The End Of American Capitalism?

Discussion in 'Politics' started by KenH, Oct 11, 2008.

  1. KenH

    KenH
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    The End Of American Capitalism?

    By Anthony Faiola
    Washington Post Staff Writer
    Friday, October 10, 2008; A01
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    The worst financial crisis since the Great Depression is claiming another casualty: American-style capitalism.

    Since the 1930s, U.S. banks were the flagships of American economic might, and emulation by other nations of the fiercely free-market financial system in the United States was expected and encouraged. But the market turmoil that is draining the nation's wealth and has upended Wall Street now threatens to put the banks at the heart of the U.S. financial system at least partly in the hands of the government.

    The Bush administration is considering a partial nationalization of some banks, buying up a portion of their shares to shore them up and restore confidence as part of the $700 billion government bailout. The notion of government ownership in the financial sector, even as a minority stakeholder, goes against what market purists say they see as the foundation of the American system.

    Yet the administration may feel it has no choice. Credit, the lifeblood of capitalism, ceased to flow. An economy based on the free market cannot function that way.

    The government's about-face goes beyond the banking industry. It is reasserting itself in the lives of citizens in ways that were unthinkable in the era of market-knows-best thinking. With the recent takeovers of major lenders Fannie Mae and Freddie Mac and the bailout of AIG, the U.S. government is now effectively responsible for providing home mortgages and life insurance to tens of millions of Americans. Many economists are asking whether it remains a free market if the government is so deeply enmeshed in the financial system.

    Given that the United States has held itself up as a global economic model, the change could shift the balance of how governments around the globe conduct free enterprise. Over the past three decades, the United States led the crusade to persuade much of the world, especially developing countries, to lift the heavy hand of government from finance and industry.

    - rest at www.washingtonpost.com/wp-dyn/content/article/2008/10/09/AR2008100903425_pf.html
     
    #1 KenH, Oct 11, 2008
    Last edited: Oct 11, 2008
  2. TomVols

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    Credit is not the lifeblood of capitalism. Capital is. That capital is often raised through private credit (indebtedness) but often through public credit (bonds, etc.)

    We have become a credit-oriented nation. And our chickens have finally come home to roost. Now we're upset that we hear clucking and have to scoop up chicken dung. Well, you reap what you sow.
     
  3. poncho

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    Obviously what we need to do then is sow more of the same seeds. Only this time on a global scale. That should fix the problem.
     
  4. Analgesic

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    Tom stole my point. Credit is the lifeblood of what the author calls "American-style capitalism" (i.e. what we have in America today), but it is entirely possible to have a capitalist economy without any credit whatsoever.
     
  5. Gold Dragon

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    Whatever it is, it is the end of an era in global economics.

    For fans of the Sci-fi book Ender's Game, I'm reminded of Peter Wiggin's insight that there are key moments in history where real power shifts and those who seek that power, for good or bad, need to be ready to act when that happens.
     
  6. ray Marshall

    ray Marshall
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    Every country now has a central bank/ing system. We have seen many changes sence 1971 and we have been losing control of this great nation. When the Federal reserve was set up in 1913, it was set up to fail. I don't know how it has lasted this long. Look for bad days ahead. We may not have seen nothing yet as the slang goes. Brace yourself for whatever comes. Watch and PRAY.
    Appalachian-american here!
     

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