E
EmptyTimCup
Guest
You Can’t Kill Capitalism…It’s Already Dead
Bismarck set out to create a pan-German state with progressive social ideals, groundbreaking at the time, and at first glance, would work in perpetuity (so long as the population and the real economy grew indefinitely). It created a social safety net and took a bit of the Darwinism out of life. It looked good on paper until populations realized they could vote themselves ever larger entitlements, and politics became a profession, one where it turned out you could advance your career by promising to redistribute other people’s money.
“Too little attention has been paid to the fact that electoral politics lures disorded, messianic personalities into positions of power.”
– Davidson & Rees-Mogg in The Sovereign Individual
Fast forward a couple hundred years and we arrive at the point which looks pretty close to the proverbial “end of the road”. All it took was barely a century of Keynesian suicide-economics and we’re at that place where there is no more road left to kick the can down. Not for lack of trying…it is possible that another decade, maybe even two more, can be eeked out of today’s sputtering system. But even then, the only thing we can say for sure is that the trainwreck then will be a lot worse than the one we’re experiencing now.
This century has been brought to you by the letter “E”, not for Enlightenment, unfortunately, but for Entitlement. The system is a mess and Everybody expects to be “made whole” in all this by Everybody Else.
* Labour unions want to lock in their annual raises and secure job guarantees, even if those jobs are to manufacture goods nobody wants to buy.
* Fast-buck traders are leveraged to the hilt and scream for “stimulus!” if the stock market commits the unthinkable and goes down.
* Governments refuse to allow the system to sputter out on their watch and hold interest rates down forcibly and wonder why nobody is investing or lending money.
* Massively indebted people who bought houses they didn’t need with money they didn’t have demand loan modifications and principle forgiveness on debts they themselves incurred.
* Banks and financial houses who blew themselves up demand bailouts lest we all end up “under martial law”.
* Central banks debase the currency with one hand, intervene in “free markets” with the other, monetize their own debt while simultaneously jawboning a “strong currency policy”.
There is one common element through all these themes and it is the flat out refusal of anybody to accept responsibility and the consequences of their own actions and decisions, lest the results become too stark.
Instead, more debt will be issued, the bill for all this will be handed off to future generations, and if anybody needs to cough up a down payment now, we can just confiscate it from “the rich”, who of course, have more than their “fair share” of the wealth in the world because (wait for it):
Capitalism is to blame.
Capitalism: the behavior in which people specialize in goods and services and then sell or trade those services to each other, with pricing set by the mutually agreed upon value, is the problem. So we are told. It creates…inequality. Somebody eventually ends up wealthier than most of the others, and this is not fair to the others. Want to know how we got into this mess? Look no further than “runaway free markets”.
The only problem with this premise, as I’ve lamented many times in the past:
Free markets, aren’t.
What passes for capitalism, isn’t.
What we have today is a type of government controlled cronyism, where free markets are only allowed to function if the outcomes benefit those closest to the political epicenter of the state. If it doesn’t, then a crime has been committed. Just ask Martin Armstrong.
interesting read
What Destroyed the Roman Empire?
Martin Armstrong is a market analyst who spent a long time in prison for offending “the powers that be” and he has a lot to say on the subjects of government overreach, the economic cost of government and what he calls the cyclical pendulum between public and private interests. We live in an age where government everywhere is literally strangling the very economies they feed off of. His essay “What Destroyed Rome” is a must read:
The Decline & Fall of Rome was driven by the UNFUNDED guarantee of PENSIONS and like social security today, there was nothing actually put aside. It was always assumed that the state would be able to fund its promises. During the Republican days, 25 denarii paid 52 percent of the cost of his family’s annual needs for grain. By the 3rd century AD, it would take 6,000 denarii to create the same standard of living.
Inflation was the RESULT, not the SOURCE, which was the fiscal mismanagement of Rome.
Under Julius Caesar and Augustus, they established new pay standards whereas donatives (bonuses) to the military were paid in gold aurei. Such donatives paid to the troops were actually the spoils of war. This gradually was transformed into expected benefits even when there were no spoils. Tiberius and Caligula transformed donatives from rewards paid out of booty into regular bonuses. When a new emperor came to power, they bought the loyalty of the troops paying a donative upon their accession to the throne. Each paid donatives of 50 million denarii (by matching 25 million denarii in testamentary gifts of his predecessor).
Sound familiar?
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