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Capitalism is Dead! Let's bury it.
Did the title get anyone's attention? Well, it is only slightly hyperbolic. The ongoing collapse of our economy should tell any thinking person that capitalism doesn't work. In fact none of the pure economic "ism's" work. But, they all have some good features.
We now have a golden opportunity to make some big changes in how our economy works, an opportunity that will vanish very soon. It is when people are reeling from a disaster that major changes can be made without the majority being too fearful to allow the changes to happen. Bush took advantage of the disaster of 9/11 to make some major changes, all of which were in the wrong direction and none of which were designed to benefit our nation. This particular disaster is the Democratic Party's chance to make major changes that do benefit the nation.
My blueprint for change follows. First, we need to separate basic human needs from capitalism. It is utterly immoral to tie health care, for example, to profits for big businesses. It is equally immoral to tie education, housing and food to big business profits. Those four basic human needs should become our socialist experiments, just as Social Security was such an experiment in elder care back in the 1930's.
Capitalism is fine for non-essentials, such as entertainment, luxuries, and extra-basic human needs, like 6000 square foot houses for 2 person families, or SUV's, or long distance air travel. That capitalism should, however, be the heavily regulated variety, with strong oversight by the government to rein in the lust for money that reigns supreme today.
Health care is an excellent place to start this transformation. Now is the time to force our government to adopt a pure, single payer form of health care, with all basic care available to every occupant of this country, at no cost. The cost of this basic care must be a shared cost paid by every occupant of the country, whether they want to opt in or opt out. Even Congressmen should be covered by and pay for this same basic health care.
One reason for high health care cost is the rapidly escalating cost for medical training in our universities and hospitals. That cost, along with all other education cost should be paid for by all occupants of the country, whether they use the education opportunity or not.
Housing and food require a lot more thinking to find good ways to socialize their costs, but the principle of basic needs being paid for by every occupant of the country, whether they eat a lot or a little, and whether they choose to opt for a 6000 square foot house instead of the more modest basic housing or not.
FDR did not make the mistake of thinking small when our nation faced its last economic disaster. I'm afraid Obama is making that mistake now. But, if we apply sufficient pressure on him and on our Congressional representatives I do believe it is possible force them to think big and make these needed changes.
Obama's change.gov website set up health care community meetings all over the country to hear our input about the needs in health care. But, they organized those meetings to preclude any really significant input from occurring, asking instead for us to wail about our own personal problems, and then decide what form of future similar meetings we preferred. As soon as possible Obama needs to learn that this won't be acceptable to us.
I'm running short of ideas about how to force the Obama team to open their minds, and think "Yes, we can", instead of "we can't do that" when it comes to the changes we need.
We now have a golden opportunity to make some big changes in how our economy works, an opportunity that will vanish very soon. It is when people are reeling from a disaster that major changes can be made without the majority being too fearful to allow the changes to happen. Bush took advantage of the disaster of 9/11 to make some major changes, all of which were in the wrong direction and none of which were designed to benefit our nation. This particular disaster is the Democratic Party's chance to make major changes that do benefit the nation.
My blueprint for change follows. First, we need to separate basic human needs from capitalism. It is utterly immoral to tie health care, for example, to profits for big businesses. It is equally immoral to tie education, housing and food to big business profits. Those four basic human needs should become our socialist experiments, just as Social Security was such an experiment in elder care back in the 1930's.
Capitalism is fine for non-essentials, such as entertainment, luxuries, and extra-basic human needs, like 6000 square foot houses for 2 person families, or SUV's, or long distance air travel. That capitalism should, however, be the heavily regulated variety, with strong oversight by the government to rein in the lust for money that reigns supreme today.
Health care is an excellent place to start this transformation. Now is the time to force our government to adopt a pure, single payer form of health care, with all basic care available to every occupant of this country, at no cost. The cost of this basic care must be a shared cost paid by every occupant of the country, whether they want to opt in or opt out. Even Congressmen should be covered by and pay for this same basic health care.
One reason for high health care cost is the rapidly escalating cost for medical training in our universities and hospitals. That cost, along with all other education cost should be paid for by all occupants of the country, whether they use the education opportunity or not.
Housing and food require a lot more thinking to find good ways to socialize their costs, but the principle of basic needs being paid for by every occupant of the country, whether they eat a lot or a little, and whether they choose to opt for a 6000 square foot house instead of the more modest basic housing or not.
FDR did not make the mistake of thinking small when our nation faced its last economic disaster. I'm afraid Obama is making that mistake now. But, if we apply sufficient pressure on him and on our Congressional representatives I do believe it is possible force them to think big and make these needed changes.
Obama's change.gov website set up health care community meetings all over the country to hear our input about the needs in health care. But, they organized those meetings to preclude any really significant input from occurring, asking instead for us to wail about our own personal problems, and then decide what form of future similar meetings we preferred. As soon as possible Obama needs to learn that this won't be acceptable to us.
I'm running short of ideas about how to force the Obama team to open their minds, and think "Yes, we can", instead of "we can't do that" when it comes to the changes we need.
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Good Post!!! Take heart. We shall email our Congressional Representatives, we shall email our President for the first time, we shall critique and discuss.
December 29, 2008 10:05 PM | Reply | Permalink
I am most heartened by MoveOn agreeing with its membership, including me, that health care is the first priority issue to be worked on. If we can get some strong actions through MoveOn I can see a possibility of success, but a slim one.
December 30, 2008 12:31 AM | Reply | Permalink
Woo Hoo!
Hoppy for Congress!
There is not a single point you make in this excellenct post that isn't right on. Unlike many, you are not content to wait until it is too late for the centrist element of the Democratic Party to screw up once again and waste this golden opportunity to make advancements in all the areas you mention but health care is the number one item. Those of us who share this view need to keep being as noisy as possible and refuse to go away no matter how many apologists for failure continue to counsel patience and tolerance of timidity and ineffective responses that might emanate from the next White House.
For some reason Hoppy, there are lots of people who don't understand that their willingness to give the new admin "a chance" is all the slack the DC Democratic centrist scalawags need to wiggle out of doing anything that really benefits the people of the nation on healthcare, education, etc... It needs to be clearly understood by Democrats from the grass roots right on up to Obama that our party can no longer serve two masters. We cannot be for the people but also supporting the corporate interests that have been the bulwark preventing progress on almost every front for the past 30 plus years. It's time for our elected representatives to start serving the people's interests instead of straddling between looking like they are on the side of the people whilst really doing the bidding of the guys with the big bucks who can take care of them once they are out of office. That's the game, the scam if you will and it needs to come to a screeching halt. If it doesn't, then the common people of the United States are simply screwed and have no hope of progress on any front.
Your example of the theatrical setup of the Obama health care meetings is a classic example of co-opting a large number of people to do the predetermined bidding of the political dealmakers by structuring the meetings in a way that produces the desired outcome. I do not fault them for it. The technique is time-honored and tested. It's done all the time in many different ways. I've conducted such maneuvers myself more than once. By the same token, it is what is and what the health care meetings were not was an opportunity to genuinely have input on policy from the grassroots level. The parties were designed to support whatever it is the Obama position is going to be. If the campaign was any indication, the Obama policy is going to be a gift to the insurance companies and not much for regular people. Yes, it will cover some people who aren't now covered but it will do nothing to address the fundamanetal flaws in our system. The answers to our dillemma are not unknown. On the contrary, we'd be better off if they were not known. It is the opposition of corporate power and wealth that stands in the way of solving the health care crisis and nothing else. If the parties were actually to allow the opinions of regular people to be aired, the feedback would have been overwhelming for single payer. But our centrist friends who are soon to be in charge of the executive branch are not interested in such "radical" stuff. They would rather take another stab at trying to make our rotten, corrupt and increasingly bad system of thievery by the health insurance companies palatable for just a wee bit longer (like maybe another 20-30 years) so the healthcare execs can continue to grow fatter and fatter off of keeping the American people away from proper health care that they can afford.
In any event, this was a most excellent post and I hope it is widely read. It is accurate, gets right to the heart of the matter and it's succinct. Bravo!
December 30, 2008 1:04 AM | Reply | Permalink
Thank you oleeb! I think the health care problem involves a lot more than pharmaceuticals being overpriced. For example, there is the outrageous cost of obtaining a MD, followed by the hazing that is internship. Neither the cost nor the hazing should be tolerated. There is no other professional field that requires that neophytes work 48 hour shifts as an initiation rite before they can be licensed. That obnoxious and well imbedded practice is nothing more than a way to force a shortage of doctors to keep up the pay for those who survive the initiation.
I tend to rant when it comes to corporations, but there are a few absolutes I think need to be insisted upon when it comes to corporations:
1. A corporation is a business, not a person, and laws cannot be allowed to operate as if they were persons.
2. Boards of directors must not be made up of CEO's and other top officers of other corporations. They must consist of people with substantial stock holdings in that corporation, representatives of workers in that corporation, and experts in business administration.
3. No one in a public traded corporation should be allowed to have total compensation greater than 5 times the average compensation for all employees of that corporation.
4. Golden parachutes should be prohibitted, unless available to all employees.
5. Stock options as a form of compensation should be prohibitted.
6. Bonuses must be paid proportionally to all employees and officers or none.
December 30, 2008 12:15 PM | Reply | Permalink
The fundamental flaw in our current health care is that it stands outside of any sort of market as defined in the classical sense. People have no choice but to pay the extortion artists for what they charge for drugs. Little headache, take an aspirin. Cheap. Migraine headache that has you puking? That'll be twenty-five bucks for a sumatriptan (or whatever it costs.) Got HIV. Pay the freakish cost of drugs or risk developing AIDS. Bottom line: you pay the tab or waste away, endure pain, or croak. People whose health is on the line have no choice but to spring for the bizarre fees charged by specialists of this sort or that. You can't shop around in the same manner that you can for shoes or a bicycle on the wonderful "market" so touted by the assholes who drove us into this ditch. So the "market" argument is a snare and a delusion. The only sensible choice is to take the racket away from the greedy shits and run it as a public service for everybody.
December 30, 2008 7:00 AM | Reply | Permalink
No 'ism' works if you let an unmonitored elite handle the money.
December 30, 2008 8:16 AM | Reply | Permalink
Good post.
A friend made a good point re capitalism, executive compensation, and the stock market. You want to make 26 million a year, sure, it's a free county, but take your company private. You want a public company then there needs to be earning caps, and lots of rules, regulations, and oversight.
The term "free market," to me, has become synonymous with, "license to steal."
Happy and a better New Year to all...
December 30, 2008 10:02 AM | Reply | Permalink
I agree! Publicly traded corporations have to be regulated very strictly to rein in the money lust that otherwise makes them nothing more than cash cows for the elite. Nevada has strict rules regulating casinos, so why shouldn't there be even more strict rules regulating the gambling industry that is stock markets?
And, while we are designing Utopia....all income should be taxed in the same way, same rates, etc. The primary driver behind the stock market is to generate income that will be taxed as "capital gains", at a low tax rate, instead as regular income. Take away that incentive to drive up stock prices, but pay no dividends, and corporations become much more responsibly managed.
December 30, 2008 12:21 PM | Reply | Permalink
They took away shareholders rights a long time ago with surreptitious plays in state legislatures orchestrated by by economic oligarchy. The boards are always bribed--or extorted--by management and management steals everything. Can you imagine getting paid on the basis of gross receipts?
That hides the impact of the salaries, bonuses and perks from the corporate books. I am no expert but the Federal Legislation in this area has not helped things. Then you close the doors of the courts to shareholder actions, and all is lost.
Management just looks down their noses and say we are the deciders.
December 30, 2008 4:34 PM | Reply | Permalink
Not sure I agree with the exact suggestions for these continuing ills, but I certainly agree with the intent. The items you list should not be left up to the market, "free" or otherwise.
Since we are not working with a clean slate or an undivided electorate, getting national health care passed will probably look a lot more like Germany or Taiwan than Canada or the UK. I imagine some sort of non-profit paradigm rather than a purely government-run system will be closer to what we end up with. Either way, I suspect Obama will have very little problem getting this through Congress as part of a larger American Renaissance.
I think housing and food and education are all basic rights and should be enabled through a combination of direct subsidies to people and colleges as well as a living wage that is tied to inflation and cost of living in different areas of the country. A realistic living wage as well as progressive taxation will naturally put a cap on executive compensation and make companies more accountable for their actions.
Whatever the final solutions look like, every administration over the last thirty years has proved that self-regulating industries are a pipe-dream. We will have to ride corporate America like a mule to get it up the steep path ahead.
December 30, 2008 11:11 AM | Reply | Permalink
Non profit model is a better idea with governmental oversight.I am for single payer also. The employers cannot afford it any longer. That is the truth.
There are twenty different systems in play here and some sort of consolidation has to be made.
December 30, 2008 11:55 AM | Reply | Permalink
I think it works because it a model we are familiar with in regards to the delivery of other social services, but the real key is the fact that businesses can't afford health insurance any longer. I am really surprised that the American business lobbies haven't risen up against the insurance industry long before this.
Kind of like why hasn't the tobacco lobby or other cash crop lobbies haven't taken on the War on Drugs yet. They would make a ton of dough from re-categorizing pot to the same regulatory status as alcohol and tobacco. We cannibalize everything in this country in the name of competition when working toward common interests would be so much more efficient and effective.
Kind of like my main criticism of labor unions. They should have banded together with employers across industries decades ago to achieve their individual successes at the national level. Instead, they worked in silos and never benefited from economies of scale.
I think your energy blog is another perfect example of new economic ecosystems coming together from previously disparate competitors.
December 30, 2008 12:12 PM | Reply | Permalink
Jason, there are really only a few categories of entities that benefit from a 'system' that includes:
Veterans Health Care
Federal Employer Health Care
State Employer Health Care
Workers' Compensation
No-Fault Automobile Insurance
Railroad Retirement (which is its own scandal)
Medicare
Medicaid
SCHIPS
Private law suits
Blue Cross
Diverse State Programs
Private plans for small business
Private plans for large business
Now who can benefit?
You would think doctors. The more sources for funds the better. But the AMA just hates this 'system'. And individual doctors hate all the forms and being cut off in the middle of treating someone.
Drug Companies love it. Billions in their pockets.
Insurance companies make out like bandits.
So it appears only two categories of business entities against the entire economic system in this country are for this mess.
Drug companies and insurance companies contribute (don't you like that word, contribute?) millions to Congress and both parties but so do larger lobbies.
So it is probably a 'sure thing' that change is coming.
December 30, 2008 12:26 PM | Reply | Permalink
The question of why seemingly unrelated industries do not oppose the health industry and insurance industry is the incestuousness of it all. Every company needs to have insurance and mega-insurers have their hands in the pockets of every industry. The financial assets of these companies all have health and insurance stocks as well. Woe to the organization that takes a stand against insurance. They will not get any coverage.
The problem seems to be related to these insurance and financial trusts. A classic risk management tactic is to have numerous sources for the things you need so that you do not have to rely on the success or failure of one or two sources. The US has come to the point where there are too few entities that support the economy, i.e. too few banks and insurance companies. We thought they would never fail. Now that they are on the brink of failure, if they do fail we have very little left on which we can rely, and so they have us over a barrel.
It would be better if we spread the wealth around. Take a look at the issue of banks. It is the local banks and businesses that are faring the best. Although they may not be doing well, they are small and nimble and can adept quickly to the changing environment. When we lose a few of them, there are many to replace them. But when we lose an AIG, or Washington Mutual, there is ... not so much.
December 30, 2008 12:59 PM | Reply | Permalink
Good point. The law eschews motive as an element that must be proven in criminal court. But there are few jurors who do not consider motive.
If there was ever a time to examine conspiracy theories, it has to be in the area of health care.
Thanks, you have me thinking.
December 30, 2008 1:08 PM | Reply | Permalink
The reason we have anti trust laws is to avoid this problem, among other problems. If our anti trust laws had been left alone and had been enforced we wouldn't have corporations "too big to fail". And that is still one more area where Obama has a big job ahead of him.
December 30, 2008 3:37 PM | Reply | Permalink
So wait, companies that want to make lots of profits can't be public?
Let's say I start a new satellite radio company to compete with XM/Sirius (I chose that so it's not healthcare/food/etc). The company does fabulously well, grows fast, gets lots of new subscribers, earns lots of cash.
I want to take my company public. Let's assume that there are some investors willing to buy stock without having completely strict controls over executive compensation, how profits are spent, etc.
I shouldn't be able to have a publicly-owned company? If people don't want to buy stock in the company, they don't have to. If there's proper disclosure and transparency, then for-profit companies should continue to exist.
What about companies like Intel, Apple, and Microsoft? They all need to go private??
December 30, 2008 12:48 PM | Reply | Permalink
A corporation is a business, and a business is an entity that produces something for which there is sufficient demand for that entity to make a profit by supplying that something. Any method of making money from trading pieces of paper (old system) or lines on a statement (new method), should be classified as a form of gambling, not investing. That should be required to be made clear to the public. Stock exchanges act as the casino for those wishing to gamble on those "lines on a statement". I don't believe John Q. Public should be exposed to this gambling game with any less protection that he gets when he walks into a Las Vegas casino.
Intel, Apple, and Microsoft make profits by selling their products. People who own those corporations should share in those profits by receiving dividends. Or, if they share in the profits by selling their share of the corporation they should pay taxes on that income just as they would on dividends.
The public vs private aspect of this is separate.
December 30, 2008 1:02 PM | Reply | Permalink
I was responding to one of the comments above that said something like "if you want to make 26mm a year, it's a free country to do that, but you have to take your company private"
That comment I didn't agree with. Do you think Gates, Jobs, Ballmer, Grove etc all didn't make a lot more than that by taking their companies public? And once these companies are public why shouldn't management be allowed to sell the rest of their stock over time with follow-on IPOs and make gobs of money?
If you're talking about investment banks paying themselves huge bonuses, I think the bonuses are justified to the extent that they're paid in stock, put in escrow and paid out over time. But I also do think that the investment banking model makes more sense as private partnerships than public companies (as I've said on TPM in the past)
December 30, 2008 1:24 PM | Reply | Permalink
Gates, Jobs, et al could have made their profits selling their companies in bits and pieces even if those companies were privately held corporations. All that being publicly held does for them is expand the market by opening it for many thousands of naive people to be scammed by them, looking to buy low and sell high.
If we learn nothing else from this economic disaster, and it is a disaster, it should be that no one is altruistic when it comes to making money. Everyone needs to be restrained by regulations to keep them honest, and that goes double for people with lots of money.
December 30, 2008 3:45 PM | Reply | Permalink
Great post, hoppy. Though I take issue with long distance air travel being left to the capitalist wolves (or considered a luxury). It's a big country and long distance air travel is the only fast way to traverse it. No way I'd ever get enough vacation time from work to be able to visit my family if I had to always take multiday train and car trips to cross thousands of miles.
Oh, and that's another thing the government should do -- it should guaranty paid vacations in America that would put us on par with European workers.
December 30, 2008 4:14 PM | Reply | Permalink
Destor, I have mixed feelings about the proper role of capitalism in our transportation system, of which air transport should be a major part, for the reasons you gave. My mixed feelings are in part because I can't see how air travel can continue to be cheap enough for us "masses" with the looming shortage of oil. Even today we have one profitable air carrier and a bundle of near bankrupt ones. I'm not sure how a socialistic, thus subsidized, air transport system can avoid being another money sink. I hold on to the hope that capitalism can lead to innovations of some sort that will enable that form of travel to remain available to all of us.
People like the idea of "bullet trains" substituting for air travel, but that doesn't seem feasible to me at all. And, any expansion in automobile travel just makes our energy problems, and carbon emission problems worse.
So, even though I worked in the air transport industry, I have run out of ideas for that sector of the economy.
December 30, 2008 6:09 PM | Reply | Permalink
"Capitalism is Dead! Let's bury it."
Be careful, hoppy! When Sarah Palin institutes the New McCarthyism period in 8 years the HUAC will ban you from working in Hollywood :)
December 30, 2008 4:46 PM | Reply | Permalink
In 8 years I expect to be at that stage of life where my expectations are reduced to just breathing and eating. The HUAC will then be nothing more than an improvement over watching daytime TV for me. Bring em on!!
December 30, 2008 6:12 PM | Reply | Permalink
Hoppy, good post, well constructed. I was given a review copy of "Free Lunch," (2007) by David Cay Johnston a while ago. I need to write my review of it. Perhaps you will inspire me. Each of the author's chapters discusses an aspect of the corporatocracy under which we live. I had a vision of Johnston shivering as he listened to the meltdown start and finish this fall. Little did he know.
Re health care, I am for single payer, also, though I understand the pragmatism of Obama's approach.
December 30, 2008 5:18 PM | Reply | Permalink
Thank you Carol. I understand that Obama is a pragmatist, but did Bush utilize pragmatism when he ordered spying on American citizens, or when he authorized torturing POW's and suspected "terrorists"? Did he utilize pragmatism in ordering non-enforcement of environmental laws, or opting out of the Tokyo accord on global warming?
Why should a Democratic President refuse to use the same powers that Bush used to attempt to destroy our form of government? At least Obama faces a real major threat to our country, while Bush faced a manufactured threat, manufactured to allow him to be a "war president".
Obama has a Democratic majority in both houses of Congress, and an acknowledged crisis, a crisis that allowed the government to simply give away $700billion to the banks to use as they wished. Surely Obama can take advantage of the situation to do things that really do help to get us out of this crisis and leave us much better prepared to avoid a future crisis.
December 30, 2008 6:01 PM | Reply | Permalink
Good post. Maybe you can assign a few of the Obama bobbleheads to work on our president-elect since they think he is flexible. The change we need today is greater than the change needed two months ago and will be greater still in a month; the backward thinking of Obama and our centrists may prove very costly.
December 30, 2008 5:51 PM | Reply | Permalink