In the last thirteen years, a new financial order replaced capitalism in America. With cat-like tread, this transformation has caught most Americans unaware, let alone some of country’s best financial minds (many of them fascist anyway).
This new order constitutes the socializing of risk, a concept I have termed: Sociapitalism. Sociapitalism is different than Social Capitalism – a European concept. Social capitalism is the redistribution of wealth through social programs, such as unemployment benefits, food stamps, and government housing. Sociapitalism is not a redistribution of wealth, but a redistribution of risk. The government transfers risk from one entity to the system, securing the safety of the entity.
Social capitalism allows corporate failure. Sociapitalism does not, reducing the only possibility of failure to the sovereign state.
For the most part, our country was founded on the principle that success or failure should be predicated on one’s own merits. The weak died, the strong survived. Depressions and recessions cleansed the system, firming up the foundation for the next economic advancement. Capitalism brought corruption – true - but that corruption was eventually punished with failure. Failure distinguishes capitalism from all other economic systems.
That model has changed, and it became visibly apparent in 1998 when the government orchestrated the bailout of Long Term Capital Management. In hindsight, this intervention may have been the biggest mistake in American financial history. If Long Term Capital Management would have failed, Lehman Brothers would have likely failed at that time, and the United States would have fallen into a recession. Positively, the United States would have averted an equity bubble, Glass Steagall would have never been repealed, and the system would have been cleansed from the froth of the late nineties.
More Here..
Washington Post and CBS receiving money from Obamacare ’slush fund’
This new order constitutes the socializing of risk, a concept I have termed: Sociapitalism. Sociapitalism is different than Social Capitalism – a European concept. Social capitalism is the redistribution of wealth through social programs, such as unemployment benefits, food stamps, and government housing. Sociapitalism is not a redistribution of wealth, but a redistribution of risk. The government transfers risk from one entity to the system, securing the safety of the entity.
Social capitalism allows corporate failure. Sociapitalism does not, reducing the only possibility of failure to the sovereign state.
For the most part, our country was founded on the principle that success or failure should be predicated on one’s own merits. The weak died, the strong survived. Depressions and recessions cleansed the system, firming up the foundation for the next economic advancement. Capitalism brought corruption – true - but that corruption was eventually punished with failure. Failure distinguishes capitalism from all other economic systems.
That model has changed, and it became visibly apparent in 1998 when the government orchestrated the bailout of Long Term Capital Management. In hindsight, this intervention may have been the biggest mistake in American financial history. If Long Term Capital Management would have failed, Lehman Brothers would have likely failed at that time, and the United States would have fallen into a recession. Positively, the United States would have averted an equity bubble, Glass Steagall would have never been repealed, and the system would have been cleansed from the froth of the late nineties.
More Here..
Deflation or Hyperinflation?
Washington Post and CBS receiving money from Obamacare ’slush fund’
i hope being able to clothes by hand will be useful
ReplyDeleteExcellent article!
ReplyDeletesadly there no solution for this complicated situation.
ReplyDeletehe essence of social capitalism is that private markets are the most effective allocation mechanism, and output is maximized through sound state macroeconomic management of the economy.
ReplyDeletesocial capitalism