Thursday, April 16, 2009

Capitalism as Corruption – a Simple-Minded Indictment

“The fact is that people acting selfishly get us exactly what we have right now -- economic catastrophe.

Bernie Madoff certainly acted in his best interest, wouldn't you say? All of the insider traders, Ken Lay, all of the thieves, cheats, and liars who became millionaires and billionaires definitely acted selfishly."
(anonymous committed Liberal)
“I'm sure Conservatives will say, "buyer beware" and other such conservative euphoniums and platitude that serve to remove any social responsibility for the rich business owners of the world...”

“...Fact is if the rich could make people work 80 hour weeks, work children, or work people for 1.00 an hour, they would (hell they have)...

“Like we have laws to keep people, the average citizen in check from their greed, we should have laws to keep the rich in check from their greed...”
(anonymous Leftist)
What a bunch of DOPES!

In the first case, Madoff was a criminal, involved in a ruthless ponzi scheme, while actual Capitalist entrepreneurs, like Bill Gates have delivered MORE good over the last three decades, to MORE people than ANY government in the history of the world.

Anyone so dumb as to NOT be able to see the difference between entrepreneurial behavior and the Capital investment that fuels it, enriches EVERYONE far more than even those made incredibly wealthy by the value of their own ideas, is too stupid to breathe on their own.

"Rockefeller's or Gates' productivity never hurt any of us, in FACT, the prodigious output by such giants improved life for us all....a little gratitude and perhaps even inspiration, in the form of inspiring the rest of us to work ceaselessly and tirelessly to contribute something that'll help others while enriching ourselves, would be in order.

The reason why there are so few such people is almost certainly proof that entrepreneurialism is the highest form of human creativity ever to exist.

But far from being linked to anarchy and criminality as the anonymous goofball above posits, because Capitalism is rooted in private property rights, it requires a STRONG law & order styled governance.

In FACT, Capitalism is INCONSISTENT with anarchy (no government). Everywhere Capitalism hs sprung up, so have harsh penalties for criminals (violent offenders and especially "crimes against property" scumbags).

Capitalism is VERY consistent with, say, a Bill Bratton-styled justice system that seeks to grind up those who don't comply to the accepted standard under the wheels of that judicial system.

We can blame a LOT of things for the current CRISIS, but MOSTLY it was the result NOT of government INACTION, but of wrong-headed government ACTION.

The ill-conceived Bush plan to "increase low income and especially minority homeownership" (a seemingly laudable goal) done in a very poor way, was a HUGE part of the crisis.

Bush signed onto the 0% DOWN for FHA mortgages, THAT coupled with the "turbo-charged CRA" of 1995, among other things, reconfigured lending criteria (although THAT was NOT entirely enforced or even encouraged UNTIL the Bush administration made increasing low income homeownership a stated goal.

Once 0% DOWN for FHA mortgages was signed onto in 2002, and the GSEs were directed to buy up (back) as much of those subprime mortgages as the banks and brokers could write - the U.S. government had, in effect, allowed "legalized counterfeiting." After 2002 Fannie and Freddie increased their share of the mortgage market they bought/backed from 24.8% to almost 50% including a HUGE portion of the post-2002 subprime mortgages!

That allowed banks and brokers to create as much wealth (CREDIT is wealth) as they could write. T
he current crisis proved two things, (1) there's as much money in writing counterfeit credit (government-backed bad debt) as there is in counterfeiting currency and (2) counterfeit CREDIT/DEBT may be as dangerous if not MORE than currency counterfeiting.

Were those banks and brokers who gorged on that flawed policy greedy? Were their actions criminal?

Yes to the first and NO to the second, given that government had taken the lead in encouraging and BACKING the "creation of credit (wealth) out of thin air" by members of the private sector.

That above anonymous poster didn't merely compare entrepreneurs to criminals like Madoff and lay, he clearly and inanely implied that that WAS part and parcel of the market process.

Perhaps one of the best, or at least most noteworthy passages, in Atlas Shrugged is that of Francisco D’Anconia explaining to Bertram Scutter, who’d uttered the phrase “Money is the root of all evil...”, that money is merely a tool, a medium of peaceful exchange that could not exist without the productive efforts of others.
“When you accept money in exchange for your efforts/labors, you do so only on the conviction that you will be able to exchange it for the products of the efforts of others. The trade, by means of money, is the code of men of good will. Money is rooted in the axiom that every man is the owner of his mind and his efforts...So long as men live together on Earth and need means of dealing with each other, the only substitute for money is the muzzle of a gun.”

As to the argument that “there are laws to rein in the “greed” of average men,” THAT is utter nonsense.

We have no such laws!

Are there laws that keep you and I from leaving our current employers to take jobs for more pay and better benefits?

No, there are NOT.

Are there any laws that keep you or I from investing as much of our own incomes as we want to try and leverage and make as much money as we can?

Again, there are NO such laws!

OK, so are there laws that restrict either of us from going out and starting our own business and making as much money as we possibly can?

AGAIN, no there aren’t.

The FACT is that there IS NOT “only a certain amount of wealth available.”

That’s called a “Malthusian argument...and it’s FALSE!

Wealth is constantly expanding and contracting and it’s ONLY expanded by the growth of private enterprise. Aggregate wealth SHRINKS as a result of the growth of government.

The accruing of inordinate amounts of wealth by individuals DOES NOT deny wealth to any of the rest of us, in fact, it INCREASES the aggregate amount of wealth available and increases opportunities for ALL.


Roadhouse said...

It will almost make it all worth while to see the Obama-bots reaction when there are no more "rich" people to provide jobs and tax revenue for their pet projects and social engineering progams.
Sure, we'll all be starving and pennyless, but at least we'll have a few laughs about it.

JMK said...

Ayn Rand would agree Roady - I'm re-reading Atlas Shrugged right now, so that's very timely.

It seems we go through these periods or swings between Keynesian and Supply Side policies.

What's been horrific about the current trend is that way too many of us have failed to realize that the KEYNESIAN shift began around 2002...

The only saving grace in Keynesian economic policies is that they DON'T WORK....they CAN'T WORK!

When they inevitably fail, they are replaced with Supply Side administrations - Carter was followed by Reagan, Dinkins by Giuliani and the Liberal Democratic Congress of 1956 - 1994 was follwoed by the Gingrich Congress of 1995 - 1999.

The REAL shame is that G W Bush's Keynesianism has been wrongly portrayed as "Conservative" and "Supply Side", allowing the Obama administration to come in offering more Keynesianism as "change"!

The good news is that more and more people are finally coming around.

Anonymous said...

One of the signs I saw, at the TEA party that I attended was this: "Mr. Obama, you have run out of our money!"
The rich people are the ones that actually run this country, giving jobs to the not so rich and the poor alike, but only if they are willing to work. And therein lies the problems here. "Democracy will cease to work when the people find out the government will give them money, instead of working." We are coming so close to that, yet, no one seems to realize it. the last unemployment numbers, didn't it say that 91.5% of the people WERE working? Great post as usual sir.

Seane-Anna said...

Liberals' righteous anger against greed reeks of hypocrisy when you consider their devotion to the sin of covetousness, greed's identical twin. Liberals have made covetousness--enviously wanting what someone else has--their guiding principle. Their second principle is that the poor are entitled to be covetous and "justice" demands that the gov't help them get what they want. Peruse history and see what this kind of thinking inflicted on mankind. I'll take greed, and capitalism, any day.

Clifton B said...

Excellent posting JMK! Liberals make the mistake that wealth in America is static. That there is a finite amount and that your economic station in life is also fixed. Nothing could be further from the truth. Weath in America is dynamic, constantly expanding, shrinking and changing hands.

JMK said...

"Democracy will cease to work when the people find out the government will give them money, instead of working." (WC)
That is the primary flaw of both pure democracy and Collectivism in general...and it's why neither of those two conditions CANNOT work.

Government does not produce anything, so it relies on the private sector to produce all the goods and services a country needs.

When the private sector implodes, the government cannot replace the productivity and the prosperity of a vibrant private sector.

JMK said...

" Liberals have made covetousness - enviously wanting what someone else has as their guiding principle. Their second principle is that the poor are entitled to be covetous and "justice" demands that the gov't help them get what they want." (Seane-Anna)
A brilliantly made point Seane-Anna!

Claiming complete ownership of all that YOU create is NOT "greed," it's the natural right of any self-owning, sovereign citizen.

What you call "covetousness" is actually "greed." - wanting some or all of what someone else produces, THAT is true GREED.

Pandering to the poor and ignorant is always in the best interests of those in the political class, simply because there have always been more poor and dumb people, than wealthy and educated folks.

JMK said...

"Liberals make the mistake that wealth in America is static. That there is a finite amount and that your economic station in life is also fixed. Nothing could be further from the truth. Weath in America is dynamic, constantly expanding, shrinking and changing hands." (Clifford B)
I wonder why that undeniable fact is so alien to so many people Clifford.

The naive belief in the static wealth model is so obviously false, you have to wonder why so many people hold to it and why so many of our educators disseminate this falsehood.

Seane-Anna said...

I did make a brilliant point, didn't I? :)

JMK said...

Indeed you did!

Uncle Joe said...

Obama's solution to everything is to nationalize it. My fear is that Barrack Chavez Obama and the modern DNC aided and abetted by the news media will be able to do a lot of damage before enough people realize what's going on.

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