The Capitalist System Is Decaying Because Of Its Own Contradictions

Maybe he should ask for a class in marxist physics, or marxist biology, or marxist engineering...

 

That's because there are no contradictions.

 

At least none of its own causation.

 

How, in your opinion, is capitalism reliant upon government interventionism?

 

Blaming the Fed are we for sub-prime loans that banks should have never been allowed?

I agree! (Surprise, surprise!)

The Fed should have been all over the bank's lending procedures tantamount to give-aways-and-take-backs. Troubles is, the take-backs from bad-loans mounted to such a point that the banks/lenders could no longer finance their debt. They could not offload the properties to obtain revenues.

The Fed internal administration should have been spot-checking the loans at various banks from the get-go in 2002 (when the housing boom started) to assure that the underpinning "factual information regarding the lender's capacity to repay" was solid.

When, in fact, it was just a bunch of lies, lies, lies packaged by the banksters/loan companies themselves.

The banks thought that in case of bad debt they could always recuperate the property and resell it. Trouble is, in a full-blown recession (as occured in 200 there aint no buyers! They get stuck with it, like a lead balloon the weight of which is tightening the rope around their collective necks.

Duhhhhhhhhhhhhhhhhhhh ....

 

OK, now explain why - because it is not evident by you just stating the supposed fact ...

 

Indeed it is. Somebody is trying to irk you. Get used to it - the gnats abound here.

Moreover, the proper question is not what government's do that cause both good and bad outcomes.

It whether or not they do anything at all. Both the Great Depression and the Great Recession were wrongs of that kind. Something bad had to happen before Congress realized that something drastic had occurred and needed fixing regardless of well-honed principles.

In both cases mentioned, the Replicants refused to spend-more-money in order to alleviate-the-problem of economic Demand Failure. In both cases, the economic situation got so bad that it took not months but years to come out of it. In the latter half of the 1920s-decade, political decision making was decidedly "laissez-faire" (which means "do nothing and wait"). The result was massive unemployment that brought in Roosevelt who took two-years to start the stimulus-spending that Keynes had suggested (first in his book, and then personally.

Ditto with Dubya. It was Obama that cleaned up his shat! And then, it was the Replicants in Congress who refused to accelerate the economy, which created no jobs for four long years from 2010 to 2014 (see here from the BLS) because they nixed all stimulus spending by Obama!

Which brings me to my most pertinent question: When will we as a nation ever learn?

Too late is always worse than too soon. In economics, always worse ...

 

Blaming the fed for manipulating interest rates and for backstopping banks, so that they have perverse incentives. Yes. When any business knows it's going to be bailed out it is incentivized to undertake risky behavior.

 

You mean you haven't thought about it. Capitalism is all about competition. "Competition" is one of the biggest selling points for capitalism. It's so essential and it is so wonderfully responsible, almost magically, for high quality at low price. But every business starts from day one to find ways of eliminating competition. Meanwhile quality goes to hell in order to compete and thereby "win" with greater profitability. "Planned obsolescence" becomes dominant and the "low price" becomes "what the market will bear."

Then you can tell me about all the democracy found in the workplace.

 

How did FDR "save capitalism"? There's your answer.

 

FDR didn't save capitalism. He destroyed it. What's your point?

 

Yet another emotional response devoid of any substance.

The Fed "manipulates" the interest-rate upwards to prevent runaway booms and downwards to prevent catastrophic busts. The reasons (in theory) are obvious:
*When there is too much Demand as seen in abnormal price increases, then higher money-rates reduce the incentive to Consume.
*When there is too little Demand as seen by lowered economic growth and higher unemployment, the lower money-rates spur the incentive to Consume.

In either case, it is neither companies nor the government that "lead the dance". It is the Consumers.

And contrary to your remark, there are damn few businesses in any economy that get aggressive in any circumstance just because they THINK the government will bail them out. The banks learned that lesson the hard way as a result of the SubPrime Mess that they were uniquely responsible for inducing and conducting right up to the bitter end. (Called the Great Recession.)

America's unique problem is that Americans have not realized what the National Budget is and does. (As shown here.) It is a classic rip-off of national expenditure on behalf of just one Federal responsibility - the Dept. of Defense. More than half is spent on defense, when the country needs badly both a
*National Healthcare System (to halt runaway pricing feeding the profits of private insurance companies as well as extend life-span) and,
*Funding Post-secondary Education such that our children have the necessary credentials to find a decent job in this brave-new-world of the Information Age.

Period ...

 

I think you may be mistaken in your notion of capitalism. Can you please provide your working definition?

I don't think you and I have the same definition of capitalism. My understanding is that capitalism is a system in which property rights and contracts are legally upheld. Do you have a different definition that somehow involves "competition"?

Democracy is a political system. It has no bearing on business.

 

I've already done so way back in this thread.

I have no problem with your focus on only one part. I focus on the other part - a capitalist market-economy must provide Income Fairness*. Which, in the US, it never has done adequately.

Moreover, it never will either for as long as the American voter believes the BS that the Replicants shove at them at election time ...

*By means of effective Income Taxation particularly of runaway upper-incomes.

 

Banks have been provided with special favors since the 1800s. They know they will always be bailed out, as they have always been. Hence, they make shitty loans and sell them to the federal government. They don't care, as long as they get their origination fee, and then the government (i.e. we) are left holding the bag. When a business can privatize profits and socialize losses, something is seriously messed up.

 

Piffle 'n drivel.

I tire of repeating myself ...

 

Hm, I guess that means you have no rebuttal.

 

My point is that he declared proudly that he had saved capitalism. Without his intervention the USA was likely headed for a violent revolution.

 

He destroyed capitalism and instituted fascism.

 

That describes any economic system including socialism. But that depends on your definition of "property rights".

"Democracy" is not only a political system. My particular usage of the word was not such a reference. It was more intended to obviously be a reference to the belief in freedom and equality between people, first, and the "politics" or "political system" found in the workplace secondly. And as I'm sure you're aware, there has been a continuing theme of "democracy" and "the belief in freedom and equality between people" advertised in the USA. We are told "we are a democracy". We are told daily by the right that we have "freedom". Yet for 2/3 of the worker's day, which is spent on the job, there is no "democracy" to be found.

But back to the subject:
You again do as I've just described in another post to you. You plead innocent. You plead ignorance of my "definition of capitalism". But I didn't define, nor TRY to define, capitalism. I described features by repeating some of the standard drivel we are handed. And by referring to "definition of capitalism" you attempt to change the subject just enough to provide yourself an opportunity to claim a "win", instead of "playing the ball where it landed".

You know full well that capitalism is often praised for its great benefits provided by its inherent competition, so you know exactly what I was saying. Deal with what I was saying.

 

I thought the right liked to smear him as a "socialist" or "communist".

 

Property rights would be the right to one's person and property. I did not think that would be confusing.

 

Hm, did you think that? Interesting.

In actuality, FDR furthered the institution of fascism in the US

 

Then you aren't conversant with the term. "Property rights" has been used to refer strictly to "private property" meaning business ownership and the "rights" to the benefits thereof. And it in that case is distinguished from "personal property" which would mean cars, jewelry, tools, appliances, clothes, etc.

And some people who want to obscure the issue insist on referring to all property without distinction, although that use doesn't clarify anything nor apply to anything.

So which did you mean?

 

How so?