Capitalism is failing America, says a conservative Republican
marketwatch.com
marketwatch.com
On that note, I'm not sure this belongs on HN. I don't want this site to devolve into political editorial discussion every day. There are other sites for that.
As a European I'm not into US politics, it's too bad it has become so divisive that a discussion is no longer possible, even if it contains relevant insights that may lead to opportunities for startups.
> Over the last four decades, the financial sector of the U.S. economy saw its share of corporate profits increase from about 10% to nearly 40% before the 2008 financial crisis, and nearly 30% in 2018. During this period, the capital that corporations returned to their shareholders tripled, while business investment decreased by 20%.
> The report argues that since the 1970s, changes made by American businesses and policymakers began prioritizing high returns to investors in the short term, rather than investment in long-term capabilities.
You can completely believe in big c "Capitalism" and also believe that we are doing it badly. And I think blame going on everyone, the MBA class and lawmakers alike, is pretty fair.
“Too much capitalism does not mean too many capitalists, but too few capitalists.”
Like anything, capitalism must be humanised with restraint and constraint, the application of intelligent regulations and actively fighting the private monopolist (Hayek, The Road to Serfdom). For example, to avoid race-to-the-bottom competition by mandating certain features as non-optional. Or for safety. Obvious stuff really. And not burdensome regulations to please a Media campaign or emotional blackmail from the Left.
Liberal capitalism, totally free market capitalism, ends with monopolies as beast eats beast. It's what Marx criticised though he made no distinction between capitalism and capitalism.
And this is what has happened, with monopolies so large that their power to blackmail and bribe is undermining government, threatening free speech and disenfranchising.
Meanwhile, governments support doctrines that have turned out to be false, even just basic things like diet. Animal fat and dietary cholesterol for instance, is no longer believed to be the cause of heart disease. And can aid weight loss.
Social doctrines also are arguably causing widespread misery for people trapped by government welfare systems at such a high cost that it depresses local economic activity.
Self-help rather than government help is the conservative way. And a healthy capitalism is part of that.
The problem here is that modern capitalism is quite evidently not healthy. With the historical profit margin on goods of 3% now at a mad 11% due to monopoly power.
As long as everyone gets the same voucher, same amount for voucher, and has guaranteed public transportation to the same schools as others, with no regard for race, ethnicity, background, then sure go for vouchers.... if you can't guarantee those things then it's just another system that can be gamed.
> Meanwhile, governments support doctrines that have turned out to be false, even just basic things like diet. Animal fat and dietary cholesterol for instance, is no longer believed to be the cause of heart disease. And can aid weight loss.
I agree on this because government can be bought and the sugar industry has done a snap job at turning diet industries upside down blaming fat instead of themselves.
> Social doctrines also are arguably causing widespread misery for people trapped by government welfare systems at such a high cost that it depresses local economic activity.
What about welfare that walmart gets? They not only get HUGE tax cuts, they ALSO get to pay their employees dirt wages because the U.S. government will pick up the slack.
Guaranteed basic income could stop that or alleviate it at least by giving them a guaranteed living wage. Another issue is runaway spending on executives who really aren't worth a damn in (many instances), and those who are still are NOT worth what they're paid.
Also how does welfare depress local economic activity more than taking money from the bottom, and funneling it to an offshore account? If A. makes $25k, and gets government help to raise that to $35k, that's $10k more they have to spend yearly. 60%+ will be spent locally propping up the local economy. If B. earns > 10 million annually and gets a huge tax cut that saves them an extra 100k, that 100k is just going to sit in the bank in the Caymen's -- it might be earning interest for the rich guy but that's about it.
> The problem here is that modern capitalism is quite evidently not healthy. With the historical profit margin on goods of 3% now at a mad 11% due to monopoly power
Pegging CEO pay to average of ALL employees including outsourced, freelance, and contractors (even janitorial staff), would go a long way towards making capitalism more fair.
Anything can be gamed if you are adequately cunning. That's the problem of the "public parasite". And your conditions are arbitrary and ride roughshod over private liberty and the choices of the parents.
A voucher system would induce the creation of local schools, so the transportation thing is irrelevent (and in anycase the responsiblity of parents not the State).
"Pegging CEO pay to average of ALL employees including outsourced, freelance, and contractors (even janitorial staff), would go a long way towards making capitalism more fair."
That would result in socialism. A healthy system looks for liberty based solutions, not coercions. More liberty intelligently applied (as with vouchers) requires politicans with backbone and brains. Able to withstand emotional blackmail and do the right thing for the long term instead of pretending to solve problems by banning stuff and throwing money around.
I mean whether the CEO earns 50 million or is capped at only earning 5 million is up to him.
All he needs to do is raise wages across the board. Multipliers could be given also for increased employee#s year to year. --- CEO could still earn plenty, say it's pegged at 200 * average worker and average worker earns 60k - that's STILL 12 million per year, hardly anything to scoff at.
Then say you also get an extra 10% bonus allowance for every 1% increase in employees (you also get docked 10% per 1% decrease), and you increased employment by 2% over last year, so you get 220* average worker salary or an extra 1.2 million. Furthermore we could add bonuses based on u.s. to offshore worker ratio, more U.S. employees = higher CEO pay.
If I'm a CEO earning $10 million, but I want to earn $15 million, I'm going to have to get creative about increasing the average from 50k to 75k. When all companies are in this same boat -- wages across America will go up organically. There almost won't be a need for a minimum wage even.
It is worth noting that Trump's protectionism and views on immigration are nearly same as that of Bernie Sanders. (Motivation might be different but Trump and Bernie are likely to support exact same actions).
Marco Rubio's statement does not surprise me, it is the general direction in which Republican party is headed.