President Obama, acting as our chief steward, wisely put conditions on the truckload of cash being shipped to Detroit. Too bad the cash pumped into the flat tire we call the financial system was not similarly encumbered. We might be able to see where it went. Businesses SHOULD be leery of accepting bailout funds [and are not being forced to do so]. Business needs to be careful not to trade away autonomy for cash. If the government buys a stake, they have investor rights - for better or worse.
Does the stake in large companies held by our government equate to socialism? Does it represent an erosion of capitalism? Are we asking the right questions?
Capitalism is not a structure subject to erosion - but merely a tool used to accomplish projects on a scale impossible for individuals. Likewise, socialism is not an all-consuming beast about to devour all of our creative souls - but merely a tool to assure basic access that individuals are unable to attain on their own. Both tools provide benefits to society, and both, like all tools, must have guards to prevent accidental injury, and instructions for productive use. In clumsy hands, or used in the wrong application, either would be damaging. Also, one tool cannot produce all that's needed.
Since Reagan, capitalism has been overused and underregulated in our economy. This has produced a lot of wealth, but you can't eat wealth. The auto industry, like many in the US, operated with its primary goal to maximize shareholder return; a laudable intent, but this should have been lower as a priority than building the best automobiles. The capitalist tools were used to make poor quality, inappropriate, but high profit cars and SUVs. This short-sighted strategy was accomplished by investing in lobbying, to excuse the industry from efficiency [and sometime safety] standards; advertising, to create demand for these vehicles; and financing, to smooth the buying process. Lack of vision [supposedly the great benefit of capitalism] and unwillingness to keep focused on their market, is what left these hulks so vulnerable in the current recession.
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Chris in general I agree with your post. But I want to explore things a little further.
ReplyDeleteCapitalism as defined by Wikipedia "Capitalism is an economic system in which wealth, and the means of producing wealth, are privately owned and controlled rather than commonly, publicly, or state-owned and controlled".
So we probably all agree that in concept this is the way to go. But what happened in our country and the world that capitalism failed. And I think the answer to that does not rely on a breakdown of government or capitalism. I believe the reason capitalism failed is because of a breakdown of our society, and unfortunately I don't know how you fix that.
Government doesn't have the means to regulate greed, irresponsible spending by individuals, predatory lending, living beyond our means.
The government can't tell Wall Street that demanding and expecting quarter after quarter of higher earnings is not sustainable. The government can't tell Pharma companies and doctors that medicating the country up the wazoo is wrong. As long as Pharma is producing "safe" drugs why would the government prevent doctors from prescribing them.
The truth as I see it is that we need to fix the basics. Our society needs to go back to spending more time with each other, eating healthy foods, exercising more, watching less TV, educating our children to respect each other and adults, teach our children morality, honesty, integrity.
Fix those things and capitalism will work.
Wikipedia's definition of capitalism as "an economic system" is only useful in an academic sense. In the real world, economies are hybrids of many systems that are theoretically incompatible - yet they work. The means of production are ALWAYS controlled to a degree by government, except in primitive [subsistence] states. Whether by tax policies, regulation, or direct ownership, the political authority acts "in the national interest".
ReplyDeleteCapitalism did not fail, the problem was that we expected it to operate with a moral compass which it does not have. Greed advised against regulations requiring transparency, and prosperity became the sole benchmark. Now everyone is saying that confidence is the key to recovery. Unlike cash, which can be injected like steroids, confidence must be built over time, and be based on trusted value - in very short supply today. It goes without saying that socialism also lacks a moral compass, so there will be no magic cures from that direction either. All systems break down, because they are designed and operated by human beings - who are fallible.
I don't know what will restore the sense of community in the US, but I know a few things that won't: endless pusuit of material goods, demonizing people or cultures different from us, expecting solutions to our problems to come from other people.
" we need to fix the basics. Our society needs to go back to spending more time with each other, eating healthy foods, exercising more, watching less TV, educating our children to respect each other and adults, teach our children morality, honesty, integrity" - that's a good start.
Slowing down to smell the roses, read a good book, and spend quality time with family and friends is something that drives me every day to work as hard as I do. It would be wonderful if I could work less and reach my goals at the same time. But that's not how the world works. And thank God for that. Things are not fair in life, or perfect. So we do the best we can to get as far as we want in life, and provide the best for our kids - whatever that may be. If I want to live in a shack and work 2 hours a week, or live in mansion and work my ass off, that's my decision; not society's; and certianly not the government's. The point is that regulating any of these things is not the government's role.
ReplyDeleteChris said:
"I don't know what will restore the sense of community in the US, but I know a few things that won't: endless pusuit of material goods, demonizing people or cultures different from us, expecting solutions to our problems to come from other people."
The freedom of choice to pursue material goods to your heart's content is one of the most beautiful things about a free, capitalist society. Just imagine (well, some of us don't have to imagine) what it would be like if the government stepped in, to any degree, and started telling you when enough was enough. You can't buy this car. Buy only this size house. Etc. No. I disagree wholeheartedly with that statement, Chris. No way.
What I do agree with is not expecting solutions to our problems to come from other people. Absolutely right. That supports my statement above, and is the exact same thing that our Founders had in mind when writing the Constitution. In a free-market, limited government system (not no government, mind you) we, the people, are each responsible for our own lives and the lives of our families. Once again, we can not, and history teaches that we should not, put that much faith into any governing body, nor expect them to "give" us that prosperity.
It is crucial to recognize that people are A) imperfect, and B) individuals. Societal utopias are not only impossible, but striving for them creates turmoil and upheaval, for these reasons. So the goal has to be creating a society with limited (but just enough) collective control in order to create stability, while leaving great freedom of living and expression to individuals. The longer one thinks about it, the more one realizes how correct and insightful were the people who founded this Country. They lived throught the alternative. This is what they were thinking, and our society of limited government is what they created.
As for "demonizing people or cultures different from us", the only ones worth demonizing are those who spawn suicide bombers, and teach their children to blow themselves up. Unless they change their ways immediately, these people, whether individuals, groups, cultures, whatever, have to be dealt with in a swift, effective manner. Rationalizing, equivocating or negotiating has not worked, and will not work. Aside from them, it's all about quality education.
I merely listed a few actions that inhibit the healing of our ruptured social fabric. Endless pursuit of material gratification is immoral, causing deprivation and degradation.
ReplyDeleteI would agree that the freedom to choose such pursuits is a wonderful grace, but the negative consequences of taking such a course remain. Electing to forgo self gratification marks a complete person, and contributes to building community.
Government mandates toward that end are impossible to enforce, and do not achieve the desired effect anyway. Neither can religion force it on its followers [much to the chagrin of the Catholic Church]. It can only happen within the individual, and should be encouraged.
I guess what I'm saying is that necessary government actions to achieve the bailout, and addressing our social problems are not directly related. I'm blaming Alex for pulling us off topic, instead of putting it in a separate post.