Bottom line: The Free Market Won. Socialism Failed

Kini on October 13, 2008 at 5:49 AM

Perhaps what you are missing is that the most of the best economies all through history have not been examples of pure socialism or free markets. The best economies have elements of both. The US has a mix. The interstate road network is not privately owned. Government has a role supporting and encouraging the markets to be as free and fair as possible.

Right_of_Attila on October 13, 2008 at 6:20 AM

Many ideas seem crazy at first until you actually think them through. But one thing is absolutely certain, you haven’t thought mine through at all. If you did then you might be able to concede that there is some thought in them even if they seem radical. I am perfectly willing to explain this to you if you like. But this is not the proper forum for that.

Outlander on October 13, 2008 at 7:37 AM

I am in agreement that unions have done a fantastic job of killing the golden goose in the auto industry. The downturn of the American auto industry revolves around several important factors, and yes, the unions have been a very damaging part of it. But that is not the entire story.

People act as though outsourcing our jobs is trade (as one of our previous commentators states). Since when have our jobs become the centerpiece of trade? I always believed trade is about selling a product. Currently trade is not a positive for America. We have a trade deficit measured in many billions of dollars. That does not represent our wealth working for us. It represents our wealth being drained off to other countries.

People love to talk about responsibility here. They love to point out how we must live inside our means. But they completely ignore the massive outflow of our cash to other countries as though this is a sensible and balanced trade policy. It is not. It is a way to have America fund the growth of other nations. It is international welfare, and it is fueled by companies that are misleading about labor costs.

It is important that we stop oversimplifying the causes of our economic troubles. They take a very large number of forms. It is not just the banks, or greedy companies, or greedy stockholders, or greedy consumers, it is all of them. To point at one part of it without acknowledging the rest is to be purely blind and ignorant.

I hate the bailouts. I hate that we have to do this over our own laxness and stupidity. But there is one point that is inescapable. The taxpayers are the ones that are bailing out the country. They are the only ones that will bear the burden in the end. Therefore they are the only part of this equation that has a right to be aided by the bailout. It is their money.

I am not proposing that we help the companies that did wrong any more than necessary to avoid a depression. But I am proposing that we help them by helping the American people. They are the ones paying, and they are the only ones that deserve the help.

Spoken like a true Detroit union thug. Ignore the greed of unions and blame the companies for looking for other sources of labor when union labor become uncompetitive and a threat to the survival of the company.

If your silly ideas were implemented, lots of companies would take their money out of the US as fast as they could. You obviously have not thought through the implications of your proposals. I can see that you are not used to being taken seriously. You have incorrect and harmful ideas about things you offer opinions, without a clue.

Right_of_Attila on October 13, 2008 at 6:20 AM

It may not be a silly idea, but I find it a foolish assumption that Hawthorne is a union thug

One might not want to jump to the conclusion that Hawthorne has not thought his ideas through

I cannot deduce from Hawthorne’s comments that he is not used to being taken seriously.

I do not find ideas harmful. I find all ideas useful. It is implementation that can be harmful

I missed the clue that explained why Hawthorne, the union thug, does not have a clue. Perhaps because I missed the proof that Hawthorne is a union thug

Re: the conclusion that

lots of companies would take their money out of the US as fast as they could

I thought they already did.

Large corporations point the boat to maximize short term profits. That is why the crash happened

Interestingly the U.S. bailout, having preceded the current international bailout, caused a huge flow of money into U.S. Treasuries as money holders outside the U.S. cleaned out their banks, thus forcing the European bailout. Sometimes the backwash of the corporate boat brings flotsam and jetsam to your shores

‘flotsam and jetsam’ both words originated in 17th-century sailing terminology. Flotsam literally meant “wreckage or cargo that remains afloat after a ship has sunk.” Jetsam meant “goods thrown overboard from a ship in danger of sinking in order to give it more buoyancy

“With no desire to exaggerate, this might be considered the financial pre-conditions of a depression.”

Leave it to the DOOM AND GLOOM DEMS….

I prefer to say

With no desire to exaggerate, this might NOT be considered the financial pre-conditions of a depression.

unseen on October 13, 2008 at 4:13 AM

I’m sorry, unseen, but your posts on this thread are very reminiscent of Das Kapital.

*** And he is a lot closer to a real honest to God socialist than anyone we have seen in the White House since FDR. If the government does not put something into place now to stop an honest to God meltdown and he becomes president, he will do whatever he damn well pleases because he will say it is a national emergency.
Terrye on October 13, 2008 at 7:10 AM

You are damn right. Divided government right now should be a MAJOR selling point for McCain. Conservatives should be making this argument big-time in public as much as possible, and the McCain campaign immediately should start tying Obama directly to Harry Reid and Nancy Pelosi (who have lower approval ratings than Bush!).

The sales pitch: Electing Obama President means that Obama, the most liberal Senator, will be able to work with Pelosi and Reid to enact far-left wing legislation. There will be no check on their liberal inklings. And may we remind the American people that Bill Clinton made the same middle class tax cut pledge Obama did, and then turned around and ushered in the largest tax increase in modern American history in his first year in office? The world economy and our national security are both in too much peril to trust to a far left “community organizer” and his far left pals in Congress.

Hawthorne on October 13, 2008 at 5:43 AM

The biggest thing clusterf—ing the automotive industry is the giant yoke of pensions and retirement benefits hung around its neck by the United Auto Workers. For decades, GM rolled over to crazy union demands for added benefits. That, in turn, caused Ford and Chrysler to do the same.

Now it’s time to pay the piper. I think something like $2,500 of the price of any domestic car goes directly to UAW pensions/benefits. For a Honda, it’s like $1,000.

On the subject of government intervention and the great depression… Even most conservatives, post Andrew Jackson, believe that the government plays an important role in monetary policy. That’s why almost all banks in the United States operate under a federal charter, and why the Fed has so much power. Government policy (both in terms of tariff policy and monetary policy) played a HUGE role both in causing and prolonging the great depression. One hopes we’ve learned since then…. and part of learning is making sure we do not elect Obama as President and place Obama, Biden, Harry Reid, and Nancy Pelosi in unfettered command of the entire country!

The chances of this recession turning into a depression near unity.

But thinking that it does not matter what people think is exactly what put Obama in the lead. And he is a lot closer to a real honest to God socialist than anyone we have seen in the White House since FDR. If the government does not put something into place now to stop an honest to God meltdown and he becomes president, he will do whatever he damn well pleases because he will say it is a national emergency.

Living in a fairy tale world.

Not looking at reality.

Americans are not crazy about NAFTA right now because they think it means that big bad companies go to Mexico and Canada and employ illiterate children in the place of American workers. True? No, but that is what a lot of people think.

And if we sit back and debate whether the government should get involved via bank stocks or whatever while the world economy goes into a global seizure, people will blame the government for not doing more to protect them. You can call it what you want, but that is what will happen.

They want to take our money out of the country, but there is not any real reason our economy should be the vehicle to fund growth outside of America while we get fleeced.

Hawthorne on October 13, 2008 at 5:43 AM

On second thought…. NAW!
If that were the case…. nobudy wood in invest here!

You are a glittering jewel of ignorance.

I live in the Detroit are and have watched the downward spiral of the auto companies. There are a lot of reasons for this, but the stock market is the primary reason.

So the excessive union contracts that paid above market wages, force inflexible work practices, and huge pensions had nothing to do with it.

The stock market acts in ways that expose unrealistic business practices. You are blaming the little boy for pointing out that the auto company emperors had no clothes.

There are two times in our history where the stock market ceased to become an investment in the long term growth of a company and became a vehicle for fast profit to investors. Both of these periods have ended in horrible conditions as the banks played fast and loose with their investments and led to a run on the market. The first was the Great Depression, the second is now.

So you propose the sort of policies that led to the Great Depression. Brilliant! /sarc

The profit is the only consideration thinking that is forced on the boards of our corporations is there because of demand for high returns by the stockholders. It is our own greed that causes our jobs to be sent overseas.

Spoken like a true Detroit union thug. Ignore the greed of unions and blame the companies for looking for other sources of labor when union labor become uncompetitive and a threat to the survival of the company.

I think three rules would go a very long way toward fixing the problems in the market and jobs here in America.

Outlaw leveraged transactions. All stock must be purchased immediately with cash on hand.

Better to regulate the credit for leveraged transactions.

Otherwise, investors can use the securities as collateral for loans outside US control to get the same result as a leveraged purchase through a US brokerage. As you have accomplished is moving Wall Street jobs overseas. Is that a bad thing?

All securities and stocks must be held for at least 30 days (or longer) before it can be sold without a penalty. This will remove the “get rich quick” impetus of the market and turn it more toward stable long term investment.

Destroy liquidity for securities in the midst of a credit/liquidity crisis. And this will help make stocks more stable by setting their value close to zero. Brilliant! /sarc

The tax rate on any company operating in America is directly proportional to the number of Americans they employ. A company with 100% American employees will not pay any taxes at all on money earned in the United States. A company that has no American employees will pay a ceiling of say 80% on their profits.

So companies show have increased barriers to invest in the US. Thanks for cleaning off the Smoot-Hawley tarrifs that led to the Great Depression, along with union laws and other minimum wage restrictions that led employers to fire workers as their only legal alternative to market conditions leading into the Great Depression.

They want to take our money out of the country, but there is not any real reason our economy should be the vehicle to fund growth outside of America while we get fleeced.

Hawthorne on October 13, 2008 at 5:43 AM

If your silly ideas were implemented, lots of companies would take their money out of the US as fast as they could. You obviously have not thought through the implications of your proposals. I can see that you are not used to being taken seriously. You have incorrect and harmful ideas about things you offer opinions, without a clue.

Hawthorne on October 13, 2008 at 5:43 AM

I live in the Detroit are and have watched the downward spiral of the auto companies. There are a lot of reasons for this, but the stock market is the primary reason.

BS. I haven’t bought a GM, FORD or Chrysler because they produce crap. CRAP.

I owned a 67 Chevy Malibu back in the 70″s and it was CHERRY.

But since then, the whole Auto industry has gone down hill from the unions, environmentalist, and Ralph Nader. My last GMA TranSport that broke down in Yonkers NY along the Saw Mill River Parkway gave me that reality when the dealership refused to work on my car.

The board of any public corporation is elected by the stockholders. These stockholders have only one goal, to make a profit on their stock. Ideally this profit is realized long term. That allows the companies to grow in a stable way and make use of the cash influx of a stock issue.

The Board is also the reason why CEO’s get Million Dollar Parachutes. So, I am in agreement with you.

They want to take our money out of the country, but there is not any real reason our economy should be the vehicle to fund growth outside of America while we get fleeced.

Interesting…. and I think I agree, in principal.

I can tell you one thing we cannot do, that is just let the market self-correct. That is exactly how we got the Great Depression last time our banks screwed us this badly.

Hawthorne on October 13, 2008 at 5:22 AM

That is not how the Great Depression happened.

The Great Depression happened because of several blunders the government imposed after the credit markets failed.

1. Herbert Hover raised taxes after the Stock Market crashed, see Revenue Act of 1932, the problem escalated.

2. Socialist – FRD may had had our nation’s welfare at heart, the solution were wrong. But I don’t want to go back to prove it.

Bottom line: The Free Market Won. Socialism Failed

Kini on October 13, 2008 at 5:19 AM

I live in the Detroit are and have watched the downward spiral of the auto companies. There are a lot of reasons for this, but the stock market is the primary reason.

The board of any public corporation is elected by the stockholders. These stockholders have only one goal, to make a profit on their stock. Ideally this profit is realized long term. That allows the companies to grow in a stable way and make use of the cash influx of a stock issue.

When stock is turned around very quickly it becomes a negative for the company. If there is large sell-off because of a drop in stock value the companies become cash strapped because they have to come up with the money to buy back their stock. This loss of liquidity has put many companies under.

There are two times in our history where the stock market ceased to become an investment in the long term growth of a company and became a vehicle for fast profit to investors. Both of these periods have ended in horrible conditions as the banks played fast and loose with their investments and led to a run on the market. The first was the Great Depression, the second is now.

The profit is the only consideration thinking that is forced on the boards of our corporations is there because of demand for high returns by the stockholders. It is our own greed that causes our jobs to be sent overseas.

I think three rules would go a very long way toward fixing the problems in the market and jobs here in America.

Outlaw leveraged transactions. All stock must be purchased immediately with cash on hand.

All securities and stocks must be held for at least 30 days (or longer) before it can be sold without a penalty. This will remove the “get rich quick” impetus of the market and turn it more toward stable long term investment.

The tax rate on any company operating in America is directly proportional to the number of Americans they employ. A company with 100% American employees will not pay any taxes at all on money earned in the United States. A company that has no American employees will pay a ceiling of say 80% on their profits.

They want to take our money out of the country, but there is not any real reason our economy should be the vehicle to fund growth outside of America while we get fleeced.

Don’t get me wrong, I fully understand the concept of making people be responsible for their actions. I also fully understand not wanting our government to become the owner of the banks. I hate socialism too.

The problem is that it does not serve anybody well to go into a depression for decades in order to teach an object lesson. That is the economic equivalent of a radical Muslim killing a woman for talking to an infidel. It is taking an ideology so far that you become fanatical and self-defeating.

While I do not agree with how the problem is being approached, we MUST try to avoid a depression if we can. A depression will not hurt just the responsible parties, it will hurt everyone. Even the people that have been responsible will get hurt. SO please just stop acting like radical nuts and understand one thing…

The government has a role to play here because they are the only ones that can. If they don’t we are done. While it might not be ideal we need to concentrate on efforts to propose solutions that keep our banks private and help the consumer rather than the corporations. The only way we will avoid a depression is if we can keep people spending money and trusting that it will all work out. If the cash continues to tighten then we will get either a deep recession or a full-blown depression.

unseen on October 13, 2008 at 4:48 AM

you have no idea where I come from.
Neither do I care.

You write like Representative John Lewis (D – GA).

I happen to be a conservative. A CONSERVATIVE!

Of course if the worker does a great job I expect the company I am investing in to reward that worker. Not make him poor so he changes jobs.

You got to be kidding? You say I’m embarrassing myself?

Where are you working? If working at all.

unseen on October 13, 2008 at 4:35 AM

You are tooo cute…

401k are government created accounts for the workers.

401K are Government created accounts…. where ever did you get your education? Did you make it past the 12th grade?

Your kool-aid view of taxes again paints you as an extreme individual that can not think for himself.

My view becomes very clear when someone reaches into my wallet.

Please stop posting before you embarass yourself more. your arguements are childish kneejerk responses that add nothing to the converstaion and actually give capitalists a bad name.

Palease, embarrassment is my freedom to do as I want.
And you give Socialist a good name. Such a good commie you are. My embarrassment is my choice, as is spell checking, and reading comprehension.

I am actually an investor and stock trader I understand risking capital.

I’m sure my investments are doing better than yours. Let me know who and where you place your money so I can avoid any loss of my money.

I’m sure your career in investment will last about, 3… 2…

you have no idea where I come from. you think I did not live in cars at times in my life, I too lost everything, I too started over. I am now very well off, I have everything I want, I give to charity, I invest, I work, I have no debt, I live within my means. And nothing I have would have been possible if not for the this great country. This great country could not be if not for the government formed by the consitution. It is an experiment in the world and in history and it is in danger because of unrestranied greed. I understand my capital is just as important as a workers time. Without the worker my invest goes to zero. A bad worker can change a money making investment into a money loser. I respect the workers enough to understand they and not just cogs in the wheeel but are the foundation for my profit. Of course if the worker does a great job I expect the company I am investing in to reward that worker. Not make him poor so he changes jobs. I would rather my comapny that I invest in pay the CEO a lot less and the workers a lot more. the CEO does nothing without a good base of workers. It is the workers that determine if the company makes a profit, a good product, under budget not the CEO. The CEo sets the big picture. It is the rest of the workers that fullfill that picture. Porductivity in Mexico is 30% less than it is here. I expect my company I invest in to pay Americian more because they are better workers. I expect those workers to buy the companies products with their income therby increasing my return on my investment.

Sam Walton would be ashamed what Walmart as become under the new CEO’s. We need more Sam Walton and Warrne Buffets and less Charlie Princes..

with every post you become more of an kool-aid drinker.

You want to highlight every wrong key stroke go right ahead I will tell you there will be plenty. those that pick out the little mistakes of others usally have surrendered the main arguement.

401k are government created accounts for the workers. They derive their name from the tax code that created them. The gov could offer incentives for comanies to match more of the 401k or place a set amount in the workers account. They are many ways to increase companies willingness to help their employees.

As far as taxes. without taxes you have no government, no law, no order. I think taxes are needed for the common good. They should be kept small but some taxes are needed to fund the governmental functions that creat a society. Your kool-aid view of taxes again paints you as an extreme individual that can not think for himself.

What part of lack of work don’t you get. Lack of work means no productivity. Please stop posting before you embarass yourself more. your arguements are childish kneejerk responses that add nothing to the converstaion and actually give capitalists a bad name. I am actually an investor and stock trader I understand risking capital. I also am a consumer, citizen, and worker and understand the other side of the coin. You seem like you have no idea about supply, demand, price points, cost of doing business, lack of historic prospective on America over the last 300 odd years. the mix that America has had with socialism and capitalism. What did they teach you in school? you want to live by the law of the jungle fine. But that is not a way to form a society of any lasting result. The consitution created guideposts. The government is for, by and of the people. that includes the workers, the CEO’s and the shareholders. All must partake of the feast or none will.

when did money become more important risk then someones life?

unseen on October 13, 2008 at 4:13 AM

When it became more than a Sally Field moment in your response to my comment on personal responsibility.

Coal miners, like all Americans, have a choice. A choice.

unseen, you need to understand where a lot of us come from.

At one time in my life. I had nothing, I slept in cars, I relyed on others for food. Then, I got a job, I saved, I avoided credit cards, I only payed for what I could afford. I now live my dreams.

That’s America. You are too quick to dismiss who and what we are.
Money is life. Money is not God, Money is part of the pursuit of happiness. Success is not measured in money, but is part of life and liberty and it’s pursuit.

Sure, I wish I could make the millions that corporate executives make, but I don’t want to live in a 3000 sq foot house, because I would not want to clean it.

Your life is your responsibility. Not the govmints. Capish?