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?
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
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,
run by altruistic and benevolent people. It is man and his greed that screws up
We've all been indoctrinated
from an early age to believe thatsocialism 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?
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
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
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
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
Like it or not, it's true in many
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
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
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.
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
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
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
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
...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."
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
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.
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.
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
the brunt for the upper class's greed.
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.
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
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.