Oh my…oh my…
A Nobel Prize winning economist has come out with yet another analysis, showing that capitalism isn’t working. It is failing the middle class, says Michael Spence.
The rich are getting richer. The poor are as poor as ever. And the middle classes are losing ground. That’s what he says.
And he’s a moron. Here’s the Reuters blog…
Capitalism is failing the middle class
Global capitalism isn’t working for the American middle class. That isn’t a headline from the left-leaning Huffington Post, or a comment on Glenn Beck’s right-wing populist blackboard. It is, instead, the conclusion of a rigorous analysis bearing the imprimatur of the US establishment: the paper’s lead author is Michael Spence, recipient of the Nobel Prize in economic sciences, and it was published by the Council on Foreign Relations. – Reuters Blog, Chrystia Freeland
Actually, the poor are making huge gains – in India, China, and Southeast Asia particularly.
The rich are making huge gains too – all over the world.
And the middle classes? The poor middles classes in the developed world can’t seem to catch a break. They’ve been treading water for the last quarter century. But rather than accept the status quo, they managed to improve their living standards by working more hours and going further into debt.
Alas, with the labor markets full of millions of unemployed workers…they can no longer add to their incomes by working longer. And with household debt near record levels, they can’t get more stuff that way either.
What are the poor devils to do? They need to cut back…downsize…learn to live better on less income.
Does that mean capitalism has failed? Not at all. Capitalism is just doing its job…
…separating fools from their money…
…and giving people, not what they expect or what they hope for, but what they deserve.
Of course, there’s more to the story. The feds are the real culprits. Their central planning is largely responsible for the strange pattern of income distribution.
But that’s a long story…for another day.
for The Daily Reckoning
Since founding Agora Inc. in 1979, Bill Bonner has found success in numerous industries. His unique writing style, philanthropic undertakings and preservationist activities have been recognized by some of America's most respected authorities. With his friend and colleague Addison Wiggin, he co-founded The Daily Reckoning in 1999, and together they co-wrote the New York Times best-selling books Financial Reckoning Day and Empire of Debt. His other works include Mobs, Messiahs and Markets (with Lila Rajiva), Dice Have No Memory, and most recently, Hormegeddon: How Too Much of a Good Thing Leads to Disaster. His most recent project is The Bill Bonner Letter.
Long Live Capitalism! Socialists hhave been meddling and neutering the free market forever. But still what meager amount of capitalism and free markets we have has done a great job for the world.
“Capitalism is just doing its job – separating fools from their money – and giving people, not what they expect or what they hope for, but what they deserve.”
seems to me you could say that about any system. socialism, nazism, cronyism, mercantilism, free trade, mafia, communism … yep, it all fits.
I suspect gman has got it right on the “getting what they deserve” mantra–certainly the Romanov’s got what they deserved regardless of one’s affinity or lack there of for communism. And yes, it had everything to do with the distribution of wealth.
Capitalism fairly separates fools from their money, where as what is going on now is in no way fair for the middle classes, whom are having their hard earned wages stolen from them, even before they have the chance to spend it.
There are many reasons for the current weakness in the middle classes, I would table one pernicious, insidious, and subtle way this is being achieved is through the loss of identity; just look at the way the middle class dress now, no longer the smart suite, distinctive, confidant, the well kept look; instead now they wear the working class jeans and t-shirt. The boss says these days throw away the tie, but he will use it to hang you by when it comes to review wages and conditions.
Smart dress is not the all that is wrong by a long shot, but it does help the ruling elite to treat the middle classes like sweat shop workers, and reduce the provision of capacious and elegant working environments down to shoe boxes with ease.
Further, the loss of identity has been so successful and skilfully applied the majority of the middle class are cheering their loss of status, as they have been conditioned to prefer the sophistry of the freedom to look poor and ware want “they” want instead of what they deserve.
The American people are MORONS who are getting exactly what they deserve for aiding and abetting fascists. Let the banks and the politicians rape them until they are dead.
Rather than go after the real (financial) terrorists on Wall Street (the privately owned Federal Reserve included), the people of United States Inc. choose to screw themselves even more by electing despots like Obama to plunder the country even more.
What the U.S. has is a fundamental lack of knowledge in what “capital” is, where it comes from, and how you get more of it. Folks, it doesn’t matter what political-economic system a country has, whether it be socialism, capitalism or otherwise, because “capital” is a universal requirement for all of them to work.
You may believe (albeit wrongly) that “capital” is a term associated with “capitalism.” An etymology dictionary reveals that the term “capital” was manifested in the 1620’s to develop a word for: “stock, property” (NOTE: there is no distinction made for private/public stock, property). It follows then that, if a country’s existing “stock, property” of “value” is decreasing, the economy of that country will decrease as well, and vice versa.
Effectively, an economy is a “balance sheet.” Currently the U.S. economy has alot of liabilities in comparison to its assets. If the U.S. is going to get out of the black hole it put itself in, it will have to increase its assets (production and export activity), decrease its liabilities (consumption activity) and increase its capital (retained earnings/savings). In the mean time, I agree with Young buck: “the American people are MORONS who are getting exactly what they deserve for aiding and abetting [domestic and foreign] fascists.”
In capitalism, man uses man.
In communism, etc., it’s just the reverse.
Clearly, many people have no concept of “capital,” which is to say the key to understanding how ALL economic systems work. All systems require “capital” as an input, that’s the simple part. The hard part for most systems is ensuring “capital” is also an output. If “capital” is not an output of the system, then that means “capital” is being consumed/destroyed.
“Capital” is an input for building homes and developing real-estate. For a time, the building of homes and development of real-estate produced “capital” as an output. At some point however, building homes and the development of real-estate ceased to produce “capital” as an output, which means building homes and real-estate development became “capital consuming” activities. Effectively, we’ve destroyed a good portion of our “capital stock” in the U.S. by engaging in consumptive growth rather than productive growth.
In capitalism, man uses machine.
In communism, people used collectively owned horse and ox.
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