Is unfettered capitalism a threat?

**Ron Toronto** · 01-17-2010, 11:58 AM

I was really disappointed earlier this week when I heard on the news that some of the CEO's who relied on government bail-outs last year were now rewarding themselves with bonuses in the tens of millions of dollars. In their defense, one of them claimed that the economic turn around "wouldn't be happening without their guidance". Mind you, a lot of folks including myself doubt that there is a sustained economic turn around in evidence yet ...

So in this context, I found an article today of interest. The link is below, here's an excerpt:

"The new year has barely begun and already one of 2010s most important analyses of economics has appeared.

It's John Cassidy's rather brave confrontation with the so-called "Chicago School" of neo-con economists, whose free-market doctrines laid the groundwork for the epic global financial crisis we've just endured.

We have paid a heavy price for the dangerous primacy given unfettered capitalism by conservative economists at the University of Chicago beginning in the 1940s, and achieving its peak influence in the late 1990s.

That's when U.S. policy makers, infused with Chicago thinking, began deregulating financial markets and setting the stage for the epic global financial collapse of 2007-08 that triggered the current devastating recession."

The link:

http://www.thestar.com/business/arti...red-capitalism

**IdRatherBeSkiing** · 01-17-2010, 01:45 PM

The fundamental problem with the bailout was that pure capitalizm said it shouldn't be done. Bad businesses should be allowed to fail and go bankrupt even if it means thousands of people go unemployed. Throwing money at the corporations just makes sure non-viable businesses survive.

If you go with de-regulation this is the ONLY reasonable result in a bad economy.

Now if you keep everything heavily regulated, then bailouts and governemnt involvement should be expected. But you can't do 1/2 of one model and 1/2 of the other. It results in the mess we have right now.

**Mark** · 01-17-2010, 03:31 PM

Originally Posted by Ron Toronto

I was really disappointed earlier this week when I heard on the news that some of the CEO's who relied on government bail-outs last year were now rewarding themselves with bonuses in the tens of millions of dollars. In their defense, one of them claimed that the economic turn around "wouldn't be happening without their guidance". Mind you, a lot of folks including myself doubt that there is a sustained economic turn around in evidence yet ...

So in this context, I found an article today of interest. The link is below, here's an excerpt:

"The new year has barely begun and already one of 2010s most important analyses of economics has appeared.

It's John Cassidy's rather brave confrontation with the so-called "Chicago School" of neo-con economists, whose free-market doctrines laid the groundwork for the epic global financial crisis we've just endured.

We have paid a heavy price for the dangerous primacy given unfettered capitalism by conservative economists at the University of Chicago beginning in the 1940s, and achieving its peak influence in the late 1990s.

That's when U.S. policy makers, infused with Chicago thinking, began deregulating financial markets and setting the stage for the epic global financial collapse of 2007-08 that triggered the current devastating recession."

The link:

http://www.thestar.com/business/arti...red-capitalism

Oversight is always a good thing, be it in government or business. The market will not correct itself if those playing it are running a crooked game.

The economic meltdown was a clear indication of that.

Everyone should have to answer to a boss, even the boss.

M

**IdRatherBeSkiing** · 01-17-2010, 04:13 PM

The other thing, if they were responsible for the recovery, were they not also responsible for the meltdown?

Did they not put clauses on bailout money requiring payback if bonuses were given? If I was giving away billions I would have.

**mikezila** · 01-17-2010, 06:00 PM

Originally Posted by IdRatherBeSkiing

The other thing, if they were responsible for the recovery, were they not also responsible for the meltdown?

Did they not put clauses on bailout money requiring payback if bonuses were given? If I was giving away billions I would have.

those requirements were (attempted to be) added after the banks were strong armed into taking TARP funds.

a good chunk of the problem is the screwy corporate payroll system. stock options and bonuses are written into employment contracts in lieu of higher salary. it's a good idea. if they don't perform to the standards in the contract, or the stock doesn't perform, they don't get the extra money.

well, it's a good idea until politicians get a hold of it.

**mikezila** · 01-17-2010, 06:03 PM

Originally Posted by Mark

Oversight is always a good thing, be it in government or business. The market will not correct itself if those playing it are running a crooked game.

The economic meltdown was a clear indication of that.

Everyone should have to answer to a boss, even the boss.

M

what melt down? Chase was never in any danger of failing, neither were the other big banks.

**Ron Toronto** · 01-18-2010, 11:11 PM

Originally Posted by mikezila

what melt down? Chase was never in any danger of failing, neither were the other big banks.

So everything has been hunky dory then. C'mon everyone, run along home now, nothing to see here.

**grainfedprairieboy** · 01-19-2010, 10:30 AM

Today the poorest of Canadians live better then the richest of kings only a thousand years ago. The middle class live better then the wealthiest nobility of only a century ago.

Capitalism has improved every aspect of our personal lives and allowed democracies to triumph over tyranny ever time they have come into conflict.

If a private company wishes to reward it's CEO or executives what a comfortable liberal perceives to be obscene amounts of money it is their right and the liberal has recourse in not purchasing the products of services of that company any longer and encouraging others do do likewise.

If the liberal feels that denying his collective purchasing power is not enough and wishes the state to become involved I would suggest to that liberal he instead focus his attentions on the state itself which has no business propping up, loaning to or otherwise favouring any industry in the first place.

**Vilepagan** · 01-26-2010, 06:30 AM

Originally Posted by mikezila

what melt down?

http://en.wikipedia.org/wiki/Financi...7%E2%80%932010

**Vilepagan** · 01-26-2010, 06:40 AM

Originally Posted by mikezila

a good chunk of the problem is the screwy corporate payroll system. stock options and bonuses are written into employment contracts in lieu of higher salary.

Agreed.

it's a good idea.

Great idea, bad practice.

if they don't perform to the standards in the contract, or the stock doesn't perform, they don't get the extra money.

If such contracts were worded that way, it might work, but frequently such "bonuses" aren't performance-based.

well, it's a good idea until politicians get a hold of it.

Of course.

Just ask Robert Nardelli. He was the CEO of Home Depot until they fired him...and gave him $210 million as a parting gift. The he went to work as the CEO of Chrysler...until that company went bankrupt. No politicians involved.