12.05.2008

The Capitalist Chimes In

First, let’s start with the thanks. Anok has graciously opened her Blog to the Enemy. Whether she is crazy for doing it, or I am for taking the bait, remains to be seen… 

As Anok said, this isn’t about whether we are against the Bailout, we both are touchingly in agreement on that point. Maybe this simple fact should serve as a hint to Washington. If you know about Anok’s and my own normally diametrically opposed viewpoints this is a hint as subtle as a train wreck.
Anok, you raise many points here, in fact, too many to deal with in one reply, so I am going to break it down into a few answers. Effectively walking around the 800 limit 

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I am going to begin by addressing your final point, that of unregulated capitalism.

Let’s be clear that there are very few people left in this country that are proponents of a complete unregulated capitalist system. I don’t know anyone that believes companies should be allowed to do anything without any consequences. For instance, you’d be hard pressed to find an American “Capitalist” that believes companies should be allowed to hire 5 year olds because their small hands and arms are just the right size to reach past that spinning saw-blade. There is undoubtedly some regulation that is necessary, warranted, and good for everyone involved. So we end up with not as much capitalism, as we do fiscally conservative ideas. To call a fiscally conservative a “capitalist” is about as accurate as calling Obama a communist. I will however loosely use the term Capitalism to denote the fiscal conservative stance since it is undoubtedly closer related to that than to the far left view of Socialism.

The problem here isn’t “Unregulated Capitalism”, the problem here is too much regulation, the efforts of Government to regulate capitalism or to be more precise to control one side of the equation only. Which is the potential negatives that come with having the benefits of capitalism.

This meddling is what has allowed companies to become “too big to fail” to begin with. (Which I’ll discuss in the next post.)

That being said, capitalism (as defined above) is essentially fair – Take a deep breath and two aspirins- I know that one made you see stars. But I promise I have a point here.

Real Conservative fiscal policy, would indeed allow for failure, which can be perceived as bad. But it would also remove any rights that these companies have to come crying when they end up making too many bad decisions. If they made large loans to small income families, they would eventually end up eating that loss and the company would fail. THAT serves as the warning to others. It isn’t until government steps in and says that these corrections occurring in a free market are “not acceptable” and start to meddle to control it, that the problems really begin.

Any side of this issue, be it left or right has to deal with the good and the bad of their own position, it’s when you try to implement the good of both sides that you end up with a clash where the bad reaches a synergy. Quite frankly, we can’t have the cake and eat it too.

Yes, there are negatives to both systems. Capitalisms problem is that it places a responsibility on the all parties not to make bad decisions. It operates on the basic assumption that a majority of decisions made will be good decisions. And it gives little or no pardon to those that makes bad ones. In the words of my old secretary,” Stupid hurts.”

A perfect example of this is the difference between the Big Three, and the foreign brands that have placed factories in for instance Tennessee. The big three have enjoyed government protectionism in order to stem their failing position on the international market. Now these Big 3 that have had that benefit, are the very ones that need more help. The foreign companies that had to fight their way into this market IN SPITE of big 3 having the backing of the US government aren’t sitting in Washington asking for 25 billion, they are functioning as they should.

You blame greed, and that is naturally a major player in this. But just to irk you a little I have to quote Gordon Gecko,” Greed is Good, Greed Works”.
Greed is no different than any other motivating emotion. It serves as a creating and driving force. It is only when greed is accompanied with rewarding bad or even illegal decisions and actions that it becomes a problem.

You seem to forget that these people, making bad decisions as to their own finances, taking loans they can’t afford. Are doing so because they are greedy to have things that their financial status can’t support. You blame the corporate greed, but I put it to you that the real greed rests with the lenders who are taking these loans. If a company is greedy, and makes bad decisions because of it, they should not be rewarded with a bailout either. But without the greedy customer, this problem wouldn’t exist.

The truly fiscally conservatives see no difference between a greedy person, and a greedy company. They both made their beds and now they have to sleep in them. Neither situation is the problem of someone else.

Finally, you discuss how the market was doing well regulated, and how despite unregulated markets it crashed in the late 20’s. Aren’t you forgetting how it did before it crashed? If you care to examine how the US economy grew before the 20’s crash, you will see that it wasn’t exactly stagnant and dismal before that, in fact, 1870 to 1916 US production increased tenfold. That’s a slight 1000% dent in your “unregulated markets are bad” theory. The position of the US as the world leading industrial nation was created in this unregulated market.

Now I’m past the 800.. so I’ll be back to post on the “too big to fail” argument next.

3 comments:

Tamera said...

You both make good points. One thing you two obviously agree on is

(ref: You wrote:)

"If a company is greedy, and makes bad decisions because of it, they should not be rewarded with a bailout either. But without the greedy customer, this problem wouldn’t exist."

This is something I think all citizens would agree on, and that must be a great starting point.

Anok said...

Excellent! I'm glad you decided to do it, I think this is good, Surprisingly, I actually agree with probably far more of what you said than you might expect - however there are a few things....

I'll work on a rebuttal, I think this is fun!

And yes, watching a (loosely defined) Capitalist and an Anarchist agree on something economic is a sign that things have gone terribly wrong in the economy :D

Anonymous said...

greed is good.
i stopped reading after that.
ever hear of morbid obesity and what THAT generally leads to?
open the business section of any newspaper today and see if you can make the analogy.
probably not.
you're the guy who thought "collared (sic) greens and watermelons" was something funny to invoke after obama and bush had lunch.
some markers are so clear they can't be mistaken for anything else.
loj