The curruption will (did) prevail - rant
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"I fear most Americans, when reading attacks on capitalism, wrongly interpret that to mean an attack on America itself."
I am really wondering why. Capitalism is not an American invention. Americans maybe perfected it or not ...depends on point of view.
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@bellwells said:
@chango70 said:
How can Capitalism be divorced from the practice of Capitalism?....Capitalism is all about anti-competitive practices that actually detriment free-market principles....You see Capitalism in its current form is actually detrimental to the practice of free-market enterprise.
Read my post again. I'm distinguishing capitalism from those who practice it.
Capitalism is precisely the opposite of anti-competitive. It thrives on competition and innovation. The inverse is probably more true: competition and innovation need a capitalistic environment to thrive and flourish. Innovators and doers need to know their efforts can be rewarded within a capitalistic environment; one owned by the people. Corporations aren't the only entities who practice capitalism. You do, I do, the corner store owner does. You can't define system by looking only at large international corporations.
I'm baffled as to why you think "capitalism is detrimental to the practice of free-market enterprise". I think exactly the opposite. Please explain.
Simple, what you describe is free market dynamics of which the laws are probably immutable. Capitalism is a particular form of free market dynamic that exist as a certain historical formation. Capitalism isn't an ideology but a particular set of practices within the frame work of the Free market. In this day and age the dominant form of Capitalism is Corporate Capitalism which have the following anti-competitive tendencies and I quote myself "monopoly, dumping, with-holding stock, lobby groups, hotile take-overs of peer companies or those that supply or deal with related services and conditioning of consumers they can manipulate the market to their favour". These are all anti-market practices. For example when a manufacturer get sufficiently big it no long has to play to the market rules of supply and demand. It can do the following. Buy out its competitors as a form of horizonal monopoly (stifles competition and innovation). Alternatively it can take over services related to selling the product (Apple Stores) or take over the suppliers of Raw Material (vertical monopoly). It can withold stock to inflate value (de Beers dimonds anyone?) and it can dump cheap stocks of deflate market value. It can advertise and creat demand that isn't there. It may decide to move its capital elsewhere where labor is cheapor. Do any of those sound familier? You see we live in an age of Giant Mega corporate form of Capitalism which is a abhorant deviation of free market priciples brought about mainly through our own folly. When Adam Smith wrote the Wealth of Nations he didn't have Nike, or Microsoft in mind. Theorists such as Deleuze and Guattari in 'Capitalism and Schizophrenia' calls Capitalism 'Anti-Market'.
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Amen, brother!
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Mr S was on target. The quote from Jefferson was right on, and that is where the true problem lies.
Banks, not the Stock Market, are the ones who create money out of thin air - in the form of loans. When they lend, the full amount of the loan is not required to be held in reserve. In the US, it's at a ratio of around 9:1 loan:reserve.
That creates the possibility of 90 times the amount of real money available existing as loans that need to be repaid with interest. But since the amount of lent money already exceeds the real money available, that means someone has to default in order for someone else to pay off their loan with interest - unless the banks keep conjuring new money out of nowhere (but that just means even more debt).
Further, that imaginary money created by the bank as a loan is deposited in another bank, and becomes available for further lending. Customer deposits and central reserve deposits (from the bank's own money) are handled differently: a bank can lend 90% of customer deposits (9:1 loans:reserves).
Example:
Fred decides to open a bank, Bank1. After his startup costs, he has $1111.12. He puts this money into reserve at the central bank.
Since Bank1 has $1111.12 in reserve at the central bank (the bank's own money, not money from deposits), it can legally lend out at a 9:1 ratio, or $10,000 dollars.
Borrower1 takes out a $10k loan from Bank1 and buys a car.
The seller takes the $10k and deposits it at his bank, Bank2.
Bank2 can now lend $9k against that deposit, holding $1k in reserve.
Borrower2 takes out a $9k loan and buys materials for a home improvement project.
The home improvement store deposits the $9k in their bank, Bank3.
Bank3 can now lend $8100 against that deposit, holding $900 in reserve.
Borrower3 takes out a loan of $8100, makes a purchase, and the seller puts the money into his bank (Bank1, Bank2, Bank3, or any other bank), and the process keeps repeating.If the minimum loan amount is $1, then the total money created out of thin air by the banking system from that initial $1,111.12 is $99,990.59.
Now multiply by a few billion, and then mix in high-risk mortgage loans for overvalued properties that can't be resold...
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I'm not too sure things are going to change quite yet - at least not for the better. A tax evader was just approved as Treasury Secretary.
Worst case: lending dries up, which means no "new" money to grow the economy; jobs are lost on a massive scale; an American public that has grown accustomed to relying on government demands a solution; in the ensuing panic, the Constitution is eroded as new government programs are enacted and government power reduces our freedoms; and the ultimate nanny state is finally put in place in the U.S.
Best case: lending dries up, which means no "new" money to grow the economy; jobs are lost on a massive scale; an American public that has grown accustomed to relying on government to solve the problems the people should solve finally wakes up and realizes the government can't do much of anything correctly; people demand restoration of Constitutional government and the rule of law; the clowns are voted out and replaced with people who will support Congressional term limits and limited government; revision of the financial system to a more stable, equitable, and sustainable system results in a stronger economy.
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New BBC series on the Banking system and what went on that lead up to the current crisis. Enlightening.
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What a shame. Hope it will turn up on google video someday.
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Hi RickW,
@unknownuser said:
the people should solve finally wakes up and realizes the government can't do much of anything correctly; people demand restoration of Constitutional government and the rule of law; the clowns are voted out and replaced with people who will support Congressional term limits and limited government; revision of the financial system to a more stable, equitable, and sustainable system results in a stronger economy.
I have long given up on "the people waking up".
Without, I admit, any real empirical evidence, I would be surprised if more than one or two percent of the population gives a thought to these issues. That's a tiny minority that cannot exercise any political pressure whatsoever. The other 98% are interested only in TV, Sports and Sex etc. In so far as they do take an interest in politics, they like it presented to them in simple soap-opera style.
A simple telegenic appearance with meaningless catchphrases such as "Change" and a wife whose fashion choices can be discussed endlessly are on about the level required for most.My only hope is that nothing lasts forever.
But real change is always brought about my small dynamic minorities, never by the masses.Regards
Mr S -
@mr s said:
The other 98% are interested only in TV, Sports and Sex etc. In so far as they do take an interest in politics, they like it presented to them in simple soap-opera style.
A simple telegenic appearance with meaningless catchphrases such as "Change" and a wife whose fashion choices can be discussed endlessly are on about the level required for most.That's about right, thanks to our dumbed-down government-run education system and our leftist news/entertainment industry, which teach us to trust the government to take care of us.
I personally am sick of the rhetoric that the government will solve our problems and the media's complicity in spreading that message. The government can't even solve its own problems (deficit spending, public debt, overinflated bureaucracy, gross inefficiency), much less ours. And yet, we (collectively) have been conditioned to believe we can't take care of ourselves.
How, then, is it even conceivable that for over 150 years, the US managed to survive without government welfare, government healthcare, government retirement pay, government work programs, and other government fiscal insanity?
The Constitution was established for certain stated purposes, namely to create and set the limits of a new national government for the USA. In outlining the form of that national government, it stated the following reasons and goals for that government:
- form a more perfect union (the new form of national government dictated by the Constitution, as compared to that under the Articles of Confederation)
- establish justice (through the court system)
- ensure domestic tranquility (through the rule of law, not the rule of majority)
- provide for the common defense (strong military)
- promote the general welfare (not "provide" - the government should create an environment of success, partly by regulating fair practices, but primarily by staying out of the way of what the people can and should do for themselves and each other)
- secure the blessings of liberty (liberty being the freedom that comes from a limited government. More government equals less liberty)
And what has happened since 1787?
@unknownuser said:
Paradoxically enough, the release of initiative and enterprise made possible by popular self-government ultimately generates disintegrating forces from within. Again and again after freedom has brought opportunity and some degree of plenty, the competent become selfish, luxury-loving and complacent, the incompetent and the unfortunate grow envious and covetous, and all three groups turn aside from the hard road of freedom to worship the Golden Calf of economic security. The historical cycle seems to be: From bondage to spiritual faith; from spiritual faith to courage; from courage to liberty; from liberty to abundance; from abundance to selfishness; from selfishness to apathy; from apathy to dependency; and from dependency back to bondage once more.
At the stage between apathy and dependency, men always turn in fear to economic and political panaceas. New conditions, it is claimed, require new remedies. Under such circumstances, the competent citizen is certainly not a fool if he insists upon using the compass of history when forced to sail uncharted seas. Usually so-called new remedies are not new at all. Compulsory planned economy, for example, was tried by the Chinese some three milleniums ago, and by the Romans in the early centuries of the Christian era. It was applied in Germany, Italy and Russia long before the present war broke out. Yet it is being seriously advocated today as a solution of our economic problems in the United States. Its proponents confidently assert that government can successfully plan and control all major business activity in the nation, and still not interfere with our political freedom and our hard-won civil and religious liberties. The lessons of history all point in exactly the reverse direction. - Henning W. Prentis, Industrial Management in a Republic, p. 22 (1943)
Are we now in that stage between apathy and dependency? Economic woes have caused many to look to the government for a panacea. A charismatic leader said he could help government make that happen. Each new government program, each new entitlement pushes society further into dependency and that much closer to bondage. It's disconcerting to realize that equally describes 1930s Germany as well as modern day America. Would that we could learn from history before we find ourselves condemned to repeat it.
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Personaly 'bondage' to government that people voted for is better than 'bondage' that would happen to any other powers that be without representation. Remember modern government came from feudal serfdom. Which do you think is worse? Oh I forgot the US has rather short memory. I can never understand this blind devotion to private enterprise. Even Adam Smith warned against the dangers of unfettered private enterprise. If you ever get to watch the documentary it is pretty conclusive that financial institutions abuse of 'securitization' are to blame for the current financial crises.
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