This page has been archived and commenting is disabled.
Greed is go(o)d, or will it Destroy America?
From www.thetrader.se
If the “free-market” theories of Ayn Rand and Milton Friedman were correct, the United States of the last three decades should have experienced a golden age in which the lavish rewards flowing to the titans of industry would have transformed the society into a vibrant force for beneficial progress.
Direct Action for Single-PayerAfter all, it has been faith in “free-market economics” as a kind of secular religion that has driven U.S. government policies – from the emergence of Ronald Reagan through the neo-liberalism of Bill Clinton into the brave new world of House Republican budget chairman Paul Ryan.
By slashing income tax rates to historically low levels – and only slightly boosting them under President Clinton before dropping them again under George W. Bush – the U.S. government essentially incentivized greed or what Ayn Rand liked to call “the virtue of selfishness.”
Further, by encouraging global “free trade” and removing regulations like the New Deal’s Glass-Steagall separation of commercial and investment banks, the government also got out of the way of “progress,” even if that “progress” has had crushing results for many middle-class Americans.
True, not all the extreme concepts of author/philosopher Ayn Rand and economist Milton Friedman have been implemented – there are still programs like Social Security and Medicare to get rid of – but their “magic of the market” should be glowing by now.
We should be able to assess whether laissez-faire capitalism is superior to the mixed public-private economy that dominated much of the 20th Century.
The old notion was that a relatively affluent middle class would contribute to the creation of profitable businesses because average people could afford to buy consumer goods, own their own homes and take an annual vacation with the kids. That “middle-class system,” however, required intervention by the government as the representative of the everyman.
Beyond building a strong infrastructure for growth – highways, airports, schools, research programs, a safe banking system, a common defense, etc. – the government imposed a progressive tax structure that helped pay for these priorities and also discouraged the accumulation of massive wealth.
After all, the threat to a healthy democracy from concentrated wealth had been known to American leaders for generations.
A century ago, it was Republican President Theodore Roosevelt who advocated for a progressive income tax and an estate tax. In the 1930s, it was Democratic President Franklin Roosevelt, who dealt with the economic and societal carnage that under-regulated financial markets inflicted on the nation during the Great Depression.
With those hard lessons learned, the federal government acted on behalf of the common citizen to limit Wall Street’s freewheeling ways and to impose high tax rates on excessive wealth.
So, during Dwight Eisenhower’s presidency of the 1950s, the marginal tax rate on the top tranche of earnings for the richest Americans was about 90 percent. When Ronald Reagan took office in 1981, the top rate was still around 70 percent.
Greed was not simply frowned upon; it was discouraged.
Put differently, government policy was to maintain some degree of egalitarianism within the U.S. political-economic system. And to a remarkable degree, the strategy worked.
The American middle class became the envy of the world, with otherwise average folk earning enough money to support their families comfortably and enjoy some pleasures of life that historically had been reserved only for the rich.
Full article, Greed will Destroy America
»
- advertisements -
Who is that guy? Better for him to run away. It is indeed self inflicted. U S citizens are victims of themselves. But as victimilogy is high in the US, it is better to see the victimizers elsewhere, even in places that are laughable as Zimbabwe for example.
I believe he is entitled to a citation exemption since he is going the the Guiness World Record on Posts within a six hour period.
Greed IS good.lol
Oh wow +1.
Greed is bad. That's why the Bible says it is a sin. Yet the most religious people in this country think greed is good.
You are dealing with faith - faith in "the markets", faith in capitalism, faith in greed. Facts do not matter.
In case you haven't noticed we're being coerced into worshipping the weather and the government these days...
Any government control mechanism you put in place will slowly be inflitrated, subverted, and then turned against it's founding principles. You only have to look at the FDA and SEC to see this in action. They were put in place to protect the public from predators but now serve to protect the predators from the public. What the U.S. form of government is lacking is a mechanism to look into the operations of government to determine if they are living up to their principles and, if not, terminate them.
Free market capitalism? There is no free market as long as we have the Federal Reserve and there is only crony capitalism working hand in hand with government facist.
For better or worse (and as your own post aptly demonstrates) envy, especially in the context of relative status is a far bigger driver of human behavior than greed.
Income tax (something which hasn't even been around for 100 years) rates may be at historically low levels (are they really if measured by effective rate standards?) but the facts are that ~50% of American wage earners pay zero fed income tax and the total tax burden that say, a small business and property owner pays to local, state and federal authorities each year is enormous by any standard.
And sorry but anyone who thinks the Obama years are best characterized by laissez-faire capitalism needs to have their head examined.
The U.S. banking/finance sector may be out of control and way too powerful but that's because they're effectively morphing into another branch of our ever-growing, unelected and unaccountable government.
Less of that please, not more.
Suggested book reading for the author: New Deal or Raw Deal, The Road to Serfdom, End The Fed.
FDR did more to destroy the middle class than any other president. He was a egomaniacal kleptomaniac.
... and who lowered the top bracket from 90% to 70% and what did it do to the welfare of the economy and the middle class? Yes sir, Kennedy understood economics.
The Fed has been the single greatest cause for the disparity of wealth distribution. The wealthy can more effectively hedge against inflation or even profit from it.
"The threat to a healthy democracy"???? You cannot possibly be talking about Amerika. Amerika ceased being a democracy long ago. Democracy is now only an illusion sold to school children to make them feel superior to those less fortunate people our leaders decide to murder for no reason other than their misfortune of living on land under which there appears to be oil we feel should be ours at a low low cost. Democracy? You'd have a better chance convincing me that Santa Claus, the tooth fairy and the Easter bunny are real than convincing me Amerika is a democracy.
In case you are not inclined to tap the links, here is the key commentary:
Wednesday, December 10, 2008Stiglitz: Monday Morning Quarterback
Nobel Prize winning economist Joseph Stiglitz has written a critique of the financial crisis in Vanity Fair (see “Capitalist Fools”). But the critique is limited to an evaluation of where and how the “system” failed. And consequently any suggestions for avoiding future crises that he might have made or implied are limited to fixing his problems with the system – namely, elimination of the barriers between investment and commercial banking, non-existent or lax regulation, appointing as Chairman of the Fed, “a devotee of the objectivist philosopher and free-market zealot Ayn Rand” (a falsehood), tax cuts, opaque accounting practices, flawed incentive structures, and mismanagement of the bailouts. Having completed the critique, Stiglitz ends his piece with a conclusion that was not supported anywhere in his evaluation.
"The truth is most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal. Looking back at that belief during hearings this fall on Capitol Hill, Alan Greenspan said out loud, “I have found a flaw.” Congressman Henry Waxman pushed him, responding, “In other words, you found that your view of the world, your ideology, was not right; it was not working.” “Absolutely, precisely,” Greenspan said. The embrace by America—and much of the rest of the world—of this flawed economic philosophy made it inevitable that we would eventually arrive at the place we are today.
Ipse dixit.
A free market is self-adjusting. But when government interferes in the market to eliminate the incentives, whether positive or negative, the market’s adjustments become distorted. The market then becomes moved, not by the invisible hand, but by an iron fist.
Had Dr. Stiglitz critiqued free market economic philosophy in his article, we might have been able to identify some specific point to debate, but alas, Dr. Stiglitz provides no statement of economic philosophy except the bare assertion that markets are not self-adjusting and that the role of government should not be minimal.
Oh yes, he does make an ad hominem argument against capitalist “ideology” – “a flawed economic philosophy” – by playing the Ayn Rand card. Such sophistry is certainly not beneath the likes of Henry Waxman, but you would think that it should be beneath the intellectual stature of a Nobel Prize-winning economist.
I guess not.
Stiglitz wants to perfect a system that itself is flawed to the core and cannot be perfected. He could have addressed the problem at the core – that the century-long experiment in central planning (the Federal Reserve System) has reached its logical conclusion. He might have engaged in a constructive discussion about how to establish a medium of exchange that is not subject to the whim of politicians or the coercive monopoly of a cartel of banks that are insulated from risk and indulge in moral hazards. See "Credit Crisis and Moral Hazards."
Instead, Stiglitz has revealed himself to be just another second-rate Monday morning quarterback.
P.S. The "flaw" in Greenspan's thinking was that he was attempting to apply free market principles to a system based on government control. If he were a "devotee" of Ayn Rand, he would have recognized the contradiction immediately and understood that one of his premises was wrong.
Here's a new word for you: Pleonexia. The Chinese philosopher Lao Tse wrote 2500 yrs ago, ‘There is no calamity greater than lavish desires, no greater guilt than discontentment and no greater disaster than greed.'
I think Stiglitz was spot on, not only about the nutjobs who devote their time to that illiterate and hate-mongering jewess Aynd Rand whose "philosophies" I can only describe as infantile , but about the mistake of believing that free markets are self adjusting.
You miss a fundamental point: A free market is not self-adjusting. You would have to be a particularly dimwitted 6yr old to believe that it is. A free market presumes fair play, that the corporations will not forsake ethics, public safety, and the law to make their profits, but succeed through pure merit and effort that benefits the consumer by providing choice. Yeah right, maybe if you live on Skittle Island.
The corporate mantra of "Growth and Profit" is the reality. Successful organizations grow by killing its competitors off, forming cartels and monopolies, swallowing up other companies, and cutting corners. New companies with better products and business models are constantly bought or crushed until just a handful of multinationals own and/or control their market sector. Then the consumer has no choice at all but different brand names owned by the same corporations. That's where we are today, and they will all claim that they are "Too big to fail".
Why do you think there are hundreds of laws in the statutes to protect consumers from unscrupulous companies, anti-trust laws to force fairplay, and consumer/environmental protection groups? Because given a "free market" with little or no intervention, the horror that is man-ape in the pursuit of profit will lay waste to his world for a bit of black ink on the ledger. There are literally hundreds of thousands of case studies to prove that simple point. If you don't get it now when the evidence of its failure is all around you, then you never will.
Both you and the previous poster are missing the point.
Government should enforce a basic set of rules, not the outcomes (and that includes not indirectly influencing outcomes by micro-managing the rules all the time.)
With that, a free market is self-adjusting.
Wrong. In the gulag casino of crony capitalism those with political access get 'regulations' enacted to harm competitors, erect barriers to entry and create artificial markets for their products. Any benevolent intent is quickly perverted to serve the ends of those with access.
It never ceases to amaze me how some people whine endlessly about greedy corporations without ever once mentioning the fact that corporations are artificial legal constructs - there is nothing natural about them. The corporations they complain about are in fact another symptom of government (mis)management. Pointing to an artificial creation, licensed by governement, as "proof" that economic liberty and freedom is a failure and inherently unfair is preposterous.
Agreed. It's almost as if there isn't one solution to solve everything! Oh no! What will we do. Fck it let's ban corporation and government. Everything is a sole proprietership or partnership with unlimited liability. If that doesn't work we'll form a government.
There is a balance between anarchy, no laws or government, and proper laws with a cooperative government. One cannot be critical of either extreme without giving credence to a middle ground. I think that poor old Mr. Greenspan overlooked one teeny element of his trust that markets will do what is best: The Tragedy of the Commons. People (including "people" like corporations) will do whatever is expedient to increase the bottom line regardless of nearly every other consideration. Ole Alan should have kept that in mind.
Rocky
You take the academic dictionary meaning of anarchy, which is of course wrong (as most of academia are most of the time). True anarchy is what we have in front of your very eyes, a group, in this case an elite group, running riot and roughshod over society.
I refer to the murderous cunts of US Govt that wage war in countries most all Americans have no fight with (Vietnam, Iraq, Afghanistan) nor have ever threatened the US.
I refer also to the financial rape of America by an elite group of banksters and financiers
That is real anarchy ...not the academic nonsense you've swallowed
Regards your definition of anarchy please describe to me where society breaks down into anarchy simply because it has no Govt and no Law?
Belgium has not had a Govt in place for over 310 days. Is anarchy breaking out there?? Nope. Everyone seems perfectly happy without, that's because nothing Govt does is useful or of any value whatsoever. It is a fantasy land of windbags hed-fuking you while they pick your pocket.
You 'think' you need Govt and the Law you poor liberal, and may you be sucked dry until the day you're buried none the wiser Dear Rocky
Jesus you realize Belgium's government still functions as a government right? They even put in their two cents about the Euro debacle: "Belgium's caretaker premier and finance minister met investors in a hot week for the euro zone, with Greece's parliament due to vote on austerity measures the government has agreed to in return for the next slice of EU/IMF aid."
I'm not sure we are using the same term for anarchy and government. Can you describe what you mean by anarchy? I'm thinking Somalia, you are clearly thinking something else. If Belgium is your idea of anarchy I'll take it.
Anarchy as i stated above is, "a group... running riot and roughshod over society."
Matters not wether this group is a radical religous group, lefties or righties or the public sector itself (inc. politicians, their military, Police and Judges).
The term "anarchy" also includes the term "lawlessness". The Law is not important as it is wielded and influenced by authority. So with a corrupt regime the Law and Judiciary themselves are corrupt.
You can't redefine terms to suit your own weltanshauung.
...and I never said anything about societal breakdown or anything else. I was just taking the definition as it stands. Coin your own word if you need to describe something else.
Crony capitalism = Corporatism. All you have done is confirm that in non-interventionist free markets, corporations become so big that they control government policies. That is precisely where you are TODAY in present day America - the evidence is all around you.
You can go on about economic "liberty" and "freedom" all you like, but when you ignore the fundamentals of human nature, then these words are mere banners of irony used by the crooks and their lapdogs to justify their morbid existence. How can you blame "government (mis)management" when the government is merely an extension of multinational corporations who buy and pay the very people in power? You don't have to believe me - Just look up the political donations.
Economic liberty and freedom sounds pretty good, but it is meaningless drivel without ensuring that liberty and freedom for all organizations and consumers are guaranteed by law and enforced no matter how important or how big the culprits who constantly seek competitive advantage by immoral means.
It never ceases to amaze me how some people use words like freedom and liberty to do the exact opposite in America. Unless your post is nothing but cut-and-paste, you and the original poster have decent writing skills and I assume the intelligence to go with it. So I find it puzzling when encountering individuals like you, that such apparent ability does not extend to even a modicum of wisdom. It is incredibly stupid to have such naive views on the free market - it's like a pathological self delusion of a kid who never went beyond the first chapter of any book on economics. In real life, there is no such a thing as ceteris paribus.
+1
Nicely put. Alpha male behavior. It is that simple. We are a violent species. Wearing suits and ties does not in any way change that. We are social animal though... so there is hope. But, there will be no perfect system - or a system that will be everlasting. Rather, we will build and destroy, build and destroy. Cycles. All just cycles. This is our stupid nature and we are destined to repeat it for quite some time to come.
How very nice to see some common sense........
+1
Your missing one thing...the last 30 years have characterized no precious metals standard....and also fractional reserve banking...the last 100 years since the introduction of the federal reserve has constituted the greatest credit bubble in history...allow people to pull demand deposits and allow time deposits to match liabilities and then you have free market capitalism...all else is an excuse to rob the productive classes and start class war! money is power and absolute power corrupts absolutely and as long as we have old wiggle mouth up their with the printing press nothing will change...
There is a class war now in American. Mr. & Mrs. Middleclass and Mr.& Mrs. Poor are being systematically exploited and crushed by the corporations and the rich. The income disparity in america between the richest 1% and everyone else has never been greater and is growing every day. Everyone else is becoming an indentured servant to this ruling elite who effectively control the Senate and House of Representatives.
After WWII, America was a community of shared values and goals with respected unions and a vision of the future. Now we just have the few rich who get increasingly richer by taking the few remaining benefits away from the poor and middle class. The sense of community has been lost and replaced by endless work days, joblessness and no vision of the future for our children. If the exploited complain, they are accused of class warfare. The victims of exploitation are being blamed for complaining. How is that for the new vision of America.
BRING OUT THE CAKE!
A complete rebuttal to this post appears here:
http://www.atlassociety.org/tni/credit-crisis-and-moral-hazards
and here:
http://thematrixnot.blogspot.com/2008/12/stiglitz-monday-morning-quarterback.html
In your post we are back to "free markets" the individual's will above that of society. Social Darwinism disguised as the pioneer's instinct so iconistic to some. Good luck with that.
History teaches us that "social" aims are not dirty words, as their incarnate society, the very expression of civilization. I don't forget that the world began way before 1776 and that mankind collectively has learnt more than the collective experience of Americans living in the USA.
This article expresses those concerns using two American presidents on either side of the political aisle who changed the workings of the USA, by introducing legislation like anti-trust and Glass_Steagall. Just to mention a few.