Tag: American politics

The True Nature of Capitalism

As the Occupy Wall Street party gets rockin’ across the continent and the capitalist factories of China fatten their profit margins by pumping out Vendetta masks (that’s a cheap shot, by the way) I think it’s time to hit pause on the merry-go-round and take a look at where we stand.  It’s obvious the Occupy Whatever! Movement has more talking heads than a defanged Hydra, but the general stream of consciousness coming out of these Babes-in-the-Woods is that capitalism is the villain – now and for all time.  I’ve begged to differ on that question ever since I discovered marbles were legal tender, but having an open minded discussions with these people is like trying to teach a moose to dance.  It’s just not going to happen because the moose keeps getting annoyed.  The major stumbling block is a marked misunderstanding of what capitalism is, does and what it’s supposed to be.  So, let’s take a look at the Merriam-Webster, shall we, and see if we can’t clarify the situation.

Cap-i-tal-ism noun: an economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production and the distribution of goods that are determined mainly by competition in a free market.

That’s a pretty milquetoast definition; no mention of fangs or green saliva.  And we all know that things we know to be true don’t always match what the dictionary would lead us to believe.  So let’s try again.

Here’s the real deal.  Capitalism is about making money – greed, if you will.  It’s a manmade device that has no conscience and no morality.  No other animal on this planet uses it, and it causes a distinct imbalance in the fortunes of all human beings.  It has pushed people to exploit their world — physically and intellectually — to discover and fashion goods and services to sell to their fellow human beings.  It’s responsible for all we see and a ton of stuff we don’t.  Nothing in this world happens without capitalism having its fingers in the pie.  So how did we get this way?

It all started when Grog the caveman had two spears and Eddie his neighbour had none.  Grog traded his extra spear to Eddie for whatever he brought back to the stew pot that evening.  It was a simple transaction.  Over the course of time, Grog discovered that he could eat pretty well — without chasing mastodons all day — just by sitting in the cave, making spears for guys like Eddie, who did.  It was a good arrangement.  Since that time, capitalism has grown and spread throughout the world.  It has gotten extremely complicated (for example, I have no idea if Hedge and Mutual Funds are even different) but, in essence, it’s still a series of simple transactions.  We might think we’re 21st century mega-sophisticates, but, in fact, we’re all just a pack of Grogs and Eddies, with various credit limits.

The current problem with capitalism comes not from a freewheeling free market meltdown but from a lot of contemporary malcontents who spent their formative years at the Alec Baldwin School of Economics where they whiled away their time studying Wishful Thinking with a midnight minor in dystopia movies.  They are under the growing misconception that the world has been corrupted by a select group of James Bond Super-Villains who are part of a nefarious plot to …do what?… I’m not sure.  In general, I think it involves taking money from people who don’t have any – if that makes any sense.  Honestly, I’m not being sarcastic I truly do not understand what the Super-Villains are being accused of  – aside from just being nasty.  Anyway, the malcontents have been yipping and storming around for the better part of my lifetime, raging against the capitalist machine.  Unfortunately, they’ve been bitching for so long that governments have forgotten their real function and are being dragged along for the ride.  FYI, government’s only purpose is to protect me and all the other mes out there, give us a good education, keep us healthy and not let us die alone in the dark.  However, with all the whining, the malcontents have managed to muddy the lens so badly nobody can get a clear picture of what’s going on anymore.  What they have always failed to understand, despite overwhelming evidence on a daily basis, is there is no Super-Villains’ Club, and capitalism is not the root of all evil.  In fact, it’s capitalism’s benevolence which has given us the time and leisure to theorize and chatter about just how evil capitalism is or isn’t – but that’s for another time.

Capitalism, by definition, is all about making money.  It has no other reason to exist, it’s not on the verge of extinction and it works in Darwinian splendour.  Companies that make money flourish and grow: companies that don’t wither and die.  It’s that simple.  Getting upset about huge corporate profits is like getting mad at the wolf for eating sheep.  It’s what they do.  And it’s just as senseless to ask the wolf (on moral grounds) to stop chewing, or, at least to share; that’s a good way to lose some fingers.  The only way to deal with the capitalist wolves among us is to control the one thing they’re all looking for, money – which, by the way, the general population already does.  The power of the people is not standing on a street corner, holding a sign; it’s the cash in their wallets, right there next to their credit cards.  If you want to put a stop to Kellogg’s, quit buying Frosted Flakes.  And here’s the beauty of that.  It works with every company on the planet from Grog and Sons: Spear and Arrow Makers, to J. P. Morgan, General Electric and Wal-Mart.

These Occupy the Whatever! people are just regenerated 60s activists, out there getting in the way of the general problem at hand.  I agree it’s about time we put a stop to this unholy alliance between government and business.  However, instead of ragging on the bankers for cashing their bailout cheques we should be outraged at the governments who wrote them in the first place.  Our governments have no business going into business for themselves; that’s not their job.  It’s time to make it plain to our elected elite that their time in office is directly connected to how well they manage our money.  Meanwhile, it’s also time to vote with our wallets and financially punish every capitalist who took our involuntary taxpayer generosity — by loudly doing business with their competition.  It’s the only thing they’ll listen to.

But until people recognize the true nature of capitalism, I’ll tip my hat to a new generation.  It’s no wonder we all got fooled again.

How to Ruin a Debt Crisis: Part III

To put it mildly, America is in the middle of an economic crisis… again.  However, there’s a difference between this one and the crisis of 2007-08 or even 2000.  This time, instead of faceless, nameless corporate executives, Americans have somebody real they can blame — and it just might be Barack Obama.  If this credit downgrade by Standard and Poor’s sticks to the President and the crisis turns political, America is in for a ride right out of Roller Coaster Tycoon, and the rest of the world better buckle up ‘cause they’re coming, too.

Before we discuss the mayhem that’s about to ensue we need to get a few facts straight.  First of all, there’s nothing wrong with the American government’s credit.  If anybody would take even a brief panic pause, they’d notice that most people who are getting out of the stock market are putting their Yen, Yuan and Euros into US Treasury Bills.  So much for America’s inability to pay its debts!  Secondly, the US economy is in trouble, but it’s not on the verge of collapse.   Of the twenty largest corporations in the world, ten are American — and that doesn’t include Disney, Coca-Cola or McDonald’s.  Visa and Mastercard are American companies, as are Facebook, Google, Microsoft, Intel and Apple.  Your physical laptop may be made in China, but the guts that run it are American.  Also, there are two essential concepts you need to understand.  One: every single American, from birth, knows that, unless it’s your team, nobody cares who didn’t win The World Series.  It’s in their DNA somewhere.  To reiterate, they believe that there are champions and then there are the other guys; you don’t get points for close.  Two: in general, ordinary Americans don’t know anything about the rest of the world, and they don’t care.  It’s not arrogance; it’s a simple fact.  Why don’t they care?  They don’t have to.  This isn’t bashing “stupid” Americans.  Think about it, objectively.  What difference does the rest of the world make to them?  The reality is not much.  Former Speaker of the House, Tip O’Neill, once said, “All politics is local.”  For Americans this is true.  That’s why Barack better shape up, or in 2012, the locals are going to go Jimmy Carter on his ass and he’ll be spending the next four years planning the Obama Library.

Here’s the scenario.  Last November, the Republicans may have taken control of the House, but it’s the Tea Party caucus that owns it.  They proved that during the debt ceiling fiasco.  As it stands now, in 2012, there’s more than an even chance the Senate could go the same way – a Republican majority with Tea Party control.  Now, as of last Friday, Standard and Poor’s threw the White House into the mix.  Obama’s approval rating is at 40%.  That’s not enough to win re election.  If a Republican – any Republican – gets to redecorate 1600 Pennsylvania Avenue next year the Tea Party is going to be running the show.

Tea Party people are fed up with playing nice with the rest of the world.  They see America as getting kicked around by every two-bit country with a vote at the UN, and they’re tired of paying for that privilege.  This credit downgrade is just another example to them.  They look at the billions spent in Iraq and Afghanistan and say, “Hey, wait a minute!  We could have used that money.”  They want to stop wasting lives and dollars on foreign adventures and get their own house in order.  They want to protect their own borders, their own jobs and their own industry — before they start tackling other people’s problems.  They want to feed and educate their own children first.  In short, they’re old-fashioned Isolationists.  But before the anti-American choir starts gearing up for the Hallelujah Chorus, let’s look at what this means.

Admit it or not, America has been doing the heavy lifting — economically and militarily — around this planet since 1945.  American military spending has allowed Europe to spend their money on social programs and Canadians to buy Health Care.  The foreign aid they gave Asia established global industries that turned Pennsylvania, Ohio and all points northwest into the Rust Belt.  They’ve paid for schools and hospitals across South America and Africa.  And it goes on and on.  There is no part of contemporary society that hasn’t benefited from American dollars.  Pax Americana has given our world the time, space and peace to grow scientifically, medically and culturally.  Anti-American gasbags don’t realize the USA is the most benevolent Superpower in history.  They never mention the trillions of dollars worth of free food Americans have sent around the world, or the free medical aid or industrial assistance.  They don’t talk about things like the Center for Disease Control in Atlanta, or the American Red Cross or the IMF or the World Bank or any of the other goodies Americans have been paying for — for two generations.

So what happens if an America First Congress starts turning off the money tap?  Every country west of the Bosphorus is going to have to up their military spending by at least 20%.  Europe doesn’t have that kind of money, but they’re going to have to find it.  Canadian Arctic sovereignty will become an expensive proposition.  South Korea will have to do some serious sucking up to Kim Jung-il.   Japan had better invest in missile defence, and China’s lost province of Taiwan will probably be reunited with the mainland, at long last.  The Middle East is too disastrous to even contemplate, but Iran’s neighbours should consider stocking up on bomb shelters and HazMat suits.  And the military spending isn’t even the half of it.

If America erects protectionist trade barriers and shuts the world’s biggest economy out of the free trade loop, the Great Depression is going to look like a walk in the park.  World trade will collapse, just like it did in 1929 — but the fall will be further because billions more people depend on it.  Modern Asia’s prosperity is built on exports; and without them they’re burnt toast.  The Yuan, China’s much-manipulated currency, won’t be worth the time it takes to print it – never mind Asia’s lesser economies.

Then there are all the other non-threatening by-products of American isolationism.  Frantic calls from places like Haiti, Somalia and Indonesia will still be there, but they’ll be put on hold.  Relief efforts in non-big-media areas will wither and die.  The UN, not a Tea Party favourite, will be looking around for lunch money, and Unicef, Unesco, WHO and all the other alphabet agencies will be having bake sales to pay the bills.

The last time America shut the doors and went about its business, there was a global economic disaster and a world war.  In the 21st century, American voters are not going to complain if their government stops spending money in places like Eritrea; most of them don’t even know where that is.  No pressure, but Americans don’t like a loser either; so, Barack, you’d better come up with some economic answers pretty quick — or the political fallout is going to be heard around the world.

How to Ruin a Debt Crisis: Part II

The problem is this just might stick to Obama.  The president may have finally run out of Teflon.  Unless Barack can figure out a way to pull some leadership out of that teleprompter, he’s going to be wearing this like last month’s pastrami when he has to face the people in 2012.  It’s going to hurt him.  I know this is a bold statement about the most adroit politician to come out of Chicago since Dick Daley, but think about this.  I haven’t even told you what I’m talking about yet.  You already know what it is, though.  It’s the American debt crisis and Standard and Poor’s downgrading of the US credit rating – and yes, it is a crisis.  The White House has gone to DEFCON 2 on damage control, but it ain’t going to help ‘cause, as Harry S Truman’s eloquent little sign pointed out, “The Buck stops here.”

For the last 48 hours, Obama apologists have been setting break fires wherever they can find a Blackberry or a microphone.  The first line of excuse is Standard and Poor’s made a mathematical mistake – a couple of trillion dollars, apparently.  This one is way too highschool lame to even deal with.  From there, they take a run at the Republicans, who just weren’t being reasonable about Obama’s plan for a “balanced approach” to the debt crisis.  Good point, except for one minor problem: there never was an Obama plan (at least not one that was written down anywhere.)  There was a lot of in-general talk about compromise, but the Commander-in-Chief never stood up and said “This is the problem, and this is what I’m going to do about it.  Okay, Broehner.  What’s your plan?  That’s stupid.  Now let’s hammer out a deal.”  The fact is most of Obama’s thoughts on the debt crisis (including “balanced approach”) were just more media platitudes that don’t actually mean anything but invoke some vague idea of reasonable behaviour.  Even the most ardent supporter can’t point to Obama’s chapter-and-verse solution to keep America out of debtors’ prison.

Finally, the Obamanista have been dragging all-purpose bogeyman George W. Bush out of retirement and kicking him around again.  After all, that worked in 2008.  “Bush was the one who spent all the money.  (Stage direction: point fingers accusingly)  He did it.”  Please!  Yeah, yeah, yeah!  We all know that Dubya is responsible for everything from 9/11 to Lebron losing Game 6 to the Mavericks, but there’s got to be a statute of limitations somewhere on the guy.  Even if he did spend all the money, it’s Obama’s job to fix it, and he’s had three years to do it – which he hasn’t.  Besides, everybody knows the bottom line is no matter what, where, who, when or why the debt got out of control, Barack Obama was the guy sitting in the Oval Office when the cash cows ran dry.  That’s what history and the electorate will remember, and if either one ever forgets, the Republicans are going to remind them.  And that’s the problem.

Americans are a mercantile people.  They’re willing to trade a lot if they think they’re getting something for their money.  In this case, they were willing to go with a next-to-useless president because he was interplanetary cool.  In 2008, the whole world loved the guy.  (He started his presidential campaign in Germany, for God’s sake.)  So, during the election, nobody bothered to notice that Barack Obama was a (less than one term) junior senator, with fewer credentials to be president than Millard Fillmore.  He expounded change and then cut a traditional backroom deal with Hillary to make her Secretary of State — but nobody cared.  The guy was Kennedy-sweet — with no downside.  He got the Nobel Peace Prize just for showing up.  All he had to do was hang out at the White House, pull an Eisenhower and don’t touch anything.  Most Americans would have been more than happy with that after eight years of George Bush.

However, Americans are also a proud people.  They don’t like it when they think they’re not getting their money’s worth.  And they get downright unreasonable if they think they’re being conned.  Herbert Hoover, Jimmy Carter and George Bush the Elder are just a few one-term presidents who tried to pull a fast one on the American people.  This is where the Tea Party comes from.  It doesn’t take Howard Beale to figure out there’s a boatload of folks across America who are “mad as hell and not going to take this anymore.”  Despite what The New York Times will tell you, these folks are not an isolated pack of snarling, white-haired, right-wing, Sarah Palin nut bars.  They’re ordinary folks who think they’re watching their prestige going over the falls along with their economic future.  This is just insult to injury to an electorate who trusted Barack Obama to change America’s position on this planet.

Right now there is an economic crisis in America.  So what?  That’s nothing serious!  Take a look around you.  There are more farmers raising livestock on Facebook than there are on real farms in Europe, and Facebook is less than a decade old.   More people are touching Google on their iPads every day than there are people in Malaysia.  Google is a teenager and iPads didn’t even exist when Obama was elected.  Last year Walmart customers made 7.2 billion purchases (the population of the world is approximately 6.5 billion) and most of them were made with a Visa or Mastercard.  Americans win more money on Jeapordy than most humans earn in a year.  Use your head, folks: American economic power is awesome (in the true sense of the word) I don’t care what Standard and Poor’s says.  However, if this thing really does stick to Obama and these economic problems turn into a political crisis, all bets are off.  The world is going to change radically and not in that cool, glamourous way Barack was singing about three years ago.  It’s going to get ugly, and it’s going to be mean.

Wednesday:  What happens to economics when American voters get angry?