State-Wrecked: The Corruption of Capitalism in America

[austinN4]

State-Wrecked: The Corruption of Capitalism in America
http://www.nytimes.com/2013/03/31/opinion/sunday/sundown-in-america.html?_r=1&

This opinion piece by David Stockman on Sunday got very little response after montanadave posted a link (post # 269) to it in the very long Top or Interesting Economic or Political Articles thread in GD.

David Stockman is a former Republican congressman from Michigan, President Ronald Reagan’s budget director from 1981 to 1985 and the author, most recently, of “The Great Deformation: The Corruption of Capitalism in America.

Because I believe this is a significant indictment of our current economic situation I am reposting the link here in its own thread in hopes that it will get more attention. FWIW, I happen to think that Stockman was pretty much spot on.

[maximus83]

A great essay that gives a concise history of the economic missteps that have been made since the 1930's. He has some great lines like this one that summarizes the 2008 meltdown:

"Within weeks of the Lehman Brothers bankruptcy in September 2008, Washington, with Wall Street’s gun to its head, propped up the remnants of this financial mess in a panic-stricken melee of bailouts and money-printing that is the single most shameful chapter in American financial history."

His analysis of the GOP's contribution to this process of corruption and the run-up of public debt is pretty insightful. It shows how leading GOP or "conservative" figures directly contributed to the current corruption, federal manipulation of the economy, and the fiscal crisis: Nixon, Milton Friedman, Reagan, GW Bush. Really the fiscal policies of some of these past GOP leaders have been as disastrous as those pushed by the Left.

[mikelowrey]

Oh man, I was actually Corporate Security at Lehman Brothers when the shit was about to hit. Us (Corporate Security) were briefed About 6 months prior about what was going to happen and were getting ready for the disaster, some of the employees started noticing before time and some were going crazy selling classified info to others companies in exchange of jobs and some others were doing a lot of shit, I told my boss I was jumping ship and when to LE previous to the real meltdown and thank God I did that if not I would have been without a job right now. What really sucks is that the CEO of LB knew everything about it and In top of that got compensated a bunch of millions, where are we going?

[skydivr]

The emporer has had no clothes for years; we are circling the toilet drain and nobody publicly had the guts to say it, because it will be like yelling fire in a crowded theatre. It's obvious to me that the market is running high because the banks and investors had to put all this free cash into SOMETHING. But I'm not sure cash is a good place either, as it won't be worth the paper it's printed on if it REALLY gets bad.

The good news for us is, as bad as it is, the USA is still the BEST investment country in the world (at the moment).

[Belmont31R]

Government is a cancer that has spread to every cell in the body.

This is the nature of the government but as a people we allowed this to happen. Can you name 1 elected person who is currently serving who's mandate was to repeal the welfare state and central planning?

Start a thread on here about repealing SS and people will come out of the woodwork and go apeshit.

[maximus83]

Start a thread on here about repealing SS and people will come out of the woodwork and go apeshit.

I have two close relatives, both shooters, both 2A advocates, both who rail against the excesses of government as much as people here do.

One of them applied for federally assisted housing recently and grumbled how unfair it was that he was a bit over the income limits. And griped that his SS was being taxed due to his income level. The other one receives disability checks for a disabled adult child, and similarly grips about getting hit with higher taxes on SS benefits. Both of these will complain about government spending and waste, but seem to have an overwhelming sense that SS and other government entitlements are something they DESERVE, because they "paid into it" their whole working lives. I think what they don't realize with stuff like SS, there really is no big account that you are saving up funds in, like a pension. Instead, the government confiscates money from everyone to pay current recipients today, and makes promises to everyone else (which cannot possibly be kept) to pay benefits in the future.

This mentality, even among the "good guys," suggests to me that Stockman is right. We are not going to reverse this situation. This corrupt system is coming down, it'll take a while, but it'll definitely get much worse before it gets better. We have met the enemy, and he is us.

[duece71]

The emporer has had no clothes for years; we are circling the toilet drain and nobody publicly had the guts to say it, because it will be like yelling fire in a crowded theatre. It's obvious to me that the market is running high because the banks and investors had to put all this free cash into SOMETHING. But I'm not sure cash is a good place either, as it won't be worth the paper it's printed on if it REALLY gets bad.
The good news for us is, as bad as it is, the USA is still the BEST investment country in the world (at the moment).

Gold and Silver may not be either as people won't know what to do with it. Trade and barter would take over, once the dust settles. Of course, 300 million people probably will not trade and barter in an orderly fashion anyway.

[Belloc]

Edit.

[J-Dub]

Capitalism is not to blame. Fascism is to blame.

[khc3]

Capitalism is not to blame. Fascism is to blame.

No, it's capitalism, a term coined by Marx.


"The directing motive, the end and aim of capitalist production is to extract the greatest possible amount of surplus value, and consequently to exploit labor power to the greatest possible extent."

"Capitalism" has no love for freedom, and no fear of big government.

"Free markets," or more accurately, freedom of association, the understanding that the only moral decisions are those made freely, are what should have been defended, not "capitalism."

But that would mean we'd probably still have to witness things like "colored-only" waiting rooms, and whatnot. And it doesn't appear that too many people have the stomach for that.

[montanadave]

A question regarding Stockman's article: Why, after presenting what I viewed as a rather compelling argument for impending economic collapse which Stockman largely blames on the Fed's monetary policy, does he tell folks in the last sentence of the his NYT op-ed piece to move out of the markets in favor of a cash position?

I understand the logic of avoiding the collapse of a financial market bubble, but if the dollar is in the toilet as well, why be holding cash?

I just received Stockman's new book in the mail yesterday. Maybe it will shed a little more light on the subject.

[skydivr]

if the SHTF, then cash is only going to be worth using as toilet tissue. I think he really means moving it into cash-like solid assets.

[austinN4]

I understand the logic of avoiding the collapse of a financial market bubble, but if the dollar is in the toilet as well, why be holding cash?
Devalued dollars may be worth more than worthless stock, perhaps?

[montanadave]

Devalued dollars may be worth more than worthless stock, perhaps?

That's about all I could figure.

If it's gonna be as ****ing grim as Stockman and others (read Jim Rogers for another pick-me-up: http://moneymorning.com/ob-article/jim-rogers-major-crash-ahead.php?p=PPYRP206&utm_campaign=content&utm_medium=cpc&utm_source=taboola#.UV79Z6Ksh8E) say it's going to be, I think I'd rather position myself in dried beans and bullets.

[Armati]

No, it's capitalism, a term coined by Marx.



"Capitalism" has no love for freedom, and no fear of big government.

"Free markets," or more accurately, freedom of association, the understanding that the only moral decisions are those made freely, are what should have been defended, not "capitalism."


Indeed. Most people are completely unaware of what Capitalism actual is. In a truly Capitalist society people could sell their children to interested buyers. Capitalism in it's pure form is immoral in the extreme. No one on "our" side of the argument should be defending Capitalism because it not reasonably defensible.

[Belmont31R]

Indeed. Most people are completely unaware of what Capitalism actual is. In a truly Capitalist society people could sell their children to interested buyers. Capitalism in it's pure form is immoral in the extreme. No one on "our" side of the argument should be defending Capitalism because it not reasonably defensible.



Thats why we have a limited government, and we are selling kids right now. We have some friends going through an adoption and you are more or less buying a child. It would cheaper to just hook up with someone on 'the market' and pay them outright.

[chadbag]

"Capitalism" has no love for freedom, and no fear of big government.


That is not capitalism either. True "capitalism" as described by Adam Smith is not what we have today. And does not work or exist without freedom to act.


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[Armati]

That is not capitalism either. True "capitalism" as described by Adam Smith is not what we have today. And does not work or exist without freedom to act.


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Perhaps you should re-read "Wealth of Nations"?

"The man whose whole life is spent in performing a few simple operations, of which the effects are perhaps always the same, or very nearly the same, has no occasion to exert his understanding or to exercise his invention in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become." - Adam Smith, "Wealth of Nations"

Smith knew well that "capitalism" as coined by Marx, would lead ultimately to slave labor, sweatshops, and otherwise inhuman working conditions. The history of the Industrial Revolution bears witness to this.

I think a lot of people like to invoke Adam Smith without really understanding the whole body of his work.

[chadbag]

Perhaps you should re-read "Wealth of Nations"?

"The man whose whole life is spent in performing a few simple operations, of which the effects are perhaps always the same, or very nearly the same, has no occasion to exert his understanding or to exercise his invention in finding out expedients for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion, and generally becomes as stupid and ignorant as it is possible for a human creature to become." - Adam Smith, "Wealth of Nations"

Smith knew well that "capitalism" as coined by Marx, would lead ultimately to slave labor, sweatshops, and otherwise inhuman working conditions. The history of the Industrial Revolution bears witness to this.

I think a lot of people like to invoke Adam Smith without really understanding the whole body of his work.

And your point is? What I said is exactly true. What you've said does not in the least counteract what I said.

Adam Smith explained that people being free to make their own decisions would lead to greater wealth for a nation than one fettered or controlled by government. It is not a moral judgement.


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[Armati]

That is not capitalism either. True "capitalism" as described by Adam Smith is not what we have today. And does not work or exist without freedom to act.


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Ok, one more time, Adam Smith did not describe Capitalism - Marx did. Modern free-marketeers like to latch onto Adam Smith, only envoking the parts of his work that they like, and dismissing entirely the parts they do not like or do not understand.

Raw Capitalism leads to the destruction of the individual and any democratic form of govt is replaced by oligarchy.

Are you suggesting that we would be better off prior to anti-trust laws?

[chadbag]

Ok, one more time, Adam Smith did not describe Capitalism - Marx did. Modern free-marketeers like to latch onto Adam Smith, only envoking the parts of his work that they like, and dismissing entirely the parts they do not like or do not understand.

Raw Capitalism leads to the destruction of the individual and any democratic form of govt is replaced by oligarchy.

Are you suggesting that we would be better off prior to anti-trust laws?


So, are you claiming that only Marx's description of Capitalism is valid? Because he gave it a name?

Adam Smith did not believe in private ownership of capital and private direction in its use?

"Capitalism is defined as a social and economic system where capital assets are mainly owned and controlled by private persons, where labor is purchased for money wages, capital gains accrue to private owners, and the price mechanism is utilized to allocate capital goods between uses." (Wikipedia)


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