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The Growing Threat to Capitalism

This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.

American exceptionalism, the country’s qualitatively demonstrable advantage over other nations, used to be characterized by individualism.

Not to mention egalitarianism, republicanism, and populism.

All of this was supported by the government’s laissez-faire approach to America’s capitalist economic system.

That’s all changed. And not for the better.

Now, top-down technocratic government manipulation of civil liberties, and the American economy, is pushing the nation towards the pernicious charms of socialism.

And America, investors and non-investors alike, will suffer from its impact…

The Government ATM Is Funding It

Yes, socialism has its charms in the neo-liberal political model sweeping the country.

It’s evident in government’s interference in free markets.

It’s resulted in bailouts becoming intrinsic to capitalism.

The too-big-to-fail mentality in risk taking and decision making is now built not only into our banking system, but other industries may also “opt in” to that economic fail-safe category.

It’s proof that an incompetent and corrupt majority in Congress compensate capitalist elites. Those same elites reinvest their gross wealth back into the political system.

It’s more commonly referred to as “socialism for the rich.” And it’s the new normal.

Both Republicans and Democrats aided and abetted the new order, especially the new economic order.

Starting in 1980 Republicans began the systematic dismantling of regulations that had been effective in bridling banks and bankers’ greed and scheming.

The final prying open of Pandora’s Box, killing the last vestiges of the Glass-Steagall Act that separated commercial and investment banks, occurred in 1999. This came from the signing into law by Democratic President Bill Clinton of the Gramm-Leach-Bliley Act, also known as the Financial Services Modernization Act of 1999.

The ensuing bankers’ bacchanal “ended” with the credit crisis in 2008. Of course, the crisis spawned the Great Recession in America and imposed hardship globally.

In the new ersatz capitalism, banks were bailed out in the name of saving capitalism.

Only this time, given the scale of their greed, leverage, and derivative scheming, taxpayers saw first-hand how the new economic sociology worked. Losses were socialized.

Big banks and government-sponsored enterprises of unimaginable proportion and power were made whole, larger, and more systemically lethal.

And as if that wasn’t evidence enough of the socialization for the preservation of the corrupt system’s richest and most protected political paymasters, the newly elected Democratic President Barack Obama crammed down the public’s gullible gullet his sweeping socialist agenda.

He got into bed with the medical-industrial complex so they could profit at the expense of taxpayers.

Capitalism’s Best Hope Remains

The jury is out on the effectiveness of Obamacare… and way out on the cost of it.

But what isn’t a matter of judgment is that the Affordable Healthcare Act is a socialist agenda that may or may not serve better health in America. It definitely will serve up what will be gross profits to another protected class of business elites.

Whether it’s the Federal Reserve acting on the de facto wishes of crony capitalists in business and Congress, or presidents and their administrations pandering to institutional political power dynamics, the direction America is headed is further and further away from American exceptionalism and right into a socialist gulag.

In case we forgot, Dr. Costas Panayotakis wrote in his 2010 essay, Capitalism Nature Socialism, “The failings of the Soviet model were intimately connected to its undemocratic organization of social and economic life. This model was undemocratic because of its lack of political pluralism as well as its failure to give ordinary workers and citizens a say over the priorities of the economic system and the use of the economic surplus.”

He adds, “Rather than subordinating the economy to the democratically-determined priorities of their citizens, the societies of the Soviet bloc ended up being run by a relatively small political and technocratic elite.”

It’s a lesson well-learned. Fortunately America’s individual, democratic investors provide a great truss work for “true” capitalism…

The post The Growing Threat to Capitalism appeared first on Money Morning – Only the News You Can Profit From.

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