[lbo-talk] Capitalism, it doesn't work too good

Shane Taylor shane.taylor at verizon.net
Mon Sep 15 18:07:55 PDT 2008


Brother Can You Paradigm? By Dr. C.A. Rotwang - September 15, 2008, 8:17PM

You may have noticed the Capitalism, it doesn't work too good. This should not be good news for John McCain. But it isn't very good news for Barack Obama either, since the secret watchword for his economic policy is "nudge," whereas what capitalism needs is more like an ass-whippin. Obama has good and smart economists, but they are so square you could jab yourself on one of their sharp corners.

McClueless is entertaining. By the way, did you hear he was a P.O.W.? He is going to clean up Wall Street, and he wants to free the economy of burdensome regulation. At least, that is the ideology to which he apparently adheres. Free enterprise, individualism, small government, "laissez-faire."

Except the model towards which the U.S. system and its politicians incline, like flesh-eating zombies to a ripe Rotarian, is not laissez-faire at all. It is the unified machinations of big corporations, high finance, and big, bad government, also known as corporativismo. (Sounds better in the original Italian.)

It is aptly described as "socialism for the rich" or "corporate welfare." For those of you who haven't given up books yet, you can find elaboration from Jamie Galbraith, Dean Baker, and Mike Perelman, among others.

In the era of big, bad government, the state's repressive powers expand. More defense spending, fewer civil liberties, reduction of the Constitution and the Bill of Rights to a shell. Financial powers are left free to gamble, comforted by the knowledge that regulation will be absent, enforcement will be minimal, and bail-outs will be plentiful. Heads they win, tails you lose. The irresponsibility of corporate and financial miscreants is given free play in the name of unleashing the productive forces of the economy. In the actual event, huge resources were sacrificed to the waste of dot-com duds and overpriced real estate. Capitalism is some great system. Unfortunately, it is not very good at allocating capital.

The old frame of the G.O.P. as the party of limited government is obsolete. The Republicans are the party that greases the big wheels of finance and the corporations, to the benefit of few but the self-selected cronies. We're Russia, but with better toys.

We might have expected that under capitalism, legitimate profit opportunities would lead investors down the primrose path to a national cornucopia of wealth. But the actual dilemma seems to be a dearth of really exciting, windfall profit opportunities that entice those with the most money -- the truly greedy. Instead we get a panoply of flim-flam aimed at paper returns that result in accumulated claims on real resources created by others. The speculators and financiers are the true welfare queens of the age. They use and waste money that isn't theirs, get paid handsomely for abysmal performance, and are able to extort bail-outs from the taxpayer by creating messes that are too big to allow to unwind.

You know there's a problem when the presidential candidates sound the same. Obama needs to ramp up the policy a notch. What sort of improved regulation or oversight is in question. What penalties for those who violate their fiduciary responsibilities. Unfortunately, some of the opposition is in his own party, nay, his own campaign. The legacy of the fabulous decade of the 90s, and the Democratic leaders who insist on paying tribute to it, built substantially on the dot-com bubble, is an intellectual millstone that prevents the flowering of truly new thinking. Of course, Obama can only win by staying as far away from new thinking as possible.

The change we really need requires a revolution in public opinion. Alas, such knowledge is acquired at grievous cost.

<http://tpmcafe.talkingpointsmemo.com/2008/09/15/brother_can_you_paradigm/>



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