This is NOT Capitalism

I become very angry when uninformed people blame the current economic crisis we are in on Capitalism. The reason; they don't know what real Capitalism is. The system we have been living under since the creation of the Federal Reserve (1914) has been slowly morphing into a bastardized version of capitalism. I found and article that explains this much better than I can. Here is an excerpt:

"Where in capitalism is the idea that you can spend more than you earn? Where in the vision of Adam Smith is the idea that foreigners will subsidize your standard of living – indefinitely? Where in laissez-faire is the notion that central bankers will prevent corrections by controlling the price of money? What had happened to the old sturm and drang? Where was Schumpeter’s ‘creative destructive?’ The new capitalists offered creation without destruction... resurrection without crucifixion! They offered not only to hold harmless investors in the face of their own bad judgment...but to revive booms before they ever expired and to cut short corrections before anything has been corrected.
This was not the old capitalism of our grandfathers. The old-timers had been wary of it...they knew that the free market was dangerous and unpredictable. The old capitalism was a jungle...red in tooth and claw. You had to watch your back. This new capitalism was a zoo; all the dangerous beasts were supposed to be behind bars. It was almost too wonderful.
The culture of zoo-capitalism spread to all levels of society. At the top, such was faith in this new doctrine that tax rates were reduced...in the belief that more capitalism would enlarge the tax base (unfortunately, spending increased faster). But don’t worry, “Deficits don’t matter,” said Dick Cheney. In other words, our dynamic capitalistic economy will grow itself out of any problems. And at the bottom, too, people fell victim to the same delusion. Consumer debt multiplied as householders borrowed and spent money they hadn’t made yet. Why not? Their houses, their stocks and their incomes would always go up, wouldn’t they? And savings? Who needs savings when you live in the strongest, most flexible, most globalized, most technology-enhanced, most tax-enlightened economy in history?"

Bravo! I definitely could not have said it better myself. The writing is by Bill Bonner. He writes for The Daily Reckoning Australia.

Here is a link to the entire article:

http://www.dailyreckoning.com.au/consumer-debt/2007/12/10/