Has Capitalism Failed Read online

  These shakedown tactics were taught by Obama at ACORN in Chicago back in the ‘90s. They are the tactics of the community organizer. To the extent that he sanctioned and advocated the methods of ACORN relative to sub-prime lending, Barack Obama is just as responsible for this economic fiasco as are Barney Frank, Christopher Dodd, ACORN and the Community Reinvestment Act (CRA) passed with the approval of Bill Clinton.

  Recently, in an article sent to me by a friend, I read the following:

  "Most significantly, Penny Pritzker, the current Finance Chairperson of Obama's presidential campaign helped develop the complicated investment bundling of subprime securities at the heart of the meltdown. She did so in her position as shareholder and board chair of Superior Bank. The Bank failed in 2001, one of the largest in recent history, wiping out $50 million in uninsured life savings of approximately 1,400 customers. She was named in a RICO class action law suit but doesn't seem to have come out of it too badly.

  “As a young attorney in the 1990s, Barack Obama represented ACORN in Washington in their successful efforts to expand Community Reinvestment Act (CRA) authority. In addition to making it easier for ACORN and other groups to force banks into making risky loans, this also paved the way for banks like Superior to package mortgages as investments, and for the Government Sponsored Enterprises Fannie Mae and Freddie Mac to underwrite them. These changes created the conditions that ultimately lead directly to the current financial crisis."[26]

  What was it in Barack Obama’s political philosophy that justified the above changes toward sub-prime mortgages? The idea of providing more home ownership opportunities seems like a laudable goal – but the means of re-distributing savings from the banks to the poor is a tactic that should have been questioned. Obama must surely have asked, “Isn’t it good for the economy that more people be able to buy homes?” “Isn’t it good that the government seeks to ‘level the playing field’ and help the poor in realizing the American dream of which they seem to have been locked out?”

  If you encourage more home ownership by making more loans available to the poor through lowering loan approval standards, are you really making home ownership available to more people or are you setting up a situation where massive amounts of money are transferred from banks and mortgage companies into the hands of government bureaucrats at Fannie Mae and Freddie Mac? These companies bought these loans from the banks and packaged them for the financial services industry – giving their executives huge bonuses. Was the transfer of capital from the banks to the politicians an added side benefit or was it the purpose of the whole scheme? Was the intent of the whole program to siphon money to the Democratic Party so it could finance elections?

  Nevertheless, the sub-prime crisis was caused by this re-distribution. This is the principle of the policy of re-distribution: “from each according to his ability to each according to his need.” Is this a laudable goal? Consider that, in the case of sub-prime lending as practiced under the CRA, the poor were not helped. When they defaulted on their loans most of them were evicted. The companies that bought the derivatives invented by Obama's operative, including those that insured those derivatives, were left holding worthless assets and this caused the meltdown that precipitated the TARP bailouts. All of this was caused by trying to force the banks to issue more loans to the poor.

  When you justify the intent of political action, like that under the CRA and today under the Obama health care bill, by using the idea of helping the poor, you are on a slippery slope that leads to more and more damage to the economic system. In order to justify the destruction of the profit motive you must attack businesses by calling their profits theft. You must regulate these businesses and bring the everyday decisions of private individuals under the purview of the government. You must attack and eliminate self-sufficiency by calling it selfish while at the same time praising end-of-life eugenics and risk assessment as enlightened concern for the elderly. Eventually, the stresses on the system, due to the losses that the government creates, cause a collapse of that system.

  But it also puts the government on a path that would enslave the people who practice the morality of self-interest, the very people who are forced into poverty by re-distribution of their incomes. Socialists don't consider the certainty that their policies could actually cause economic collapse; they have convinced themselves that everyone agrees with the idea that we should help the poor, that the government is merely trying to do good and that any collapse must surely be caused by selfishness and greed. It is a perfect scam, the dream of a flim-flam man. Take from the suckers and then blame them for any bad consequences of your taking.

  The productive taxpayers and savers, confronted by the demand to sacrifice for the sake of the poor, will, over time, respond to the dominance of government. These protestors realize that the government has created a powerful shakedown scheme. What began as a program of supposedly benign re-distribution becomes a criminal gang making millions of dollars through extortion and racketeering...with the same "goals," the same "ideals," as an organized crime group. Al Capone would be proud of his children.

  Obama, while he ruled our country, insisted that the productive citizen allow the expropriation of his savings as a matter of doing good for others (Chrysler) - while no one explained to the saver that nothing would improve in his life (in fact, Obama clearly signaled that he should just shut up). (No gender bias is intended)

  Obama accepts the Marxist premise that property, income and profits are theft. This justifies his health care program as well as his attacks on the insurance industry. He, like other Marxists, must denigrate the profit motive at every turn in order to justify the expropriation of savings, income and profits through sub-prime mortgages and free health care.

  Yet, most Americans know that, in a proper society, the government must enforce property rights for all citizens in order that they experience economic autonomy. They know that full and free competition, not government picking winners, is what drives innovation and improves our lives. They know that government does not create new products and bring new ideas to market; they know that government can only skim profits and create decline. They know that when government makes life difficult for the honest citizen it is the honest citizen who will suffer.

  If government can seize property at will, not only does the seizure of such property take money out of production (by minimizing the amount of money available for capital investment), but it also punishes production and profit-seeking, ensuring that government is not the friend of the people. Obama clearly expressed, through his words and actions, that free markets are evil. This is the explanation for the upsurge in the anger of Americans over TARP and later the health care bill (ACA). Americans saw the seizure of the health care industry as a massive re-distribution scheme that would further enslave them and destroy their ability to experience economic progress. They knew that someone would benefit from the health care program...but not them. They understood that under this bill, their standard of living would be seriously eroded. But, more fundamentally, they knew that government was seizing their health care because it wanted to ensure that the poor got health care.

  Were the “Tea Party” protesters just a bunch of right wing radicals? Were they just haters of Obama? Or did they represent a philosophical movement that advocated individual rights, in particular property rights, as espoused by the Constitution? Did they, on this basis, oppose on principle Obama's re-distribution policies? Is it possible that they knew that you cannot benefit the poor by destroying the rights of all men (including the rich)? Perhaps they knew that re-distribution actually destroys both the poor and the rich - as is evident in the aftermath of the sub-prime crisis.

  The Tea Party protesters had, at this point, become a real force in society because they recognized that capitalism was the only system that could help the poor - by leaving all citizens free to thrive and prosper. They knew that you can’t re-distribute wealth and achieve anybody’s wellbeing.

  When the Te
a Party protesters hit the streets and town halls they did so out of a conviction that freedom is better than slavery. They knew that something was wrong about this mad rush of re-distribution that is taking society over the precipice. They knew that this crisis was caused by the philosophy of re-distribution; and they knew that the problems of our time were a failure of that philosophy, not the failure of capitalism. They realized that socialist failure was being used to advance socialism.

  Plucking Out the Parasites

  The criminal who presumes he has a right to cheat others out of their property is not so different from the professional parasites who ask for handouts from the government. The criminal is only more honest in his hatred of those “suckers” who "presume" to own property that he can easily take.

  Consider the “incremental” approach taken by many radical progressives. Their goal is to establish the ideological framework (economically and educationally) for a complete radical change of society; they want to start with small steps that first establish the principle of re-distribution so they can argue that it is proper to “adjust” capitalism for the sake of the poor. They want to move toward ever larger government intrusions into our lives and they know that they must destroy capitalism piecemeal. They know, from history, that capitalism improves the lives of people. So it must be destroyed without people knowing it is happening. So progressives promise affluence over the next few years while they chip away at that affluence through re-distribution. When the economy falters, they will tell us it is because man is too greedy and the solution is more re-distribution. The strategy against affluence continues. Eventually, people will be so poor and so disenchanted with capitalism, that it will be willingly discarded.

  This strategy requires that young people be educated as anti-capitalists. Toward this goal, businesspeople are portrayed as concerned with getting money at any cost. The caricature of an evil monster with distorted face and ugly nose who is interested only in exploiting the innocent for the sake of jewels and gold is just that; a caricature. The beleaguered businessperson in a capitalist country is you and me; we are the people who have worked our way up and done it through honest work and honest trade; people whose genius has been released through the possibility of living a better life. When progressives denigrate capitalism, economic freedom and profit-seeking, they are denigrating honest people who are only trying to live well through honest work.

  The radicals, through their anti-capitalist propaganda, in our schools and in the media, have placed businesspeople in a position in which regulations, rules and arbitrary standards make it difficult for them to be honest. This is part of their strategy to corrupt all values, especially economic values. Government intrusions allow men who would otherwise be criminals a chance to legitimize their plunder by controlling and manipulating government bureaucrats. Real criminals are often portrayed as merely rebels against moralistic monsters while businesspeople are portrayed as people-hating criminals and exploiters. The professional parasites seek to portray themselves as builders who care passionately for people, but the truth is their “caring” for others requires the theft of money made by honest people.

  And this is where the average, hard-working citizen comes in. He and she are producers being denigrated and minimized by media and government spokespeople…because they are the very people who provide the banquet for the professional parasites. They are supposed to think of themselves as a minority of slaves that have no real power. They are supposed to feel guilty for defending capitalism. In addition, the idea of white privilege is invented to further “guilt” them into allowing their bank accounts to be plundered for the sake of progressives who need honestly earned money in order to advance redistributionist schemes.

  What happens if productive Americans refuse to accept the guilt? What happens if they stand up for their right to prosper and succeed? What happens if they withdraw their sanction from these parasites? What happens if they refuse to provide the money for all these government boondoggles and social engineering schemes? What happens if they refuse to give power to professional thieves?

  What if they refuse to compromise? What if they challenge the requirement of self-sacrifice? Such a course might cause the thieves to lose control of the debate. They might lose the allegiance of the docile slaves they thought they were educating to be good self-sacrificial citizens.

  When men refuse to buy into the idea of service to the collective, when they stand up for their right to pursue happiness, the professional parasites will lose their university seats, their government jobs, their grants and their stimulus bills. If men refuse to be enslaved in their own minds, then the schemes of the parasites will not work. What they don’t realize is that the parasite always dies when the host plucks him out.

  Capitalism, the Perfect System

  “The best way to understand a historical phenomenon is to start at the beginning and examine the causal factors that gave rise to it. Prior to the capitalist revolution of the 18th century, Fuedalism and its legacy dominated Europe. Fuedalism, the ancient regime, was the dictatorship of the hereditary aristocracy. Millions of commoners, who made up the overwhelming preponderance of mankind, were subordinated to the dictates of kings, lesser nobles and the Church. For centuries, serfs were tied to the land and commoners, more broadly, had no rights. The dominant economics of the period was some variant of mercantilism, a direct application of the dictatorship of the aristocracy. Wealth was construed as bullion in the national treasury which was used to finance the wars of kings and wealth emphatically was not conceived as the wide-spread availability of consumer goods and services that raised man’s general standard of living. The king and his aristocratic advisers controlled the economy and intervened regularly to levy taxes, to establish guilds and apprenticeships, to ban a free labor market, to impose tariffs and prohibit free trade, etc.

  “If you seek to understand the essence of an age, go to its fundamentals. Since the mind is mankind’s survival instrument, ask the question, what was the period’s characteristic attitude towards the mind? During the pre-capitalist feudal era, the answer to that question was not a happy one. The dominant philosophy came from Christianity which stipulated faith over reason. Politically, the aristocrats tolerated no intellectual criticism of their rule. The free thinking mind was proscribed by both state and church. The result of course was brutal oppression. During the dark and middle ages, for example, heretics of a dozen varieties, including such serious intellectual challengers as the Pelagians[27] and the Manicheans[28], as well as their later intellectual heirs, were routinely suppressed and often put to death. As late as the 17th century, Giordano Bruno was burned at the stake and Galileo threatened with torture for disagreeing with Church doctrine. Even in the 18th century, Voltaire was confined in the Bastille. Diderot, the editor of and driving force behind the encyclopedia, was imprisoned. Dalembert, the great scientist and writer was intimidated by the authorities into temporarily abandoning his association with the encyclopedia. The crime of each and of many more, similarly punished, was independent thought.

  “It would be impossible to calculate how many potential Isaac Newtons, Thomas Edisons et al, were compelled into bondage on the manorial fields over the centuries; or at the very least, stifled by the arbitrary power of the ancient regime. With the best, the most creative minds suppressed, progress was impossible. The result was the most abysmal destitution and misery.

  “There is a myth put forth by the Marxists that the pre-capitalist era was a golden age of the workers and of the non-aristocratic guys working in the domestic industry. Myth is the right term for that; it is an unadulterated falsehood. There is not a shred of historical truth to that.

  “Poverty, famine and disease were endemic throughout the feudal era. For example, the bubonic plague wiped out almost one third of Europe’s population in the 14th century and recurred incessantly into the 18th as well as many other diseases. Famine too was widespread in Europe until the 18th century killing sizable portions o
f the population in Scotland, in Finland and Ireland and causing misery and death even in such relatively prosperous countries as England and France.

  “Regarding living standards, one economist, Angus Madison, in his book Phases of Capitalist Development,…states that ‘economic growth, during the centuries 500 to 1500 was non-existent.’ That means, zero, nada, the null set, nothing and that per capital income rose by merely 0.1 percent per year in the years 1500 to 1700. In 1500, Madison estimates, the European per capital GDP was roughly $215. In 1700, roughly $275.”[29]

  What was the cause of this poverty? Political systems are based on ethical systems. Ethical systems are based upon our view of man as either autonomous or incompetent. If you think that man is autonomous, you celebrate his individuality and his nature as a thinking being who is essentially good and capable. You develop a system that honors that nature. If you think that man is incompetent, you question man’s ability to think and understand reality as well as his ability to choose correct action. You become a critic of man and you seek a society that is intent on ensuring that man takes those actions you (or God) deem to be correct.