy, under capitalism, a manufacturer or retailer then abandons those goods or services for greener ($$$) pastures, whether or not those less profitable goods or services are necessary for a better society.

Per my previous comment on patents... the current law gives an inventor the exclusive right to charge whatever the market will bear for their new invention. This can often be an outrageous fee, making it unaffordable to many in the middle and lower class, even though the invention might be for the betterment of society. This has the potential to stifle the immediate advancement of society by not allowing everyone fair access or equal use of a possibly beneficial product. Perhaps a better system would be a government buyout, or royalty payoff to the inventor from those exploiting the new idea. This would allow the new invention into a competitive marketplace much sooner, thus benefiting society as a whole immediately, while possibly furthering the new idea with fresh thinking and more innovation.

These observations are but just a few points worth consideration regarding some of the inherent shortcomings of our present system of capitalism.

Buy Low Sell High?

We've all been told that the secret to success is to "buy low and sell high", but buying something dirt cheap and then selling for 400x profit is as criminal as blatant theft. It is demeaning and derogatory to a system allegedly based on fair trade.

This concept of capitalism, when taken to the extreme, does nothing but drive up the prices of other goods and services through an escalating domino-type effect.

While supply and demand are often the noted keys for moving our economy, greed has become an integral component in driving the price of goods ever higher under capitalism.

Everything in a mutual economy is tied together. When the price of some items rise, other goods do as well, in an effort to maintain a balance of affordability, but that model seldom ever resorts back to the lower price that we used to enjoy.

When you can buy something for a penny and sell it for 400 times it's cash value, that is indeed a problem and a hallmark characteristic of unchecked (bad) capitalism.

Regulate Capitalism

For years, the upper class and corporate elites railed against government regulation of the financial industry. Their mantra was for less Federal regulation and more free market enterprise, letting the markets decide what was best.

After $200-billion in bailouts for the savings and loan industry in the 1980s, and now nearly two trillion dollars for greedy banking and Wall Street institutions, it is clear that more government intervention is needed to oversee these entities, keeping watch over the avarice of the wealthy. The Reagan era deregulation of banking and financial services was, in hindsight, not the best idea. The continued 1990s deregulation, pushed by a Republican led Congress and signed by former President Bill Clinton, was the topper in the recent collapse of our capitalist house of cards. One thing should finally be apparent to all, we need government regulation.

In a nutshell, there need to be limits on our unchecked capitalism and our financial systems. The conservative theory that markets can regulate themselves has officially been proven as pure fallacy. Greed always finds a way to upset the equation.

Government Intervention Can Be A Good Thing

Like it or not, "We the People" set up government to protect us from ourselves, from those who would take advantage of and exploit society. The wealthy were most certainly one of the major entities that people feared the most, having previously had enough of kings, monarchs and the rich. "We the People" formed a public government "of the people, by the people and for the people" for a reason.

Ever wonder why the wealthy and corporate elite scream about too much government regulation? They don't want an overseer telling them to play the game fairly. They seek to play the game as they wish, unencumbered with regulation and unfettered in their drive for corporate hegemony.

...there is a class war raging in our country right now. It is a struggle steeped in avarice as the uber-wealthy seek to own it all.

We need to go back to government regulation of our financial sector. Regulations on capitalism would have a beneficial effect for all, helping stabilize goods and services to keep up with rising costs, without the runaway escalation of rapid price increases. It may be contrary to the notion of capitalism that we've been taught to accept, but just perhaps setting standards for pricing, possibly a percentage cap on product mark-up, very well may be an idea worth exploring.

Capitalism Gone Wild

Its well documented historically that Republicans like to spend our tax money, running up huge deficits and then not paying for them. They leave their exorbitant bills for a Democratic administration to clean up, forcing the Dems to raise taxes in order to dig ourselves out of a Republican dug hole. They then have the political underhandedness and immoral gall to call Democrats "tax and spend liberals."

This unfair allegation of a "tax and spend" liberal is a clear ruse that few fail to ever reason through. The concept of tax and spend is the root of capitalism, whether some like it or not. It is the exact same precept of work to earn a living and then spend your income, rather than the concept of spend first and then work to pay off your already purchased credit card debt.

A government earns its money through our tax system, so why is it that conservatives find the notion of tax and spend contrary to a sound fiscal process? They seem to have it backwards, continually overspending before we have the money, exceeding our preset budget by egregious amounts.

Fact: A Republican administration led us into the Great Depression and a Republican administration led us into our current economic fiasco. Obviously their flawed system of "Spend first, then tax" doesn't quite seem to work so well.

WWJD

Hopefully after reading this you may start to question whether unregulated capitalism is a good thing for any society. In all actuality, it is stifling and unbalanced, creating wealth for some while disparaging others.

Make no mistake about it, there is a class war raging in our country right now. It is a struggle steeped in avarice as the uber-wealthy seek to own it all. They try to paint our struggles as left versus right or black versus white, but the real discourse lies with the wealthy and its assault on the American middle and lower class.

We need to come to grips in this country with our brand of unchecked (under-regulated) capitalism. The rich have run the show for too long. As evidenced time and time again, the middle and lower class will always take the brunt for the upper class's greed.

Fundamentalist Christian conservatives need to ask themselves but one question, "What would Jesus do?" They all believe that Jesus will return one day to lead the world out of darkness. Accepting that as the case, which form of government rule would best define Jesus' efforts to help govern our world, 1) greed based capitalism, 2) socialism that supports the many, or 3) government run communism.

Jesus overturned the tables of the merchants and money changers once. It's hard to believe he wouldn't do it again.
 


This is not a pretty picture for humanity. We can do better as a society.
 


Fact: When The Rich Get Richer, The Rest of Us Get Poorer

Reagonomics and the "trickle down theory" is absolute pure bullshit.

Predatory Capitalism: How The Poor Get Poorer

American Capitalism

The L Curve: Income Distribution In The US

The graph in this video will amaze and anger you. (Unless you're a billionaire)

Bill Moyers: Plutonomy And Democracy Do Not Mix

A Common Sense Understanding of Our Economic System

You have to admit, he understands the problem pretty well.

The Story of Stuff
 

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What Most Donít Know About Our System of Currency  (The Federal Reserve)

Socialism Is Not A Dirty Word

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Class Warfare In America

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