Saturday, May 30, 2009

Is Capitalism Dead in America?

That's the question Glenn Beck asked the other night of several people. No one wants to come out and take a firm stand saying it is. On the other hand, no one really wants to say it isn't. So, I'm taking a look at it today.

First, let's define capitalism. Hard to know what we are observing, if we don't know what it is. My simple Mac dictionary says, "an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state." Seems simple enough.

Right away my brain is reeling with the idea that private owners in our country are allowed to make a profit any more. At least, allowed to make it without having the liberal media and liberal congress screaming about how unfair and unAmerican profit is. Hey, the famous document says we are created with equal opportunities, not that we will take equal advantage of them!

I hear that a large majority of people who win millions in the lottery are bankrupt within a few years. Talk about wasting an opportunity! Being a wealth-creator, let alone a wealth-preserver, takes a mind-set that many of us just don't have. We can redistribute the wealth all we want, but it's going to keep going back to those who know how to get it to work for them. The answer seems to me to be in educating people in the principles of capitalism, rather than penalizing those who understand them.

So, let's take a look at our country. Is private ownership of business still the norm? I think we'd all have to say that, for now, it is. There are still plenty of businesses, large and small, as well as in between, which are owned privately or traded on the stock exchange by revolving door owners.

It is, nevertheless, a red flag to see the government becoming part-owner in banks, auto companies, financial institutions of various types, and gaining an interest in more and more areas, such as health care. A fast look at the post office, which I find always delivers my mail, and I mail a lot, and which has the very best people at the local level, usually, shows that it isn't run profitably.

"The recession accelerated declines in mail volume in fiscal year 2008 and flattened revenues despite postal rate increases. That year, mail volume fell by 9.5 billion pieces, or 4.5 percent, and resulted in a net loss of $2.8 billion as the U.S. Postal Service's (USPS) cost-cutting did not close the gap between revenues and expenses." U. S. Government Office of Accountability (GAO)

Look at their solutions: "In the Postal Accountability and Enhancement Act of 2006, Congress recognized USPS has more facilities than it needs and strongly encouraged streamlining its networks. Rightsizing will require continued congressional support for necessary closures and USPS leadership to address resistance to change. Other options that could help USPS remain financially viable involve difficult trade-offs, including (1) deferring USPS payments for retiree health benefits, which would increase the unfunded retiree health benefit obligation; (2) reducing the frequency of 6-day delivery, which would affect a key aspect of universal service and could further accelerate mail volume decline; (3) downgrading delivery standards, which could affect time-sensitive mail; (4) raising statutory debt limits, which could further exacerbate USPS's financial difficulties in the future; and (5) providing direct appropriations, which would be contrary to the fundamental principle that USPS remain financially self-supporting. Finally, GAO is closely monitoring USPS's financial viability to determine whether to add USPS's need for restructuring to GAO's High-Risk List."

Rightsizing? What kind of term is that? It's another in the long list of new vocabulary designed to spin the news to sound less negative than it actually is. Why doesn't the government just come out and say what it means? You notice that each solution has with it a negative consequence?

We could take a look at Amtrak and find similar problems and statements. The latest report I could find on GAO was January, 2007. It said this, "The future of intercity passenger rail service in the United States has come to a critical juncture. The National Railroad Passenger Corporation (Amtrak) continues to rely heavily on federal subsidies--over $1 billion annually in recent years--and operating losses have remained high. In addition, Amtrak will require billions of dollars to address deferred maintenance and achieve a "state of good repair." These needs for Amtrak come at a time when the nation faces long-term fiscal challenges."

Okay, does anyone think it's a good idea to have the government in charge of health care? Of auto manufacturing, especially in conjunction with the unions? Or of any other businesses? We could look at example after example of government-run business, including our own national budget, which has soared into debt worse than it already was, since Obama took over. It was bad enough under Bush, but now it's a total disaster. We cannot spend our way out of debt!

Nor can we tax our way out of it. We are already taking, from those who create wealth, an unconscionable amount of money in various taxes. I don't think anyone minds paying taxes for the things the federal government is supposed to be overseeing, such as national highways and national defense. However, the federal government has gone far beyond the powers granted to them by congress. All three branches of our government are out of control. I don't think any of our founding fathers ever guessed they would all go out of whack at the same time!

If we continued to tax producers to pay for non-producers, there's only one possible outcome. The pool of producers will become smaller and smaller until it totally disappears. America is heading down that road right this very minute. Capitalism is being vilified, marginalized through liberal diatribe, and demonized. In other words, the government is eating its money producing system. Not money printing, money producing! It is becoming more and more "shameful" to make a decent profit in the almost non-existent free market, at the very time when America needs money the most.

So, are we still a capitalist country? I think we are, barely, today on May 30, 2009. How long we'll be able to say that remains to be seen. There's a very disturbing trend in this country that was forecast decades ago when Ayn Rand wrote Atlas Shrugged. I first read it more than 30 years ago, and it seemed total fiction to me. I couldn't see where we were going then. I hadn't studied enough history. Now, it's obvious to anyone who reads the book. We aren't going there. We are there. And Atlas, in the form of those who are innovative and productive, is going to begin that shrug any time now.

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