MANAGUA, NICARAGUA – Oh my… Capitalism has failed.
You hear it shouted from the rooftops. It is on every pair of lips… and in every journal, newspaper, website, opinion piece, hard fact, and scurrilous innuendo in the media.
Even the Chinese are getting in on the act. Here’s the U.S. Sun:
CHINA has taunted the United States over the Texas winter storm blackout as a “failure of capitalism” that is affecting “desperate” Americans.
An opinion piece in the English-language Chinese newspaper Global Times says a large number of Americans feel that the “current capitalist system” has “serious flaws” and “cannot help them with their concerns.”
Capitalism Is Blameless
Yes, capitalism sent a polar vortex whistling down over the plains and froze the joints, valves, pipes, pumps, and everything else it could find.
It froze up the green windmills and the gas lines. It even failed to provide mittens, long johns, cords of air-dried, split, and stacked oak… or the stoves to burn it in.
People argue over who’s to blame. But we know one that is as innocent as new-fallen snow – capitalism.
Capitalism is blameless because it is heartless, soulless, and doesn’t give a damn. It doesn’t care if the pipes freeze. It merely reacts to the pressures applied to it – laws, consumer choices, innovations, restrictions, regulations, plagues, and prices.
And it delivers – not necessarily what people want… but at least what they’ve got coming.
No Plan B
Apparently, in Texas, one thing they didn’t want… didn’t think they needed… and didn’t want to pay for… was a Plan B.
The whole system ran with few precautions. Texas doesn’t get that cold that often. People had no stoves… and no wood.
The power companies had no back-up plans.
And the Texas government had no way to offer much in the way of help.
But what should we take away from this story?
That we should abandon capitalism and let the government drill for oil and gas – as it does in Venezuela, where a gallon of gas recently sold for less than a single U.S. penny?
Perhaps a better takeaway is that people can’t depend on good weather. Or on institutions – private or public – to function flawlessly.
Meanwhile, who’s to blame for America’s COVID-19 deaths?
Well… capitalism, of course!
According to a number of thinkers, given voice by Chauncey DeVega:
The mass death from the coronavirus pandemic reflects a broader pattern of negative outcomes, largely caused by the Republican Party and broader right-wing “conservative” movement.
This allegedly evil “‘conservative’ movement” Mr. DeVega tags as “gangster capitalism.”
And he doesn’t stop there. He’s already in deep water. Now, his head is disappearing as he blames capitalists for everything.
“Every part of society is to be financialized,” he says, “and subjected to the forces of the market.” The result:
As exhaustively documented by public health experts and other social scientists, across a range of policies such as gun violence, tax policy, the environment, access to health care, education, voting rights and the size and strength of the social safety net more generally, Republican policies over the last several decades have resulted in the deaths of many more Americans, compared to the policies advocated by Democrats.
As for the coronavirus, Mr. DeVega needs to come up for air.
Death rates are about the same or higher in Europe. Belgium is hardly a bastion of capitalism. Yet, it’s coronavirus deaths per 100,000 are up to 192. In the UK, the figure is 182. In Italy, it’s 159. And in France, it’s 127.
And the U.S.? Right in the middle, at 153.
Oh, and Sweden, which famously took the laissez-faire road, with respect to the coronavirus – 124… lower than them all!
Price of Government
Mr. DeVega also seems unaware that Republicans are no more “capitalistic” than Democrats.
Both parties – especially the Republicans under Donald Trump – favor the heavy involvement of government in every part of the economy.
“Market forces” still function… people still give and take, and get by as best they can. But they are hobbled by programs and policies set in place by the feds.
GDP growth falls. Inequality increases (as the government tends to shift more and more wealth to the elite). People become poorer and less able to protect themselves.
Plan B costs money. And you don’t bother with it if a) you don’t have any money, and/or b) you think the feds will make sure nothing bad ever happens.
And for all their frets and moans about how much damage capitalism has done, the real damage is yet to come.
Again, capitalists – people trying to do honest, win-win deals with one another – have nothing to do with it.
Inflation Is Coming
Meanwhile, economist Umair Haque reports in Eudaimonia that:
A full third of Americans can’t afford healthcare, food, and shelter. Pause. Take it in. That’s north of a hundred million people. Astounding – maybe even shocking – isn’t it? […] The poor cannot afford the basics of decent lives, while the rich cannot find ways to spend their fortunes.
Colleague Dan Denning reports that many of these “left behind” people are ending up in “Nomad Land,” living in old RVs… cut off from mortgages, utility bills, and property taxes…
And this is after the feds “protected” people from real interest rates – capitalism’s most important signal – and saved them from market corrections… three times this century.
How? By printing up some $7 trillion worth of fake money and handing it out – mainly to Wall Street.
And as this money-printing gathers speed, there is little doubt about what lies ahead: consumer price inflation.
When prices rise, the government will have to come to the rescue with more “stimmy” checks.
And since it is already broke, it will have to print even more money… which will drive prices even higher.
And then what? What about all the poor people with no savings? What’s their Plan B?
The net national saving rate is below zero – near its lowest level in history. And yet, savings are the simplest, surest Plan B in the world. A cord of wood… a few extra rolls of toilet paper… and some cash.
But who bothers to save when real interest rates are negative? Who bothers to rick up firewood when the government guarantees to keep you warm?
And who bothers to protect himself from inflation when Jerome Powell, America’s top banker, says it’s nothing to worry about? MarketWatch reports:
In a speech to the Economic Club of New York, Powell said he doesn’t expect “a large nor sustained” increase in inflation right now.
All Capitalism’s Fault
But higher consumer prices are coming. And there is a whole minor industry of economists, think tanks, political hacks, and opinion mongers already preparing an explanation.
They find evidence of failure as soon as they open their eyes.
Then, they close them quickly, for fear of seeing something that doesn’t fit.
In the years ahead – with so many failures to gawk at – we predict that they will do a lively trade, trying to pin it all on capitalism.
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