Adrian Shepherd wrote on 03/31/09 10:09 AM

I honestly had never heard of an oligarchy before now; it's a word that will become part of my vocabulary because it's precisely what is happening. Capitalism is supposed to be about the law of the jungle applied to business. Good businesses thrive, others disappear or get swallowed up. Each time the government bails out a company based on it being too big to fail then we have a problem because it is essentially saving companies that made mistakes and lost. Why should companies that damaged the system so severely get rewarded? That just sends the wrong message to our society as a whole.

The system is flawed because the people that got rich from these schemes have been widely unscathed. Their decisions have destroyed the lives of millions. We need a new system and new companies, let the dinosaurs perish.

Nick Akhbari wrote on 03/31/09 4:59 PM

We are a nation of consumers, this is the heart of our economy and without business America as we know it will no longer exist. It seems that our government has decided to do everything exactly opposite of the policies implemented during the great depression. Instead of freezing the money supply they are printing more money then ever imagined, as a result our country is on a socialistic path where capitalism and opportunities will be limited by bureaucratic webs. Now all the faith and trust of the consumers are in the hands of government officials who seem to be brain washed by the idea of throwing money at the problem will ultimately solve it, when in fact will put us under a mountain of debt so outstanding that the mere interest payments will be difficult to accomplish. President Obama has decided to base his administration on an extraordinary fiscal policy in which he claims to cut the budget deficit in half by the end of his first term, but at what cost? A global depression will result in more socialized spending, higher crime rates and massive global unemployment.l At the peak of our adaptation our old way of consumer indiscretion will be replaced by a more global conscious economy where efficiency and renew ability will become a trend of our future. In order for this to occur a new age of global cooperation is required and a "trickle up" theory of economics must be implemented.

Jana Gallus wrote on 03/31/09 9:13 PM

1. Business and its Management are two terms that seem to be essential in a description of the US. Though, when looking at the broader definition of a society guided by business, I think it is important to stress that the American community has become a main supplier of services, whereas its stake in supplying goods has diminished. It rather redistributes the latter, and it is very likely that the redistribution of goods and services will be the field in which the US will be able to excel in the near future.

2. I think there is some truth in the fact that there are major differences distinguishing the recent crisis from previous ones - most notably because of the fact that the economy nowadays is globalized in an unprecedented way (there is this nice quote saying that while it has shrunk from size L to M with the falling of transportation costs, it has now shrunk from size M to S with the decline in communication prices). Nevertheless, I don't think that we should expect that this time, everything will be even worse. We won't be living in a world like that of the dystopia Mad Max, characterized by a complete social breakdown. In my opinion, we have reason to hope, as many of the world leaders still make an effort and gather together. I think it is clear to most of them that we need international cooperation to get out of this crisis. And I am looking forward to see how China will position itself during this week's summit - whether it has recognized the opportunities that would arise with an assumption of responsibility on its part.

3. I think we cannot speak of oligarchy in its traditional meaning because of the aforementioned interdependence. Nevertheless, the events of these last weeks are really reminiscent of this antiquated form of society, and I totally agree with Adrian Shepherd's criticism. In Germany, automobile companies are NOT bailed out (whereas financial institutions still are) because it would become hard to draw a line between firms that are bailed out and those that are not.
Though, I understand that certain actors need to be bailed out, and I don't think that this signifies the demise of democracy. The latter depends on the steps that will be taken to increase accountability through more transparency. But in this respect, I absolutely do not understand why many CEOs can stay and only the boards of directors is fired.
For me, the bailout is not the biggest problem. It is rather the inconsequential conviction of the ones responsible!

John Clifford wrote on 04/01/09 8:40 PM

Our economy collapsed in 1929 because it was built on a lot of borrowed money (credit), and once credit dried up the whole house of cards collapsed. This was the underregulation that we needed to fix (not letting any one invest on margin at high ratios). FDR's New Deal didn't fix the problem, and in fact worsened the collapse... look at the 1938 Crash. We're repeating the same mistakes today, but the difference is that the mistakes are caused by excessive regulation instead of insufficient regulation. Houses were bought on credit, highly-leveraged credit, by folks who couldn't afford to pay the note, and the banks were required to make these loans. The Bush Administration tried repeatedly to bring some regulation to the chaos, but was rebuffed by Congress.

The way to fix America is for people to start living within their means. If this causes some big banks, and big auto companies, to go bankrupt, then so be it. Government spending isn't the answer; only a fool believes that he can spend himself out of debt. And, capitalism isn't the problem and neither is under-regulation.

Excessive regulation forced the banks to lend to unqualified borrowers. Excessive regulation prevents us from drilling domestically. Excessive regulation makes America one of the worst places to headquarter your corporation. Excessive regulation makes running a business in America harder today than it was 20 years ago. Excessive regulation makes us uncompetitive. Why is it that Boeing can build a fuselage in Japan, and a wing in Australia, barge both of them to the US and assemble the pieces into a complete jetliner for less cost than building the subassemblies here? Could it be because we don't allow for competition between labor in Washington state with its protection of unions and requirements for workers to join a union to work at a unionized company? This is the Law of Unintended Consequences in action; laws were passed intending to increase wages, but instead they caused jobs to go offshore.

We don't make anything in this country any more, not because we can't but because we've set the rules of business so that it is not profitable to do so. Our native poor won't work for the wages that illegal immigrants will, so the illegals are given the jobs (illegally) and the money is sent back to their homeland. We send anywhere from $300 billion to $700 billion a YEAR overseas to countries like Venezuela or Saudi Arabia and others that hate us, but we won't drill here in America. Not up in Alaska, not off the coast of Florida... yet the Chinese are going to drill off the coast of Florida with the consent of Cuba.

Americans don't have a monopoly on hard work, or intelligence, or entepreneurialism, and if we continue to insist that reality is wrong, that handcuffing ourselves won't matter, then the rest of the world is going to kick our butts in business, and laugh at us for being so stupid. We had better wake up.

David Guerra wrote on 04/05/09 9:49 PM

Of all the quotes I have to say I especially enjoyed the third one by Fran Leibowitz. Though I don't agree with it entirely I still thinks that it highlights a good point that capitalism and American capitalism for that matter certainly has its flaws. It seems that everyday in the United States we are constantly bombarded with the notion that capitalism is the 'best' form government and that all others don't work. There's no argument that our economy our government and our way of life depends on consumerism and the exchange and accumulation of capital, however I would argue that doesn't mean it is the best method in which a society should exist. As we have seen, capitalism unchecked and unregulated can and will inevitably lead to greed and exploitation when profit is the underlying incentive and sole purpose of producing goods and services. In today's world this phenomenon stretches far beyond our borders and has become globalized, effecting the economies and lives of people all over the world. Our never ending consumption and extravagant lifestyles has led to the exploitation of numerous countries and millions of people. Transnational corporations and large agribusiness are only a couple of the capital seeking organizations that engage in such practices of exploitation, particularly in regards to cheap labor. While, I'm not implying that Capitalism is root of that world's problems, I am simply critically questioning the commonly preached notion in this country that it is the best and only system of government that works.

Lara wrote on 04/08/09 10:20 PM

The description of the US as an oligarchy is perfectly accurate. There is a hegemonic hold of power by the wealthy elites of this country. Every single politician that gets to a place of power has gotten there riding on a wave of huge campaign donations. No one can win a seat in politics in a state wide election or a nation wide election without a huge campaign budget. Our government it run by the wealthy elite. Not only that, but our government is controlled by the special interests of all the huge corporations and incredibly wealthy individuals that make up the elite top of the business world in the US. Our elite government does not even run itself but is run by even more elite business people.

The idea of it always being different this time around is just something that is natural to humans. People never want to believe that they have backed themselves into the same corner for a second of third time. The 1929 depression started because the economy was based on a bunch of borrowing internally from the treasury. This time, the collapsing of our economy comes because our economy is based on a bunch of borrowing, except that this time the money is borrowed globally which is part of why the whole world is now in a recession/depression. It is different this time because it is a global issue now and there is no WWII that can fix our economic problems. The problem is not about over regulation or insufficient regulation, but about smart regulation. There needs to be more truth at the top of our economic structure and there needs to be more personal responsibility with everyday citizens. The only problem is that personal responsibility means not spending outside an individual's means and not buying into the consumerism that is the basis of our nation's economic and social system.

Eva Van Wingerden wrote on 04/10/09 11:15 AM

I am confused as to why the entire world is so concerned with the status of the American economy, when our neighbors in Europe seem to be in up to their waists in debt as well. Banks are failing overseas, but all anyone can focus on is the United States. The leaders of countries are ready to point fingers at American financial failures, but what kind of constructive advice do they have to offer? If everyone stopped trying to blame others and spent their time finding solutions we would all be much better off. After all, almost every single foreign economy depends- at least to some extent- on the well being of ours.