Why do People Look at Government Failures and Blame Capitalism?

Question

Great Depression - Hoover's anti-trade policies and the Fed's artificially low interest rates had a lot to do with this, yet its constantly cited as "proof" that free market capitalism doesn't work. What about the government intervention that contributed? Do we have proof that they failed too?

Bush - Oil prices are up, inflation is up, food is up, housing is a mess, and the world is angry at us and insecure about the future of our investments. Why? Well, because he spent too much money using the government to interfere with the economy!

So, if a Socialist Government calls itself Capitalist and then fails, is that good proof of the failure of Capitalism ... or of the failure of Keynesian Socialism?

Answer 1

There are two things that you forgot to mention. Neither had any time to really contribute before the BIG BANG that got it started. I can't recall Hoover time before Black Monday, but Bush only had nine months before 9-11. That is not sufficient time.

Answer 2

All governments have been manipulating Adam Smith's economic ideology (supply and demand politics) since its beginning (1700's). You mention the chimp's policies where "Oil prices are up, inflation is up, food is up, housing is a mess" ... I agree with you. It's true that economics are manipulated in favor of the wealthy - (funny how the rich control everything, and the poor just try to get by, huh?) Where has inflation gone this year? You have to admit that it is out of control and that it has to be in double digit range - yet when the cost of living adjustments are made for 2007, it will be a lot less than what is really the truth.
What will YOU do? I will be an active activist as I have been for the better part of my life - but of course our present stack of politicians won't listen and there are no candidates for president (from each and every party out there) that have the charisma it takes to win over the people and business and make the appropriate changes in policy that must be made in order for world survival. Of course things will continue as it always has and activists will be beaten down in the streets by the police and SWAT teams, the media will report the activists are wrong and that the politicians are insensitive to the needs of the people .... it will continue until revolution actually happens (by the way don't give up your guns because if you do, only the police, government officials, business security forces, crooks and Mafia will have them). What we have is an worldwide economic community that is out of control. What will YOU do????

Answer 3

Roderick Long called this the Zaxlebax problem:

"Now I think the word "capitalism," if used with the meaning most people give it, is a package-deal term. By "capitalism" most people mean neither the free market simpliciter nor the prevailing neomercantilist system simpliciter. Rather, what most people mean by "capitalism" is this free-market system that currently prevails in the western world. In short, the term "capitalism" as generally used conceals an assumption that the prevailing system is a free market. And since the prevailing system is in fact one of government favoritism toward business, the ordinary use of the term carries with it the assumption that the free market is government favoritism toward business."

http://en.wikipedia.org/wiki/Definitional_concerns_in_anarchist_theory#The_"Zaxlebax"_Problem

People look at profiteering by Halliburton or Blackwater, and assume it is part of the market. So people demand that the government do more to restrict the market, not that it do less to favor the profiteers.

Answer 4

Public education!

"Our schools have been scientifically designed to prevent overeducation from happening. The average American (should be) content with their humble role in life, because they're not tempted to think about any other role."

U.S. Commissioner of Education, William T. Harris, 1889


"The children who know how to think for themselves spoil the harmony of the collective society that is coming, where everyone would be interdependent." 1899 John Dewey, educational philosopher, proponent of modern public schools.

"A general State education is a mere contrivance for molding people to be exactly like one another; and as the mold in which it casts them is that which pleases the dominant power in the government, whether this be a monarch, an aristocracy, or a majority of the existing generation; in proportion as it is efficient and successful, it establishes a despotism over the mind, leading by a natural tendency to one over the body."

John Stuart Mill, 1859





Capitalism -- the social system based on individual rights -- says that one may obtain property from others in only one way: by their voluntary consent. By banning the initiation of physical force capitalism leaves only one way for men to deal with each other: through the peaceful means of persuasion, by appealing to another's self-interest. This form of dealing with others is the highest form of voluntary social cooperation, and is known as trade.




"When goods don't cross borders, soldiers will."

"The state is the great fictitious entity by which everyone seeks to live at the expense of everyone else."

Fredric Bastiat, early French economist

Answer 5

i do not blame capitalism for this mess we are in - I blame GREED. Banks were giving out loans like they were handing out glasses of water! even as the time to will pay comes round, they are somewhat shocked that the guy making $40,000 in line with 12 months can not have sufficient money to pay the non-public loan on the $three hundred,000 domicile? The persons getting the loans were stupid! If I were making $40K, i might want to infrequently also be gazing a house this is nicely worth $300K! The economic device went too some distance in accordance to credit. everybody determined they could stay previous their ability because they did no longer ought to pay on the prompt - that they had credit! this is like the school pupil that has a mastercard, and famous out that they could leave the shop with the large television without dispensing a dime. yet even as the bill comes later, you ultimately do ought to pay for it - with pastime. and do not get me all started on the automakers! The idiots went and changed maximum of their flora to make SUV's with the aid of the undeniable fact that change into the position the money change into. Nevermind they were relying on oil remaining "low" so as that the gas guzzling vehicles might want to stay wide-spread. It change into stupid, impulsive, and extremely "contained in the now, to hell with the destiny" wondering. infrequently a thanks to run a multi-billion greenback employer! as a lot because it galls me do it, my tax money are going the position needed - type of. they should be bailing out the shoppers - the resources vendors especially. in the adventure that that they had the money to pay, they would not have this style of credit disaster contained in the banking market, and it would want to all be positive interior some thing else of the commercial device. yet instead they throw money on the reason - no longer on the priority. this is like throwing water on the tournament to end the wooded area hearth after it has raged for per week. And even as the authorities provides the money to the resources vendors in disaster, it may comprise the stipulation that they take economic counceling classes, and characteristic a certificate proving very last contact to save a low pastime personal loan. practise many times is the most to this disaster contained eventually.

Answer 6

It's up to the individual to make capitalism work for them. They have to go out and work, make decisions for themselves. Socialism is the opposite: the state chooses for you. Anyone getting screwed by capitalism, which is usually due to a lack of participation, is going to think a system where they don't have to make choices is a lot better. Why wouldn't they?

Answer 7

We can't have it both ways. We can't when it's conveinant say the president has no bearing on the economy or capitalism but then blame his policies when things are bad.
We can't then want to give the president all the credit for the economy when it is good.

Either the president has a significant role in our country's economy or he doesn't.

Answer 8

Because only in a capitalistic democratic republic do big businesses hire lobbyists to help politicians forget the campaign promises that got them elected.

Answer 9

When one takes a step back and look at the larger picture, one has to wonder why, no matter what party is in power and whether the government is left, right, socialist, imperialist, democratic or otherwise - almost every political or economic event over the past 100 years or so, has in the long run played into the hands of the super-rich elite and has ground the noses of the poor.

Is it possible, under the law of averages, that almost every political or economic event, works in favor of the rich, just by sheer coincidence? What are the odds of that?

Or could there be some other hidden powers operative, to make this occur?

We know that the federal reserve bank is a private corporation and is completely independent from the government. We also know that it, and not the government dictates monetary policy in the US. The Fed finances the government by purchasing treasury bonds, which is beneficial to the government because it is a way of raising revenue without directly taxing the people (but the people are taxed in the long-run through inflation). The Fed then uses these bonds as a securities asset which it uses for issuing loans to commercial banks (who then use fractional-reserve banking methods to lend out to the customers up to 10 times the amount loaned to them by the Fed). This is the basis of all money in circulation in the U.S. The Fed is an exact clone of the Bank of England, which is the Central Bank in the UK. The same system applies in every nation which has a Central Bank. Now let's have a look at history, to see who is really in control of America and likewise every nation which has a Central Bank:

Historical records tell us that the Fed lowered interest rates and made money easily available in the 1920's, increasing the total money supply by 62% in those years, so businesses expanded and became strung-out on credit and the stock-market was booming.

In April of 1929, Paul Warburg, one of the founders of the Fed, sent out a secret advisory warning his friends that a collapse and nationwide depression was certain. Then in August of 1929 the fed began to raise interest rates and tighten money.

On October 24th, 1929, the big NY bankers called in their 24-hour broker call loans. This meant that both stockbrokers and customers had to dump their stocks on the market to cover their loans, no matter what price they had to sell them for. As a result, the market tumbled and that day was known as "black Thursday".

Within a few weeks, $3 billion of wealth simply seemed to vanish. Within a year, $40 billion had been lost.

But did it really disappear? Or was it simply consolidated in fewer hands?

And what did the Fed do? Instead of moving to help the economy out, by quickly lowering interest rates to stimulate the economy, the Fed continued to contract the money supply further, deepening the depression. Between 1929 and 1933, the Fed reduced the money supply by 33%.

But the money lost by most Americans during the depression, didn't just vanish. It was just re-distributed into the hands of those who had gotten out just before the crash.

Is it sheer coincidence that the biographies of all the Wall Street giants of that era, John D. Rockefeller, J.P. Morgan, Bernard Beruch etc. all marveled that they got out of the stock market just before the crash and put all their assets in cash or gold? And was it sheer coincidence that these men were instrumental in the creation of the Federal Reserve Bank in America?

After the crash of 1929 and during the great depression that followed, these business men who had got out of the stock-market before it crashed then were able to buy-up whole corporations for pennies on their worth. This was one of the greatest consolidations of wealth in history.

Now, about what is happening today in America :

As you say: Oil prices are up, inflation is up, food is up and housing is a mess. How how have these things all happened all of a sudden? Coincidence...? Or Fed controlled rowing of the economy?

In the 1980's the U.S. government was going into debt at a greater rate than ever before, but because the Fed had set interest rates high, the treasury bonds issued by the government were being purchased by private investors instead of the Fed. This kept inflation at a minimum because the government bonds were being paid for with money already in existence, and not money being created by the Fed. (Interest rates high = low inflation - less money created by the Fed)

Since then, the Fed has dropped interest rates. These bonds have been maturing and the government has had to issue larger amounts of bonds to raise the funds to honor the bonds issued in the 80's plus the interest, plus the extra spending it is doing in the meanwhile. The Fed has been the main buyer of the new bonds, because they are no-longer attractive to private investors. (interest rates low = high inflation - more money created by the Fed)

This is what has created the spiraling inflation - the creation of huge amounts of money by the Fed to purchase large quantities of bonds from the government.

Since inflation is the debasement of the value of existing money, everything real (food, oil, housing, etc.) goes up in relation to the dollar, and thus the price of living rockets.

With the combination spiraling prices of all commodities and low interest rates, comes rises in house-prices, because investors are going for real-estate as the best paying investment of the times and it is easy and cheap to borrow money while the Fed is issuing huge amounts of it.

The Fed then decides its time to start hiking interest rates (after the insiders have been advised and have quietly exited the markets), so what happens? Less loans are taken out by individuals, so less new money is being created through the commercial bank's fractional reserve banking practices. The amount of money in circulation in the economy shrinks because the old loans are being paid back to the banks plus interest, but less new loans are being taken to put new money into the economy.

The result is depression. Many people find that they can't find the money to pay back the loans they have, plus the rising interest charges and are forced to foreclose and investments in the share-market dwindle as money evaporates from the economy. Property then comes on the market at greatly reduced prices and the share-market dives.

The deeper the depression the more heavily reduced the prices of everything and another opportunity for the insiders to purchase for pennies.

This system gives terrific opportunities to those insiders who have prior knowledge of the Fed's intentions.

So who is really controlling your country? The visible government, or the invisible one?

And what's really important, if your government is left, right, socialist, liberal, etc. or who is issuing your money, the government or a private corporation owned by international bankers.



... But on the other hand, if you go to a communist dictatorship which doesn't have a Central Bank, all the insiders need to do is control one man (the dictator), and they control the whole nation. International bankers can easily control a dictator, by financing his enemies to come and over-throw him if he doesn't behave.

Answer 10

Three reasons

1. They are ignorant.

2. They believe socialism's lies and want to see a change.

3. They are honestly unhappy with the way things are and demand change regardless how bad the next system is.