Thursday, March 5, 2009
The Changing Face of Capitalism
Last week our local newspaper, the Naples Daily News, published a commentary by a former business executive, which contained all the shibboleths of radical Conservatism. Then he urges that we find a consensus on his agenda in order "to come together.
Jack Tymann’s latest Promethean pronouncement, “America needs to stimulate Capitalism”, urges the retrogressive policies of Reaganism to save us from disaster.His rightwing nostrums are advanced as unimpeachable ideology. Stereotyped Capitalism and free market dogma are practically elevated to state religion. Ignored are needed corrections or variations to adapt to circumstances.
History shows Reaganomics fails on three accounts: Tax cuts are not self- financing, financial markets are not self-regulating, and trickle down is a hoax. Figures prove that tax cuts do not create net public revenue, and that wealth flowed upwards through these tax cuts. The Reagan and Bush tax cuts increased the federal debt enormously and the middle class got screwed while a few at the top got richer. “Starwars” and Iraq depleted our national wealth. Clinton’s tax hike, by comparison, produced surplus without inhibiting growth.
Reagan deregulation produced political and financial scandal: the Savings and Loan crisis. Deregulation under Bush required an even larger bailout of corrupted Wall Street. The Republican dogma promised that lifting supervision from banks would produce lasting prosperity. The opposite took place. Capitalism ran wild and the system crashed. Reagamaniacs spouted, “Let the market do it.” We did! And we got financial meltdown, and recession.
Should we now pursue the identical policies that caused the trouble in the first place, extinguish fire with a flamethrower? Thymann's Chauvinism and mythological assertions, ("we are the greatest, most prosperous, most compassionate nation in history", and "American's can tackle any challenge, defeat any adversary") ignore the reality that something has not been working properly, that our power has diminished in significant respects.
If there is to be a national dialogue and consensus it cannot follow Jack Tymann’s creed. New times require new solutions, not old partisan bromides.Any theory of economic organization is not written in stone. Capitalism is not a fixed concept, and must be adapted to prevailing circumstances. It is a great mobiliser of activity in formative stages of an economy. Incapacitated by age, as now, it needs government intervention. It was the withdrawal of regulation that permitted the sins of Wall Street, and onset of recession.
We will not turn to socialism. A different model of Capitalism will emerge, one evolved to be consonant with social responsibility, and with regulations designed to protect the economy from self-destructing.
