April 16, 2012 by David K. Sutton
A Brief: The State Of Capitalism In The United States Of America
I want to make one point very clear, there has never been a “free market” in the United States. If lobbyists can descend on Washington to sway congress to shape legislation in favor of their clients (corporations) then there is nothing free about the marketplace of capitalism in this country. A free market would mean no oversight, no favors, and no regulations. I’m not saying that would be desirable, I’m simply pointing out a fact that gets overlooked when people talk about the free market. They are talking about something that doesn’t exist.
What we have in the United States is crony capitalism along with privatized profits and socialized risk. The capitalists lobby congress for favorable tax laws and other legislation. In turn government introduces tax “incentives” otherwise called “loopholes” while looking the other way when corporations merge and gobble up other corporations.
These corporations continue to grow and take on more risk until they are too big to fail. It’s the very fact that they are too big to fail that enables them to take on so much risk, particularly in the financial sector. When these corporations finally take on too much risk and they are on the verge of failure, government bails them out with borrowed money, meaning tax payers get the bill with interest. And while they are bailed out, CEOs walk away with tens of millions and executives still get their bonuses. This is the privatized profits and socialized risk part of the equation.
Take for example the big investment banks that are in the equity investment business as well as the deposit banking business, something that had been barred for over 60 years until the late 90s when the Glass-Steagall Act was repealed. These investment banks can gamble with your deposits knowing that this money is federally insured (FDIC). Wouldn’t you like to gamble with your own money knowing that if you lose it all you will get bailed out by the government? Well, take that a step further. These banks aren’t gambling with their money, they are gambling with your money!
This is the state of capitalism in the United States of America.
And you are giving your endorsement to the state of capitalism if you vote for Mitt Romney in November.