In this commentary Paul Craig Roberts supposedly documents the evils of capitalism, specifically the social costs which he defines as: “costs of production that are not born by the producer or included in the price of the product.” He elaborates on this general description and his list is quite lengthy. One might assume that Mr. Roberts is an educated man who understands economics since he was an assistant secretary of the treasury and writes extensively. So this nonsense about the deleterious effects of capitalism strikes me as strange.
Certainly from the founding of the Federal Reserve in 1913, and at an accelerating pace to this day, we have lost capitalism. By capitalism I mean free market capitalism, not the crony capitalism that has become the norm. The federal government in collusion with the Federal Reserve and the major banks, whose profits have been guaranteed, now control the U.S. economy.
First of all the massive federal deficits have required the cooperation of the Fed to peddle the debt, and they now buy much of it in order to deep the federal monolith going. Trillion dollar stimulus programs and Quantitative Easing have corrupted our monetary system while enriching the banks and the Fed. Right now the federal government virtually owns the home mortgage industry. Is this free market capitalism?
As for offshoring U.S. jobs, that has been the natural result of lower labor costs overseas and heavy-handed government regulations on manufacturers. Had American manufacturers continued to build products in the U.S., one can be sure that Japanese or European manufacturers would have taken the initiative to build more affordable products overseas and import them into the U.S. If American manufacturers cannot compete, is there some virtue in having consumers pay significantly higher prices for our computers, electronics, clothing, etc. just to support U.S. industry? Our standard of living would have been lowered proportionally. Incidentally, perhaps more significant than labor costs is government regulations on business. The destruction of American manufacturing is not the result of free market capitalism.
The author talks about the deregulated financial system, but what he fails to mention is that the large investment banks essentially control our government. Just look at the Goldman Sachs men that have permeated the executive branch. An oligarchy controlled by the major banks is not free market capitalism.
And we have the Federal Reserve which has become the controller of our economy. Our Founding Fathers never envisioned giving a national bank control of our money and banking system. Actually, a few did foresee that possibility, and they warned against it. The Fed creates money at will and drives interest rates to near zero, both of which are distorting our economy and punishing savers. What kind of twisted mind would call this free market capitalism?
“In order to keep the deregulated financial system afloat, the Federal Reserve has monetized trillions of dollars of debt over the last several years. Real interest rates have been driven into negative territory. Retirees are unable to earn any interest income on their savings and have to draw down their capital in order to cover their living expenses.”
What Mr. Smith should have written about is the social cost of crony capitalism and our banking oligarchy. We have not seen anything but a facade of free market capitalism for 50 years.
Bloomberg Says
April 28th, 2013
Mayor Michael Bloomberg of New York City is either a simpleton, terribly uninformed, or malicious. He has gone on record for diluting the Constitutionally protected rights we enjoy in order to guarantee public safety. On second thought, he may be just a politician who cannot pass up a good crisis. The article by Jill Colvin is posted on Politicker.com.
Does the mayor really think that a terrorist who wants to put a bomb on a subway, in a park, inside a department store, or other public place can be stopped without some prior knowledge of his plan? The USA Patriot Act and other measures enacted since 9/11, legal and extra-legal, cannot prevent that kind of violence, and what is worse they are destroying our free nation. What the terrorists could not possibly do, our government is doing for them in the destruction of our freedoms. If our goal is total protection from terrorists we will forfeit our free country, and we have moved steadily down that road since 9/11.
The ability of terrorists to attack our society at will, and with suicidal intent, is frightening. However, more dangerous than terrorists is a government that has enslaved its citizens. History has shown that governments always move toward totalitarian control of their citizens, and are the primary threat to the safety and security of peoples. Our Constitution is our protection against government, and it should be maintained and guarded at all times. In fact, elected officials swear an oath to defend and protect our Constitution. Let’s insist that they do that, unequivocally, and that includes Mayor Bloomberg.
Our times may resemble what this nation went through at its founding when the tiny colony was facing the most formidable military power on earth. Rebellion against England was a one-way ticket to the gallows. Do Americans have the raw courage to insist that politicians defend our Constitution, even while facing the scourge of terrorism? I suppose we shall find out.