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  • jimby9 jimby9 Dec 14, 2011 4:50 PM Flag

    Why Capitalism Fails

    It fails when capitalism's proponents forget that it's strictly an economic system and not a form of governance. In other words, capitalism is a useful tool that creates shared wealth for the socities it serves, and is not an end in itself. This means that nearly all enterprises need to be regulated by the government in order to insure that they promote the common good. The government has the inherent right to insist that all companies pay a living wage to their employees and provide them with descent working conditions. The government also has the right to severely penalize corporations that pollute or offshore jobs to foreign countries in order to take advantage of their cheap labor or lax environmental standards.

    American capitaalism is failing because corporations have been allowed to subvert the government and plunder the country for the sake of short term profits. Banksters and corporate hucksters of all stripes have been been given a license to eliminate living wage jobs, pollute at will, destroy the nation's housing wealth, scam their customers, and reject fair taxation.

    The bottom line for a capitalist like me, is that the economy is so rotten that I can't make a living from my investments.

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    • You are absolutely correct. What you posted is historically true. There is an old saying, "when interest rates are high, stocks will die." "When interest rates are low, stocks will grow."

    • SILLY MAN!
      you are writing on the internet, using a computer, expressing yourself freely without fear of arrest=ALL PRODUCTS OF A DYNAMIC CAPTILISM THAT ENCOURAGES INNOVATION FOR THE PURPOSE OF MAKING MONE!

      I suspect you are a young person with no experience of the cycles of life and economics and so you are limited...just study history and you will realize only Capitalism provides for freedom!

      Merry Christmas!!!!!!!!!!!=

    • Capitalism fail because of assholeslikeyou.

      You think Government has the right to ...blaaa...blaaa.blaaa. When the Government has no rights at all. It is we, the people, who have the right and responsability to make sure that our Constitution is followed and nothing is added unless it is the will of the people and in accordance with the subject constitution.
      The Surpreme Court has been making law instead of "Reading" law and has perverted the American ways because of the people on the dole, .....those who prostitute themselves in order to get free foodstamps and free ding-dongs while they sit at home, on their lazyfatasses and get income from the SS fund because they have been deemed unemployable because of some drummed-up aids...or they cant speak english....or they are asylum seekers from foreign lands.

      For every right, there is a responsability.....even the kings law says " let he who does not work, also not eat."....It might also be deemed that: " let he who does not work, also not vote" That would sure ashell change the sympathy that the politicians have for the no-goods in this world.

    • Actually, andersohn, I don't pay any fees on my Templeton funds, due to a special arrangement they made with an acquired fund where I owned shares.

      I do have an advisor at Smith Barney, but don't usually take his advice. We did recently discuss increasing my muni position, but munis are currently paying next to nothing, so I passed.

      My approach to investing might be a bit unusual, in that I base my asset allocations on where I think the economy and financial markets are headed in the intermediate term. I've been investing for over 30 years and this allocation strategy has worked well for me. I did get caught,though, with a 50% cash position at the start of the great recession. It wasn't enough, and I took some needless losses.

      This time I'm paying closer attention, and it looks to me like Europe is going to push us back into the crapper. That's why I'm 70% cash.

    • andersohn Dec 17, 2011 9:58 PM Flag

      Yeah, the post by Needful stunned me a bit. I'm old enough to remember what happened in the 70's and 80's when interest rates rose precipitously. I didn't realize the how historically durable the relationship was. Based on your portfolio containing a Templeton Fund, I assume you use an advisor. Fees on this fund vary depending on which which one of the "alphabet" funds your manager purchased on your behalf (A, C, R, etc). Basically you are probably getting hit with 1-2% front end or deferred load and an annual expense of1.3% + and I bet you are paying some kind of portfolio management fee. In my humble opinion, advisors that put you into bond funds charging 2-5% annual fees are not looking after you, they are looking after themselves. Performance is nothing if you have to give most of it back to an advisor. I won't buy a fund with a load on it. With a little due dilligence of your own and a fee only CFP, you might do better.. You may want to start reading Scott Burns online . He's famous for his couch potato portfolios. I guess what I'm saying is that you might look at discount muni-companies like Vanguard, American and even Fidelity. High fees are very corrosive to long term portfolio performance.

      When inflation starts digging in and long duration bonds start tanking, other investments will show up. I did well with MLP's, Royalty Trusts, GIC's (Insurance issued guarenteed contracts) and some high dividend yield stock funds. Depending on your tax situation muni-funds may give you good after tax returns. If your advisor is just telling you to go into cash and sit there - well there should be a real good reason - other than what I've heard so far (maybe there is). Look every economic calamity ends sometime. If your view is that the economy will recover in 5 years, then protect 5 years worth of money you will need to spend over that period. But you really should be investing the rest in something. The greatest risk of running out of money comes from pulling to much too soon and/or investing so defensively that your portfolio doesn't keep pace with inflation. Just my opinion.

    • AGREED, and bottom line: GREED is the way of man, some types (and even groups) of men, are more greedy than others. so, capitalism HAS to be a controlled capitalism, and here i agree with you, government remaining a 'pure' outside oversight mechanism, which punishes people involved in financial scams, just as the the government has to deal with a bank teller who just embezzled a couple months money from the counter. the enforcement mechanism must remain objective and 'pure.' you can't have government enteties lending blind eyes to corruption and bubbles. (reminds me of that coca-cola-bottles for eyeglasses idiot named Alan Greenspan. did he fool lots of people!)...

    • You can't tax your way out of over promising benefits that can't be delivered!

    • you can't spell for

    • Our Democracy is now 235 years old.

      "A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money (generous gifts) from the public treasury. From that moment on the majority always votes for the candidates promising the most money from the public treasury, with the result that a democracy always collapses over loose fiscal policy, (which is) always followed by a dictatorship."

      "The average age of the world's greatest civilizations has been about two hundred years.

      These nations have progressed through this sequence.

      From bondage to spiritual faith;
      From spiritual faith to great courage;
      From courage to liberty;
      From liberty to abundance,
From abundance to selfishness;
      From selfishness to complacency;
      From complacency to apathy;
      From apathy to dependency;
From dependence back into bondage;

      Where do you think our democracy is on the scale above?

      I think our democracy is not far from the bottom and slipping yearly.

      Presently, 47% of our working population do not pay any Federal Income Tax. And, the real unemployment in the US is way north of the printed 8.6%, its realistically closer to 15% to 18%. Additionally, most State and Federal employees are unionized and most vote democratic because of the politically promised enhancements to wages, salaries, healthcare, retirement packages and other benefits that far exceed those realized in the private sector by democratic and liberal politicians.

      There is my 2 cents...

      • 2 Replies to dowjones1234
      • Your post is pretty good,dowjones,and deserves more than two stars. Actually, I agree with you and another poster who said that the voting public is largely responsible for our present mess. But greed is not the only reason why we often elect irresponsible, self serving jerks. Somentimes voters succumb to jingoism, fear of minorities, or uncomprising views on social issues.

        Your comment on uniions is somewhat off the mark. Federal govt. unions are strictly voluntary, and the law prohibits "closed shops" and the use of dues money for political contributions. State govt. unions, however, can be a serious problem. The California Prison Guards' Union, for example, is thoroughly corrupt and has way too much political influence in California. I don't favor govt. unions because of obvious conflict of interest issues. That said, there would be little need for unions of any kind if the govt. had the legal ability and determination to protect the rights of all workers.

      • Funny. I was taught the united states was a republic, not a democracy.
        this ain't ancient athens, boy.
        the people who use the term "democracy" the most, seem least disposed to actually see one happen.

    • OH... AND BTW.... 5 STARS FOR YOU.

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