January 30, 2012

Capitalism: Use or Lose

Capitalism is broken and needs fixing or must be further regulated to protect the consumer and worker from oligopolies. This is directly related to the inequality of income in this country.  If we desire to fix inequality, we must fix capitalism.

The United States was founded on the principle that everyone is born with the right to life, liberty and the pursuit of happiness. Early on our forefathers decided the best economic model to reach these pursuits was capitalism. Free markets was chosen to  best attain the nations  economic objectives. Capitalism is here to serve society. Society is not here to serve capitalism.

Our early leaders recognized in order for capitalism to work markets must be free. Free markets meant the individual must have a wide variety of choices as to whom he could buy goods and services. Many providers  forced them to provide the best products at the lowest prices possible or they would go out of business.

Early settlers were less concerned about government over-regulating markets then about devious suppliers trying to control markets. Today when a conservative complains about the destruction of free markets he is condemning the government saying it is over-regulating the markets and not allowing them to operate effectively. The damage caused by regulations pales to the damage caused by markets taken over by oligopolies and oligarchs.

With the consolidation of market control comes the consolidation of income. This is at the heart of today's unequal distribution of income. If a small group of companies are in control of a market, they can set prices and set the quality of the products produced. They also have more control over the cost of labor in the industry.

A corporation's principal objective is to maximize the wealth of its shareholders. In a competitive marketplace, with many buyers and sellers, this is accomplished by selling the best products at the lowest price possible. In a tightly controlled market, this is accomplished by tightening the control of the market and making it hard for the consumer and suppliers, including labor,.to go to a competitor.

The oligopolies are tightening their grip further by buying influence in Washington with huge campaign contributions. We are now seeing the results of the so-called Super PACS. We have one billionaire financing a major portion of Gingrich's campaign. Romney's campaign is being financed by huge contributions from Goldman Sachs and other Wall Street firms. The news media is reporting that Obama will be spending a billion dollars on his reelection campaign. One man one vote is being replaced by one dollar one vote.

This must change and here is how.

1. Prohibit Corporations and Unions From Financing Political Campaigns by Amending The Constitution
2. Enforce Antitrust Laws against Oligopolies & Monopolies!
3. Bring Our Deficit Under Control and amend tax code!

The question is do we citizens have the will to do it.

4 comments:

  1. People don't understand that this started back big time with Ronnie Regan and Sam Walton. Now Wal-Mart has taken over the country. I don't understand how we could go from where we were in the 60's and 70's, to what we have in government now. People don't fight or demonstrate anymore, we have just rolled over and are letting it happen to us. We complain, but keep putting the same people back in office. Change needs to come in a big way and if that means changing everyone that is in office, then we must do it. We must have the courage to change what is truly broke today to continue tomorrow!!!!!!!

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  2. When people do protest, most call them stupid and the police beat them (see the Occupy Movement).

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  3. Unfortunately, the above comment is very true. The public buys into the undercover police implanted violence, and then everyone runs away or cries "why are you violent?" to peaceful people exercising their first amendment rights. We will never change anything unless we stop letting the police undermine social movements that seek to get our country back on track. In stead we have a society pacified by toys and techinology.

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  4. In my opinion, the best way to address this is to look at the historical ratio of corporate earnings to US payroll of a company and then impose a 100% excess profits tax on any earnings that exceed the historical range of that ratio.

    For example if the upper end of the ratio is 0.2 then, once the ratio limit is reached, a CEO can only increase after-tax earnings by a dollar by also increasing payroll by five dollars.

    Lacking this, CEO's will always divert the entire technology-based savings realized to earnings and the middle class will continue to be economically destroyed.

    Our economic/political system cannot survive the destruction of our middle class.

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