Capitalism Fixes Problems & Preserves Democracy: Capitalism is what we should be relying on to fix our problems. Capitalism has it’s own ecosystem, just like biology’s ecosystem. An economic ecosystem that weeds out the weak, has parasites that eat the failures and new bacteria that evolves and grows replacements for that which failed. A system that keeps everything in balance.
The problem is we are no longer a capitalistic society. What we were taught in school is now utter and absolute nonsense. Capitalism is a thing of the past.
As outlined in “It’s Not A Financial Crisis – It’s A Stupidity Crisis”, we created two back to back bubbles. The air out of the Tech Bubble was sucked up for fuel by our next stupidity crisis: The Housing Bubble.
Now, after the second Stupidity Crisis there isn’t a third bubble to inflate. If we still lived in a capitalistic environment the banks and financial institutions that created loans for folks who should have remained renters and then sold those loans as investments to pensions and countries would have been cleansed by capitalism’s ecosystem.
But that isn’t what happened.
Unemployment claims are up, home sales are plunging without government incentives and manufacturing growth is slowing.
Meanwhile, 1.3 million people are without federal jobless benefits now that Congress adjourned for a weeklong Independence Day recess without passing an extension. That number could grow to 3.3 million by the end of the month if lawmakers can’t resolve the issue when they return.
DOOM is an appropriate title for this post. With the Dow tumbling to the lowest point of the year there is no shortage of changing sentiment about this so called “Jobless Recovery”. As Joe Biden rides around all over the country in Ben Bernanke’s helicopter pitching the idea of a “Recovery Summer” or maybe even the “Summer of Magic Leprechauns with Pots of Gold” these days, it might be worthwhile to see what the actual financial community is saying about the direction we are headed.
FORTUNE — Of all the highlights of Allan Meltzer’s half-century as a distinguished monetarist — advising Presidents Kennedy and Reagan, producing celebrated books on John Maynard Keynes and the history of the Federal Reserve — none proved more memorable than a crisis session at 10 Downing Street in mid-1980.
A group of 346 noted economists had just written a scathing open letter to Prime Minister Margaret Thatcher, predicting that her tough fiscal policies would “deepen the depression, erode the industrial base, and threaten social stability.” Thatcher wanted to make absolutely certain her unpopular attack on huge deficits and rampant spending, in the face of high unemployment and a weak economy, was the right one.
Deutsche Bank’s Peter Hooper:
Financial conditions appear to have worsened substantially in recent quarters based on our update of the broad index of US financial variables presented earlier this year at the US Monetary Policy Forum. In the wake of recent developments in Europe, increased stress in financial markets has pushed that index halfway back to its immediate post- Lehman crisis lows.
Initial claims for jobless benefits rose by 12,000 to a seasonally adjusted 472,000, the Labor Department said Thursday. It was the highest level in a month and overshadowed a report that consumer prices remain essentially flat.
First-time jobless claims have hovered near 450,000 since the beginning of the year after falling steadily in the second half of 2009. That has raised concerns that hiring is lackluster and could slow the recovery.
By Mike Whitney
Did the Federal Reserve collude with the big banks to hold millions of houses off the market until the Fed finished adding $1.25 trillion to the banks reserves? Did the Fed do this to make it appear that its bond purchasing plan (quantitative easing) was stabilizing prices when, in fact, it was the reduction in supply that stopped prices from plunging? It sure looks that way. This is from Bloomberg News:
“U.S. home foreclosures reached a record for the second consecutive month in May, with increases in every state, as lenders stepped up property seizures, according to RealtyTrac.Inc.
“Bank repossessions climbed 44 per cent from May 2009 to 93,777, the Irvine, California-based data company said today in a statement. Foreclosure filings, including default and auction notices, rose about 1 per cent to 322,920. One out of every 400 U.S. households received a filing.” (Bloomberg)
There’s nothing wrong with throwing a little money at a problem to make it go away. There’s equally nothing wrong with throwing a little borrowed money at a problem to make it disappear, as long as you have the means to pay that borrowed money back.
But what happens if you throw a lot of borrowed money at a problem, and the problem doesn’t go away? If you’ve ever experienced a situation like that you can probably understand how Europe feels right now. It just unleashed a magnificent $1 trillion euro bailout and the market responded with a selloff by the end of the week! So what happened? That money was supposed to make the problem go away, after all. And it was a lot of money. Why did the market respond to it with such disdain?
“Gold rallied to a new all-time high this morning as worried investors continue to pile in to the precious metal,” said Rajesh Patel, head trader at financial betting firm Spread Co.
“We are seeing continued signs of stress in the financial markets and investors, novice to expert are looking at gold now as a hedge against further turmoil.” Gold is viewed as a safe-haven investment in times of economic trouble.
by Chuck Baldwin
Posted on May 19, 2010
People all over America are discussing freedom’s future. In short, they are worried. In fact, many are actually talking about State secession. In coffee shops and cafes, and around dining room tables, millions of people are speaking favorably of states breaking away from the union. Not since the turn of the twentieth century have this many people thought (and spoken) this favorably about the prospect of a State (or group of states) exiting the union. In my mind, this is a good thing.
Even many of those who oppose the prospect of secession understand the increasing tyrannical nature of the current central government in Washington, D.C., and that something must be done about it.
The Merriam-Webster online dictionary defines tyranny as “1: oppressive power . . . 2: a government in which absolute power is vested in a single ruler . . . 3: a rigorous condition imposed by some outside agency or force . . . 4: a tyrannical act.”
Even a casual observer would have to conclude that most of the actions proceeding forth from DC today match at least Webster’s 1st and 3rd definitions of tyranny. Besides, who would argue the advantage of the tyranny of an oligarchy over the tyranny of a monarchy? A tyranny of many cannot be distinguished from a tyranny of one in most cases–especially not by those poor souls who are at the point of the spear of Government’s cruelties.