i had never heard of that before; had to look it up. it seems to be a simplistic economic model, in the sense that it could never occur in practice, but sounds logical in theory. i used to enjoy economics in college.

for sure, capitalism has worked thU.S. far, but i really believe it is failing. well it sure as shit has failed lately. but i mean in respect to it's total lack of morality and resulting decline a societal dignity.

and i wasn't referring to distribution of wealth as an advocate for changing it, but as a statistic. you know like, 1% of the people have "earned" 95% of the wealth.

IMO, that is an inherently bad signal. if not bad, certainly unknown in this country in history.

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"We shall not cease from exploration, and the end of all our exploring will be to arrive where we started and know the place for the first time." T.S. Eliott

Why do people keep saying "Capitalism has failed?"
Capitalism hasn't failed at all.
Capitalism isn't being practiced.

Corpratism has failed.
If you know your history Mussolini said:
"Fascism should more properly be called Corpratism,
a merger of state and corprate power." (Or something to that effect)
What we are seeing is the collapse of Fascism.

Government minimizing risk cause corparations to make bad desisions.
These bad desisions are not free market.
In a free market this mess would never have happened.
In a free market the government doesn't get involved.
They don't provide money or regulation to prop up an industry or corperation.

Governments role in this mess should be investigating instances of fraud.
Not creating more debt, we've got plenty already.

i agree except for the collapse of Fascism. i don't really think its collapsing. it's still the dominant influence on fiscal policy.

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"We shall not cease from exploration, and the end of all our exploring will be to arrive where we started and know the place for the first time." T.S. Eliott

It did occur in practice when countries used gold as their medium of exchange. Basically there is no advantage for one country to hoard gold. By having excess gold in your economy you made the value to decrease because the price level would increase. This would cause you to buy exports as they are "cheaper" and the gold flows back out. What is important to an economy is the flow of money, not the excess of it.

The problem is not the system - it is it's administration that is the downfall. In real capitalism there are no rules. You get burned by Madoff or Wall Street - too bad - it is not an FDIC insured investment and you should have done more research into what you were investing in. That is the "risk premium." There is no "too big to fail" because investors will purchase viable distressed companies at a discount. We have so many regulations and rules that capitalism is stifled in the name of consumer protection and government with its hand in the the honey pot.

Try to open a LEGITIMATE business tomorrow (one you hold no prior certificates in). Let me know when you are legally allowed to open that establishment and how much you have to dole out in permits / fees / insurance. Then there is the cost of compliance and employees that are determined by the government.

We do have a capitalist economic and social system, but our political system is undeniably corporatist.

We don't have a free market economy, we have a mixed market economy. In a free market, this mess would have still happened - but the banks would have been "allowed" to fail, and we'd be in a much worse state than we're in now (at least as outward appearances go). As it stands, the government is "propping up" it's corporate interests, at the expense of the working class in order to create some kind of illusion that everything is going to be okay.

Hopefully we are seeing the collapse of fascism in the US. I'm not totally convinced of that, yet. I think it could go either way...

In a free market, the government's role would be to investigate fraud. Shouldn't paying your executives millions of dollars in bonuses after begging the government for a "bail out", because you're on the verge of bankruptcy constitute fraud?

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A government big enough to give you everything you want, makes Santa Claus pretty much obsolete.

Actually most of the world is moving toward Capitalism. Right now the US is in a crisis because the Left meddled with the free market. This however shall pass. And Capitalism is by light years the most moral system of Government. Communism and Socialism are nearly always tied to hideous human rights abuses. Just look at Russia or China. The same is true with societal dignity. Again, look at the complete lack of basic human dignity in Communist Countries.

Anyway, I don't want to saddle a tangent and ride it into the sunset with this. The point is, there is no such thing as a fixed quantity of wealth of which people hold pieces of differing sizes. Wealth is created by our actions and our abilities. Growing weed is an example of producing wealth. You start with a seed and nurture it and the result is a valuable product. The product wasn't there floating in the cosmos waiting to be distributed, it was produced from lesser materials. Get the picture?

Right on.

I think the failure of banks (which is happening at record numbers - but being bailed out by the FDIC) is what is needed. The strong disciplined banks stay in business - it is their reward for diligence.

Unfortunately the banks that are failing now are generally smaller, local banks - rather than the HUGE "too big to fail" banks that really deserve to take the ride into oblivion for causing this mess in the first place.

The only thing I would worry about if the big banks failed, would be the chance for some super-monopoly to emerge from the ashes.

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A government big enough to give you everything you want, makes Santa Claus pretty much obsolete.

That is what is happening now. The FDIC auctions off failed banks and the ones with higher capitalization creating bigger banks - more "to big to fail" banks.

Banks are legal Ponzi Schemes.

Consolidation was seen as a necessity in 2006. There were and still are far far too many banks. Banks are like fleas...for every one you see that are many more that you don't.

I do tremendous amount of business with banks that aren't even retail banks. For example, to deposit money with them you need to go to their main office or to Wells Fargo. Wells Fargo along with many other banks and the Credit Union Co-Op system allow these smaller more efficient banks to operate without all the staffing.

Banks are not Ponzi schemes. Some are mismanaged and many have failed but they are not Ponzi schemes. Many banks that have failed were promising unrealistic returns to people who also were looking for unrealistic returns. If you want to make 10% be prepared to lose 20. But of course those that think 10% is truly realistic are blind to what is a standard return. So they wind up being blind to risks associated with such high returns.

Banks don't have much to do with wealth. They are nice to have but aren't mandatory.