Friday, February 20, 2009

When Capitalism Goes Bad

Today, ladies and gentlemen, I bring to you a topic that I know almost nothing about. It should be no different than the last 10 months.

Capitalism: an economic system based on private ownership of capital.

I think by private ownership it is opposed to government ownership. However, we supposedly, have a government of the people, by the people, and for the people.

If capitalism is private ownership based, then the stock market is very un-capitalistic. What does it mean by "private ownership"?

Isn't corporation ownership with a CEO in charge nothing more than a government? Hell, it's kin to an oligarchy. Where do you draw the line?

In America, capitalism has gone bad. Some people blame it on the government (which seems to be is tinged with a touch of undeniable irony). Capitalism is "survival of the richest".

The CEO's are getting $100+ million dollar bonuses. They have nothing to desire any more. If I'm the CEO of GM and I get a $50 million bonus, then it doesn't matter to me what happens after that. Who cares if 50,000 people lose their jobs. I've got my $50 million. I'm happy. Now, the government comes along and gives me $7 billion. Worst thing I have to fear is my guilty conscience which I'm not going to have. If I had a guilty conscience I wouldn't be in this position in the first place.

The government doesn't have a choice though. When an entity like GM threatens to "dissolve", the government sees unemployment spike, income tax losses and lots of unhappy Americans driving Corvettes without warranty. They prop up the company because the company has become too big to lose.

Capitalism only works well in a land where all the owners have a conscience. That land doesn't exist. The guys at the top don't care. With wealth comes power and a disregard for those not in your league.

What is the answer? Can you have one person run an organization without an exorbitant salary? They've talked briefly about limiting executive compensation. Others will argue that even this is heading towards socialism. Maybe socialism is not so bad.

What we all want is freedom. Unfortunately freedom from the government is easier to obtain than freedom from corporate America. Every American has the right to vote for their government representatives. We can vote them out. To be able to have a meaningful vote in corporate America, you have to have wealth. In order to have that kind of wealth you must set your conscience aside for greed.

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