Crises of Capitalism

[Derwood]

YouTube - RSA Animate - Crises of Capitalism

YouTube - RSA Animate - Crises of Capitalism

I found this extremely fascinating and thought it would be a good jumping off point for another discussion about Capitalism and its alternatives. I think the speech/animation boil down some of the problems with Capitalism into very simple terms. While it doesn't provide any concrete solutions, I think it makes clear that we're stuck in a cycle that will eventually destroy our economy for good.

[ASU2003]

I think we need to learn more about why other capitalist countries failed and what should be done to prevent it here.

[Derwood]

One of the interesting things (to me) about that video was the idea that wage stagnation has as much to do with recession as job loss

[Hektore]

Originally Posted by Derwood

One of the interesting things (to me) about that video was the idea that wage stagnation has as much to do with recession as job loss

On a somewhat related note, I heard an author on 'Fresh Air' the last week talking about how income accumulation and wealth disparity lead into the recession and why this recovery is going to be so stagnant.

Originally Posted by NPR

Economist Robert Reich isn't surprised at the anemic economic recovery from the meltdown in 2008. His new book, Aftershock: The Next Economy and America's Future, argues that the economy isn't going to get moving again until we address a fundamental problem: the growing concentration of wealth and income among the richest Americans.

"I think that we have not fundamentally reformed Wall Street," he tells Fresh Air's Dave Davies. "We have not done what we needed to do. Derivatives are still relatively unregulated. There are big, big holes in that Wall Street financial reform act — holes big enough for Wall Street traders to drive their Ferraris through. We didn't bust up the big banks. ... We have not in any way helped the mortgage market. ... I think we're going to be left with a Wall Street that continues to grow more and more powerful and richer relative to the rest of the United States economy."

Reich says the last time income was so concentrated at the top was before the Great Depression, and he thinks that's no accident. Until the fruits of the economy are more broadly shared, he says, the middle class will lack the buying power to restart America's economic engine.
Robert Reich
Enlarge Perian Flaherty

Robert Reich is currently the Chancellor's Professor of Public Policy at the University of California, Berkeley.
Robert Reich
Perian Flaherty

Robert Reich is currently the Chancellor's Professor of Public Policy at the University of California, Berkeley.

"[The middle class] can't go deeper and deeper into debt. They can't work longer hours. They've exhausted all of their coping mechanisms," he says. "And people at the top are taking home so much that they are almost inevitably going to speculate in stocks or commodities or whatever the speculative vehicles are going to be. ... Unless we understand the relationship between the extraordinary concentration of income and wealth we have this in country and the failure of the economy to rebound, we are going to be destined for many, many years of high unemployment, anemic job recoveries and then periods of booms and busts that may even dwarf what we just had."

Reich is Chancellor's Professor of Public Policy at the Richard and Rhoda Goldman School of Public Policy at the University of California, Berkeley. He served as labor secretary in the Clinton administration and is a co-founding editor of The American Prospect and a regular contributor to Marketplace.

The Fresh Air Interview: Economist Robert Reich - The 'Aftershocks' Of America's Income Disparity : NPR

the interview

the transcript

[aceventura3]

After watching the video, the word "water" came to my mind. We would not say the hydrologic cycle, or the water cycle is in crisis any more than we should say capitalism is in crisis. In the water cycle, there may be droughts in areas, floods, excessive ice, unseasonable rain - and this activity may put people in crisis as they respond, but the cycle is what it is. The cycle can be managed to a degree, but there are consequences, both wanted and unwanted - but again the cycle is what it is. Capitalism is a similar type of cycle. You can not say the cycle is in crisis because the cycle will exist regardless as do cycles in nature.

There is no business activity or industry that I can think of that is not subject to cycles. There will always be normal times, good times, and bad times. During these "times", wealth will be accumulated - wealth and power will shift. some will experience crisis, some booms - but the cycle will live on. There is no lasting alternative to capitalism.

[ASU2003]

So the large corporations and wealthy have built damns to block the water and keep it for themselves. And then they complain about the evaporation and say it will eventually rain down on the people downstream who used to have a slow steady stream...