Democracy vs Capitalism

In 2005 both Japan and Germany were struggling with this same situation we are in now. Recently a couple of people asked me to talk about the economy and I have been thinking and writing little snippets here and there. I was very aware of the situation in Japan mostly because I get some Japan news when I am reading about anime. I am a little more tuned to Japan than Germany. Politically I really don’t think either did the right thing when it came to their failing economies that started to show signs of trouble way before the U.S. did.

Listening to Obama’s speech last night my mind kept on going back to why is banks giving out credit so necessary for the economy? What about private investment? What about social lending?

Obama seemed to be pretty harsh towards Wall Street, but still believes that banks should survive.

Whether we like it or not, the government will end up having a huge stake in our banking system. Their failure to see the big picture and need to make money rather than look at long term goals made them in my eyes obsolete. I am not sure if the right solution is to keep them alive. I honestly think that our economic system is in need of a total makeover.

When I lived in Colombia I remember that lending was mostly done through credit unions. Credit cards simply did not exist to the extent they did here in the U.S. I learned all about credit here in the United States and frankly the model sucks quite a bit. It makes no sense to me that I cannot get a comparable rate on my savings as I get on my borrowing. That is why I am leaning more and more towards the social lending model these days rather than using a system that all that has done for me is charge me tons of extra fees. Oh yea, I think banks have cost me close to thousands in fees, some of it due to my youth check floating bonanza, but mostly to a mistake in their system a few years back that created a domino effect on my account. It taught me that living paycheck to paycheck was a huge mistake, and even though it took a lot more than that I have finally gotten back to having a savings account with some cushion.

If the banking system is the blood of capitalism, it certainly has leukemia. I look at capitalism and democracy as two sides of a scale, and right now democracy is starting to really tip things to one side. Democracy is supposed to save us from the injustices of capitalism, but for years it did just the opposite. Capitalism had free reign and it got us into this mess. Now a lot of people think that the solution is to let capitalism take its course and let business fail… but at what cost? who will end up losing the most? the rich already got richer, the poor are the ones unemployed and without millions in bonuses in the bank. Sure the super rich might have lost a lot in the stock market, but when the money was funneled out of wall street it was CEOs that were getting millions in bonuses. When one of them gets fired, they still have their financial future assured. Those people will still be able to send their kids to college and will never come close to starving. Their biggest sacrifice might be that they have to travel coach rather than on their private plane now.

I am very watchful of what is happening now, and still believe in democracy, capitalism truly not as much as I used to. I always go back to the thought that a hungry worker is not a good worker. I hope that what Obama says last night is going to happen and more jobs are going to be created because of the stimulus package. However, I think as a country we have a responsibility, and it is not to spend money, but to spend money wisely in the coming years.

7 comments on “Democracy vs Capitalism

  1. there is no economic system that’s perfect, including various hybrids. many countries that are always brought up as examples of getting it right like EU or Canada, end up developing poplulations that don’t contribute at all. sooner or later their systems will be bankrupt. in this country the system is easily swindled, in my opinion the reason is that a large number of people is allowed in on a scam i.e housing bubble, internet bubble, amway (on a smaller scale). with so many people participating it’s in no one’s interest to ruin the party. some countries in Europe, who seem to get it right, severely limit immigration, try getting into Sweden, you probably have a better chance of infiltrating gitmo.

  2. Fundamentally there are two opposite forces at work when you put capitalism (which encourages unequal outcome) and democracy (which requires equal footing). Capitalism must be protected from rampant mob-rule populism in order to function, and democracy must be protected from turning into an oligarchy through corruption and graft.

    So we end up with a blend no matter what we do, with rich people trying to buy influence at every turn and the public trying to squash the excessively-successful at most elections. We end up with rich people as our legislators and executives, but with a fear of populist backlash should they get too far into bed with the other rich folks. We also end up with regulated corporations that aren’t allowed to practice unfettered free trade.

    It mostly works out. Mostly.

  3. Can you give some examples of some of your statements?

    Democracy is supposed to save us from the injustices of Capitalism, but for years it did just the opposite.

    Capitalism had free reign and it got us into this mess.

    It sure seems like to me, that “Capitalism” doesn’t have the ability to get us into any mess but the PEOPLE that are ultra greedy and only out for their own self or the Politician who wants to be seen by the people they represent as standing up to the big bad wealthy person. Free markets encourage innovation and competition, which is what makes it so great. The freedom that is supposed to be a part of our democratic republic go hand in hand…..

  4. John, the Capitalist free market was doing fine and successful until it was the Democratic US Government that interfered. The market is always self-correcting and does not depend on emotion. The fact that Congress forced banks to lend to people who could not afford it, along with raising the minimum wage on small businesses that could not sustain it is what ultimately caused the issues that we are having. Whenever the government interferes, this is the result. Why we would want them to run anything is beyond me. I don’t need the government for anything other than our volunteer Army. All I can tell you is this $4 Trillion spending budget is NOT going to be a good idea, it will end up costing much more, and will be a failure from which the USA and the World will not escape. And we’re all along for the ride.

  5. Yes, the market is people paying first for what’s important, and people producing what is in demand. This is why the market is self-correcting. It’s true that people become selfish and hurt others for their own benefit, but thinking that corrupt politicians have souls inherently more loving than corrupt businessmen is a symptom of GAS(Government Adoration Syndrome). If a business is unethical, it is the people’s responsibility to cut off the business through market choices. Expecting the government to regulate these companies is like running to a wild lion to protect you from a savage puppy.

    Anyway, if there is no loss of resources or food, no mass war, disease, etc., there is no reason for economic troubles except that someone is manipulating financial machines which process tools of exchange (which in this case is the Federal Reserve Dollar, forced upon us, manipulation enough by itself). When people get poor enough, and jobless enough, they will begin to try to do things on their own, grow food, barter, until the owners of the economy decide to somehow promote cash flow to once again capture the loyalty of the trusting citizens and get back the control. (ex: “the” Great Depression)

    Oh, and also Capitalism is the “private” ownership and use of capital, resources, etc. Democracy is “rule of the people”(which is pretty scary concerning how much most people here don’t care). So, I don’t understand the relationship we’re making here…

    Thanks for inviting me to your blog, log. 😀

  6. in my opinion democracy has been put on the back burner while capitalism takes over our country. the rich don’t give a shit about anyone else or anything else, besides making MORE money. our banking system is all sorts of screwed up considering that every dollar that is “lent” (i put it in quotes b/c who pays them back? no one.) to our government from the federal reserve already has debt on it. our world leaders only want to rule the world while keeping the average person uninformed, distracted and in a bubble of fake happiness with their i pods and TV’s. nothing against technology, of course; but the underlying factors is what gets me. the way we’re surrounded by advertisements everywhere we go to buy buy buy, and the mind sucking television that people choose to sit in front of all day (which has more advertisements than programming), and the bullshit schooling system that our country has put in place that teaches us lies and never tells us the whole story (ex. we didn’t have a feast with the native Americans… we took some as slaves and slaughtered the rest.) AND I JUST WANT TO KNOW WHAT HAPPENED TO MY FREEDOM!?! why do i have to work my life a way just to be a nameless face? money is slavery in its self.why do i have to work my entire life just to come out in the end in the same situation as before? maybe its because with out the proles of our society (us, the citizens) the few that run our world will crash and burn. so yes, we need a major makeover.

    1984 by George Orwell
    Fahrenheit 451 by Ray Bradbury

    im sure most have of these books but if not or if you never read them i would strongly suggest it.

    Zeitgeist I
    Zeitgeist II
    The Obama Deception

    good movies. i recommend those as well

  7. Democracy:
    A belief thatthat the freedom of the people is best achieved thru a “government of the people,by the people
    and for the people”
    A belief that Capital exists for profit and of profit.
    One belief is for a spirit of people. the other is a tool used mor for the self than the people.
    Which is more important?
    If the spirit rules then there is a need for the tool.
    If the tool rules, it will kill the spirit.
    And so ends Democracy.

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