11 September, 2008

Fannie Mae announces the death of Capitalism? Er, no, actually.

With the nationalization of the FM twins, Bush has actually CONFIRMED that Capitalism has succeeded beyond the wildest dreams of its pioneers. However, through sheer human greed, Capitalism has morphed into Frankenstein, turning on its wealthy masters. And that leaves young Republicain John McLame in an embarrasingly tight spot, given that he's just finished poo-pooing the idea of Big Government Spending, high taxes etc.

The purpose of Capitalism (Colonialism, Globalisation) has always been to create a self-perpetuating system which ensures that the rich can constantly become richer. When Bush drones on about FREEDOM, what he really means is "the freedom to move financial capital unimpeded around the world".

Taken to its logical extreme, the "rich-getting-richer" model would result in all the world's wealth concentrating into the hands of a single individual. Trouble with that is, no-one else in the world would have any income to buy products from that rich person's corporation. The richest person in the world would therefore, ironically, starve to death along with all the poor people.

That's what's happening with Freddie Mac and Fannie Mae. The rich can get richer only if the poor get poorer. There's only so much water in a glass. The money has to come from somewhere, ain't it? We know there is no such thing as a free lunch... even if the Fed were simply simply to print more cash.

And it has come to pass that as the Poor get poorer and can't afford their mortgages, the rich people's cash cow has suddenly dried up. If you want a cow to give regular milk, you must give it some decent pasture. If you want people to give regular mortgage payments, you have to give them decent pasture too. You've got to structure the system to ensure they have jobs. And here's a novel idea to many Republicans: a job should actually produce enough income to pay for both food AND rent. Please read that last sentence again.

The wealth of a nation must be spread relatively fairly around all its members, not hugely concentrated in its elite. This idea, of course, is Socialism. Other associated 'dirty' media-speak words spring to mind ...like Marxism, Unionism, Left Wing, Equality, Respect for others, Respect for self, and above all (ugh, heaven forbid) "Liberalism".

Just because you're well-heeled doesn't mean that you're smart.

With Freddie Mae and Fannie Mac threatening to go down,
maybe there'll be fewer Volvo bicycles sold to millionaire CEOs this year.

This nationalisation means that the Republicans are being forced to compromise and head further to the political Left. Deliciously, all this at a time when it's forcing Republican candidate George W. McClone to squirm and dodge.

And even more interesting when you consider that the world's largest Socialist power, China, is now powering to the political Right by becoming Capitalists. Makes you wonder if there is a perfect point somewhere in the political Centre (...or should that be 'Muddle'?).

For a fireside chat about the idealogical differences between the Right and the Left, see this post. Although it related to the last Australian election, it's still relevant to the Obama-Muckain duel.


  1. IS it not clear that the movement of large sums of money through the economy and the production of large amounts of consumables and the regulation of just about everything coupled with unlimited printing of paper to pay for the 'help' we give to anyone from the lowest to the highest is not capitalism? Get real. Of course there are a lot of folks interested in convincing you that it is, but the rough ride ahead is not a free market's doing. We haven't had an unregulated, free market since the passage of Sherman anti-trust. And we have lots of examples of the failure of command and mixed economies from Canada to Britain to the Soviet Union. Oh, ad now China.

    Atlas Fan


  2. Thanks for your comment, and I'm entirely with you. One speaks glibly of a universal mythology called 'Capitalism' ...or worse 'Free Enterprise' ...but we know it ain't free. It's Keynsian 'rose-coloured purity' is crippled and corrupted by the very elites to whom I referred. In the effort to keep my article brief and tight, I had to refer to it in that iconic way. I wasn't writing a doctoral thesis.