The death of Capitalism

[spot]

I suggested on the day the bank rescue fund was created that we'd just seen the death of Capitalism. I'd like to explore how it happened but to do that I need to draw parallels between events over the last century. All the quotes are from a book I've been reading this week, "The Sinews Of American Capitalism: An Economic History", Clark C. Spence, 1964.

Here are a few to start with from the boom days a year before the Great Crash of 1929.In my opinion the wealth of the country is bound to increase at a very rapid rate... I am firm in the belief that anyone not only can be rich, but ought to be rich" - John Raskob, vice-president of General Motors.

"We shall soon, with the help of God, be in sight of the day when poverty will be banished from this nation" - Herbert Hoover, accepting the Presidential nomination of the Republican Party.And then came the stock exchange crash of October 1929 which triggered "an ever-widening spiral of disaster... speculators, bankers, industrialists, wage earners and farmers.

"GNP, the total production of the economy, was a third less in 1933 than in 1929; personal income was almost cut in half in the same period; 85,000 businesses failed... By the end of 1932 the automobile industry was running at 20% of 1929 output... an estimated 13 million were unemployed by 1933".

So,what led up to the collapse?90% of the market transactions in 1929 were purely speculative. The whole boom was based on credit which at times became overextended. Most buying was done "on the margin", the buyer advancing 20% to 40% of the purchase price and borrowing the rest from a broker who in turn acquired call money from a bank. The stock thus purchased was put up as collateral against the loan. Call loans were considered safe because of the margin and the security against them".The crash destroyed the bank cover. The loans became toxic as the share collateral failed to cover their value. The mechanism for the bank collapse which destroyed the credit market is identical to that of the last few years here - over-inflated valuation of collateral. Then it was industrial stocks, holding company overvaluation and pyramid investment trusts, this time it was derived stocks based on overvalued sub-prime mortgages. In both cases, pulling the rug from under the valuations brought down the banking system and destroyed investment portfolio value.

The stock index - the equivalent then of the Dow Jones Average today - built from the end of World War One from 7 to a high in 1929=26, 1930=21, 1931-13, 1932=7 where it bottomed out. That's 30% of the peak valuation. 30% of last year's Dow high around 15,000 would take the current market down below 5,000. Last September I said it would bottom out at 4,000. We'll see.

Between 1929 and 1939, GNP and the proportion of the civilian labor force unemployed looked like this:



What other quotes might help draw the parallel between then and now?With government the tool of business, regulation in the twenties was a burlesque.

As the depression deepened following the first shock of the crash, official and unofficial optimism prevailed on the surface. President Hoover assured the public that prosperity was "just around the corner" but privately had reservations. "Forward America, Nothing Can Stop U.S." screamed the billboards.

"Passed the Potter's Field yesterday and they were burying two staunch old Republicans, both of whom died of starvation, and the man in charge told me their last words were 'I still think America fundamentally sound'." - Will Rogers.

"Economic depression cannot be cured by legislative action or executive pronouncement. Economic depression must be healed by the action of the cells of the economic body - the producers and consumers themselves" - President Hoover.

In Akron in the entire year 1929 the Family Service Society had been called upon to deal with 257 needy cases; in the next two years it had to cope with 5,000 each month.

So, what has that to do with the death of Capitalism?

It's in how they got out of the mess. They had a war and followed it with a bottomless pit into which taxation could be handed back to wage-earners without generating goods, thereby stimulating an artificial demand for what goods were actually produced or more often imported for consumption. The bottomless pit was, of course, the US military, much to the discomfiture of the planet.

The reason it could be done in the 1950s was the availability of industrial expansion which year on year reduced the existing loan to a smaller proportion of GDP.

I suggest that route no longer exists. The percentage existing debt to GDP is astronomical now compared to what it was either going into World War Two or coming out of it. There's no credit margin to build back with.

I think what we have here now is a depression, not a recession. It has the same mechanism as that of 1929. This time it doesn't have a cure.

[CARLA]

I think you are exactly right Spot this is a depression and there isn't a cure on the horizon that I can see. I went for a drive with my sister today and we were stunned to see all the closed businesses. I haven't seen this in my life time just sad.

[Carolly]

CARLA;1118488 wrote: I think you are exactly right Spot this is a depression and there isn't a cure on the horizon that I can see. I went for a drive with my sister today and we were stunned to see all the closed businesses. I haven't seen this in my life time just sad.Totally agree with you Carla.I drive around in popular areas in Essex and in London and and there are so many closed shops now.The high rents and rates haven't helped.The markets even are not what they were thats for sure and Traders are selling off their goods as they cant make it pay.A depression is the right word for what is going on right now......so many out of work.Chris also lost his job and he knows because of his age and the way things are he will never be employed again.....so sad.

[Lon]

I have the uncomfortable feeling that within a year we may be taking a wheelbarrow full of money to the store to buy a loaf of bread as the government goes on a money printing binge.

[Galbally]

I think global capitalism may indeed have failed (in fact it has), but the people are still here, the planet is still here, the future is not etched in stone, and nothing is inevitable. Its going to take a long time to get out of this mess, but we will come out the other side, it will be different though, that I am sure of. What way its going to go, no one can say at present, but the times as dylan said "are a changing".

Good. We've been living in a fantasy world for too long anyway, it had to collapse, the only sad thing is that its the ordinary small people who will pay the heaviest price for the collapse in the ideology.

[Galbally]

So cheer up you buggers, we are not done for yet. :-6

[gmc]

Galbally;1118523 wrote: I think global capitalism may indeed have failed (in fact it has), but the people are still here, the planet is still here, the future is not etched in stone, and nothing is inevitable. Its going to take a long time to get out of this mess, but we will come out the other side, it will be different though, that I am sure of. What way its going to go, no one can say at present, but the times as dylan said "are a changing".

Good. We've been living in a fantasy world for too long anyway, it had to collapse, the only sad thing is that its the ordinary small people who will pay the heaviest price for the collapse in the ideology.


I think you could put a pretty good case that what has happened is we moved away from the basics of liberal capitalism. There is nothing capitalist about allowing complete free rein to the market and then taking action to prevent the market correcting itself or allowing monopolies and cartels to operate or allowing the generation of wealth out of nothing, or having no moral responsibility to society.

[spot]

gmc;1118546 wrote: I think you could put a pretty good case that what has happened is we moved away from the basics of liberal capitalism. There is nothing capitalist about allowing complete free rein to the market and then taking action to prevent the market correcting itself or allowing monopolies and cartels to operate or allowing the generation of wealth out of nothing, or having no moral responsibility to society.


What you're describing there which rejects those things is a regulated economy. All of those evils were inherent in Capitalism itself. Capitalism was the naked application of Darwinian survival to the generation of excess wealth and the world isn't going back to that. What we have now, in its place, is Socialism.

[gmc]

spot;1118553 wrote: What you're describing there which rejects those things is a regulated economy. All of those evils were inherent in Capitalism itself. Capitalism was the naked application of Darwinian survival to the generation of excess wealth and the world isn't going back to that. What we have now, in its place, is Socialism.


Not a regulated economy per se but one where there are checks to prevent abuse of power (developing monopolies or cartels for instance that actually interfere with the operation of the free market free market and prevent competition) or protect failing businesses from the consequences of their actions as in getting govt to prop things up. There has been a corporatist economy in the states, and to a lesser extent here, not a capitalist one.

Socialism has it's roots in liberal political thought just as much as socialism does. Utopian socialism won't work because of human nature and the theories of marx were just flat out wrong. Socialism has a broad meaning nowadays but the characterisation of capitalism as simplistic social darwinism is just that simplistic. Greed is not a good survival tactic for any society.

Perhaps the real lesson is that capiltalism/socialsm/fascism none of them are right-you need an eclectic mix to get it right, taking the best from each.

[CARLA]

GMC I think your right and hopefully this time we will learn the lesson and won't let ourselves get in the way.

Just this morning before the bell went off on "Wall Street" it was announced that Catapillar, John Deer, Sprint, and few other companies are laying off thousands of workers. It is going to get worse before it gets better and we haven't seen the bottom yets.

[QUOTE]Perhaps the real lesson is that capiltalism/socialsm/fascism none of them are right-you need an eclectic mix to get it right, taking the best from each.[/QUOTE]

[spot]

gmc;1118575 wrote: Not a regulated economy per se but one where there are checks to prevent abuse of power (developing monopolies or cartels for instance that actually interfere with the operation of the free market free market and prevent competition) or protect failing businesses from the consequences of their actions as in getting govt to prop things up. There has been a corporatist economy in the states, and to a lesser extent here, not a capitalist one. It really comes down to asking how you can square these two opposing extremes, "regulated market" and "free market". If it's a free market economy it's Capitalist and it's by definition unregulated. It's been the Mythical American Ideal for (at least) the Bush Administration, whether they achieved it or not. Striving for it has caused the crash and the consequent depression. Whether it ever existed or not, it's never going to happen again.

[Clodhopper]

Much of this argument is waaaay over my head. I dunno what's going on. My impression is that no-one else did either - except a couple of con artists busily designing the Emperor's new clothes.

What has struck me is the delay. The banks crashed what? Just before Christmas? And since then we've had a few announcements of layoffs in the last week. That's all. Ok, everything slows over Christmas but I'm reminded of a common reaction to very serious injury - for the first moments afterwards there is no pain. Everything stops. THEN crash bang wallop ouch. It really hurts.

I have a feeling that the longer the pause after the initial crunch, the worse the collapse will be when it comes.

[spot]

Scrat;1118662 wrote: What is worrying is not so much seeing the bottom but the question of where is the bottom? Now Microsoft is expected to lay off up to 15000 people in the next 18 months.


I presume the US and UK economies will move roughly in parallel. I expect the UK to be turning the corner when the Olympics start in 2012 but that's not going to fix the unemployment problem that's about to hit us, I think we'll be stuck with that for a generation.

[mikeinie]

It will get worse, but all of this end of the world and death of capitalism is overstated.

There is a basic economic fundamental that everyone chose to ignore:

Boom & Bust.

For some reason the governments and banks believed that they had found the magic formula that would result in a never ending boom with no foreseeable bust.

However, everyone knows, the bigger the boom, the bigger the bust. We had a big boom and now we will have a big bust.

People can only buy so much stuff, companies can only cut their margins so much before they go under, people can only afford to buy houses if they can repay their mortgages, companies will only employ people if they are making money.

When unemployment grows, people want work and will take jobs at lower salaries, when prices start coming back down, people will be able to start affording more and will start buying again, that will create jobs and the whole cycle will begin again.

In 30 - 40 years from now there will be another bust and all the papers (or whatever technology will be around then for providing news) will be saying ‘this could be as bad as the big one back in 08/09’.

Just sit tight, ride out the storm, don’t panic, and be smart with your money.

[Sheryl]

mikeinie;1118683 wrote: It will get worse, but all of this end of the world and death of capitalism is overstated.

There is a basic economic fundamental that everyone chose to ignore:

Boom & Bust.

For some reason the governments and banks believed that they had found the magic formula that would result in a never ending boom with no foreseeable bust.

However, everyone knows, the bigger the boom, the bigger the bust. We had a big boom and now we will have a big bust.

People can only buy so much stuff, companies can only cut their margins so much before they go under, people can only afford to buy houses if they can repay their mortgages, companies will only employ people if they are making money.

When unemployment grows, people want work and will take jobs at lower salaries, when prices start coming back down, people will be able to start affording more and will start buying again, that will create jobs and the whole cycle will begin again.

In 30 - 40 years from now there will be another bust and all the papers (or whatever technology will be around then for providing news) will be saying ‘this could be as bad as the big one back in 08/09’.

Just sit tight, ride out the storm, don’t panic, and be smart with your money.


I think your right there. You cannot keep extending folks credit when they cannot pay it back. Greed is what brought this on. In the high offices of the financial companies, and on main street, folks over extended themselves.

[CARLA]

I'm no ecomomist but for its simple when the price of goods are inline with what we the people have to spend then it stops. I for one will not spend $15.00 on 4 razor blades when they use to be $4.00 insane. I will not pay full price for women's clothes they are extremely over priced and that goes for shoes, handbags, under garments you name we have been paying these insane prices far to long, and now we can't whoops store close no surprise there. When the companies get it then things will change. Cars don't need to cost $30,000.00 that is a down payment on a house. Then the housing market has to be dealt with until people have homes again nothing will change. Sorry no house is worth the price they are today it has to stop then things will turn around. Yes greed got us here now we won't be spend a dime till we get our monies worth and that is how it should always be. Companies won't get away with it anymore and sorry to say that will put many out of business. Until they come up with a reasonably priced products we won't be buying anytime soon.

What is worrying is not so much seeing the bottom but the question of where is the bottom? Now Microsoft is expected to lay off up to 15000 people in the next 18 months.

[Oscar Namechange]

Sheryl;1118687 wrote: I think your right there. You cannot keep extending folks credit when they cannot pay it back. Greed is what brought this on. In the high offices of the financial companies, and on main street, folks over extended themselves.
The only people i see suffering are the one's who have lived totally beyond their means in houses they can't affored. Small Business's that are going under are the same, they have invested badly, borrowed recklesssly and now blame the government.

Where i live, I don't see shops shut up or people throwing them-selves off car park roofs. Peolple are just getting on with it. Sure there are jobs being lost, but look to the management and the owner and ask him where he went wrong, other than blame the government. There is plenty of work out there, just as one e.g. B&Q down here are always advertising for staff. Yes, it means changing career direction but it's still work.

[Galbally]

For my part, I don't just think this effects people who have over-extended themselves, it effects everyone. A perfectly good company will go bust if it can't raise day to day working capital to pay wages or invest in new equipment/staff etc, that company will go bust, its staff made redundant, they will buy less stuff, further depressing demand, which quickly becomes a vicisous circle; which is why making credit available again is so important, or the whole economy will tank.

This is going way beyond just dodgy consumer credit, the whole system of money supply and credit supply is broken and that cripples everything. If this situation isn't remedied soon there will be a deflationary depression, where everyone will have less money, and things will be cheaper, but your debts will be much bigger as a percentage of your income, making them impossible to pay. Considering how much personal debt is out there right now, thats the doomsday scenario.

In terms of the philosophy of capitalism, of course it will survive, but in a curtailed form, there are aspects within Capitalism that are part and parcel of a free society. These to my mind are.

1. The absolute right to property.

2. The right to trade/invest/earn interest

3. The right to earn a profit from private trade

4. The right to form companies and business associations

5. The right to raise capital from private sources.

These things provide people with the freedom and motivation to work hard, invest, and improve their lives, they are good things and I wouldn't want any of them changed.

I think what has happened is that many people became convinced that what was good in the short term for any given market was always what was also best for their country/society etc. this has been shown to be a complete load of nonsense, markets do not always work in the interest of the nation that supports them, or even in the interests of the people in the market itself, which is why they shouldn't be given free reign as they have been, thats the lesson.

Also, never allow banks to grow to such an extend where their balance sheets are 10 times the GDP of the country they are based in, not wise.

[Clodhopper]

15000 people in the next 18 months.


Carla: spoke to a friend who is hot in his own little way in the industry and can generally be expected to know about these things: apparently it's 5,000.

Ok, that's still not good.

But there is one good in this IF as people seem to expect we recover from this without a world war. And it's a big good: it's a damn sight easier to build when the previous structure has been destroyed. The power of vested interest never goes away, but it's now that it's at its weakest.

[Clodhopper]

Scrat, Carla: Aaaah. I just asked about the 15,000. It was the friend hit by a train (I'm still working out how much to mention this) and while his professional friends all assure me his computing skills are entirely there his verbal communication skills are limited and he tends to restrict his computer screen communications to the exact question. Good correction. Thank you.

[Galbally]

Scrat;1119115 wrote: Clodhopper.



What I read was 5000 this first quarter with a possible 15000 over the next 18 months. Let's emphasize "possible 15000 over the next 18 months".



So we make credit available again and repeat the process? Pile more debt onto the debt we already have? Why don't we just forgive all debt. We can start over that way. C'mon Galbally, a lot of people out there are so far in debt they won't pay off what they have now IN THEIR LIFETIMES!!

At least if the government paid off all the credit card debts people have we'd know where the money is going. Right now it seems to be just disappearing into a black hole. :-3


I mean ordinary working credit to small businesses, shops, medium manufacturing or R&D companies Scrat, Banks are crucifying everyone at the moment, from small restaurants with €1,000 overdrafts, to couples who miss 2 months mortgage repayments because someone is sick or redundant, or a daycare centre that needs to fix a broken window on account. Most ordinary shops buy things on account, payroll is done through the bank, sometimes with a new company a small overdraft facility is vital for the first 1 year, it makes all the difference.

If you retract all credit entirely from an economy it will collapse.

Obviously I am not saying that the same kind of crazy lending practices should go on again (by the way most of the really serious problems involve lending between banks and finance houses, most of this is nothing to do with ordinary people's lending so don't let them pin this on ordinary people, its the banks). So yes, the guys running the banks essentially have destroyed the system with their lunatic ways, but making normal credit to normal companies and people is actually still vital, seriously.

I think governments should just nationalize some banks now, shoot (sorry I mean fire, fire ) the top guys, and use the institutions to make credit available to credit-worth businesses and customers in the normal way.

Otherwise we'll have a depression its a simple as that.

[wildhorses]

gmc;1118546 wrote: I think you could put a pretty good case that what has happened is we moved away from the basics of liberal capitalism. There is nothing capitalist about allowing complete free rein to the market and then taking action to prevent the market correcting itself or allowing monopolies and cartels to operate or allowing the generation of wealth out of nothing, or having no moral responsibility to society.


What has happened in the last several years only resembles capitalism is some ways. In reality we had a manipulative uncontrolled free for all.

[gmc]

oscar;1118729 wrote: The only people i see suffering are the one's who have lived totally beyond their means in houses they can't affored. Small Business's that are going under are the same, they have invested badly, borrowed recklesssly and now blame the government.

Where i live, I don't see shops shut up or people throwing them-selves off car park roofs. Peolple are just getting on with it. Sure there are jobs being lost, but look to the management and the owner and ask him where he went wrong, other than blame the government. There is plenty of work out there, just as one e.g. B&Q down here are always advertising for staff. Yes, it means changing career direction but it's still work.


So all these people who have carefully lived within their means, never used credit cards to run up thousands of pounds worth of debt keep their cars till they fall apart rather than have the newest model but have now just been laid off in an area where they haven't opened a big shopping centre and having lost their job through no fault of their own can't pay their mortgage it's all somehow their fault is it and they just get on with it?

How about careful OAP's that depend on their savings for all the little bits that make life better and the increasing fuel bills but now find the return on their savings accounts is below inflation meanwhile gordie boys means tested benefits still assume a 10% return on investment for anyone with savings of any kind. Not to worry though-when they have spend everything they will still have the minimum income guarantee once it's all gone.

How about those having seen their company pension become not worth the paper it was written thanks to gordon brown and yes that really is down to him the first thing he did as chancellor was start taking 5 BILLION a year out of private and company pension schemes by removing tax credits on pension funds-where did he think companies would get the money to replace it or people would get the additional income to increase contributions. Meanwhile he is terrified of changing the superannuation schemes to make them realistic for fear that the poor dears go on strike and he needs then to deal with all the unemoployed. maybe if those being laid off can't et a job in B & Q they get a job in the benefits agency.

You are either still a deluded labourite that thanks the sun shines out of the same orifice gordie boy uses to talk out of or you have been hanging around with that tory MP too much.

posted by wildhorses

What has happened in the last several years only resembles capitalism is some ways. In reality we had a manipulative uncontrolled free for all.


A free for all yes but not for everybody just those with their noses on the trough and anyone criticising what was going on and pointing out the obvious flaw was dismissed as a dangerous liberal and the politicians didn't like to upset their sponsers.

None of this is a surprise, do a trawl on the internet there were actually plenty of warnings given. The thing is we in the UK and europe didn't need to get sucked in to it.

[Galbally]

gmc;1119229 wrote: So all these people who have carefully lived within their means, never used credit cards to run up thousands of pounds worth of debt keep their cars till they fall apart rather than have the newest model but have now just been laid off in an area where they haven't opened a big shopping centre and having lost their job through no fault of their own can't pay their mortgage it's all somehow their fault is it and they just get on with it?

How about careful OAP's that depend on their savings for all the little bits that make life better and the increasing fuel bills but now find the return on their savings accounts is below inflation meanwhile gordie boys means tested benefits still assume a 10% return on investment for anyone with savings of any kind. Not to worry though-when they have spend everything they will still have the minimum income guarantee once it's all gone.

How about those having seen their company pension become not worth the paper it was written thanks to gordon brown and yes that really is down to him the first thing he did as chancellor was start taking 5 BILLION a year out of private and company pension schemes by removing tax credits on pension funds-where did he think companies would get the money to replace it or people would get the additional income to increase contributions. Meanwhile he is terrified of changing the superannuation schemes to make them realistic for fear that the poor dears go on strike and he needs then to deal with all the unemoployed. maybe if those being laid off can't et a job in B & Q they get a job in the benefits agency.

You are either still a deluded labourite that thanks the sun shines out of the same orifice gordie boy uses to talk out of or you have been hanging around with that tory MP too much.

posted by wildhorses



A free for all yes but not for everybody just those with their noses on the trough and anyone criticising what was going on and pointing out the obvious flaw was dismissed as a dangerous liberal and the politicians didn't like to upset their sponsers.

None of this is a surprise, do a trawl on the internet there were actually plenty of warnings given. The thing is we in the UK and europe didn't need to get sucked in to it.


Your making a very valid point GMC, don't let banks pin this on customers and tax payers, its their commercial arms and investment houses that have collapsed the system, and their derivatives based on land assets that they caused the US, the UK, and others to undergo an extraordinary financial bubble routed essentially in land prices as they poured more and more Asian money into it.

The myth that this was ordinary people's greed and idiocy is only 10 percent true, 90 percent of this is all about commercial lending between banks themselves, the derivativization of risk, the self-creation of banks of a monumental asset bubble (that we somehow still have to deal with), and the failure of the auditors and regulators to stop what was going on. The auditing companies need to be investigated, they are seriously, seriously culpable in my opinion, and they need to be opened up.

Where the governments are at fault was that have believed the financial markets BS ideology for far too long, and only now realize that they have essentially allowed the nations they govern to be undermined economically by this neoliberal nonsense. But at least we can get rid of governments, roll on the next election cycle thats what I say.

Can't wait.

[gmc]

posted by galbally

Where the governments are at fault was that have believed the financial markets BS ideology for far too long, and only now realize that they have essentially allowed the nations they govern to be undermined economically by this neoliberal nonsense. But at least we can get rid of governments, roll on the next election cycle thats what I say.

Can't wait.


it's not liberalism, neo or otherwise that got us in to this mess it's right wing monetarist theory coupled with just outright greed and a distinct lack of basic common sense and a political establishment brainwashed in to thinking they had no right to curb free market forces-except, in a demented stretch of logic, add fuel to the fire by stopping the market working when it would have meant bank failures earlier on. maybe the wind of reality might have helped prevent it-who knows.

The problem seems to be people were so hung up on the threat from the left they forgot to watch the equally real threat from the right. I not sure the US and UK use the term left and right wing in politics in the same manner. But since it was europeans that first used the concept we have the right of it.

Your making a very valid point GMC, don't let banks pin this on customers and tax payers, its their commercial arms and investment houses that have collapsed the system, and their derivatives based on land assets that they caused to undergo a bubble in prices as they poured money into it.


You can see the north south divide creeping in again can't you. It doesn't affect me and I don't know anyone it does therefore people who are unemployed, losing their homes losing or can't pay their debts must just be feckless.

[Clodhopper]

There's no doubt that Labour is past its sell-by date. The man I'd like to see as Chancellor is Vincent Cable. It isn't going to happen.:-1

[Galbally]

gmc;1119246 wrote: posted by galbally



it's not liberalism, neo or otherwise that got us in to this mess it's right wing monetarist theory coupled with just outright greed and a distinct lack of basic common sense and a political establishment brainwashed in to thinking they had no right to curb free market forces-except, in a demented stretch of logic, add fuel to the fire by stopping the market working when it would have meant bank failures earlier on. maybe the wind of reality might have helped prevent it-who knows.

The problem seems to be people were so hung up on the threat from the left they forgot to watch the equally real threat from the right. I not sure the US and UK use the term left and right wing in politics in the same manner. But since it was europeans that first used the concept we have the right of it.



You can see the north south divide creeping in again can't you. It doesn't affect me and I don't know anyone it does therefore people who are unemployed, losing their homes losing or can't pay their debts must just be feckless.




Okay, I will use the term Market Fundamentalism then, is that better? Whatever you call the ideology, its as dead as the dodo now. Someone better tell Irwin Seltzer though. :wah:

[gmc]

Galbally;1119270 wrote: Okay, I will use the term Market Fundamentalism then, is that better? Whatever you call the ideology, its as dead as the dodo now. Someone better tell Irwin Seltzer though. :wah:


An ideology is a system of ideas and ideals forming the basis of an economic or political theory it is not an immutable gospel that must be followed word for word. Capitalism and socialism have the same roots and are intertwined and not necessarily mutually exclusive. Although the revolutionary socialism of marx and engels was of it's time and is a dead end you still get it's advocates spouting the mantras of class warfare as if they were quoting a religious text and those who don't agree meet the same disdain that fundamentalists reserve for atheists. Capitalism is no more dead than socialism.

One can balance the other. You can put a good case that adam smith was an advocate of a social market economy, rather than laissez faire economics, to curtail the potential excesses of a market given free rein. Without restraint you end up with mercantilism the development of monopolies and/or sheer greed coming to the fore. some things you want to keep the free market away from other things you need to prevent the free market from doing.

How come no one blames monetarism and the interference in the workings of the market for all that's happened. Maybe it's because fear of the left and socialism has become so endemic, especially in the states, means that no one is allowed to say right wing or corporatist or even fascist any more.

The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. ”



— Franklin D. Roosevelt, "Message from the President of the United States Transmitting Recommendations Relative to the Strengthening and Enforcement of Anti-trust Laws"


Military-Industrial Complex Speech, Dwight D. Eisenhower, 1961

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the militaryindustrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.


Military-Industrial Complex Speech, Dwight D. Eisenhower, 1961

Maybe if people, on hearing a company or bank CEO complaining about govt interference in the way they ran their business/bank or tried to regulate the effect they have on the environment/those who work for them or society in general had thought about it before agreeing with them it was necessarily a bad thing we might not be in the mess we are in now. Now private power is coming cap in hand with a begging bowl to the democratic state-that's us the voters you know-speaking as a member of that democratic state I would like to kick the **** out of them and the politicians as well. Not terribly constructive perhaps:-3 but it would feel good. Then I would take all those who think it is simply down to those who have lived beyond their means, sack them so they can't pay their bills, make them homeless and then prevent them getting a job for two years just so they can appreciate that it is a lifestyle choice most people don't deliberately choose.

The really depressing thing about it all is that british political leaders are even bigger arseholes than the american ones.

[Oscar Namechange]

gmc;1119229 wrote: So all these people who have carefully lived within their means, never used credit cards to run up thousands of pounds worth of debt keep their cars till they fall apart rather than have the newest model but have now just been laid off in an area where they haven't opened a big shopping centre and having lost their job through no fault of their own can't pay their mortgage it's all somehow their fault is it and they just get on with it?

How about careful OAP's that depend on their savings for all the little bits that make life better and the increasing fuel bills but now find the return on their savings accounts is below inflation meanwhile gordie boys means tested benefits still assume a 10% return on investment for anyone with savings of any kind. Not to worry though-when they have spend everything they will still have the minimum income guarantee once it's all gone.

How about those having seen their company pension become not worth the paper it was written thanks to gordon brown and yes that really is down to him the first thing he did as chancellor was start taking 5 BILLION a year out of private and company pension schemes by removing tax credits on pension funds-where did he think companies would get the money to replace it or people would get the additional income to increase contributions. Meanwhile he is terrified of changing the superannuation schemes to make them realistic for fear that the poor dears go on strike and he needs then to deal with all the unemoployed. maybe if those being laid off can't et a job in B & Q they get a job in the benefits agency.

You are either still a deluded labourite that thanks the sun shines out of the same orifice gordie boy uses to talk out of or you have been hanging around with that tory MP too much.






First of all, please refrain from refering to my Prime Minister as Gordy Boy or I'll have to come and rough you up in a car park. Yes. I have been hanging out with the Tory MP but only to oust the idiot who is currently the MP for my constituancy. That is war and the battle has only just begun.

I agree about the pensions and i accept that. I probably sound harsh when i say there is plenty of work out there for those who want it.

When i said B & Q, that was an example. I live on the border of a city but it is not even a town, more a serie's of villages and we don't have large shopping parades. For people who want a job, there is things called buses and trains into the city for work.

People are using the economic difficulties as an excuse to be bone idle. Their own greed has caused this and nothing else. Maybe it's just me, I don't know but if i could live within my means, pay my bills, not succumb to tempting offers of credit, not buy a house that i haven't a chance of paying for in my life-time, run my car until it falls to bits, save my money wisely, etc etc, then yes, i am critical of any-one who has done the opposite and is now blaming the government for their downfall. The very people who critise the government soon accepted the free child benifit every month and snapped up their cold weather payment of £250. I don't see armies of pensioners dis-gruntled with the government sending that back in the post.

I'm sure you'll correst me if i'm wrong gmc but was it not 'Norman Tebbit' who said in these times, 'Get on your bike' when we faced similar some years ago.

[Galbally]

Scrat;1119413 wrote: Everybody is making good points and Galbally I made my post in haste. We do need to get these banks under control and get spending power into the pockets of the people. There is a lot of speculation and nonsense out there and it's freaking hard to put it all together.


That's cool scrat, even the people who are supposed to understand all this crap don't understand what's going on, so we are probably doing about the best we can.

[Galbally]

wildhorses;1119223 wrote: What has happened in the last several years only resembles capitalism is some ways. In reality we had a manipulative uncontrolled free for all.


I think essentially your correct WH, it seems just like there are no atheists in a foxhole, there are no corporate free-marketeers in a depression.

The global capital markets and banks have been run in such a scewed way, that realistic market values for assets just went out the window, and the people who are supposed to ensure that market forces correct these things, basically didn't, until it became so untenable that reality kicked in, and the global financial market finally started acting like a really free market by collapsing. All trust gone, all credit dried up, all institutions discredited in the process.

Then of course, its corporate socialism time, paid for by Mr and Mrs taxpayer citizen.

[Galbally]

gmc;1119442 wrote: An ideology is a system of ideas and ideals forming the basis of an economic or political theory it is not an immutable gospel that must be followed word for word. Capitalism and socialism have the same roots and are intertwined and not necessarily mutually exclusive. Although the revolutionary socialism of marx and engels was of it's time and is a dead end you still get it's advocates spouting the mantras of class warfare as if they were quoting a religious text and those who don't agree meet the same disdain that fundamentalists reserve for atheists. Capitalism is no more dead than socialism.

One can balance the other. You can put a good case that adam smith was an advocate of a social market economy, rather than laissez faire economics, to curtail the potential excesses of a market given free rein. Without restraint you end up with mercantilism the development of monopolies and/or sheer greed coming to the fore. some things you want to keep the free market away from other things you need to prevent the free market from doing.

How come no one blames monetarism and the interference in the workings of the market for all that's happened. Maybe it's because fear of the left and socialism has become so endemic, especially in the states, means that no one is allowed to say right wing or corporatist or even fascist any more.





Military-Industrial Complex Speech, Dwight D. Eisenhower, 1961



Military-Industrial Complex Speech, Dwight D. Eisenhower, 1961

Maybe if people, on hearing a company or bank CEO complaining about govt interference in the way they ran their business/bank or tried to regulate the effect they have on the environment/those who work for them or society in general had thought about it before agreeing with them it was necessarily a bad thing we might not be in the mess we are in now. Now private power is coming cap in hand with a begging bowl to the democratic state-that's us the voters you know-speaking as a member of that democratic state I would like to kick the **** out of them and the politicians as well. Not terribly constructive perhaps:-3 but it would feel good. Then I would take all those who think it is simply down to those who have lived beyond their means, sack them so they can't pay their bills, make them homeless and then prevent them getting a job for two years just so they can appreciate that it is a lifestyle choice most people don't deliberately choose.

The really depressing thing about it all is that british political leaders are even bigger arseholes than the american ones.


Yes, I am not disagreeing with you, I don't think Capitalism is dead at all, of course it isn't, and neither is socialism, or any of these broad human ideas, they are all aspects of how humans interact economically with one another, and people don't change.

What is happening is the collapse in a certain system that has been allowed to emerge over the past number of years, a global and largely unregulated financial system based on a very particular vision of what these globalized markets were, that obviously no-one really understood the dangers of. I am using these shorthand terms to not overcomplicate my posts. If you know what I mean.