LumberJocks

Greed, Capitalism and Romney

  • Advertise with us

« back to Coffee Lounge forum

Forum topic by jim C posted 03-07-2012 10:03 PM 1579 views 0 times favorited 31 replies Add to Favorites Watch
View jim C's profile

jim C

1467 posts in 2563 days


03-07-2012 10:03 PM

OK be nice, and agree or disagree on this op-ed. I’ll even unblock the critics

Greed, capitalism and Romney
By John Stossel
Published March 07, 2012

Now that Mitt Romney is likely to be the Republican nominee, we can expect new attacks on his “vulture capitalism.”
That’s how Rick Perry characterized his private equity work when he was still a GOP presidential candidate.
As the campaign has unfolded, Newt Gingrich’s supporters ran an ad about Romney’s firm, Bain Capital, that said, “Their greed was only matched by their willingness to do anything to make millions in profits.”
Give me a break.
“Greed” means you want more for yourself. Fine. If you obtain it legally, without force or privilege—say, by buying a business and making it more efficient, or shifting resources to where consumers prefer them—that is a good thing. “Creative destruction” makes America richer.

Shifting resources does mean some people lose their jobs. That is sad for those who are fired.
But on balance, it’s a good thing. Intuition tells us that it would be better if no one ever lost a job and that capitalists who close businesses are evil.
But America would not be better off today if elevator operators and factory workers who made typewriters had their jobs preserved by a “compassionate” government.
America is richer today because those workers lost their jobs, because money once paid them is put to better use. In addition, most of those workers found new jobs where their skills better served consumers. Some even say they were glad that they were fired, because now they are more productive, and being productive makes people happy.
But we in the media almost never tell that story. That’s because we only report what we see.
We can see, and interview, the sad people who get fired. We take pictures as they leave their jobs on that last day when the factory closes. We interview them about the hardship to their families.
It’s a sad and moving story.
We tell it well.
But we never tell the flip side, the creative part of creative destruction. That’s because we don’t see it. We don’t see the better things that are done with capital that once went into the factory. We don’t see what many of the workers do next.
None of us covered the first few weeks of Apple or Google or Staples or Domino’s Pizza. We had no clue that those companies were about to produce cool new things, thousands of jobs and billions of dollars in value. Staples and Domino’s, by the way, were funded by Bain Capital.
Not all bankers and private equity firms create wealth, because some make bad decisions. But if government does not bestow privileges, those that don’t create wealth go out of business, and those that fund good ideas grow. Some may call that “vulture capitalism” and sneer at “hostile” takeovers, but if the takeover is not enabled by government force, it is likely to be a good thing. It makes America more prosperous.
Michael Moore says, “Capitalism has no moral core.”
Is that right? Since the word “capitalism” is ambiguous, the answer depends on what we mean. If it’s crony capitalism—well, yeah. It stinks.
Handouts to Solyndra and special deals for Goldman Sachs and GM are not capitalism. That’s “crapitalism.”
Many people hate banks, private-equity firms and mortgage brokers.
In light of the last few years, this isn’t totally unjustified. I resent the bankers who got rich by taking foolish risks and then, when they failed, got bailed out with our tax money.
I guess I shouldn’t blame bankers. I should blame the politicians. They gave our tax money away. If someone offered me money to cover my losses, I’d take it, too.
The real evil bankers are the government cronies, like those at Fannie Mae and Freddie Mac. They took our money by force, our taxes, then paid themselves fat salaries and promised us that none of our money was at risk. And then they squandered more than $100 billion, betting that housing prices would always rise and few people would default.
I resent them and their backers in government.
But in a real free market—no government privileges or barriers to competition—capitalism is great. It’s the only system with a moral core because it’s based on freedom, not force.

-- When I was a boy, I was told "anyone can be President", now I'm beginning to believe it!


31 replies so far

View superstretch's profile

superstretch

1530 posts in 2158 days


#1 posted 03-07-2012 10:25 PM

Was that written by John Stossel or Milton Friedman?!

In recent months, I’ve become fascinated with Friedman.. I love his work. When the “Occupy” movement was started, capitalism was condemned and capitalists were accused of all the problems. The distinction you make is an important one.. when government starts getting involved, it adds greatly to the corruption of business and, in turn, the businesses add to the corruption in government.. The two should be separate (completely free market capitalism… Friedman used Hong Kong as an example) and in doing so, this idea of crony capitalism ceases to exist.

In an age where there are countless review websites (consumer reports, yelp, google reviews), we have no excuse not to look at and compare everything we buy, understand the risks we’re taking, and calculate the benefits. We don’t need government propping up failed ventures and restraining successful ones

-- Dan, Rochester, NY

View HawkDriver's profile

HawkDriver

447 posts in 2098 days


#2 posted 03-07-2012 10:30 PM

Well put Dan.

Thanks for sharing Jim.

-- Patrick, Helicopters don't fly. They beat the air into submission.

View jim C's profile

jim C

1467 posts in 2563 days


#3 posted 03-08-2012 02:00 AM

Patrick,
Stossel is a great writer and sees issues from a different perspective. I like sending his thoughts along.

-- When I was a boy, I was told "anyone can be President", now I'm beginning to believe it!

View Joe Lyddon's profile

Joe Lyddon

9444 posts in 3517 days


#4 posted 03-08-2012 04:33 AM

View EPJartisan's profile

EPJartisan

1116 posts in 2590 days


#5 posted 03-08-2012 02:40 PM

”But in a real free market—no government privileges or barriers to competition—capitalism is great. It’s the only system with a moral core because it’s based on freedom, not force.”
~ I absolutely agree…. if you are an older white straight christian man who comes from a family of means.

Jim my only true response is… “Those who refuse to learn history are condemned to repeat it!” Take away a social structures ability to regulate it’s own structure (called “Government”) and it will always create an imbalance based upon animalistic strengths not human values.. one powerful person with a lack of compassion for the rest of the social structure means only HE has freedom and the rest are subjugated… and then we have a Dictatorship. A herd… a mass of unhappy and discontent which festers and destroys the integrity of the social structure.. thus in the end leaving a structure to the will of one or the few means it will always destroy itself. History man history.

Capitalism is a tool.. not a goal. ~ my opinion :)

Unregulated capitalism = salvery, child labor, health threats, environmental cuts.. public servce cuts like sewers and clean water. Capital will always = money and will never = human. It will never create balance for it requires an imbalance .. a competition.. between two forces where one is deemed inferior and one is deemed superior… but this has little to do with quality and more about revenue… thus capitalism creates schisms in a society that can only work if the playing field is already balanced.. and can be balanced again… and this requires government established regulations so the harmony of the social structure stay intact and competition is encouraged from all areas of the structure not just the ones already in the lead.

-- " 'Truth' is like a beautiful flower, unique to each plant and to the season it blossoms ... 'Fact' is the root and leaf, allowing the plant grow and bloom again."

View superstretch's profile

superstretch

1530 posts in 2158 days


#6 posted 03-08-2012 03:16 PM

Eric-
I think its because of history that true capitalism can work. As I mentioned in my comment above, we have many tools now to avoid many of the negatives you’ve mentioned.

Dictatorship—in a free market economy, with government and business essentially firewalled off from each other, dictatorship isn’t really an issue. If government gets its hands out of business, business has less of a need to pay into campaign funds and run political action committees.

Slavery and child labor—I think its pretty safe to say these won’t be an issue if the US were to align more closely with FMC.

Health threats, environmental cuts, public services/sewers, clean water—Some of these operate outside areas I would consider business and would benefit from being firewalled from it. The CDC is a good resource, but could a collective of hospitals do the same? (Again, this is something that I see operating outside the realm of business). As for environmental issues, this also operates outside of business (for the most part). I think a majority of ‘national’ parks should be turned over to the states (I’m a big advocate of more states rights and the majority of taxes being payable to states, rather than the IRS). I’ve also been impressed with efforts in my area concerning the stoppage of hydrofracking. Entire towns are standing up to companies that want to come in and harvest natural gas. As for sewers/water, my needs are fulfilled outside of the government. I pay for my septic to be pumped by a guy with the cheapest rate for my neighborhood.. Water is provided by another company. Out where I live, its up to the landowner to pay for water/sewer hookups.

In a state of deregulation, the possibility of sub-par, sub-standard products and companies is very high, but with a consumer response and evaluation, they’d be phased out of business. Standards organizations like IEEE would still exist as independent entities.

Its not like this is all theoretical, either—Look at the success Hong Kong has had, turning from an impoverished colony into a region that has:
  • one of the highest scoring educational systems
  • modernized city planning and architecture
  • one of the highest per capita incomes in the world
  • very low political corruption
  • high quality of life
  • one of the highest life expectancy rates
  • high degree of religious freedom
  • some of the best hospitals in the world
  • highly developed and highly utilized public transportation

And of course.. can’t forget that it gave rise to many a kung fu movie ^_^

In all honestly, I kind of want to live there.

-- Dan, Rochester, NY

View HorizontalMike's profile

HorizontalMike

7152 posts in 2379 days


#7 posted 03-08-2012 03:56 PM

Eric,
You have concisely completely caught the essence of not only “capitalism” but also the NEED for an effective government to consistently balance the inequities of the unregulated greed exhibited as crony capitalism under the guise of “free market, less government” capitalism. The banksters most recently proved this beyond a shadow of a doubt.

-- HorizontalMike -- "Woodpeckers understand..."

View IrreverentJack's profile

IrreverentJack

724 posts in 2308 days


#8 posted 03-08-2012 04:06 PM

Wow. Hong Kong even has government funded health care! I’ve read too many James Clavell novels to want to live there though. I think there is a lot of fiction written about Hong Kong. -Ja

View superstretch's profile

superstretch

1530 posts in 2158 days


#9 posted 03-08-2012 04:21 PM

Jack-
Its interesting you point that out.. They have a two-tier system, mainly because of their former colony status with GB.

I found this article – http://www.huffingtonpost.com/nathan-lewis/does-hong-kong-have-the-w_b_299907.html .. its a pretty good read

-- Dan, Rochester, NY

View HorizontalMike's profile

HorizontalMike

7152 posts in 2379 days


#10 posted 03-08-2012 04:27 PM

Jack,
I think your link is broken. Here is something similar:

Original Source
The chart below illustrates the overall structure of the healthcare system and the services provided in Hong Kong:

-- HorizontalMike -- "Woodpeckers understand..."

View superstretch's profile

superstretch

1530 posts in 2158 days


#11 posted 03-08-2012 04:34 PM

The one reason why, at the core, I cringe at this idea, is that I’m so used to the fraud, waste, and abuse we see in this country.. but if the article I linked to is correct, if the US could provide a similar type of healthcare at a cost of 3% GDP (A huge savings over what we currently burn through), the logical side of me would not have a problem with this.

However..

Hong Kong even admits that this model isn’t sustainable, and, in fact, are currently working in a sane fashion to reform it: http://www.fhb.gov.hk/beStrong/emain.html

-- Dan, Rochester, NY

View Jimbo4's profile

Jimbo4

1432 posts in 2228 days


#12 posted 03-08-2012 05:18 PM

You guys really make it tempting – - – - – but I’m not going to.

-- BOVILEXIA: The urge to moo at cows from a moving vehicle.

View TopamaxSurvivor's profile

TopamaxSurvivor

17671 posts in 3141 days


#13 posted 03-08-2012 05:27 PM

What Stossel fails to mention is the process. First buy a company that is in trouble. Issue bonds under the pretense of saving it. Take big payouts for yourself as management from the proceeds of the bond sale. After a year or 2, file bankruptcy leaving the bond holders with nothing and the Federal Pension Guarantee Trust with any pension liabilities. Do the names Micheal Milken and Ivan Boesky ring a bell?

-- Bob in WW ~ "some old things are lovely, warm still with life ... of the forgotten men who made them." - D.H. Lawrence

View CharlieM1958's profile

CharlieM1958

16242 posts in 3683 days


#14 posted 03-08-2012 05:31 PM

The problem with capitalism is that the vast majority of wealth and power inevitably ends up in the hands of a small minority.

The problem with communism is the same, only quicker.

The problem with socialism is that it’s a bastardized combination of both of the above, which mix about as well as oil and water.

Pick your poison, folks.

-- Charlie M. "Woodworking - patience = firewood"

View TopamaxSurvivor's profile

TopamaxSurvivor

17671 posts in 3141 days


#15 posted 03-08-2012 05:55 PM

Capitalism works very well as laid out by Adam Smith and Alexander Hamilton. The problem today is we are in the monopoly phase and the gov’t is Fascist as invented by Mussolini ;-(( The only difference is corps bought it instead of a dictator appointing them to run it.

-- Bob in WW ~ "some old things are lovely, warm still with life ... of the forgotten men who made them." - D.H. Lawrence

showing 1 through 15 of 31 replies

Have your say...

You must be signed in to reply.

DISCLAIMER: Any posts on LJ are posted by individuals acting in their own right and do not necessarily reflect the views of LJ. LJ will not be held liable for the actions of any user.

Latest Projects | Latest Blog Entries | Latest Forum Topics

HomeRefurbers.com