Feb 27, 2013

Capitalism Hits The Fan - Background, Notes & Solutions


On QE (Quantitative Easing): It only helps the rich in the long run

Summary of "Socialism", Keynesian Economics & "Road to Serfdom" (by F.A.Hayek)

On Hayek from BBC Business News

Economics is divided into two large categories called "Micro-Economics" and "Macro-Economics"

Colbert Report On Ayn Rand: Her philosophy is of rational self interest and she states that the purpose of life is in pursuing your own happiness with NO regard for others. (does/can this attitude create corporatism?)

Daily Show: The government investigates trading on non-public information -- unless members of Congress are doing it!

7 Videos & 1 Image that Illustrates Capitalism & the GOP 


Capitalism Hits the Fan (Video Clip)

Introduction to this video by Bill Moyers:

Economist Richard Wolff believes capitalism has spun out of control, is not salvageable in its current state, and that nothing short of a major systemic overhaul is needed to get America back on track and fix the problems that unraveled our economy.

In his lecture, “Capitalism Hits the Fan,” Professor Wolff dissects the 30-year-old root causes of the recent financial crisis. He explains how a combination of factors — outsourced jobs, flat wages, soaring credit card debt and the biggest corporate profits in history — led to the most severe economic crisis of his lifetime.

“Stressed, exhausted, this is a population that has reached the limits, it cannot carry more debt and it can’t do more work,” Wolff says. “That’s why this is not a temporary problem, this is not a blip along the way. We have reached the limits of the kind of capitalism this society has become.”


Reasons for flat wages:

1. Computers started replacing workers/labor.
2. American businesses had the whole planet to themselves as everything had been destroyed in WW2. Everyone saw US as the competitor to beat so they started to focus on making everything better or cheaper than the US. So business in the US started shipping jobs abroad i.e. if you can't beat em, join em.
3. More women entered workforce in the 1970s.
4. Immigrants began moving in, in the 70s.

That's why wages stopped rising in the 1970s

To deal with the stopping of rising wages people:

1. Americans started working more hours
2. They started to fuel their spending/consumption with credit - first by using collateral (such as mortgages) then came the credit card.

More details on the financial crisis:

Washington D.C., TARP & Homeowners Nonsense Explained In 3 Videos & 1 Image

The Financial Crisis Explained In 3 Videos (Only one is over 7 minutes)

Possible Solution: Decentralization?

1. Developing Self-Sufficient & Self-Sustaining Local Economies & Businesses

2. Hemp Can Be Used To Make Plastic Stronger Than Steel, Paper, Textiles, Oil, Non-Toxic Medicine, Cement... & Tornado Shelters!

3. Coal Management (Air Filtering Solutions) (Combining 1 & 2 for fast development i.e. hemp towers in city for industrial production and air cleaning and food towers outside of polluted areas.)

Independent/free energy. Oil companies won't like it, but this is possible:

Anyone CAN Harness The Wind For Energy

Cheap to Expensive: Solar Power Solutions (Plus Other Alternative Energy Solutions)

Fast & Cheap Method to Develop Organic Plastics for Everyday Use

Water Filtration Tips & Techniques

More on this general topic in the section Creative Problem Solving {Environment Economics}

Update April 21st 2015: 

The part he leaves out are trade bills that don't protect domestic workers. Since he isn't a domestic worker it's not a major concern for him. The simple reality is that if you are talking about how technology is reducing wages and then are sending jobs to labor intensive countries 'cause labor is cheaper' then you're just being a hypocrite (or incredibly dense, maybe even religiously so)

Related info:

Related post:

Note April 22 2015: On the TPP - To say wages are going down because of technology and then to send jobs overseas for people to do it in other countries who are not robots, is a bad excuse. A lowering of wages in one industry as it declines & another one emerges, is normal economic behavior. To make treaties to allow these new industries to grow in other countries will lead to thier profits and a few corporations of ours (at the expense of their corporations, i.e. it's our rich people vs thier rich people in our trade policies). ON the whole the country sending jobs abroad will lose it's internal stability. Temp jobs isn't a real recovery i.e. one that puts citizens first. If you send manufacturing jobs abroad and then say this is a service economy you're just fooling yourself. All that said, trade does help improve relations. Generally speaking.

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