Posts Tagged ‘capitalism’

Lots and lots of people seem to have opinions on “capitalism” these days. I think that’s a positive because I think there are some things that warrant discussion. The problem is that many who have rose to prominence right now, especially on the political left, have not a clue what they’re talking about and probably haven’t read anything that ever challenges their small minded understanding of what capitalism is, or could be. You even see it with some on the political right which I often find a lot disconcerting.

The reality is, we have nothing right now that even remotely resembles “laissez-faire capitalism.” The market is not free. Price discovery is on life support in many industries. Capitalism hasn’t failed, hell we barely have it in this country right now.

There’s a new book out by Jonathan Tepper called The Myth of Capitalism: Monopolies and the Death of Competition. Tepper is a Rhodes scholar, and off the charts brilliant.

I’m yet to read the book, but I’ve read a couple of other books by the author. Tepper has been all over much of the financial media I follow, and I’ve heard him interviewed a couple times. He makes a compelling argument, but I’m concerned what solutions he may propose. I need to read the book to establish a better understanding and opinion.

Here’s the summary of the book:

The Myth of Capitalism tells the story of how America has gone from an open, competitive marketplace to an economy where a few very powerful companies dominate key industries that affect our daily lives. Digital monopolies like Google, Facebook and Amazon act as gatekeepers to the digital world. Amazon is capturing almost all online shopping dollars. We have the illusion of choice, but for most critical decisions, we have only one or two companies, when it comes to high speed Internet, health insurance, medical care, mortgage title insurance, social networks, Internet searches, or even consumer goods like toothpaste. Every day, the average American transfers a little of their pay check to monopolists and oligopolists. The solution is vigorous anti-trust enforcement to return America to a period where competition created higher economic growth, more jobs, higher wages and a level playing field for all. The Myth of Capitalism is the story of industrial concentration, but it matters to everyone, because the stakes could not be higher. It tackles the big questions of: why is the US becoming a more unequal society, why is economic growth anemic despite trillions of dollars of federal debt and money printing, why the number of start-ups has declined, and why are workers losing out.

I’ve mentioned John Mauldin multiple times in my writing. He’s probably my favorite financial writer, and one of the smartest people I’ve ever read. (Tepper has co-written two of Mauldin’s books). His weekly Thoughs From the Frontline is alwas a must read for me. I don’t think I’ve missed one in over five years now.

The Soviet Union’s collapse and spread of semi-free markets through Eastern Europe seemingly ended the socialism vs. capitalism argument. Capitalism had won. Collectivist economies everywhere began turning free. Even communist China adopted a form of free market capitalism although, as they say, with “Chinese characteristics.”

The fruits of capitalism: millions of people freed from abject poverty and a few who got rich indeed. Nor is this a recent phenomenon. Capitalism in the last three centuries, with all its faults and problems, with all its contradictions, generated the greatest accumulation of wealth in human history. From a few hundred years ago when the vast majority of the people of the world lived below the poverty line, barely above subsistence levels, today we have less than 10% doing so and that number is shrinking every year.

Yet now, perhaps because this prosperity is so easily taken for granted, some on the left are again embracing socialist ideas and irrationally high tax rates. What drives this thinking? One problem is “capitalism,” in practice, does indeed provide many points for justifiable criticism. It is, to paraphrase Winston Churchill, the worst of all systems, except for everything else.

Today’s capitalism has a contradiction that is increasingly hard to ignore: lack of competition in key markets. That’s a problem because competition incentivizes producers to get more efficient and reduce prices for consumers. Without competition, you end up with bloated monopolies that may be highly profitable for the owners, but don’t serve the greater cause of economic growth.

My good friend Jonathan Tepper, with whom I wrote Code Red and Endgame, has an excellent new book on this: The Myth of Capitalism: Monopolies and the Death of Competition. He and co-author Denise Hearn explain why this is a serious problem with world-shaking consequences. I highly recommend the book and today I want to give you a brief taste of it, plus a few more thoughts afterward.

READ THE REST OF THE ARTICLE OVER AT MAULDINECONOMICS.COM

 

My new column is up over at TheNorthlandPost.com. They have added a way to comment on their website, feel free to join the discussion there.

I am often frustrated by the complete lack of understanding of American politics by the average American. So, I thought with this week’s column, I would delve into an examination of the American political spectrum.

Read the rest (and see my really cool graphic I created, too) by clicking here.

The other day I had some harsh words for the “average” American. While I still stand by what I say when it comes to taxation, there may be some hope after all.

65% of voters favor across the board spending cuts.

I hate to break it to the political class in Washington. The American people may be ignorant about things that matter, it seems they get that we have a spending a problem. Failure to compromise could hold some interesting political consequences to the tyrants that currently “represent” us.

I am actually willing to go along with small tax increases on everyone, including myself, as long as we get massive spending cuts. The thing is the Democrats have no intention of compromising and there will be no spending cuts offered. The mainstream media has somehow managed to convince the American people that the Democrats and the Marxist in Chief are willing to compromise. It could also be that the American people are just a bit naive in believing the elected members in the Democrat party actually care about America. The American people are about to learn how much they have been duped.

Any Republican that goes along with a crap compromise that has no spending cuts of any size should be primaried and removed from office. I already will not be voting for Roy Blunt in the next Senate primary, and I definitely won’t vote for him in the general if he supports the wrong path in the next year.

Another interesting piece of data is this, 68% of people are favorable to capitalism only 24% are favorable to socialism. We still believe in the things that made this country great. The problem is I don’t think Americans are well educated on the ins and outs of each system. It is up to us to educate our neighbors, friends, and families.

Over the next year, pledge to learn more about American history and economics. Become an expert, and earn the trust of your friends and family, so that when what we are doing  as a country quits working (and it will!) you are there to educate them on the truth.