Serious Voices Are Trying To Put Back America On The Proper Capitalistic Path

As an economic system capitalism has been extremely successful because it permits loss and even also bankruptcy

. The failure-possibility generates the opportunity for success. But now the catch phrase is that banks are too big to fail and hence when it comes to profit they privatize but when it comes to risk they socialize it.

The Wall Street demonstrators have been wrongly accused by some for being pseudo-Communists; on the contrary they are against pseudo-capitalists the Wall Street barons. They sniff around for profits while pretending that risk has been done away with because the loans are securitized. The agencies engaged in rating take money to roll out an authoritative statement that is really without meaning. The system wobbles and then the ordinary taxpayers rush in to bail out these bankers. Is there any accountability?

Apart from the 'mob' participating in Occupy Wall Street demonstration there are more serious voices trying to put back America on the proper capitalistic path.

Paul Volcker (formerly chairperson of Federal Reserve) in a significant speech last September called for "Structural changes where necessary". Many of these ideas were discussed. He wanted brakes to be placed on the mega banks suggesting that their size should be trimmed. He warned that if this was not done America would be rushing down a track of "increasingly frequent, complex and dangerous financial breakdowns".

Another noted figure in the financial world, Mohammed El-Erain of Pimco (CEO) is supporting some of the aspect of the Occupy demonstrators. He observed that the system need to be pushed forward towards "inclusive capitalism" creating jobs on a broad base while controlling too much of inequality. He said, "You cannot be in a good house in a rapidly deteriorating neighborhood. The credibility and the fair functioning of the neighbourhood matter a great deal. Without that, the integrity of the capitalist system will weaken further".

Economist Lawrence Katz of Harvard said there has to be some inequality for the generation of incentivize in an economy that is capitalistic but "too much inequality can harm the efficient operation of the economy". He said this lack of balance may lead to two unhappy results. The super rich will lobby for undue favours and bailouts that will twist the market; secondly the increasing inequality will make the poor unable to invest in their education. Thus high inequality will lead to even more inequality and eventually economic growth will be poor.

It is time to slice out the crony part of capitalism right now.

by: Julie Thompson

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