Capitalism is like Ambition

[catsittingstill]

It"s a great engine for getting things done.

But if it isn't bridled, the results often turn out bad for all concerned.

We've been stripping the bridle off capitalism for the last twenty years or so, and it got us the mortgage meltdown, the credit crunch, and the current falling stock market, and an enormous increase in the wealth gap between the richest one half of one percent and the normal world.

Of course Capitalism doesn't like it when we start putting the bridle back on; it's got used to being able to go in whatever direction, at whatever speed, it damn well pleased, and to eating people's gardens to the bare dirt along the way.  We should bridle it anyway; it will get used to being a tame horse again.  As tame as it was under Reagan, anyway.

Comments

[pocketnaomi.livejournal.com]

Amen. I don't insist on being able to ride it, but I'm getting really sick of being trampled under its hooves.

[ndrosen.livejournal.com]

Stripping the bridle off capitalism? You mean by passing the Sarbanes-Oxley law, greatly expanding the SEC budget, expanding the Federal Register of regulations, encouraging subprime lending through the Community Reinvestment Act, helping to create a market for allegedly AAA tranches of securitized mortgage debt by requiring certain institutions to invest in highly rated bonds, and a few other things like that?

Or do you mean stripping the bridle off state capitalism, not private capitalism, by letting Fannie Mae and Freddie Mac engage in heads-we-win,-tails-the-government-bails-us-out highly leveraged investments?

No doubt you can find some instances of actual deregulation to object to, but that isn't the main cause of our economic problems. In fact, the regulations I complained about are not the main cause. We've hit the trough of the 18 year real estate cycle; that's the biggie. Land prices are especially subject to speculative bubbles, because they aren't making any more land; when the price goes up, people want to rush to buy before it goes up further, so the bubble feeds on itself, right until it bursts. And mortgages, securities based on mortgages, and so on become toxic assets. Read Henry George; he pretty much explained the crash of 2008 back in 1879.

[randwolf.livejournal.com]

Whence this post? Not that I disagree, but why now?

BTW, it's been more like 30 years. Deregulation began with Reagan and, especially, his corruption of the SEC and the federal banking regulation system. John McCain was also a part of that, as one of the Keating Five.