(5-20-09) "Why Government Can't Run a Business (WSJ)

[Suzan]

This is an opinion piece with some excellent points. I was glad to see the author point out that capitalism isn't perfect, however. The right system, imo, is a balance of free market capitalism and government oversight to keep the sociopaths in check.

Politicians need headlines. Executives need profits.

The Obama administration is bent on becoming a major player in -- if not taking over entirely -- America's health-care, automobile and banking industries. Before that happens, it might be a good idea to look at the government's track record in running economic enterprises. It is terrible.
In 1913, for instance, thinking it was being overcharged by the steel companies for armor plate for warships, the federal government decided to build its own plant. It estimated that a plant with a 10,000-ton annual capacity could produce armor plate for only 70% of what the steel companies charged.

When the plant was finally finished, however -- three years after World War I had ended -- it was millions over budget and able to produce armor plate only at twice what the steel companies charged. It produced one batch and then shut down, never to reopen.

Or take Medicare. Other than the source of its premiums, Medicare is no different, economically, than a regular health-insurance company. But unlike, say, UnitedHealthcare, it is a bureaucracy-beclotted nightmare, riven with waste and fraud. Last year the Government Accountability Office estimated that no less than one-third of all Medicare disbursements for durable medical equipment, such as wheelchairs and hospital beds, were improper or fraudulent. Medicare was so lax in its oversight that it was approving orthopedic shoes for amputees.

These examples are not aberrations; they are typical of how governments run enterprises. There are a number of reasons why this is inherently so. Among them are:

1) Governments are run by politicians, not businessmen. Politicians can only make political decisions, not economic ones. They are, after all, first and foremost in the re-election business. Because of the need to be re-elected, politicians are always likely to have a short-term bias. What looks good right now is more important to politicians than long-term consequences even when those consequences can be easily foreseen. The gathering disaster of Social Security has been obvious for years, but politics has prevented needed reforms.

And politicians tend to favor parochial interests over sound economic sense. Consider a thought experiment. There is a national widget crisis and Sen. Wiley Snoot is chairman of the Senate Widget Committee. There are two technologies that are possible solutions to the problem, with Technology A widely thought to be the more promising of the two. But the company that has been developing Technology B is headquartered in Sen. Snoot's state and employs 40,000 workers there. Which technology is Sen. Snoot going to use his vast legislative influence to push?

2) Politicians need headlines. And this means they have a deep need to do something ("Sen. Snoot Moves on Widget Crisis!"), even when doing nothing would be the better option. Markets will always deal efficiently with gluts and shortages, but letting the market work doesn't produce favorable headlines and, indeed, often produces the opposite ("Sen. Snoot Fails to Move on Widget Crisis!").

3) Governments use other people's money. Corporations play with their own money. They are wealth-creating machines in which various people (investors, managers and labor) come together under a defined set of rules in hopes of creating more wealth collectively than they can create separately.
So a labor negotiation in a corporation is a negotiation over how to divide the wealth that is created between stockholders and workers. Each side knows that if they drive too hard a bargain they risk killing the goose that lays golden eggs for both sides. Just ask General Motors and the United Auto Workers.

But when, say, a school board sits down to negotiate with a teachers union or decide how many administrators are needed, the goose is the taxpayer. That's why public-service employees now often have much more generous benefits than their private-sector counterparts. And that's why the New York City public school system had an administrator-to-student ratio 10 times as high as the city's Catholic school system, at least until Mayor Michael Bloomberg (a more than competent businessman before he entered politics) took charge of the system.

4) Government does not tolerate competition. The Obama administration is talking about creating a "public option" that would compete in the health-insurance marketplace with profit-seeking companies. But has a government entity ever competed successfully on a level playing field with private companies? I don't know of one.

5) Government enterprises are almost always monopolies and thus do not face competition at all. But competition is exactly what makes capitalism so successful an economic system. The lack of it has always doomed socialist economies.

When the federal government nationalized the phone system in 1917, justifying it as a wartime measure that would lower costs, it turned it over to the Post Office to run. (The process was called "postalization," a word that should send shivers down the back of any believer in free markets.) But despite the promise of lower prices, practically the first thing the Post Office did when it took over was . . . raise prices.

Cost cutting is alien to the culture of all bureaucracies. Indeed, when cost cutting is inescapable, bureaucracies often make cuts that will produce maximum public inconvenience, generating political pressure to reverse the cuts.

6) Successful corporations are run by benevolent despots. The CEO of a corporation has the power to manage effectively. He decides company policy, organizes the corporate structure, and allocates resources pretty much as he thinks best. The board of directors ordinarily does nothing more than ratify his moves (or, of course, fire him). This allows a company to act quickly when needed.

But American government was designed by the Founding Fathers to be inefficient, and inefficient it most certainly is. The president is the government's CEO, but except for trivial matters he can't do anything without the permission of two separate, very large committees (the House and Senate) whose members have their own political agendas. Government always has many cooks, which is why the government's broth is so often spoiled.

7) Government is regulated by government. When "postalization" of the nation's phone system appeared imminent in 1917, Theodore Vail, the president of AT&T, admitted that his company was, effectively, a monopoly. But he noted that "all monopolies should be regulated. Government ownership would be an unregulated monopoly."

It is government's job to make and enforce the rules that allow a civilized society to flourish. But it has a dismal record of regulating itself. Imagine, for instance, if a corporation, seeking to make its bottom line look better, transferred employee contributions from the company pension fund to its own accounts, replaced the money with general obligation corporate bonds, and called the money it expropriated income. We all know what would happen: The company accountants would refuse to certify the books and management would likely -- and rightly -- end up in jail.

But that is exactly what the federal government (which, unlike corporations, decides how to keep its own books) does with Social Security. In the late 1990s, the government was running what it -- and a largely unquestioning Washington press corps -- called budget "surpluses." But the national debt still increased in every single one of those years because the government was borrowing money to create the "surpluses."

Capitalism isn't perfect. Indeed, to paraphrase Winston Churchill's famous description of democracy, it's the worst economic system except for all the others. But the inescapable fact is that only the profit motive and competition keep enterprises lean, efficient, innovative and customer-oriented.

Full article: http://online.wsj.com/article/SB124277530070436823.html#printMode

[Laura Cereta]

Thank you for posting this, Suzan. This is an excellent article. There is so much of it I could comment on. In regards to your comments about liking that they admit capitalism isn't perfect, I agree. I think it's important to recognize the ugly sides of capitalism without going to the extreme that it should be replaced.


5) Government enterprises are almost always monopolies and thus do not face competition at all. But competition is exactly what makes capitalism so successful an economic system. The lack of it has always doomed socialist economies.



Notice the word "always" there. No, not every socialist economy has imploded, but a socialist economy will never produce the wealth and therefore the high living conditions that exist in the U.S. One can hate the greed of capitalism but it brings us a standard of living that many in the world don't enjoy. It brings opportunities that no one in the world can match. I'm not willing to give that up.

[CGP]

One can hate the greed of capitalism but it brings us a standard of living that many in the world don't enjoy. It brings opportunities that no one in the world can match.

I don't know about that Laura. I think many people in this country would beg to differ. America does not have the best standard of living in the world by any means. Not all "opportunities" are necessarily good ones either, especially when they are pursued/enacted at the expense of many other citizens.

[Laura Cereta]

I don't know about that Laura. I think many people in this country would beg to differ. America does not have the best standard of living in the world by any means. Not all "opportunities" are necessarily good ones either, especially when they are pursued/enacted at the expense of many other citizens.

On an overall scale, no, you're right. I was referring specifically to our money-making capacity. There are many other aspects of society, mostly sociological ones, where other countries have a better standard of living then the U.S. I don't blame capitalism for this, though; I blame biased, ingrained Puritan patriarchal cutural values.

[CGP]

On an overall scale, no, you're right. I was referring specifically to our money-making capacity. There are many other aspects of society, mostly sociological ones, where other countries have a better standard of living then the U.S. I don't blame capitalism for this, though; I blame biased, ingrained Puritan patriarchal cutural values.

Ok. Got it.

[Classical Liberal]

Regarding things like capitalism, "greed," etc...people seem to think as if "capitalism" and "socialism" are alternative systems or something. The truth is that "capitalism" is simply reality. It isn't a "system" really, it's just the reality. The reality is that there is a limited amount of resources in society. An economy has to ration these resources around the society. Allowing people to do this via the market, under the rule of law, works very well. Trying to centrally organize it works horribly.

Even within socialist economies, capitalism functions, just in a screwy form, usually as a black market. There are different variants of capitalism.

Everywhere you find capitalism, you do not find freedom, but everywhere you find freedom, you find capitalism, people engaging in voluntary cooperation and free trade.

The government's job is to facilitate that capitalism functions in a way in which people's rights are protected.

For example, the law and government is there to protect intellectual property, enforce contracts, there's the banking and financial system, there's what we call companies, which are actually a government creation, but the modern form of the company is a tremendous wealth-creating machine, and government can regulate in certain instances where required, etc...and this allows capitalism in the West to function well.

Without these, you get screwy forms of capitalism, like in Russia for example where ordinary businessmen must walk around with bodyguards all the time because their competitors try to kill them, literally!! You can't trust the government to enforce the law there!

But nevertheless, capitalism will occur.

For example, let's say in the Soviet Union your TV broke. Well you'd have to call the state repair agency, so you could expect it to take 1000+ years before your TV would get fixed (so you could watch the one channel they had), and that was if they repaired it right the first time.

Well you might say to a repairman, "I will trade (pay) you this or that service if you will come fix my television," basically barter occurs.

Such rough forms of capitalism occurred in the Soviet Union.

The main reason socialism fails is because the government tries to centrally ration the economy. The price system is how to ration resources in an economy. In a properly-functioning free-market economy, the millions of interconnected prices all fluctuate in relation to each other.

The system works fine itself, because each person and business changes how much they buy or sell in relation to the prices.

With a socialist economy, the government actually centrally controls the prices, so if they change the price of say wheels for trucks, well then chances are millions of other prices all connected to the making of wheels have to be changed as well, but then there's millions of prices for EACH of those millions of prices that must fluctuate as well...hence, it is a MONUMENTAL task that is impossible to do. You have millions of prices all flucatuating in relation to each other constantly.

Hence no government can ration the resources properly in a socialist system. This leads to constant surpluses and shortages.

It's also simply impossible to know what is wanted and what is not wanted by the people. Imagine the government decided to nationalize the whole supermarket industry. No more evil for-profit supermarkets, the government will take over. Now imagine them trying to centrally figure out specifically how many potatoes to send to each area of America. You'd have to figure out how many potatoes had to go to each state, then how many to go into each county, then each city and town, etc...along with what is the demand? What if some people don't want potatoes?

If you ration each person seven potatoes a week, well capitalism via the black market will occur. Maybe one person wants fourteen potatoes and one person wants fourteen tomatoes, but each person get seven potatoes and seven tomatoes a week, so people decide to trade. "I'll trade you seven potatoes for your seven tomatoes."

Hence even in such a socialist economy, capitalism occurs.

Then imagine trying to pull this rationing off for the thousands of other products offered by the supermarkets.

Then imagine trying to pull this off with a collectivized farming industry in which massive crop failures keep occuring because no one is motivated to work (the Soviet Union farming industry had to actually be partially privatized just to keep the whole country from starving).

Imagine trying to pull off the above for malls!!! Imagine the government trying to figure out how many tons of steel to produce, and send to here and there, imagine trying to figure how much concrete to produce. The calculations are extraordinarily complex.

When people from the former Soviet Union came to America, they almost feinted when they saw standard supermarkets. Upon seeing malls, and it was a heavenly experience.

When Gorbachev saw the markets in the United Kingdom under Margaret Thatcher, he was dumbfounded, and said to her, "How do you see to it that people get food!?" The answer of course if she didn't, prices did that. The British haven't produced enough food to feed themselves for years.

Many think a socialist economy could work if only all of the people had hearts of gold, but really even if all of the people running a socialist economy were truly good people, the system would still fail horribly, simply because no central bureaucracy can ration.

And then of course this ignores all of the waste and fraud and corruption that occurred in the Soviet Union.

Now capitalism, that would work fine if everyone had a good heart. No one would try to steal anyone else's business ideas, no one would try to screw anyone else over, no one would try to do anything on the ultra-cheap resulting in hurting employees, etc...

As for "greed," remember greed isn't necessarily bad. If you define greed as simply seeking to advance one's economic interests as much as possible, without hurting anyone else, then greed is fine.

Remember, a true capitalist seeks to help people. You might not care about them, but you must seek to help them to get them to buy your product so you can become rich. You create a business, that in addition to creating jobs and economic growth and making yourself rich, also must provide a product or service that people WANT or need, so that they will buy it.

Fill needs, solve problems, make things easier for people, streamline systems better than your competitors, do things better. This is what makes capitalism work so much better.

With monopolies, government enterprises have no incentive to do this, or even to economize. And half the time they cannot even get the resources they need because as said the government cannot ration properly.

Greed for things like knowledge, greed for love, etc...it depends.

I don't know about that Laura. I think many people in this country would beg to differ. America does not have the best standard of living in the world by any means. Not all "opportunities" are necessarily good ones either, especially when they are pursued/enacted at the expense of many other citizens.

I would have to disagree CGP!

The United States has the world's highest standard of living, aside from perhaps Switzerland, which is more "American" then America is in many respects.

Nowhere in the world does one have the plethora of opportunities to make it as they do in the United States of America.

What countries do you think have a higher standard of living than the United States?

[Classical Liberal]

This is an opinion piece with some excellent points. I was glad to see the author point out that capitalism isn't perfect, however. The right system, imo, is a balance of free market capitalism and government oversight to keep the sociopaths in check.

You are going to one to slap me, but see, the idea of creating a "balance" between free-market capitalism and government is close to fascism; not quite the same thing, but very close.

That's what Mussolini and Adolf Hitler ran on. Because no one trusted free-market capitalism because the depression was on, but they hated Marxism as well. Fascism was seen as a balance between the two.

What often happens is people first become socialists, than learn socialism doesn't work, so they revert to the "I believe in capitalism, but it needs a balance with government regulation," but this gets perilously close to fascism.

Remember, many forms of fascism are friendly, fascism is NOT a synonymn for Nazism, the National Socialist party of Germany was one variant of fascist.

Our modern United States, in a sense, is a quasi-fascist state, but not in the form the Left thinks (that it is a quasi-Nazi state). But it has many fascist elements.

[Ikasu]

You are going to one to slap me, but see, the idea of creating a "balance" between free-market capitalism and government is close to fascism; not quite the same thing, but very close.

That's what Mussolini and Adolf Hitler ran on. Because no one trusted free-market capitalism because the depression was on, but they hated Marxism as well. Fascism was seen as a balance between the two.

What often happens is people first become socialists, than learn socialism doesn't work, so they revert to the "I believe in capitalism, but it needs a balance with government regulation," but this gets perilously close to fascism.

Remember, many forms of fascism are friendly, fascism is NOT a synonymn for Nazism, the National Socialist party of Germany was one variant of fascist.

Our modern United States, in a sense, is a quasi-fascist state, but not in the form the Left thinks (that it is a quasi-Nazi state). But it has many fascist elements.

And when corporations and Wall Street become too powerful as a result and start controlling government for their own interests, that is a form of fascism because they effectively own the government. Reverse fascism if you want to call it something.

[Classical Liberal]

And when corporations and Wall Street become too powerful as a result and start controlling government for their own interests, that is a form of fascism because they effectively own the government. Reverse fascism if you want to call it something.

Well see the thing is, the corporations and Wall Street can't become "too powerful" as long as government is limited.

The standard view of the political Left is that without proper government oversight, big corporations will take over and dominate and control government.

The reality is just the opposite: it is the very regulation and growth of government that causes business and government to get into bed with each other.

Remember, the more government tries to regulate business, the more business tries to regulate government.

When Barack Obama talks about massively expanding government into healthcare, education, and energy, and so forth, and then getting rid of the special interests in Washington, he is living in a fantasyworld, because the more government expands into such industries, the more armies of lobbyists the business community sends into Washington to try to twist this regulation to their own benefit.

When he expands the government into healthcare, energy, and education more, legions more lobbyists are going to be sent to Washington.

We have as many special interests as we do today because of the innumerable alphabet soup of government agencies that exist.

When you regulate excessively, it benefits big business because the regulations become so choking they cut out small businesses and allow big business to take over and conquer. This is what happened in Germany and Italy under Mussolini and Hitler.

Look at the most regulate industries:

The big meatpacking businesses supported the Meat Inspection Act under Teddy Roosevelt because they knew it would squeeze out smaller competitors.

The big players of the tobacco industry got themselves a cartel through these high tobacco taxes because it kills off smaller competitors.

The pharmaceuticals industry has a cartel or oligopoly because pharamaceuticals are so regulated. For example, first you'd have to develop the drug, then it takes about ten to fifteen years to get it approved by the FDA. So who in their right mind would start a pharmaceuticals company?

Banking had a oligopoly until Reagan deregulated it.

Wal-Mart supports a higher minimum wage because they know it will make it tougher for the smaller businesses to compete with them.

The big airlines oftentimes lobby for tougher regulations to cut out smaller airline competitors.

The big oil companies lobbies for tough environmental regulations to limit competition.

The heavy regulation of the waste management industry allowed the huge big businesses in that industry to grow far more easily because it became much tougher for smaller competitors to compete due to the compliance costs.

And so on.

I will bet that both Coca Cola and Pepsi will enthusiastically support a tax on soda. They are so huge that at most they only need to raise their prices a fraction of a cent to handle the tax.

Meanwhile Joe Bob the entrepreneur who owns a regional soft drink company, is going to get screwed because he'll have to raise his prices, lower what he pays his employees, or some other cut, which makes it tougher to compete with Coke and Pepsi.

The only exceptions to this rule are that in an underdeveloped free-market economy, trusts can form in certain industries, for example during the 19th century, you saw industries such as railroads, steel, coal, oil, etc...become dominated by huge, massive companies that wiped out their competitors and swallowed up businesses and gained monopolies.

However, for the event this happens, that's what anti-trust laws are for.

In general however, in a developed free-market, monopolies and trusts are tough to build, and only form when regulations of the markets are excessive.

Remember, regulations can start off light, the problem is government agencies have an inherent tendency to grow and grow and regulate and regulate more and more. As they do so, Big Business takes advantage of this.

[Suzan]

Originally posted by Classical Liberal
Remember, many forms of fascism are friendly, fascism is NOT a synonymn for Nazism, the National Socialist party of Germany was one variant of fascist.

I guess that would make me a friendly fascist. **== :D

Actually, I can't think of any political terms that didn't have a positive connotation before the opposing side got ahold of them. We do like to demonize whatever we don't agree with.

Now, can you tell me a time when free market capitalism, left to its own devices, didn't run amuck? Life and business aren't that different, or that difficult. Most people aren't naturally altruistic, sad as that is. There have to be some rules, some boundaries. Even a glance at the history of the civilization will tell you that.

And no, I don't want to slap you, at least not at the moment, lol. You have a very interesting take on things.

[Classical Liberal]

I guess that would make me a friendly fascist. **== :D

Being a friendly fascist isn't necessarily bad, just remember, a loving embrace from which one cannot escape is still a form of tyranny.

Hillary Clinton is technically a form of fascist, but she is no evil Nazi. But since she supports bigger government and universal healthcare, and so forth, that's a form of friendly fascism.

Actually, I can't think of any political terms that didn't have a positive connotation before the opposing side got ahold of them. We do like to demonize whatever we don't agree with.

Now, can you tell me a time when free market capitalism, left to its own devices, didn't run amuck? Life and business aren't that different, or that difficult. Most people aren't naturally altruistic, sad as that is. There have to be some rules, some boundaries. Even a glance at the history of the civilization will tell you that.

Sure, just don't seek a "balance" between free market and government. Have light, efficient regulation and limited government, otherwise, leave the free-market to its own devices.

Light efficient regulation to prevent certain bad things, while leaving the market free to be the free-market, works well.

And no, I don't want to slap you, at least not at the moment, lol. You have a very interesting take on things.

Fascism is a very interesting topic. It is a very loaded word unfortunately, people think if you call them a fascist, you are calling them a Nazi, but technically that is very untrue.

Some scholars even debate whether Nazism was fascism, or something else altogether, because Nazism was very unique as a form of fascism in its radical racism.

[sojourner]

Fascism is a very interesting topic. It is a very loaded word unfortunately, people think if you call them a fascist, you are calling them a Nazi, but technically that is very untrue.

Some scholars even debate whether Nazism was fascism, or something else altogether, because Nazism was very unique as a form of fascism in its radical racism.

Here is my definition of fascism: a political philosophy, movement, or regime that puts government above the individual and that stands for a centralized autocratic government headed by a dictatorial leader (or a one party system like the old soviet union), severe economic and social regimentation, and forcible suppression of opposition.

I am hard pressed to think of any fascist controlled countries that I would consider friendly or a nice place to live. Two that come to mind are Cuba and North Korea. Benign dictators are a fantasy. Caster was going to bring democracy to Cuba and look how that turned out. Hillary may be a friendly fascist in that she is pushing her health care reform for noble reasons, but it still puts the state above the individual, plus we all know how state run anything turns out.

[Suzan]

Originally posted by Classical Liberal
Now capitalism, that would work fine if everyone had a good heart. No one would try to steal anyone else's business ideas, no one would try to screw anyone else over, no one would try to do anything on the ultra-cheap resulting in hurting employees, etc...

As for "greed," remember greed isn't necessarily bad. If you define greed as simply seeking to advance one's economic interests as much as possible, without hurting anyone else, then greed is fine.

Remember, a true capitalist seeks to help people. You might not care about them, but you must seek to help them to get them to buy your product so you can become rich. You create a business, that in addition to creating jobs and economic growth and making yourself rich, also must provide a product or service that people WANT or need, so that they will buy it.

Fill needs, solve problems, make things easier for people, streamline systems better than your competitors, do things better. This is what makes capitalism work so much better.

I don't disagree that capitalism works better to create wealth and resources, but is that all it takes to sustain a society of people with complex needs? I would say no. I don't agree that it isn't a system. In some ways it's actually a very limited system that can't possibly adapt because it's based on profit motive--and humans don't live by profit alone.

I'm recalling when the CEO of Exxon was interviewed about the skyrocketing gas prices at a time when Exxon's profits were at all-time highs. Gas prices were approaching $5 a gallon and he was asked about the burden on wage earners. He said his only obligation was to his stockholders. I'm paraphrasing but that was the jist of it. He simply couldn't see that there was a greater good involved, something more essential than making money for his stockholders.

That's the best example I can come up with at the moment for the limits of capitalism. It's an engine run by money. Compassion can't be any part of the mix because that might cut into profit margins. Pure unfettered capitalism is a soulless enterprise, which might be able to factor in millions of interconnected prices but can't factor in the simplest of human needs. And greed isn't good. Greed is the instinct that made Madoff create a Ponzi scheme to rip off billions from his investors, including charities.

Ambition is good. The will to succeed is good. Perhaps that's what you meant, but those are much more complex motives than greed. And then, of course, we have to define success. For a capitalist, it's probably found in a financial balance sheet. That would not be true of a socialist, and probably not a friendly fascist, the way you define one.

Other than that, I agree with you, lol.

[Suzan]

Here is my definition of fascism: a political philosophy, movement, or regime that puts government above the individual and that stands for a centralized autocratic government headed by a dictatorial leader (or a one party system like the old soviet union), severe economic and social regimentation, and forcible suppression of opposition.

I am hard pressed to think of any fascist controlled countries that I would consider friendly or a nice place to live. Two that come to mind are Cuba and North Korea. Benign dictators are a fantasy. Caster was going to bring democracy to Cuba and look how that turned out. Hillary may be a friendly fascist in that she is pushing her health care reform for noble reasons, but it still puts the state above the individual, plus we all know how state run anything turns out.

That would be pretty close to my definition of fascism too. I think that's how it's commonly understood today. And given that definition, Hillary isn't a fascist, friendly or otherwise. I like to think of her as a problem solver, using the best of whatever our various systems have to offer to get things done.

She's a pragmatist, really, who thinks of the state as the servant of the individual, not the other way around.

[The_Basseteer]

I'm recalling when the CEO of Exxon was interviewed about the skyrocketing gas prices at a time when Exxon's profits were at all-time highs. Gas prices were approaching $5 a gallon and he was asked about the burden on wage earners. He said his only obligation was to his stockholders. I'm paraphrasing but that was the jist of it. He simply couldn't see that there was a greater good involved, something more essential than making money for his stockholders.


And If you will remember, at that point people quit driving as much... the stocks of fuel begin to rise..the price of oil begin to drop.the market does work.

[Classical Liberal]

I don't disagree that capitalism works better to create wealth and resources, but is that all it takes to sustain a society of people with complex needs? I would say no. I don't agree that it isn't a system. In some ways it's actually a very limited system that can't possibly adapt because it's based on profit motive--and humans don't live by profit alone.

I'm recalling when the CEO of Exxon was interviewed about the skyrocketing gas prices at a time when Exxon's profits were at all-time highs. Gas prices were approaching $5 a gallon and he was asked about the burden on wage earners. He said his only obligation was to his stockholders. I'm paraphrasing but that was the jist of it. He simply couldn't see that there was a greater good involved, something more essential than making money for his stockholders.

That's fascist (literally!), the idea that corporations exist for the "greater good," or have an obligation to the "greater good." That is one of the primary differences between the American form of capitalism and the early German and Japanese forms of capitalism, which led to their fascisms.

A corporation's only obligation is to its shareholders, as long as it isn't harming people. The thing is, Exxon doesn't control fuel prices, and they operate on a very small profit margin. The oil industry cycles up and down, they have up periods where they make money and down periods where they don't make much money.

People get antsy about the oil companies making huge profits in a free-market, but it's a free-market, no one forces anyone to drive an SUV, and the oil companies, as I said, function on a low profit margin, one of the smallest in all of industry.

The global price of crude, which directly influences the price of gasoline and so forth, is controlled by state-owned oil companies beyond our control.

It's the profit margin that counts, not the profit itself.

That's the best example I can come up with at the moment for the limits of capitalism. It's an engine run by money. Compassion can't be any part of the mix because that might cut into profit margins. Pure unfettered capitalism is a soulless enterprise, which might be able to factor in millions of interconnected prices but can't factor in the simplest of human needs. And greed isn't good. Greed is the instinct that made Madoff create a Ponzi scheme to rip off billions from his investors, including charities.

That isn't "limitless capitalism," that is REALITY. Do you think a government-run agency is more "compassionate" than a capitalist enterprise? Do you think the government isn't greedy and corrupt?

Greed can be fine, it's the bad forms of greed, like Madoff, that are bad. Capitalism very much factors in the simplest of human needs, the market forces it too. That's how you make money. Everything you use, from the forks you eat, to the chair you sit in, to the clothes you wear, to the home you live in, comes from the private sector.

It works because humans seek to advance their own economic interests, and the only way to do that is to provide something someone else wants. Most people do this by learning a skill or set of skills and offer it out to businesses, who hire them. Others build the business that offer services and/or products of various kinds.

Trade is the foundation. The way money forms is that people start trading and eventually one particular item becomes tradable for anything. Historically, for example, gold has proven to be tradeable for anything. So it becomes money. In prison, cigarettes are tradable for anything, so they are money.

In advanced economies, the government controls the money supply and currency, but I mean you get the basic idea, it all is grounded in trade.

Ambition is good. The will to succeed is good. Perhaps that's what you meant, but those are much more complex motives than greed. And then, of course, we have to define success. For a capitalist, it's probably found in a financial balance sheet. That would not be true of a socialist, and probably not a friendly fascist, the way you define one.

Other than that, I agree with you, lol.

That depends. Socialists can be very greedy, they seek to control everything.

An entrepreneur can be very much bent on altruism and helping society, that is the idea of building businesses. Create products or services that fill needs and solve problems, and in the process create jobs and economic growth.

A very noble profession when you think about it.

Politicians oftentimes say, "I went into government to serve for patriotism and not for profit," YEAH RIGHT, that goes both ways, people go into government for POWER, only a few for true service.

Same thing with entrepreneurship, you might not care about anyone, but you still do good through your business to make $$$, but certain entrepreneurs care very much about helping people and that is why they create the businesses they do.

Or trial lawyers, yeah some trial lawyers care truly about helping people from unscrupulous companies, others are just after tons of $$$ for themselves and don't care how many well-meaning companies they cause to go out of business.

[The_Basseteer]

Classical Liberal, I'm giving you one of my signatures for THAT post.

Use it well..

"In a time of universal deceit, telling the truth becomes a revolutionary act."--George Orwell

[Suzan]

That isn't "limitless capitalism," that is REALITY. Do you think a government-run agency is more "compassionate" than a capitalist enterprise? Do you think the government isn't greedy and corrupt?[/B]

Absolutely. No question about it. As the article points out, the government doesn't have to make a profit. The goal of pure socialism, for example, is meeting everyone's needs. Ideally, no one falls through the cracks. Even in a mixed system like ours, safeguards are built in. There are no safeguards built into pure capitalism. Lots of people fall through the cracks.

The top 1 to 5% in this country control 90% of the wealth. That leaves what, 10% for the rest of us? That can't happen in a socialistic system, but at least everyone's basic needs are met. No one goes without food, work, health coverage, etc. There are no guarantees of that with capitalism, obviously. Look at this country, supposedly with one of the highest standards of living in the world.

Greed can be fine, it's the bad forms of greed, like Madoff, that are bad. Capitalism very much factors in the simplest of human needs, the market forces it too. That's how you make money. Everything you use, from the forks you eat, to the chair you sit in, to the clothes you wear, to the home you live in, comes from the private sector.

Greed isn't fine, again because of the motives on which its based. Obviously, Madoff's "bad" greed was once good greed. From all accounts, he didn't start out to destroy everyone, including his own family, just to make as much money as he possibly could. He's an excellent example of capitalism gone wrong. $50 billion worth of wrong. And why? Because he's a sociopath and no one was checking up on him.

How does capitalism safeguard us against sociopaths? It doesn't.

It works because humans seek to advance their own economic interests, and the only way to do that is to provide something someone else wants. Most people do this by learning a skill or set of skills and offer it out to businesses, who hire them. Others build the business that offer services and/or products of various kinds.

It also fails for these reasons. You're regurgitating facts (one hopes) and figures. I'm talking about the human factor. There are millions, tens of millions, that capitalism fails on a regular basis. What about the single mom who works three jobs and still can't make ends meet because of wages driven down by competition? We all know people like this. Some of us were/are people like this. When does she have the time or the money to learn a new set of skills? She can't. In this system, she's stuck. She can't even get health insurance--and that's not the result our current economic crisis. That always was the case for her and 75 million like her.

No offense intended. As I've mentioned, your ideas are fascinating, but they're coming from books. All you have to do is put down the books and have a look around you to see the failures of capitalism. They probably live in your neighborhood and they'll never get ahead--and weren't getting ahead prior to the meltdown, not because they weren't working hard enough. Many of them were working like dogs when they had jobs, but they couldn't make a living wage at any of those jobs. History is littered with those failtures too.

It's fine to talk about capitalism in theoretical and abstract terms. But how does it work across the entire socioeconomic spectrum when it's applied? In the real world? In your neighborhood and mine? Not so well for lots of folks. I'm not arguing for socialism. I agree that it's also a flawed and limited system, but at least under it, they'd have their basic needs met.

[agatha]

I'm recalling when the CEO of Exxon was interviewed about the skyrocketing gas prices at a time when Exxon's profits were at all-time highs. Gas prices were approaching $5 a gallon and he was asked about the burden on wage earners. He said his only obligation was to his stockholders. I'm paraphrasing but that was the jist of it. He simply couldn't see that there was a greater good involved, something more essential than making money for his stockholders.


I'm recalling Houston during the early 80's. Crazy unemployment numbers, foreclosures, houses and businesses being abandoned and left to rot... If business should be concerned about the "greater good" of society, then does society need to be concerned about the "greater good" of business?

Oh and did you know that something like 80% of "big oil company" stock is owned by average, everyday Americans in their 401Ks and the like! The vast majority of those stockholders are teacher, firefighters, police officers...

And greed isn't good. Greed is the instinct that made Madoff create a Ponzi scheme to rip off billions from his investors, including charities.

Madoff is a criminal. Seeing a societal need/want/desire and filling it in a legal way so as to make a profit isn't criminal. So if by "greed" you mean unethical, then yes, "greed" isn't good.

[Suzan]

Originally posted by Agatha
I'm recalling Houston during the early 80's. Crazy unemployment numbers, foreclosures, houses and businesses being abandoned and left to rot... If business should be concerned about the "greater good" of society, then does society need to be concerned about the "greater good" of business?

Yes, absolutely. Both are dependent on each other. In my original post, I was only asking for the "balance" necessary to make that happen.

Oh and did you know that something like 80% of "big oil company" stock is owned by average, everyday Americans in their 401Ks and the like! The vast majority of those stockholders are teacher, firefighters, police officers...

No, I didn't. Lucky them. Their 401Ks must be doing much better than mine, lol. I was talking about the ones without 401Ks, the ones capitalism has failed. And I don't mean entitlement psychology, i.e., people who feel life should be handed to them. I'm talking about ones who work their butts off, but are trapped in low-paying jobs. My mother was a perfect example, divorced, work fiendishly hard to take care of her kids, finally was able to put herself through vocational school at 52, when all of us were grown and gone, and got a job as a records clerk for the county, which provided her with health care and a minimal retirement she would not otherwise have had.

Still, she lived all her life at the poverty level, even on county wages. And I will say again, that I've never met anyone who worked harder. She literally worked herself into the grave, and she's just one of millions in this country.

Madoff is a criminal. Seeing a societal need/want/desire and filling it in a legal way so as to make a profit isn't criminal. So if by "greed" you mean unethical, then yes, "greed" isn't good.

Yes, unethical. Madoff is a sociopath who became a criminal. Those are the most likely to successfully game a system like capitalism and use it against the ethical ones. A study some years back showed that something like 80% of the Fortune 500 CEOs tested had significant sociopathic tendencies. Apparently, to make the most of capitalism, it helps not to have a functioning conscience, lol.

[Suzan]

And If you will remember, at that point people quit driving as much... the stocks of fuel begin to rise..the price of oil begin to drop.the market does work.

But not before lots of them were forced out of business and lost everything. I guess for the market that's just collateral damage, yes?

The market cares only about who succeeds. It's Darwinian, and there's no safety net for the casualties. They're expendable, apparently, because when you live by the market you die by the market, and that's a good thing, right? It's just and fair?

They're not real people, just statistics, casualties of a system that thinks in dollar signs, not human blood, sweat and tears.

[sojourner]

Capitalism is an economic system in which wealth, and the means of producing wealth, are privately owned. Through capitalism, the land, labor, and capital are owned, operated, and traded for the purpose of generating profits. Investments, distribution, income, production, pricing and supply of goods, commodities and services are determined by voluntary private decision in a market economy.

Economics is the study of the use of scarce resources that have alternate uses. Free market Capitalism is the best economic system for achieving that objective because:
(1) An open market is the best mechanism for allocating resources.
(2) Competition forces efficiency. Inefficient production of goods or services are allowed to fail.
(3) It encourages startups to take risks in hopes of financial rewards if successful.

Capitalism is the reason we have so many things we take for granted today. I have more computing power in my $400 Treo than was in the $35,000 onboard computer system that took men to the moon. And my next one will be cheaper, be more reliable, and have more features. Does anyone really believe that could be achieved under any other economic system?

Yes, the Bill Gates and Michael Dells of the world are very wealthy and it was capitalism that made them that way. I, for one, believe it is a small price to pay for the goods and services they deliver.

I agree that there are social issues that capitalism does not address, but it is capitalism that allows us to create the wealth needed to address these issues. It is the goose that lays the golden eggs, let’s not kill it.

When government gets involved they invariable make things worse. Price controls result in declines in product quantity and quality. Price control on gasoline under Nixon is a good example. Rent controls intended to help the poor lead to a reduction in low income housing. New York City and San Francisco have the strongest price controls and the largest populations of homeless.

Wage controls may benefit people that already have jobs but their net effect is to reduce the number of entry level jobs hurting the very people they were designed to help.

And don’t get me started on healthcare delivery in the US. It is so far from open market capitalism that it is laughable. For openers price competition is practically nonexistent. The patient’s ability to drive the market is also missing. Because of medical insurance patients are not forces to weight the benefits of a medical procedure against alternate uses of funds, even against other medical procedures. Just going to HSAs and major medical insurance with high deductibles and no coverage for elective procedures would be a major improvement. It would force some open market supply and demand back into the system.

[The_Basseteer]

But not before lots of them were forced out of business and lost everything. I guess for the market that's just collateral damage, yes?

The market cares only about who succeeds. It's Darwinian, and there's no safety net for the casualties. They're expendable, apparently, because when you live by the market you die by the market, and that's a good thing, right? It's just and fair?

They're not real people, just statistics, casualties of a system that thinks in dollar signs, not human blood, sweat and tears.

.....and that is a BIG difference between Liberals/Progressive and Conservatives; Conservatives see equality of opportunity, "LibProgs" want equality of outcome.

But, returning to the topic of the thread;
From: Right Wing News
(http://rightwingnews.com/)
Wouldn't It Be Ironic If Obama Ended Up Decimating Unions In America?
(http://rightwingnews.com/mt331/2009/05/wouldnt_it_be_ironic_if_obama.php)
At best, what Barack Obama did at Chrysler was a grotesque abuse of power and at worst, it was a criminal act that merits his being put in a cell next to Duke Cunningham. The President of the United States should not be using billions of taxpayers dollars to maneuver his political allies into the driver's seat of a company like Chrysler.

This has not been lost on the people whom union companies are going to need to have to rely on for future funding, (http://www.bloomberg.com/apps/news?pid=20601087&sid=asXxg9ZZRjv4&refer=home)

Hedge fund manager George Schultze says he may avoid lending to any more unionized companies after being burned by President Barack Obama in Chrysler LLC's bankruptcy.

Obama put Chrysler under court protection on April 30 after lenders balked at a proposal giving them about 29 cents on the dollar for their $6.9 billion in debt. The investors said the president's plan favored a union retiree medical fund whose claims ranked behind them for repayment. It was offered a 55 percent equity stake in the automaker.

Pacific Investment Management Co., Barclays Capital and Fridson Investment Advisors have joined Schultze Asset Management LLC in saying lenders may be unwilling to back unionized companies with underfunded pension and medical obligations, such as airlines and auto-industry suppliers, because Chrysler's creditors failed to block Obama's move. The reluctance may put additional pressure on borrowers seeking capital in the worst financial crisis since the Great Depression.

"Lenders will have to figure out how to price this risk," Schultze, 39, said in a telephone interview from his office in Purchase, New York. "The obvious one is: Don't lend to a company with big legacy liabilities or demand a much higher rate of interest because you may be leapfrogged in a bankruptcy."

..."Anything that involves a large number of jobs or affects a large number of people, you can expect to see a Chrysler redux," Jerry del Missier, president of Barclays Capital, said in an interview from his New York office. "One of the consequences here is the so-called speculators, people who provide financing, will think twice about getting involved."

Barclays Plc, based in London, is the third-biggest U.K. bank.

'Rights Were Trashed'

Jack Welch, former chief executive officer of General Electric Co., criticized how the government handled Chrysler's bankruptcy, saying unions were favored at the expense of creditors.

"I didn't like the terms," Welch, 73, said in an interview yesterday at the Boston Convention Center. "The creditors' rights were trashed and the unions got 55 percent of the company."

...General Motors Corp., which accepted $15.4 billion in U.S. taxpayer aid, is also giving unions preferential treatment over bondholders in its restructuring, even though their claims rank equally. The biggest owners of GM debt include San Mateo, California-based Franklin Resources Inc. and Capital Research & Management Co. of Los Angeles, regulatory filings show.

..."It's terrible precedent," said Schultze. "The sad thing is it impacts the manufacturing sector and the companies that have legacy liabilities directly. It will be nearly impossible, or much more expensive, to get secured financing for these type of companies."

...Unions spent $52 million to help elect Obama, which includes $5 million from the United Auto Workers, according to OpenSecrets.org, a Washington-based organization that tracks campaign spending. Roger Kerson, a spokesman for the UAW in Detroit, declined to comment.

The unions may think they got their money's worth when they bought Obama for 52 million dollars and judging by what has happened so far with Chrysler and General Motors, they may be right. However, the price over the longer term could turn out to be more than they can afford.

If any contract you make may get thrown out the window if a union is involved, is it financially prudent to loan money to a union-infested company? There are some big names who seem to be thinking very hard about that question and given the state of the economy, that could literally result in some big union employers going belly up.

Wouldn't it be ironic if Obama, with his overzealous, quasi-criminal meddling on their behalf, ended up killing union jobs all across the country?

PS: I own a Dodge today, but I will never buy another car made by Chrysler as long as the union is a majority owner. The union rank and file may be good people, but their bosses are involved in politics and are implacably hostile to the things I hold dear. As long as that is the case, I don't want to do anything to help them survive.

[agatha]

The market cares only about who succeeds. It's Darwinian, and there's no safety net for the casualties. They're expendable, apparently, because when you live by the market you die by the market, and that's a good thing, right? It's just and fair?

They're not real people, just statistics, casualties of a system that thinks in dollar signs, not human blood, sweat and tears.



No, the market doesn't see people. I would agree with that. And here I think is where Liberals and Conservatives diverge, never to meet again... IMO, Conservatives believe it is their role through charity to fill in the gaps while Liberals think that role should be filled by government. I think individuals and charities do a much better job because for them, it isn't a job, it is a passion and charities are naturally more efficient than governments.

[sojourner]

No, the market doesn't see people. I would agree with that. And here I think is where Liberals and Conservatives diverge, never to meet again... IMO, Conservatives believe it is their role through charity to fill in the gaps while Liberals think that role should be filled by government. I think individuals and charities do a much better job because for them, it isn't a job, it is a passion and charities are naturally more efficient than governments.

Even if that role is filled by government it shouldn't be done by tinkering with the economic system.

[Suzan]

.....and that is a BIG difference between Liberals/Progressive and Conservatives; Conservatives see equality of opportunity, "LibProgs" want equality of outcome.

Independents want both, lol. We're greedy!

[Suzan]

No, the market doesn't see people. I would agree with that. And here I think is where Liberals and Conservatives diverge, never to meet again... IMO, Conservatives believe it is their role through charity to fill in the gaps while Liberals think that role should be filled by government. I think individuals and charities do a much better job because for them, it isn't a job, it is a passion and charities are naturally more efficient than governments.

Well, good luck with the honor system where charity is concerned. Sorry if I'm too cynical to believe that everyone can be counted on to act in the best interests of others, especially in a system based on self-interest, as CL described in an earlier post.

And why would you think liberals don't believe in giving to charity? I've heard the stats that say conservatives give more, but the difference wasn't significant. Possibly, liberals are taking into account that it's difficult to reach out and save someone when you yourself are drowning.

I'm not arguing against capitalism as the engine that runs our economy, just that capitalism isn't a perfect system. There is no perfect system. Of course, the market will correct and adjust, but there are going to be a lot of broken dreams and broken lives in the process.

I don't mean you or anyone here, but apparently some think this is simply the cost of doing business in a free market. Kick the bodies out of the way and keep going? I think it's too high a price.

[Classical Liberal]

There are no safeguards built into pure capitalism. Lots of people fall through the cracks.

How do you define "pure capitalism?" Capitalism as we have it set up simply allows people to be free and go out and pursue their own economic interests under the rule of law.

"Pure capitalism" would likely be no law and no government, where people just trade with each other and that's it.

The top 1 to 5% in this country control 90% of the wealth. That leaves what, 10% for the rest of us? That can't happen in a socialistic system, but at least everyone's basic needs are met. No one goes without food, work, health coverage, etc. There are no guarantees of that with capitalism, obviously. Look at this country, supposedly with one of the highest standards of living in the world.

And here we see one of the all-time greatest flaws in understanding by the Left, the notions that:

1) Inequality of outcome is bad
2) That there is some unspoken rule that we're all supposed to come out equal in the end
3) That there is a limited amount of wealth to go around

The highest-earning 5% will ALWAYS control around 90% of the wealth, because only about 5% of the population are willing to work hard and smart enough to create such wealth. Most people don't have the initiative, drive, motivation, etc...to build huge businesses to become rich, for example.

We live in a FREE country in which people are equal UNDER THE LAW, not supposed to have some equal outcome. Everyone is free to go out and do what they want.

If I go out and create the next Microsoft and you go out and decide to become a janitor, it isn't my fault you did that and you have no right to the wealth I have created, which leads into the next part:

The amount of wealth in society is not limited. Capitalist societies create wealth. Socialist societies are based on the idea that wealth is limited, and thus that for one guy to get rich, another guy has to become poor. That isn't how it works. And socialist societies destroy wealth.

A lot of people confuse material riches with wealth, but look at it this way: is Russia rich in resources? YES, the richest in the world, no nation is more blessed with such amounts of coal, oil, natural gas, along with some very rich farmland!

YET, Russia is a very poor country wealth-wise.

Now look at Hong Kong or Japan. Are these resource-rich? Nope. But are they wealthy? YES.

Think of wealth in this way: if you sit down and type up a brilliant computer program or software and then build a business, thus creating jobs and selling the software, you then create wealth. Let's say your business makes you worth $50 million because that's the value of the business.

That doesn't mean $50 million was removed out of society, that the rest of society now has to make do with overall $50 million less.

What you have done is CREATED $50 million more of wealth. You have created VALUE.

As such, 90% of the WEALTH will always remain in the hands of the top 5% of people in this nation.

This also is where the Left, such as Barack Obama, mislead people. They say they are for "equality," "fairness," "economic justice," etc...well just what the heck do these words mean?

Equality under the law is a lot different from equality of outcome, which means the government comes in and BY FORCE takes away your heard-earned wealth to give to the people too lazy to make their own wealth.



Greed isn't fine, again because of the motives on which its based. Obviously, Madoff's "bad" greed was once good greed. From all accounts, he didn't start out to destroy everyone, including his own family, just to make as much money as he possibly could. He's an excellent example of capitalism gone wrong. $50 billion worth of wrong. And why? Because he's a sociopath and no one was checking up on him.

How does capitalism safeguard us against sociopaths? It doesn't.

No he didn't start off trying to do good, it was a Ponzi scheme from the very beginning. He wasn't making anyone any real money. He was a liar.

It also fails for these reasons. You're regurgitating facts (one hopes) and figures. I'm talking about the human factor. There are millions, tens of millions, that capitalism fails on a regular basis. What about the single mom who works three jobs and still can't make ends meet because of wages driven down by competition?

Capitalism doesn't "fail" anyone. You act as if people are entitled to various things or that capitalism is supposed to provide for them. No one is entitled to anything. That is simply reality. No one forced the single mom to become a single mom. If she wants better wages, she should have gotten better educated and not had children. People ultimately have to provide for themselves.

Also, competition doesn't drive wages down solely, because businesses compete to drive wages up. In low-skilled labor, wages are low, because there's so many. With skilled labor, wages are higher, as businesses compete for workers. Productivity also drives up wages.

We all know people like this. Some of us were/are people like this. When does she have the time or the money to learn a new set of skills? She can't. In this system, she's stuck.

No she isn't. That's an excuse people use. You are responsible for your own decisions.

She can't even get health insurance--and that's not the result our current economic crisis. That always was the case for her and 75 million like her.

There aren't 75 million without health insurance and one reason health insurance has been driven up in cost is precisely because of excessive government regulation and socialist healthcare organizations such as Medicare and Medicaid. There is no free lunch

No offense intended. As I've mentioned, your ideas are fascinating, but they're coming from books. All you have to do is put down the books and have a look around you to see the failures of capitalism.

Once again, you keep acting as if capitalism is some "system" with an alternative. It isn't. That's simply reality. The reality is, you don't work, you don't eat. Very simple.

And no, they are not "ideas from books." They aren't ideas. They are universal truths that apply in what we call "capitalist" economies and in what we call "socialist" economies.

The laws of economics are laws. You can no more change them or circumvent them then you can the laws of physics.

They probably live in your neighborhood and they'll never get ahead--and weren't getting ahead prior to the meltdown, not because they weren't working hard enough. Many of them were working like dogs when they had jobs, but they couldn't make a living wage at any of those jobs. History is littered with those failtures too.

This is nothing but the same excuse all lazy and entitlement-minded people give, that "the man" is "keeping them down," and that we need big government social programs to fight poverty.

The reality is it is those very social programs that create the poverty in the first place. You know the time period in which the blacks most advanced themselves prosperity-wise? The 1940s to the 1960s. With the start of the "Great Society" and the "War on Poverty" in the mid-1960s, poverty and crime began to skyrocket.

New York City spent tremendous amounts on social spending for poverty, and only made it worse, because what they don't understand is when you subsidize poverty, you get more of it.

It leads to a breakdown in the family unit, and destroys peoples. The blacks are still stuck in the same state they reached in the 1960s to this day.

It's fine to talk about capitalism in theoretical and abstract terms. But how does it work across the entire socioeconomic spectrum when it's applied? In the real world? In your neighborhood and mine? Not so well for lots of folks. I'm not arguing for socialism. I agree that it's also a flawed and limited system, but at least under it, they'd have their basic needs met.

It isn't "theoretical or abstract," it's reality. And no, under socialism, "basic needs" are not met. Let me show you why:

Socialist Politician: "Vote for me and I'll give you free healthcare!"

People: "Yay!"

Socialist Politician: "Vote for me and I'll give you free education!"

People: "Yay!"

Socialist Politician: "Vote for me and I'll give you free housing!"

People: "Yay!"

Socialist Politician: "Vote for me and I'll give you free food!"

People: "Yay!"

Socialist Politician: "Vote for me and there will be jobs for everyone!!"

People: "Why will we need jobs?"

Yes, absolutely. Both are dependent on each other. In my original post, I was only asking for the "balance" necessary to make that happen.

That is fascism. Workers are not entitled to a job. Businesses have no obligation to the "greater good" of society.

No, I didn't. Lucky them. Their 401Ks must be doing much better than mine, lol. I was talking about the ones without 401Ks, the ones capitalism has failed. And I don't mean entitlement psychology, i.e., people who feel life should be handed to them. I'm talking about ones who work their butts off, but are trapped in low-paying jobs.

No one is "trapped" in any low-paying job, and it doesn't matter how "hard" you work, all that counts is WHAT you produce. That's it. Hard work does not entitle one to nice things. You have to prodcue something of worth. That's all that counts.

My mother was a perfect example, divorced, work fiendishly hard to take care of her kids, finally was able to put herself through vocational school at 52, when all of us were grown and gone, and got a job as a records clerk for the county, which provided her with health care and a minimal retirement she would not otherwise have had.

Still, she lived all her life at the poverty level, even on county wages. And I will say again, that I've never met anyone who worked harder. She literally worked herself into the grave, and she's just one of millions in this country.

Hard work is very noble, but if you don't produce something of worth, you won't get lots of money in return. Remember, you must have something to trade.

But not before lots of them were forced out of business and lost everything. I guess for the market that's just collateral damage, yes?

The market cares only about who succeeds. It's Darwinian, and there's no safety net for the casualties. They're expendable, apparently, because when you live by the market you die by the market, and that's a good thing, right? It's just and fair?

They're not real people, just statistics, casualties of a system that thinks in dollar signs, not human blood, sweat and tears.

Safety nets are different from entitlement programs. Safety nets protect capitalism by preventing the population from turning outright socialist in the event of an economic crises.

Well, good luck with the honor system where charity is concerned. Sorry if I'm too cynical to believe that everyone can be counted on to act in the best interests of others, especially in a system based on self-interest, as CL described in an earlier post.

The 19th century, the age of the "robber barons," saw the largest outpouring of private charity in this nation's history. Americans as a nation give more to charity than any other nation on Earth.

And why would you think liberals don't believe in giving to charity? I've heard the stats that say conservatives give more, but the difference wasn't significant. Possibly, liberals are taking into account that it's difficult to reach out and save someone when you yourself are drowning.

I'm not arguing against capitalism as the engine that runs our economy, just that capitalism isn't a perfect system. There is no perfect system. Of course, the market will correct and adjust, but there are going to be a lot of broken dreams and broken lives in the process.

That's just reality, unfortunately. Life doesn't always turn out to be Sex and the City.

[Suzan]

CL, should I take it mean from all the bolding in your post that you were angry? I can read without the extra help, thanks.

I'll make this simple because it is. For me, bottom line, the collateral damage I mentioned in a prior post is unacceptable. People aren't disposable, even when they can no longer produce. They have value beyond what they produce to trade and a government, if it is to be in any way humane, must take that into consideration.

The economic model you describe is as cold and Darwinian as anything I've ever heard of. I don't know what reality you're talking about, but it's not mine. I would never want to live in that world.

[sojourner]

The economic model you describe is as cold and Darwinian as anything I've ever heard of. I don't know what reality you're talking about, but it's not mine. I would never want to live in that world.

I don’t think you have a choice. The consensus is that Darwin was right and in that case you live a Darwinian world whether you want to or not.

[foxyladi]

yep.we sure do...:laughing:

[agatha]

I've heard the stats that say conservatives give more, but the difference wasn't significant. Possibly, liberals are taking into account that it's difficult to reach out and save someone when you yourself are drowning.




Hardly.

"When you look at the data," says Syracuse University professor Arthur Brooks, "it turns out the conservatives give about 30 percent more. And incidentally, conservative-headed families make slightly less money." ...

Conservatives are even 18 percent more likely to donate blood.

The second myth is that people with the most money are the most generous. But while the rich give more in total dollars, low-income people give almost 30 percent more as a share of their income.

Says Brooks: "The most charitable people in America today are the working poor."






http://townhall.com/columnists/JohnStossel/2006/12/06/who_gives_to_charity

[Classical Liberal]

CL, should I take it mean from all the bolding in your post that you were angry? I can read without the extra help, thanks.

Noooo, no not angry at all, I just figured I would start typing in bold.:)

I'll make this simple because it is. For me, bottom line, the collateral damage I mentioned in a prior post is unacceptable. People aren't disposable, even when they can no longer produce.

Well of course, when people no longer can produce, society should take care of them, the idea is when you CAN produce. Even the late great free-market libertarian economist Milton Friedman said that.

They have value beyond what they produce to trade and a government, if it is to be in any way humane, must take that into consideration.

Well technically, lots of people don't have value. The truth is a great many people are worthless, that's just the politically incorrect reality. The idea that "everyone has value" and so forth, is, well, just that, political correctness.

The economic model you describe is as cold and Darwinian as anything I've ever heard of. I don't know what reality you're talking about, but it's not mine. I would never want to live in that world.

You live in that world already, because that's the reality. And I said social safety nets are fine. Entitlement programs are not, unless you want to create a whole bunch of poverty.

Our cities for years have been social engineering experiments with regards to social policies, and when Leftist policies are applied, you end up with high crime and poverty and violence rates.

BTW, do not confuse economic self-interest with selfishness. Economic self-interest doesn't at all make one selfish.

America is the greatest nation in the world and in the history of the world because we encourage and let people pursue their economic self-interests, and encourage generosity as well, which we as a people are. We produce the most wealth and give the most to charity.