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Take that, Milton Friedman!
Well, Friedman had has shortcomings, but don't throw out the baby with the bathwater.
Gee, maybe it's because their flow of Soviet weapons has slowed to a trickle??
As for the title of the article? Of course it's flawed. Whoever said it was perfect is a moron. EVERY system has its flaws.
Gee, maybe it's because their flow of Soviet weapons has slowed to a trickle??
As for the title of the article? Of course it's flawed. Whoever said it was perfect is a moron. EVERY system has its flaws.
Nah, Egypt is a major recipient of US arms. Indonesia still gets arms from China and Russia and Kenya still gets western arms and was never a soviet client anyway. India makes its own knock-offs and continues to buy a mixture of European, US and Russian equipment, again never a constant or exclusive client of the Soviet Union.
Besides, the citizens of these countries dont really form their opinions based on what country their govt buys its weapons from.
The articles title is a mouse though. The text of the article indicates that most people want regulatory reform.
In the USA the market is very heavily regulated and monitored and it operates under a plethora of government mandates. The same goes in virtually every country in the world that government regulates commerce.
Granted, I am not necessarily against all of those regulations, but given that I am acutely aware of the vast bureaucracy that regulates world markets I'm not foolish enough to call it a 'free market'.
As to the people who want government to 'better distribute wealth' these are the people who are experience the LACK of a free market. Mexico, for instance, does not have a free market but a kleptocracy governed by the powerful. Why do you think Mexicans come to the USA to make a living? Because if they succeeded in Mexico some SOB with a macho nickname would come along and steal it from them. The Mexicans come to the US precisely because we do have a free market and because we honor property rights. Mexico does not.
In fact, alot of the regulatory agencies in the US are 'defanged' and usually concern themselves with going after the small fish when enforcing regulations. The US is probably the most deregulated market in the first world now.
This economic meltdown is a direct result of lax market regulation, especially in the US. Much of what caused the banks failure, e.g. credit default swaps, repealling the Glass-Steagall act, handcuffing and defanging the SEC, etc are directly to blame.
The Community Reinvestment Act (CRA) that forced banks to provide mortgages to low-income people with bad credit and to provide loans in areas with unstable property values was the first domino to fall. When the banks were forced to issue sub-prime paper the Federal Reserve had no choice but to come up with new rules to allow the banks to remain profitable and to allow the banks to creat instruments for conveying these sub-par loans. It was all well-intentioned, but as grandma used to say...
In fact, alot of the regulatory agencies in the US are 'defanged' and usually concern themselves with going after the small fish when enforcing regulations. The US is probably the most deregulated market in the first world now.
Nope. Switzerland and Singapore are vying for that title. Russia, unofficially, has the least regulations as it is known that a bribe can circumvent almost any law in Russia.
Free-market capitalism has never actually been tried anywhere so it's illogical to conclude that it is flawed.
Not for nothign but that's what die hard communists say about communisim. Someone points to USSR or Cuba to make a point about the failings of commuisim and they'll tell you that those were bastardizations of communisim and that people like Stalin and Castro are simply using communisim as a cover for facisim. They'll return to an idealistic view of communisim that probably can't be achieved in order to 'prove' that it works. Communisim requires 100% of the people to act explicitly in the opposite of their own personal gain which is, imo, quite beyond all instinct....that is to deny the self.
In the USA the market is very heavily regulated and monitored and it operates under a plethora of government mandates. The same goes in virtually every country in the world that government regulates commerce.
Ok but when we didn't have regulations we had a market crash -- the worst one in history. Since regulations came into place we had ebb and flow...ups and downs, but no 3rd world making crash. This suggests that if run freely as you suggest the free market would stil be flawed.
Frankly making the argument that a given system is 'flawed' is easy, a little disingenuous even. There is no perfect system therefore there'll always be a flaw. The real point is if pro's out weigh the con's and I personally think they do.
1) Is over 30 years old, dont tell me some law passed 30 years ago suddenly undermined the global economy in 2007.
2)Does not "require" banks to do any lending, except to use their discretion and try to find other factors to take into consideration when assessing a loan applicant.
3)Has been successfully watered-down and weakened by every government that has come into office since it was first passed and has always been weakly enforced.
4)Only applies to first-time, low income home buyers. The majority of failed subprime mortgaes involved re-finances and/or non low income buyers; therefore would not have been applicable.
5)Only applied to traditional banks that took deposits and handled traditional personal banking activities, not to indepedent mortgage brokers, who sold most of the subprime mortgages.
Nope. Switzerland and Singapore are vying for that title. Russia, unofficially, has the least regulations as it is known that a bribe can circumvent almost any law in Russia.
Singapore is certainly NOT a deregulated market. Their labour markets are among the MOST regulated in the world. That's why business there enjoys such freedom; they have cost certainty on wages.
By John Buell
BANGOR DAILY NEWS
11/10/2009
Is capitalism evil? Is it bound to pass from the scene? I thought such questions were forever relegated to occasional seminars in a few cloistered left academies. Now, compliments of Michael Moore and the Great Recession, such questions are part of our national discourse. Yet, as even many on the left would caution, shorting capitalism is a dangerous strategy that has burned many over the last two centuries.
Perhaps a more fruitful line of inquiry is the form in which it will survive. The capitalism of the robber barons differed in many ways from that of Andrew Jackson’s era. Mid-1950s capitalism is distinctive from today’s insider capitalism.
U.S. capitalism in its 2009 incarnation is neither just nor efficient. One need only look at a number of widely accepted measures of economic health. While nearly one of six American workers is unemployed or underemployed, almost a third of our productive facilities stand idle. While homelessness continues to grow, nearly one in seven rental properties stands vacant and foreclosure rates rise.
Put aside Economics 101 and ask a simple question. Isn’t there something wrong with an economy that fails to steer unemployed workers into the unused plants? And if some policy achieved this purpose, wouldn’t more workers earn enough to rent those vacant homes and apartments?
Americans often pride themselves on looking at facts on the ground. I find it hard to deny that as an economy we have already produced enough homes and factories that everyone could live comfortably.
Conservatives argue that government programs that pay the unemployed to work in those vacant factories would be “inefficient” or would burden our grandchildren with huge obligations. Yet what could be more inefficient than allowing nearly a sixth of our workers and a third of our factories to sit idle? And as for future generations, their ability to pay debts will depend on the strength of the underlying economy, which is being eroded day by day.
After the Great Depression, Europe and the U.S. crafted policies that corrected the crude market imbalances that allowed humans and their tools to sit idly. Athens University economist Euclid Tsakalotos points out that Keynesianism in the postwar model was also more than a tool to deal with recession and aggregate demand. “It represented a broad, and relatively coherent, patchwork of political, social, and economic elements. It included social norms about the level of acceptable inequality (the level of wages at both ends of the income distribution, care for those unable to work).
The compromises of post-World War II capitalism broke down in the ’70s. The years since this breakdown have not been kind, either in long- term growth or economic justice. GNP and productivity increases both in the
U.S. and in a liberalizing Europe slowed even as inequality grew. (By the same token, the refusal of several European states to follow as fully the U.S. deregulatory labor market model has eased their decline.)
Our experience over the last 50 years suggests that capitalism works best when the dynamism of markets is harnessed to and limited by social and moral concerns. That experience, however, raises two other concerns that the left must take seriously.
Even the most harmonious system (social democracy, socialism, farmers market capitalism) may hide old wrongs or even encourage new evils. Just as capitalism changes in shape, the social norms in which it is embedded can themselves become agents of oppression if not subject to sensitive scrutiny. Post-World War II capitalism was sustained by lonely and uncompensated women’s work, by African-Americans in ill-compensated work and by endless exploitation of natural and human capital.
Corporate capitalism can grow and adapt. Social and economic relations within individual firms acting in a market environment need not be confined to the strict hierarchies prevalent today. Not only Europe but also the U.S. provide instances of worker-controlled enterprise in which a one-person, one-vote principle prevails, corporate assets are jointly owned, and workers determine wage structures and product priorities.
Contrary to the business press, such firms have impressive track records. In Europe, workers have directly occupied some of the factories being closed amid the recession. Some have seen the social insanity of idle minds and plants and have acted directly where politicians even on the left have stood by.
John Buell is a political economist who lives in Southwest Harbor. Readers may reach him at jbuell@acadia.net.
Oh please dont start in with that CRA nonsense. The CRA:
1) Is over 30 years old, dont tell me some law passed 30 years ago suddenly undermined the global economy in 2007.
Of course it can, especially when these laws can be updated to further fit somebody's agenda. And the economy didn't suddenly fall apart in 2007. It was built up until it fell apart. If you think the market just suddenly decided to collapse for the hell of it, you're wrong.
It "encourages" lending by securing loans using government funds. Remember Fannie Mae and Freddie Mac? Telling banks that you can make risky loans and we'll cover the loss allows banks to be easy with their money. The CRA was created to try to get more loans out there. If those banks didn't start lending, somebody would have started labeling the bank for racism or discrimination.
How so?
No, those loans played a part too. But the foreclosures in middle and upper middle class neighborhoods was a very new event for a lot of people, thus why they were more publicized.