Nobody Makes Capitalism Look Worse…

I get much of my inspiration about life in the US from the New York Times. They seem to have the best reporting and columnists in the country. That’s why I pay the big bucks ($4/month) for their daily feed. 🙂

The title above came from an column from Gail Collins. It started out with following paragraph.

Department of Irony: Republicans can’t stop howling about socialism. But nobody makes capitalism look worse than Donald Trump.

I couldn’t have said it better. To the majority of international banks Trump is just persona non-grata. He has declared bankruptcy so many times (11) that they just don’t want anything to do with him. About the only bank in the world who will still give him loans is Deutsche Bank. Why is it that they still loan him money? The Mueller team is looking into that and I wouldn’t be surprised if they find something illegal about that. Cohen has already stated that he filed illegal reports to them as to his boss’ wealth.

At this point the bank did a review of Trump’s claim that he was worth about $3 billion and discovered it was more like $788 million…


The skyscraper got built, but nobody seemed to want to live there. Trump, who had personally guaranteed $40 million of the loan, then went to court, pointing to a clause in the contract that said he wouldn’t have to cough up the money in the event of a natural disaster. And what about the recession? Was that a natural disaster or what?


Onward. More loans from Deutsche Bank. Some of which he used to pay back … Deutsche Bank. Nobody seemed to think that was crazy.

So, what’s the problem here? Anat Admati, a professor at the Stanford Graduate School of Business, said she found it shocking that “a corporation the size and complexity of Deutsche Bank is so poorly governed.”

The bank, however, didn’t run for president on the basis of its financial genius. Trump did, and it worked so well he is now running around making speeches about reducing business regulatio
n.

Source: New York Times

I imagine there are many real capitalist around who hate the fact that the “proudly ignorant” voters out there consider his capitalistic traits make him worthy to be president. I suspect they are laughing and crying at the same time.

The Fallacy of Consumer Driven Capitalism

The two major things that drive the US economy are personal consumption and military spending. With this post, I will try to convince you that is a basic problem for us as a country. It thwarts happiness and is a wasteful way to live a life. But the biggest problem is that for too many of us it is the ONLY thing driving our lives. More money, more stuff.

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Ironically this is true throughout the economic ladder from the richest of us to the poorest. We think that if we can just get a few more dollars to buy more stuff everything will be better. Most of us have been thoroughly indoctrinated into consumer driving capitalism. For many of us, contrary to what the philosophers say, money can buy happiness, at least temporarily. Or so we believe…

For those on the lower end of the economic spectrum it is another flat screen TV; for those on the upper end, it is a new $50,000 car to replace the two-year-old one we currently have.

Believe it or not, there are other parts of the world that take a very different approach to capitalism. They don’t depend on all of their citizens spending more and more year after year. Instead, much of the profits of their version of capitalism is used for the overall good of the country and its citizens. Those countries have an infinitely better infrastructure.  Potholes and failing bridges are not the norms for them.  Even more importantly they provide health care for all their citizens and security for their senior citizens.  Every statistic taken shows that they are much happier than we are even if they don’t have multiple storage lockers filled with junk.

How do we as a country get out of the “more and more” mentality and into something that makes us happier?  That is the question of the day for me.

 

America’s Form Of Capitalism…

2018-08-24_09-44-00.pngThis post is about the question “Is America’s form of capitalism being pushed aside?” Is the world moving beyond the American definition?  Some might say the Capitalism as it exists in America is “The rich get richer,  and nothing else matters…

“What happens when a society reinvests the gains from industrialization into things like healthcare, education, and so forth? Well, it’s economy changes — radically. You see, the American economy is still 75% consumption — McMansions, SUVs, designer jeans, and so forth. The problem is that 80% of Americans live paycheck to paycheck. They can’t afford those things anymore. But if America had invested in public goods, then the economy would be made less of consumption, and more of investment.

Source: How to Think About the World After Capitalism – Eudaimonia and Co

I like to blame all of our problems on #CO3 but I recognize that our “consumption” problems are ingrained in our capitalist system. The “rich get richer” and “survival of the fittest” is a dominant part of our version.

Our version of capitalism will likely change in the coming years. One path will be divorcing ourselves from the rest of the world. Going it alone. Another path is that our capitalist system may morph into the version practiced by  Western Europe, Scandinavia, and Canada as cited in the source article.

So, what is the basic difference? These countries practice what some may call social democracy.  They give all their citizens what they see as inalienable rights.  They include healthcare, education, transportation, and retirement. Because these rights are endemic in their version of capitalism they divorce themselves from the “survival of the fittest mentality”. I think we have some things to learn from them in that and many other regards.

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#CO3 = Current Oval Office occupant

Capitalism Is Proving Unpopular Among Those With No Capital..

I ran across the title of this post in an article by Fraser Nelson of The Daily Telegraph which is a popular British newspaper. It basically talks about how the Brits are now leaning to the left despite the relative win of the rad-cons in the recent election. This leftward trend is evidently being pushed by the young voters in the country.

I kinda think the Brits are smarter than us when it comes to government and I  hope our young people are doing the same. The basic definition of capitalism is that it is an economic system based on private ownership of capital.  Dropping back to look at a broader view of this system, when all the capital ends up in the hands of a relative few then it morphs into an oligarchy and that is something that the Brits also know about.

An oligarchy is pretty much the opposite of a democracy in that the people without capital have little or no control over government decisions and actions. That happens because money controls information as it does pretty much everything else in a capitalist society.

2017-11-23_10-31-06.jpgThe general feeling today, at least among RedAmerica, is that anything that is not driven by capital (read money) is somehow an enemy of the state. To them, it seems logical that a capitalist state should be run by a billionaire as they are the only truly successful ones among us. I’m sure that logic was part of what got us into the trouble we are now facing.

Going back to the original thoughts on this post, I hope our young people have a similar attitude as those in Britain.  I know I started out in the opposite mode and as I grew in wisdom I turned left to a more people-oriented view. My votes during my first three presidential elections were for the GOP candidates. It was not until Reagan and his brand of conservatism that I basically made the switch.  Of course, seeing where we are today I would love to go back to Reaganism, even with his trickle-down politics.

I do still believe in capitalism but we need to have reignes on that horse or it will morph into an oligarchy.  There just seems to be something about wealth accumulation that once you have a certain amount it turns into an urgent rush to get even more.  In my mind, that is where the dangers occur.  It is hard to remember that the 90% estate tax along with excise taxes were once the primary source of revenue to run our governments.  Taxing the workers didn’t occur until one hundred years ago.

In today’s world where 1% of the population control the majority of the wealth, its time for some “real” tax reform. The current proposal being ramrodded through Congress is in no way a real reform.  We will never get that until our political parties can come together with compromise solutions.  I think our young people today can see this much more clearly than I did when I was their age.

If you are one of those who don’t have capital, it’s hard to gung-ho about it…

 

Shared Equity vs Pure Capitalism…

But, first, let’s look at an unusual way of running a business, by having your employees own the company. One popular craft brewery has made a name for itself in part by going that route, with strong results so far….

One of things that we think is a big societal issue is this widening gap between the haves and the have-nots. And we realized that we had an opportunity to support people owning something that was increasing in value. Shared equity has been an incredibly powerful engine for us….

The better I do, the better we do, and I personally take that to every day of my job, and it really does inspire us all to go above and beyond in a way that I haven’t experienced at other employers….

Source: Brewery workers pour their hearts into business when given a stake

Shared equity vs pure capitalism is a very thought provoking idea to me. Especially in the circumstances where we find that today’s capitalism returns are overwhelmingly skewed to the top 1% of our citizens. It is just not being shared by the people who are actually creating the wealth as it once was.  Will shared equity become the new capitalism in the future?  I can only hope so; it would indeed solve many of the social issues of our times.

In my day “the three legged stool” was the symbol for a successful enterprise. The three legs were Owner/Employees/Customers. Each had equal weight in corporate prosperity. If something is beneficial to all three then it was quickly implemented.  Over the years the Customer leg has been shortened. If something can be made for a penny less and the product will still last at least through its warranty period it is cost reduced. Product longevity and quality is missing from far to many capitalist institutions.

The Employee leg of the stool has been ruthlessly amputated. As profits rise they are never shared by those who generate them. In fact brutal downsizing has become the mantra. The median income for U.S. families has actually decreased significantly while profits sour.

The only leg getting attention now is the Owner or stockholder. He is the king of capitalism as shown by the massive increase in wealth of the ultra-rich in our society. It seems the only way to straighten out the three legs is to make the employees the owners. With shared equity another thing that diminishes is the constant need to grow profits. The new owners will usually be satisfied with a constant income and not be obsessed with more and more. It is obvious that many business fail because they tried to grow too fast.

Our industrial society started out as a cottage  industry. Small businesses were built based on local needs. Maybe it is time to start heading back in that direction. If you ask me “Too Big To Fail” is a formula for the implosion of capitalism. How to make shared equity once again happen is the question of the day.  The first answer is probably to force  politicians to join Bernie Sanders and Elizabeth Warren in realizing that shared equity appears to be our only viable future.

 

Spending Less…

Is it a bad thing that I want to consume less this year than I did last year?

canstockphoto3815900.jpgThis is a question I have been contemplating lately. Although I am not making out a specific list for 2016 I have decided to shed myself of much of the stuff I own and to not spend so much this year. It sounds like a noble goal but that very idea seems to have the world in a panic right now.

As I am writing this post, which is actually a couple of weeks before it is likely posted, stock markets are diving into negative territory because China manufacturing is slowing down.  To the capitalists around the world this means that we are consuming less than in the past. To them, if we are not consuming more and more then our economy is not sustainable.

I must admit that I am not much of a fan of pure capitalism. But I’m sure, if you have read even a few of my post, you know that already. Pure capitalism just seems to be concentrated on greed than anything else. Everyone wanting more and more is to me a negative instead of a positive.  Of course I am saying these words with a “western” mentality where many of us are fortunate enough to have discretionary spending money, more and more means buying things we don’t really need. To much of the world “more and more”might just mean putting enough food on the table so that their family can thrive. That is a completely different mentality.

Oil prices are going down because people like me gave up our 18 mpg car for a 35 mpg version and are even driving that one less. That on the face of it seems to be a good thing but to the capitalists it means our economy is shrinking and will soon collapse.

I know earlier I said I am not a fan of pure capitalism but I am a fan of regulated capitalism. Without it our country and many others around the world would not be in the enviable condition we are. Capitalism drives prosperity when it is properly regulated.

Getting back to the initial question, I don’t really care what others think about my decision. I have decided to take up the mantel of “Simplicity” more seriously than I have in past years. I am shedding things that I have not used in the past 5 years and that seems is a LOT of stuff. Thankfully stuff just doesn’t mean much to me at this stage of my life. Right now simplicity is the key to my satisfying retirement, at least for 2016.

Even In Small Town America…

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Pope Francis recently spoke out about “unbridled capitalism”. A good example of that is the unregulated sales of guns in this country. Even my small town of 2,000 now has a gun shop where anyone can buy just about any weapon they choose.  Capitalism is the best economic system in the world but when it is unfettered from any moral requirements it is perhaps among the worst…

Capitalism – A Dirty Word…

2014-08-14_07-49-36I have been accused by some who have come to this site primarily in the antagonist mode to be anti-capitalism.  I hope that is not the general persona that I put forth.  It is true that I don’t think that unfettered capitalism is a good thing. If left to its own capitalism would morph into a survival of the fittest mode or something even worse. But I don’t think those beliefs make me against capitalism.

I thoroughly recognize that capitalism is the primary driver that has made the U.S. and much of the industrialized world what it is today.  Without capitalism we might all be in the survival mode as found in much of Africa and other third world countries. Constrained capitalism simply brings out the best in us. Without the Robber Barons of a century ago our country would look much different. But at the same time without the Republican president Teddy Roosevelt taking down the Robber Barons things would probably have looked just as dreary.

Here is a little about what Wikipedia says about capitalism:

Capitalism is an economic system in which trade, industry, and the means of production are largely or entirely privately owned and operated for profit. Central characteristics of capitalism include capital accumulation, competitive markets and wage labor. In a capitalist economy, the parties to a transaction typically determine the prices at which assets, goods, and services are exchanged….

Proponents of capitalism argue that it creates more prosperity than any other economic system, and that its benefits are mainly to the ordinary person.Critics of capitalism variously associate it with economic instability, an inability to provide for the well-being of all people, and an unsustainable danger to the natural environment. Socialists maintain that, although capitalism is superior to all previously existing economic systems (such as feudalism or slavery), the contradiction between class interests will only be resolved by advancing into a completely social system of production and distribution in which all persons have an equal relationship to the means of production.

Having a “completely social system of production and distribution in which all persons have an equal relationship to the means of production.” is simply not workable as proven by history. Without the possibility of advancing your personal situation there is simply no incentive to make things better. But at the same time I realize that capitalism so often results in extreme greed, corruption, and worse if it is not controlled and regulated.  That is where our governmental functions come in.  Someone needs to be at the reigns of capitalism so that it doesn’t destroy itself. We seem to have lost that sense of governmental responsibility in the last few decades. Hopefully we will get it back before it is too late….

Department Stores…

Des Moines IA – Brandeis Department Store

Department stores are the epitome of a capitalist society. They started springing up in the early 1900s and soon became an important “go to” place in every large American city and even in many European cities. If you want to see a list of now defunct department stores click here.  I guess Walmart SuperStores are the equivalent in today’s world.  But I kind of think even these will soon be a thing of the past replaced by the Amazons of today.

Progress is also a necessary ingredient in capitalists societies…

The Number Two Business in the U.S….

I think everyone knows that our number one business in the U.S. is  selling weapons systems and other means of destruction throughout the world. I suspect that almost every country in the world has at least a few of our $50 million military airplanes and some of our $1 million bombs to go with them.  The $50 million is of course for a second-hand airplane, if you want a newer one be prepared to fork over three times that cost. With a $600 billion annual budget for such things our military probably scrap these guys on a regular basis so there are lots of used ones for sale to our friends and future enemies 😉 . I would be very surprised if all countries don’t have at least some of our guns. After all we are the number one gun maker and correspondingly the murder capital of the world.

But who knows what our number two business is? It’s storage lockers. That sleepy business that started in the 1960s has been booming for a couple of decades now. All of us seem to be very good citizens of our capitalist society. We buy and buy until we fill our current abodes then just keep going by renting another one or two public storage lockers.  Public storage has been thoroughly ingrained into our society.  There is now even a TV show dedicated to storage lockers.  Just within a two-mile radius of my small town of 2,000 people are six different storage locker places of at least one hundred storage garages each. I’m sure they are all pretty much filled with people’s junk.  I’m not sure which is worse, just throwing out the old things or stuffing them in a rented garage never to be seen again.  I suspect that there are more public storage garages in this country than there are families. But, I can proudly attest to the fact that I am not renting one…

Ok, I hope FactCheck doesn’t come across my site as I really don’t know if these two items are number one and two 🙂  They just seem like it to me.  But what do I know…

Democracy, The Old Fashioned Way

Can you imagine a democracy that was the result of the people living the country rising up and not from an invasion by the U.S.? What happened to the Bush Doctrine? I thought we were the democracy builders for the world? What are those Egyptians trying to do put our military out of business?  Glenn Beck and his crowd were right up front cheering the invasion of Iraq to “free” the people but it seems when its done the old fashioned way he is against it.  Unfortunately when you let people form their own democracy it sometimes doesn’t come out as you might have wanted.

I’m just a simple guy but it seems to be that the world would be a pretty boring place if governments were all cookie cutters from ours.  Not to mention there wouldn’t be anyone for us to borrow money from.  First it is  China teaching us about  capitalism and now Egypt showing us what a democracy is all about. Wouldn’t it be nice if we actually learned a lesson out of all this. But I kind of doubt it.

But what do I know?

http://mediagallery.usatoday.com/Editorial-Cartoons/G373

China, Can I make a suggestion??

With China presently holding more than $1 trillion of our debt the above cartoon is probably more reality than any of us would like to believe. Someday they may just call in all our IOUs.  I read an article recently about how the Chinese are now convinced that they have the purest form of capitalism and have very little to learn from the U.S. anymore.

This is kind of like a chicken/egg type thing but it is no wonder our government is drowning it debt. I read someplace where the average citizen now has over $5,000 in credit card debt!  That doesn’t include the trillions and trillions of mortgage debt that almost everyone has.  Talk about living beyond your means! At least our government borrows at a much lower interest rate 🙂

Someday we may come to our senses. Someday…

Source: http://mediagallery.usatoday.com/Editorial-Cartoons/G373