Death Toll for American Capitalism?


Does the crisis on Wall Street mean that the American style of capitalism is no longer the model for the world?

Posted by Fareed Zakaria on September 16, 2008 10:05 AM

Readers’ Responses to Our Question (77)

broke her 66 :

FOR SALE: BROOKLYN BRIDGE

One careful old lady owner, she only used it once a week for going to the grocery store!

Perfect for new immigrants!

Great toll potential!

Includes bunker with emergency supplies!

No reasonable offer refused. Will creatively finance for willing and able buyer.

Please send check or money order to Hank Paulson Washington D.C.

66 :

Atomic Monday?
"Experts say bad news, the wrong news or just no news by Monday could prove disastrous for markets." investegate

I'll have to read the morning paper then and see how bad it's supposed to be. The good news is that I'll still love who I love on Monday, even if they all go broke. Then back too two and "so you have Big Time Big Money and kids to think about." Don't quote me, I'll quote myself.

dangerous american :

If you don't have enemies, you don't have character.
Paul Newman

baron :

PARIS (AP) -- "In France, President Nicolas Sarkozy says the death knell has rung for freewheeling, U.S.-style capitalism. German's finance minister calls it downright "dangerous." Even the leader of more Wall Street-friendly Britain says financiers need closer watching, maybe on a global scale."

Jeepers creepers and I want to go out with Paris Hilton too when all the freewheeling stops. The chances of that are about one in zero. It's like 1984 and big brother is going to watch so nobody does too well or not too well too. I wonder if the U.S. Air Force will buy French planes. The U.S. was founded by dangerous people with dangerous ideas, so it's always somewhat dangerous. What can you do, outlaw risks? The Washington Post is taking risks and will continue to along with every firefighter in the world. Maybe we can close NASA because the space program risks the lives of astronauts.

Yousuf Hashmi :

There are many questions remained un-answered.

The problem was started with the bad loans. Months before PG editors who are not supposed to be economist were hinting the trouble, then why not the corrective measures taken then.May be the bail out can be managed in much lesser price.

700 billion $ package in fact will buy the bad shares to raise the market. This money will not be use as a productive tool but will be in fact wasted.

What will be happening that one paper money will be protecting another paper money. Now if the shares are in fact attractive or at least worth it then why not public confidence gaining.

There is no talk of accountability that why this problem came at first place. what are the root causes and what are the precautions for future recurrence.

Once US public losing the confidence on US economy then its image in the world will be questioned.

spiderman2 :

THE FOOLPROOF BAILOUT

Unless the HOLES in the financial system are properly plugged up, this 700 billion dollar bailout will just GO TO WASTE. The reason why we are in this FINANCIAL MESS is because all those holes came into play at full throttle. Some people simply abused the weakness of the dollar for their benefit. Upon seeing the weakness of the dollar, they played up the price of oil. They can do it because as we have seen last Monday, there is no regulation that can stop them from doing so. With very high oil prices, the companies become vulnerable and weak. Here comes the SHORT SELLERS taking advantage of that weakness and betted that the stock prices of these companies would fail. As a result of stocks plunging, many companies struggled and many could have borrowed money from banks and in the process raised the interest rates. Also, profits from short selling contribute to excess liquidity and to offset this liquidity, interest rates are raised. As interest rates climbed, so does the mortgage interest rates. Many homeowners defaulted which put banks on a tough situation. Again the SHORT SELLERS saw the opportunity to profit so they came BETTING AGAINST the banks until we see all these big banks failed.

Now, we can see that there are THREE BIG SUCKING HOLES that came into play that put us into this mess. The FIRST are the SPECULATORS who played up THE PRICE OF OIL. The SECOND are SHORT SELLERS which pulled down the stock market. The resulting HOLE (third hole) which these two sucking holes created are the FORECLOSED houses which continue to burden the financial system.

The SOLUTION to this mess is simply to PLUG UP these THREE HOLES. First is to create an OIL PRICE STABILIZATION LAW which I explained in my earlier posts. Second is to PERMANENTLY BAN SHORT SELLERS. Thirdly, if they want a bailout, it should be used to relieve the homeowners by lowering their mortgage interest payments and return the foreclosed houses to its previous owners under a restructured payment scheme that's affordable. The third solution will release the banks from bad debt and can therefore continue and start clean anew.

The hedgefunds which will be affected by the ban on short selling can look for MORE PRODUCTIVE investments like the manufacturing sectors and new technologies sectors. This shift of investment would lower interest rates because manufacturers would not be crowding in the banks for loans. This will also make our manufacturing sectors competitive. As a result more jobs will be created.

This is WIN-ALL SCENARIO and to achieve this, THESE THREE HOLES MUST BE ATTENDED TO, otherwise, NO BAILOUT WILL SUCCEED.

GOD BLESS AMERICA.

Citizen of the post-American world :

Just to say I thought Fareed Zakaria's interview of Mr Yew, a most charming personality, went ever so smoothly.*** There was to be seen and heard an influential statesman, both a thinking man and a wise man. I wish there were more such high quality encounters presented to a large public, in this country.

***

"A Singapore Story Part 1 and 2"

http://www.cnn.com/CNN/Programs/fareed.zakaria.gps/

MikeB :

A small proposal to restore American capitalism: To the bailout package, in addition to caps on executive compenation packages and requirements to work with consumers, how about adding $20 billion, $40 billion, whatever it takes, to create a temporary but independent investigatory and legal office to prosecute anyone on Wall Street that created this mess. Go after investors and traders at all levels, executives board members, officers at finacial firms, brokerage houses, independent traders, all of them. Provide enough money so that no crime, no matter how small, is not presecuted, every fraudsters in houded into the ground, and every executive or officer or board member is kept up sleepless in the certain knowledge that their time will come. What we actually want and need, to use an old term too often used in a derogatory manner, is a national witch hunt. Do that and imprison the thousands or tens of thousands of of these people and you will soon see an end to excesses.

At the same time, use existing technology to end scams, like the "late payment" scam used by credit card payment processing firms. The same information used to encode Posit codes on envelopes can be used to read and create a temporary database of the senders. Track payments and the date they are delivered. Then, if the posted date is a week or so later and the victim gets hits with a late payment fee, go after the frim for fraud and criminal conduct. You could do this to cell telepone companies, banks, credit card companies, the whole nest of crooks that has been runing this scam and either cause them to reform or drive them out of business.

The best thing I can think of for this proposal is that it would separate the candidates from those only only promise change from those who WILL deliver it. If a politician wont support some common sense idea like this, it's a dead certainty they are in bed with Wall Street and don't deserve our vote. I, for one, want to know.

Roism007 :

Jack Hillburg :
I was impressed with Fareed Zakaria's guest from Singapore. (This last Sunday) What an intelligent man. He seemed to understand Americas problems more than our own politicians. I even think Mr Zakaria was impressed. I believe his name was Mr Yew...he should speak to Congress. Mr Z..please have him again. I enjoy the GPS show!

______________________________________________

I agree with Jack on his comments about Mr Yew

Citizen of the post-American world :

Its blackmailed, sheepish citizenry is proof enough that in actual fact, the land of the free is dying, if not already morally dead.

That reminds me of what Agnes Smedley once reported from China: "During the hot summer months when disease took its toll of the poor, the landlords transported their entire families to the temples in the cool hills. At the base of the hills they stationed guards, and these guards permitted no one to go up the mountain paths. In this way the landlords solved the problem of deadly disease." ("China's Red Army Marches")

Ever so genuinely cruel! Ever so symbolic too: now out of reach, at the summit, the American dream! And while the land of the free is left agonizing, at the bottom of the hill, its sheepish citizenry silently looks on.

Again, American historian Howard Zinn:

“America has been heading - for some time, and is heading right now - toward less and less world power, less and less influence… and if American foreign policy continues in the way it has been - that is aggressive and violent and uncaring about the feelings and thoughts of other people - then the influence of the United States is going to decline more and more. This is an empire … that is crumbling - an empire that has no future ... [This is] leading to more and more discontent and home, so I think the American empire will go the way of other empires and I think it is on its way now.

If there is any hope, the hope lies in the American people… [It] lies in American people becoming resentful enough and indignant enough over what has happened to their country, over the loss of dignity in the world, over the starving of human resources in the United States, the starving of education and health, the takeover of the political mechanism by corporate power and the result this has on the everyday lives of the American people…

I think all of this may very well build up into a movement of rebellion… whatever hope there is lies in that large number of Americans who are decent, who don't want to go to war, who don't want to kill other people... And when people organised, and when people began to act, when people began to work together, people began to take risks, people began to oppose the establishment, people began to commit civil disobedience. Well, then that hope became manifest ... it actually turned into change… My hope is that the American people will rouse themselves and change this situation, for the benefit of themselves and for the benefit of the rest of the world.” ***

We are running out of time.


***

“US 'in need of rebellion'” (Sept. 13, 2008)

http://english.aljazeera.net/news/americas/2008/09/20089814415795791.html

spiderman2 :


THIS INSANITY MUST STOP ( Our National Security is AT STAKE)

It is high time this INSANITY SHOULD STOP. The reason why the U.S economy is so vulnerable to Wall Street speculation is because of SHORT SELLING. The economists DO NOT REALIZE that these people (short sellers) are like PRINTING MONEY UNHINDERED. Earning money at the expense of others (short selling) is NOT EARNING BUT STEALING. It's the same reason why we can't print money freely because it is tantamount to stealing.

UNLESS the regulators BAN THIS SHORT SELLING IN THE STOCK MARKET, Americans will continue to SUFFER ECONOMICALLY as what is happening now. The ENEMIES of America does not need an airplane to crash to our buildings. They only need to PLAY UP THE OIL PRICE IN THE STOCK MARKET and then start BETTING ON THE OTHER STOCKS TO FAIL thru SHORT SELLING. Not only can they ruin the economy of America, but they can also make themselves rich by doing so.

NOW WHERE ARE THE BRAINS OF OUR LEADERS AND ANALYSTS ?

BAN SHORT-SELLING AND IMPLEMENT THAT OIL PRICE STABILIZATION MECHANISM NOW and all will be well again.

That 700 billion dollar bail-out should be used to relieve American homeowners by lowering their mortgage interest rates and those who already lost their homes should be asked to return with their payments restructured.

JailBush :

This country has been rutterless since that family (Bushes) turned it over to greed and depravity.

This whole last 7 1/2 years has been a dark horror filled nightmare.

They are on a mission to destroy the US and the dollar.

USSlave :

There's a new book coming out...
"The inconvenient Loot"...how to loot the American taxpayer and there's nothing they can do about it.

When you have a Sect. of Treasury with a net worth at 500 million (and part of the piggish excess of Wall Street)demanding US taxpayers "save" the banking industry from itself, there is nothing they can do.

This is the fleecing of America by the Rich, for the RICH! Sadly, the sheeple will pay instead of riot!

Wall Street and it's pigs have become a cancer on America.

ERICA_BUTT :

GORDON ELLIOT wrote: The next step I guess would be to colour red all stars on our flag and change official name to People's Republic of USA. ( PRUSA).
----------
1. The fear in the market is overstated. Market is not going anywhere. Repbulicans are creating an artificial fear to pressurize US Congress into submission.

2. CEO pay has to be curtailed. You cannot have CEOs sucking $5+ million per corporation per year on taxpayers dollars coming out of this bailout money.

3. Republicans have to learn hygenic market behavior. There is no room for thumb sucking republicans crying out for milk and then refusing to suck on the nipple, because it takes more effort to do so.

Gordon Eliott :

The only way for USA to beat China is to become communist state.With this huge bail out and nationalisation of private investement banks we are obviously much closer to the socialism than ever before.
The next step I guess would be to colour red all stars on our flag and change official name to People's Republic of USA. ( PRUSA).

Gordon

spiderman2 :

WE NEED THAT OIL PRICE STABILIZATION MECHANISM LAW NOW.

We have seen how the price of oil jumped 16 points in just one day for no valid reason. It's very clear that the government (both Congress and the executive branch) has NOT DONE anything to rein-in speculators. It is therefore NOT farfetched that oil would rise up again to an all time high as before.

I hope they would now legislate a bill that would rein-in the STUPIDITY of these speculators. Oil has been the lifeblood of world economy and people should not be allowed to play on this commodity. It's very clear that the speculators are not using their minds. They do not understand that they are slowly hanging themselves as the price of oil shoots up to where the economy cannot perform anymore. Their money would be deemed useless if there would be a work stoppage worldwide.

I hope Congress would make a law that put a price cap on oil everytime speculators are playing with it. If the price of oil today (Monday) is 120 dollars per barrel, the price cap tomorrow (Tuesday) should be 120 dollars per barrel. Since it cannot go up that price, there would be massive panic selling which would pull down it's price. If the price of oil closes at 110 dollars tomorrow (Tuesday), the price cap should be set at 110 dollars per barrel on Wednesday. There is no way to go for the price of oil but DOWN if this mechanism would be put into place. Once the oil price reaches a SANE LEVEL of maybe about 90 dollars, regulators can then SWITCH-OFF that mechanism so it can settle to it's true value. There must be a body that can switch that mechanism on or off as the need requires.

We NEED THAT MECHANISM NOW AND CONGRESS SHOULD ACT NOW BEFORE THESE IDIOTIC SPECULATORS WOULD HAMMER THE ECONOMY AGAIN.

Salamon :

While the smoke is clearing on the socialization of excess financial manupalation the citizens of USa will experience the joys indinesians, and other East Asians felt uring the Asian collapse [courtesy of the washington Consesus] as implemented by the IMF. If that area of economic horro for the lower classes does not please the USA citizens, then they can enjoy life of Russia when her economy collapsed: no social safety net, large unemployment, lowered life expectency, lower fertility, reappearance of the scourges of infectious diseases, shortage of money for groceries and other such advancemnts of social well being.

Cheers, though, the rich got richer!

Jack Hillburg :

I was impressed with Fareed Zakaria's guest from Singapore. (This last Sunday) What an intelligent man. He seemed to understand Americas problems more than our own politicians. I even think Mr Zakaria was impressed. I believe his name was Mr Yew...he should speak to Congress. Mr Z..please have him again. I enjoy the GPS show!

Ben Zakeman :

American Capitalism went afoul when millionaires wanted to be billionaires..it's called Mammon! A great economy needs "money" to gush down to the working class..not trickle! The majority of Americans are middle class and they are the backbone of our strength. Middle America don't care what big money the super rich make as long as they are in the game...making a living, taking as vacation, owning a home. The underclasses always do well when the middle class is doing fine. But we shipped out all our factory jobs. "Lunch pail" America is gone..no more can a young man work in the factory where his grandfather worked. We are in for a "bumpy ride" as the lady in the movie said. And if we (USA) go down...so will the world! You can bet your stocks on it!

Gary E. Masters :

"telling us the fundamentals of our economy were solid, when we knew otherwise."

What you know and what is real seems to be different sets.

Ask China who has the best model. Or anyone else in the world who is not so misguided.

BobL-VA :

Seth_Bing,

No argument from me on Cox's actions. If an administration takes over and wants to let the foxes watch the chicken house for them they don't really have an excuse.

We know what percipated this crisis. Greed. We know there were plenty of warning signs it was coming and we knew logically what was being done made no sense, but everyone loved the money. Not just the mortgage bankers and Wall Street bond traders. Even Harry homeowner loved watching the value of his property skyrocket.

Our economy from day one in this country has gone through up and down cycles. Try as we might to stop this it will continue long after I've died of old age. This down cycle just happens to be particulary nasty. Left unchecked it has the potential of throwing this planet into a depression. However, the key phrase there was "left unchecked."

If you are a regular reader of this forum you will know I have no love for the Bush Administration. For the most part it has been a market driven administration that really wasn't interested in oversight of any type. It was also an administration willing to let this issue become a crisis by sitting on the side lines for 2 years telling us the fundamentals of our economy were solid, when we knew otherwise. Was this very poor decision making? Of course it was, but what could anyone expect different from an administration that never made a good decision?

Here's the irony that would be funny if it weren't so sad. Hank Paulson, who is touted as a Wall Street Guru, was a major player in letting this become a crisis. Now all of a sudden we are supposed to trust him with 700+ billion to clean it up with little to no oversight? I'm sorry, but again that goes back to the fox and the chicken coop. Why don't we just start sentencing burglars in this country to going into the place they robbed and ask them to "fix" it? It doesn't make any sense, but when someone is a wing nut sense has no meaning.

I also loved our nitwit presidents remarks today over congress's need to act quickly and not alter the bill as it was submitted. Here we have a president that has been sitting back for 2 years telling us how great our economy is and hoping for it to turn around all by itself. He was wrong, wrong, wrong. Now all of a sudden we're supposed to trust him to know what's right? He must have had a visit from god or womething. Anyway his threats of the sky is falling so leave my bill alone are so hollow they are laughable. If the crisis is as direr as his new found wisdom is telling us then where to heck has he been for the last two years? I don't even think this moron knows how stupid he sounds.

The dems are right on the foreclosure issue. Buying paper is a good start, but without stopping another 6 million homes from going into foreclosure seriously puts our initial 700 billion at an unacceptable risk. Hence, we'll see if Bush is blowing smoke again. I expect the dems to mandate the Feds to put a moritorium on foreclosures and use this money to buy the "bad" paper and renegotiate the terms of deliquent loans so the properties don't go into foreclosure. If Bush fails to sign that legislation then we deserve the depression we'll get. Sadly, I have more trust in Bozoo the Clown then I do Bush & Co.


Dove :

President Bush this morning warned lawmakers against trying to make too many changes to the proposed financial bailout legislation, saying the plan needs to be passed quickly and relatively intact to stem damage to global financial markets.
-----

Does this sound familiar? (The drumbeat just before the Iraq War).

Old habits die hard, is it not George?

George, please fall in line and wait for your turn, while the US Congress deliberates on this package.

No harm will come from a little sacrifice from US CEO Inc.

Anonymous :

President Bush this morning warned lawmakers against trying to make too many changes to the proposed financial bailout legislation, saying the plan needs to be passed quickly and relatively intact to stem damage to global financial markets.
-----

Does this sound familiar? (The drumbeat just before the Iraq War).

Old habits die hard, is it not George?

George, please fall in line and wait for your turn, while the US Congress deliberates on this package.

No harm will come from a little sacrifice from US CEO Inc.

Dove :

President Bush this morning warned lawmakers against trying to make too many changes to the proposed financial bailout legislation, saying the plan needs to be passed quickly and relatively intact to stem damage to global financial markets.
-----
Does this sound familiar? (The drumbeet just before the Iraq War).

Old habits die hard, is it not George?

George, please fall in line and wait for your turn, while the US Congress deliberates on this package.

Citizen of the post-American world :

The staggering sums of money involved in bailing out the pure seem to have made evidently clear at last, in the minds of many, what the silly, superpower game has become: one socializes astronomical losses, yet continues to privatize profits and perks.

Considered as an art form, such a ruinous system appears to be forever able to provide all the money required to "save" the genuine, friendly losers (beginning with the most morbidly obese) while never having enough funds to provide the best quality food, shelter, health care, education, pensions and infrastructures to all.

Needless to say, the feeling of travelling on such a road to no future makes one soon begin to look for ideas on how can be "saved" that towering monument to "modern civilization".

Rather than let it stand on its head, why not then put the whole inspiring structure on its feet? First, socialize profits; then, respect the right of all manners of private outfits to fail and to die quietly, alone and abandoned by all. Has it not been repeated often enough that "government that governs least governs best" and that only the "fittest (or is it the fit enough?) deserve to survive"?

Is not the best we can all do for capitalism (and for ourselves) to let it survive (or die!) while respecting its own basic principles?

Some hold that a post-American, post-Western world (they obviously resent those two expressions) would imply "the death of modern civilization", if not, I suppose, "the end of history"...

Can't we agree, instead, that for the first time in the history of mankind we now see rising, ever so slowly, ever so painfully, a truly universal post-modern civilization, something totally alien to that crowd which crafted what it once chose to call "globalization"?

Unintended consequences.

Raman Vig :

Goldman Sachs and Morgan Stanley will change their status to bank holding companies, allowing them to take deposits and bolster their capital. This means a future of stricter regulation, less leverage and probably lower returns.
-------------

The events as they unfold on Wall Street are affecting stock exchanges and main streets all over the world.

The financial market and housing market stories that are unfolding before our eyes, will have lasting impact on credit availability. This translates to less business for other corporations which have till now mostly remained unaffected.

The 30-40% yearly growth of Asian stock markets fueled by leveraged capital from US and Europe, is thing of the past.

Goldman Sachs will never be the same.

American capitalism will live on, though it will never be the same.

Hello Africa!

Zoltan :

What is the "American style of capitalism" ?

So far I understand it, it's based on credit: as long as the credit is used to make long-term investments, which in turn are used to pay-back the credit (ROI, or Return On Investment) it as a sound system. If the credit is used for daily expenses, it's simply living beyond one's means. If it is accompanied by wars to force foreigners to buy the debt, it's racket.

To me it seems that the "American style of capitalism" is largely credit for daily expenses, and that since 1987 (*) (and the black Monday on 19th october 1987) when the FED decided to inject "liquidities" into the stock market. So since 1987, Americans have been living on foreign money. Some would go back as far as 15th august 1971 and the end of the Bretton-Woods system.

The problem is not only W. Bush and his neo-cons, it is not only a late phenomenon, but has been part of the American Capitalism for a very long time. As a reminder, this famous phrase by a high US official: "the Dollar is our money, but it's your problem". Well, now it's yours.


(*) it is interesting to note that the USA went broke before the USSR, which collapsed 2 years later, although Gorbatchev initiated the perestroika in 1985, because he saw the signs on the wall.

mohammad allam :

The American style of capitalism is not just an economic system but around this develope the style of life,ranging from the cultire to religion.If we see just a recess in term of collapse then we have to also see the end of the American system of living and death of modern civilization.
There are certain drawbacks in AMerican style of capitalism and needs to remove
1 The system of encouragemnet of the monopoly nature economic institution.The art of domination of market with single unit is not good one when man is a social enemy.This monopoly led the crubling of the sound economic system.What America is paying right now is just the mistak of the past that it allowed the monster to be biggest monster.
2 American capitalism encourage the system of democratic system of goverment to promote the interest .Alwys take the reaction of people in positive and not hostile to the capitalistic culture.while in reality the American system faced more autocratic rule to sustain the American system of capitalism.with the globalisation and coming in direct contact of different current of economic system led the American to this financial position.
3 The American Heroism of pre ipretive stike to other nation to boost the nation economy in the term of contarct and the defence didnot work as planned by the tycoon of the political pandit of the Neocon.The emerging of the alternative centres of business and finance led the people to divert from the American block.The decision of the Latin American country to say good bye to American dollar and the Iranian and red revolution around the world which created anti American establishment was another cause for the sharp fall of the American hope.
4 American life style and culture now getting in touch with other cultural centre which influencing the life pattern of American.The changing pattern of American which gaurantee the capitalism system of oxygen ,now moving against the capitalism mode of production and consumption.The concentration of wealth in few hands is another matter for American capitalism.
5 The conspiracy of well established economic players against the well established american capitalsim should be keep in mind.These players want to craet another centre of economic powers.As they did in past from changing of economic centre of past from LONDON to NEWYORK.The American establsihment has to see that to whom they made fat by pumping billion dollars ,now are they not deceiving the American system.And crush that trend if is there.And in my opinion American should watch on the plight of American capital in the world and there final location.
Inspite of all these i donot see any rival economic system in presnt of American system of capitalism.Red already lost the ground once collapsed.Islamic system of economy is in womb and need more than century to deliver the American system of economy miniature.
The only point i will say that American now turn their attention towards the reconstruction of Another America capable to go for this century by saying good bye to military adventure of Mr Bush on non productive cause.A man is powerfull when home is in order.A man is weak when his home is in disorder.
At last we assume that the ongoing finacial crisis is just other depression of 1930s and like a nature of capitalism.Hope that it will pass swiftly.otherwise we donot have another system to take over American.And failure of American system will be an invitation to destruction,nothing but destruction.And now one can accept this whatever the ideological conflict we have.

September 22, 2008 4:55 AM | Report Offensive Comments

moham :

The American style of capitalism is not just an economic system but around this develope the style of life,ranging from the cultire to religion.If we see just a recess in term of collapse then we have to also see the end of the American system of living and death of modern civilization.
There are certain drawbacks in AMerican style of capitalism and needs to remove
1 The system of encouragemnet of the monopoly nature economic institution.The art of domination of market with single unit is not good one when man is a social enemy.This monopoly led the crubling of the sound economic system.What America is paying right now is just the mistak of the past that it allowed the monster to be biggest monster.
2 American capitalism encourage the system of democratic system of goverment to promote the interest .Alwys take the reaction of people in positive and not hostile to the capitalistic culture.while in reality the American system faced more autocratic rule to sustain the American system of capitalism.with the globalisation and coming in direct contact of different current of economic system led the American to this financial position.
3 The American Heroism of pre ipretive stike to other nation to boost the nation economy in the term of contarct and the defence didnot work as planned by the tycoon of the political pandit of the Neocon.The emerging of the alternative centres of business and finance led the people to divert from the American block.The decision of the Latin American country to say good bye to American dollar and the Iranian and red revolution around the world which created anti American establishment was another cause for the sharp fall of the American hope.
4 American life style and culture now getting in touch with other cultural centre which influencing the life pattern of American.The changing pattern of American which gaurantee the capitalism system of oxygen ,now moving against the capitalism mode of production and consumption.The concentration of wealth in few hands is another matter for American capitalism.
5 The conspiracy of well established economic players against the well established american capitalsim should be keep in mind.These players want to craet another centre of economic powers.As they did in past from changing of economic centre of past from LONDON to NEWYORK.The American establsihment has to see that to whom they made fat by pumping billion dollars ,now are they not deceiving the American system.And crush that trend if is there.And in my opinion American should watch on the plight of American capital in the world and there final location.
Inspite of all these i donot see any rival economic system in presnt of American system of capitalism.Red already lost the ground once collapsed.Islamic system of economy is in womb and need more than century to deliver the American system of economy miniature.
The only point i will say that American now turn their attention towards the reconstruction of Another America capable to go for this century by saying good bye to military adventure of Mr Bush on non productive cause.A man is powerfull when home is in order.A man is weak when his home is in disorder.
At last we assume that the ongoing finacial crisis is just other depression of 1930s and like a nature of capitalism.Hope that it will pass swiftly.otherwise we donot have another system to take over American.And failure of American system will be an invitation to destruction,nothing but destruction.And now one can accept this whatever the ideological conflict we have.

Stephen Karakashian :

There is great irony in the simultaneity of this economic crisis in United States and another in South Africa. The South African crisis is ostensibly political, but both are actually economic.

In South Africa, President Thabo Mbeki is being forced from office before the expiration of his term. There are those who will say that this humiliation results from a personal rivalry with his likely successor, Jacob Zuma. The rivalry is real and no doubt played a part. However, the fundamental reason is because Mbeki aligned South Africa's economic policies with American-style free-market capitalism. It is the failure of his policies that have opened the door for Zuma, a charismatic but undoubtedly corrupt character.

While there have been successes, particularly in providing housing, clean water, and electricity, progress has been very slow and uneven, and the government has seemed tone deaf to the plight of the poor. The income gap between whites and the majority of black South Africans has never been greater; unemployment has actually risen under the new government; a new black elite grows ever more ostentatious; and schools are riddled with violence and fail to educate. The mismanagement of public hospitals, on which most black South Africans depend, is perhaps the most egregious scandal.

People are angry! When I was last in South Africa a year ago, freeways leading into Johannesburg were not infrequently closed at morning rush hour by burning tires set alight by angry mobs protesting poor service delivery.

The lack of progress in providing essential services, not to mention redistributing wealth, results directly from the ANC government's adoption of neoliberal macroeconomic policies under Mbeki's leadership. There has been a decades-long struggle for the economic soul of the ANC within the tripartite alliance of the ANC, COSATU (the national labor union) and the SACP (the Communist Party). Mbeki won that struggle in the early 1990s, and he and the country are now paying the price for the failure of trickle-down economics.

So the question before us now is whether the current American economic crisis will finally sound the death knell of unfettered free market policies that have caused so much misery around the world and, yes, here in the United States. One can hope!

baron :

It's the end of global style capitalism. The American style capitalism is an American Revolution so it keeps going around. The wheel of fortune never stops here. It just keeps going and going. That's why your paycheck will be good to go to the bank the next time around.

D.H. :

The real problem is that the managers of banks, investment banks and other financial entities were no BANKERS. They were just individuals working in financial institutions. Consequently, the present crisis is the result of their greed to make a fast and easy buck.
How did it all happen. These managers were paid exhorbitant salaries, received exhorbitant bonuses. Normally, they were supposed to manage their financial institutions capital in the sound and prudent way of real - inexistant anymore - bankers. Instead, they multiplied the derivatives, being new and complex instruments, to sell to their clients as sound and profitable investments.
Their last invention, resulted with the subprime mortgages scandal, which resulted in the acute crisis we have been living lately. They sold bonds guaranteed by a package of mortgages, which included good, medium and insolvent mortgages. These new 'guaranteed bonds' were sold with a high yield, and all the financial institutions bought them in order to generate high profit, by just having them in their portfolios. To make huge profit, they bought billions of these bonds, representing a leverage of up to about 32 times their captital. The profit was generated by borrowing short term funds at a low rate to finance the long term 'guaranteed bonds' paying high interests. Thus they have proven the fact that they were not bankers, as they have broken the bankers golden rule 'NEVER FINANCE LONG TERM DEBTS WITH SHORT TERM MONEY', as it is a deadly approach. Another 'scandal' was the fact these guaranteed bonds received AAA ratings from the respectable rating institutions. In spite of their bad management, a lot of the managers kept their jobs and others left with very fat cheques.
Normally, the failing institutions - as it was normal to assume in a liberal capitalistic system - should have been left to their sad fate. However, the magnitude of the problem could have completely destroyed all the capital markets of the world with enormous side consequences. Thus, the expensive intervention with taxpayers money to guarantee the mistakes of the bad management of these financial institutions.
It is strange that the Fed, the SEC and the Treasury were not able to detect in time the excesses which were taking place.

Now, we have to hope that people who will have the hard task to manage this very difficult situation, will have the right sense and wisdom indispensable in these circumstances.

Anonymous :

The real problem is that the managers of banks, investment banks and other finacial entities were not BANKERS. They were just individuals working in various financial institutions. Consequently, the present crisis is the result of their greed to make a fast and easy buck.
How did it all happen. These managers were paid exhorbitant salaries, received exhorbitant bonuses. Normally, they were supposed to manage their financial institutions' capital in the sound and prudent way of real - inexistant anymore - bankers. Instead, they multiplied the derivatives, being new and complex instruments to sell to their clients as sound and profitable investments.
Their last invention, resulted with the subprime mortgages scandal, which resulted in the acute crisis we have been living lately. They sold bonds guaranteed by a package of mortgages, which included good, medium and insolvent mortgages. This new 'guaranteed bonds' were sold with a high yield, and all the financial institutions bought them in order to generate high profit, by just having them in their portfolios. To make huge profit, they bought billions of these bonds, representing a leverage of up to about 32 times their captital. The profit was generated by borrowing short term funds at a low rate to finance the long term 'guaranteed bonds'paying hig interests. Thus they have proven the fact that they were not bankers, as they have broken the bankers golden rule 'NEVER FINANCE LONG TERM DEBTS WITH SHORT TERM MONEY'. Another 'scandal' was the fact that these guaranteed bonds received AAA ratings from the respectable rating institutions. In spite of their bad management, a lot of the managers kept their jobs and others left with very fat cheques.
Normally, the failing institutions - as it was normal to assume in a liberal capitalistic system - should have been left to their sad fate. However, the magnitude of the problem could have completely destroyed all the capital markets of the world with enormous side consequences. Thus, the expensive intervention of taxpayers money to guarantee the mistakes of the bad management of these financial institutions.
It is strange that the Fed, the SEC and the Treasury were not able to detect in time the excesses which were taking place.

Now, we have to hope that some sense and wisdom will inhabit the people who will have the hard task to manage the future of the financial world.

Bodo in AZ :

No, we no longer have capitalism. We are going to be rescued! Actually, the estimable folks who gave us the current financial crisis are going to be rescued. And it will only cost us (that's "us", indeed) $700 billion; $2000 for every man, woman and child. Here are my thoughts on it:
First of all, the money has not disappeared. Someone has it; -- the guys who sold at the top of the bubble. I suppose that if we wait long enough (though many cannot afford that), it will percolate back into the economy. But why wait? Tax the dickens out of the bastards! Any legislator with guts would do that; -- but don't hold your breath...
Secondly, the argument is that the government will buy the bad securities now, and we'll all get the money back when the stock has risen sufficiently again. If you believe that, i will sell you the Brooklyn Bridge. If the government ever recovers the investment, it wll be spent, most likely on pork barrel projects. Remember, you heard it here first.

pippi :

We have just about socialized all of our nation's debt, so as far as I can see, we are no longer a capitalist country. The best idea I heard this week came from Naomi Klein, who suggested facetiously on Bill Maher's show that we might as well pull a Hugo Chavez and socialize our profit centers like Exxon/Mobil. America's social programs have all completely failed under the Bush regime - our public el-hi education is similar to that of a third world country, we have no affordable health care system or any kind of reform on the horizon, we are unable to provide even rudimentary services for our citizens, our infrastructure is crumbling. The wealthy have become wealthier and are buying up bargains while the middle class has disappeared. Dick Cheney, Donald Rumsfeld, the Bush family and all of its cronies have created the new oil aristrocracy while for the rest of us, our children have to fight their unnecessary wars. This America bears only a slight resemblance to the America of the 1950s and 1960s. The irresponsibility and recklessness of Bush's theological regime and holy war mentality has caused the already-fragile American system of capitalism to become a complete failure. Those of us in the middle class who worked hard and saved all of our lives have lost all or half of our savings between investments and our homes. Now we are going to be expected to pay for the losses brought on by the extremely wealthy corporate interests who have spent the last eight years gambling with our money and with our children's lives. I dread the sound of the opening bell tomorrow.

spiderman2 :

PERMANENTLY BANNING INSANITY (a guideline to who should become president)

From the time humanity started, there never was a practice that a person can sell what he DOESN'T OWN. It is only logical that NOBODY can sell a house or any property which he doesn't own. And yet, this kind of practice is LEGALLY done in the stock market thru SHORT SELLING. That is the term they use for the "PUT OPTION" in stock trading. YES, it is legal to sell stocks which you don't own in the stock market thru short selling. What happens is the one engaging in short selling gets a profit from the loss of another. The lower the stocks plunge the richer they become. What is worse is if they make creative ways to pull it down. That is how insane the stock market has become. GREED and INSANITY has become their god.

Finally, upon seeing that there's a possiblity that all banks around the world could collapse because of this practice, they've made a decision to TEMPORARILY BAN SHORT SELLING. It was not a galant act on their part but only a REACTION TO SURVIVE. They are only TEMPORARILY STOPPING THEIR GREED TO SURVIVE.

It was NOT the planned government BAILOUT which saved the market although it could help ease the money crunch. I hope the bailout would bring down mortgage interest rates so homeowners would also benefit. With the government now owning Fannie and Freddie and the planned absorption of foreclosed properties thru a massive 700 billion dollar bailout, the government has NOW the POWER to REDUCE them.

The point is, let SANITY PREVAIL. The government should now focus on that ONE GOAL to bring DOWN mortgage interest rates and MOST IMPORTANTLY make SHORT SELLING BE BANNED PERMANENTLY.

The PRESURE TO BRING IT BACK coming from the SHARKS would be great. I think Bush would buckle to the pressure. What we need is a next president who can STAND FOR WHAT IS RIGHT. The presidential candidate who can promise to abolish SHORT SELLING ( profiting from the LOSS of others) should be the NEXT President.

Seth_bing :

BobL-VA Wrote:

American captialism has always been and will continue to be a work in progress. Our financial system today has little resemblance to 100 years ago.
...
To the doom and gloomers who feel this will be the end of American capitalism all I can say is get a life and look at history.
-------

Back then on February 27, 2001 when the 'Day Trading' rule was enacted and enforced on September 28, 2001, one of the reasons put forward was to reduce the players in the Wall Street game thus reducing the probabilty of traders ganging up on the system by "Shorting" stocks at will. Another reason put foward was terrorists could use "shorting" to paralyze the system thus degrading investors invesment value.

The interesting part to note is that financial markets have been gamed over the past 8 years by authorities who are supposed to be oversears and regulators of the financial markets to protect its investors investment.

Christopher Cox has managed to wipe out trillion dollars worth of wall street investments in a year by enacting one sweeping "Short Sale" rule change on July 6, 2007, that all terrorists put together may not achieve in decades.

BobL-VA :

American captialism has always been and will continue to be a work in progress. Our financial system today has little resemblance to 100 years ago.

In this progression there are good times as well as bad. We've adjusted and made attempts at smoothing out the system. I know most of this has been done through regulation. I also know that most attempts at de-regulation have led to serious financial issues. (S&L Crisis comes to mind).

This crisis will be weathered as well and we will adapt. That's our history and there is no indication this will be any different.

All we're really witnessing today is the inevitable finger pointing that accompanies a down turn in the economy. We love to blame people and institutions for failures and this crisis is no exception.

To the doom and gloomers who feel this will be the end of American capitalism all I can say is get a life and look at history. To the people who feel our economy is fundamentally sound I have the exact same advice. We will fix this problem and smooth out our economy again only to experience another down turn 10-20 years down the road. How do I know this? Simple, show me a time when this wasn't the case.

SETH_BING :

The NASD amendments to Rule 2520 become effective on September 28, 2001, while the NYSE amendments to Rule 431, which are substantially similar, information memo from NYSE became effective August 27, 2001.
-----

September 28, 2001

As I sat down in my chair, thinking about the sweeping restrictions imposed by this change, a feeling of helpness starts to sweep over me.

I am at a loss of words to express the hideous motives of the financial world's insiders. I can sum up my feelings that day of september in one word - betrayal.

I woke up from my thoughts to conclude that the financial investment environment as we know it had come to an end.

On that day of gloom, I could not have imagined in my gloomiest thoughts that I would live to witness a financial structure breakdown of Wall Street that may eventually swallow Goldman Sachs.

SETH_BING :

When you talk about morals read the following, and you cannot help but come to conclusion that Bush Administration has gone about systematically dismatling the financial structure of Wall Street.

--------
The SEC has voted to remove the “short sale tick test”, Rule 17 CFR 240.10a-1 for all equity securities. Effective Friday, July 6, traders will be able to short all securities on an up, down, or zero tick.
--------

I really feel sorry for those people on Wall Street who cannot stop blaming Alan Greenspan. No one even mention the name of Christopher Cox, who single handedly wiped out trillions of dollars of wealth on Wall Street.

Read transcript of SEC Chairman's full speech and draw your own conclusion

*****
Speech by SEC Chairman:
Opening Statement on Eliminating the Short Sale 'Tick Test'
by
Chairman Christopher Cox
U.S. Securities and Exchange Commission
Washington, D.C.
December 4, 2006
The final item on our agenda today is elimination of the short sale price test - colloquially known as the "tick test."

Historically, the Commission and self-regulatory organizations have sought to balance the competing views of short selling -- whether it is primarily good or bad -- by permitting short sales in advancing markets, and preventing short sales at successively lower prices.

The Commission first imposed restrictions on the execution prices of short sales almost seventy years ago, when we adopted the "tick test" of Rule 10a-1 in 1938. The tick test permits short sales only at a price above the last sale price, or alternatively, at the last sale price -- if that is higher than the previous price.

The core provisions of Rule 10a-1 have remained virtually unchanged since the 1930s. But a great deal else has changed in the marketplace over that very long time. Over the years, decimalization and changes in trading strategies have undermined the effectiveness of the price test. And at the same time, increased transparency and better means of surveillance appear to have lessened the need for the price test.

When the Commission adopted Regulation SHO in 2004, there were concerns expressed at that time regarding the effectiveness of the price test. As a result, in June 2004 the Commission authorized a pilot program to test the premises of the short sale price restrictions.

The Regulation SHO pilot program began in May 2005. It suspended all short sale price tests for a select group of over 1,000 equity securities.

Through the pilot program, we sought to understand the effect of this particular regulation on our markets. The evidence gathered from the pilot suggests little empirical justification for maintaining short sale price test restrictions, at least for the exchange-traded stocks in the pilot.

In light of the results of the pilot program and the market developments that have occurred in the securities industry since Rule 10a-1 was first adopted, we will today consider proposals to remove the tick test of Rule 10a-1, and to prohibit the SROs from maintaining their existing price tests or adopting any new ones. Along with the proposed repeal of the tick test, we will also consider a proposal to make conforming changes to the order-marking requirements of Regulation SHO.

Although the proposed amendments are aimed at removing obsolete price restrictions on short selling, we believe that other controls are still needed to address abuses connected with short selling. That belief is borne out by our action today to revise Rule 105, and our proposal to eliminate the grandfathering and options market maker exceptions under Regulation SHO.

Once these proposals are published, the public and industry will have the opportunity to comment on both the repeal of the short sale tick test, and the changes to Rule 105. During that comment process, we will also welcome any alternative approaches. And we will consider all of the comments and any accompanying data that we receive in determining whether modifications to the proposals are necessary.

I would like to thank the Division of Market Regulation -- in particular Erik Sirri, Bob Colby, James Brigagliano, Josephine Tao, Elizabeth Sandoe, Victoria Crane, and Marlon Paz -- for their commendable work on both proposals. I'd also like to thank their colleagues in the Division of Market Regulation; in the offices of the General Counsel, Economic Analysis, and Compliance, Inspections and Examinations, and in the Divisions of Enforcement, Corporation Finance, and Investment Management, for their contributions and collaborative efforts.

I will now turn it back over to Erik Sirri, to hear a more detailed description of the proposal.

http://www.sec.gov/news/speech/2006/spch120406ccc-10a.htm
*****

SETH_BING :

The NASD amendments to Rule 2520 become effective on September 28, 2001, while the NYSE amendments to Rule 431, which are substantially similar, information memo from NYSE became effective August 27, 2001.
-----

September 28, 2001

As I sat down in my chair, thinking about the sweeping restrictions inposed by this change, a feeling of helpness starts to sweep over me.

I am at a loss of words to express the hideous motives of the financial world's insiders. I can sum up my feelings that day of september in one word - betrayal.

I woke up from my thoughts to conclude that the financial investment environment as we know it had come to an end.

On that day of gloom, I could not have imagined in my gloomiest thoughts that I would live to witness a financial structure breakdown of Wall Street that may eventually swallow Goldman Sachs.

ROSSANDERSON :

A $700 billion financial rescue plan was sent to Congress Saturday, and Democrats moved quickly to propose changes—including possible help for homeowners and a salary cap for CEOs.
---------
Even President George W. Bush has a cap on his income so why should CEOs be exempt.

I am a bit amused by Wall Street peddlers who can only live by rule of the Queen Elizabeth Alexandra Mary - UK did this so we have to do this. UK fu*ks the wrong way, we should fuc*k the wrong way too. More women in UK use vibrators than washing machine, why should US be left behind?

Will these Wall Street sissies ever grow to cut their Umbilical Chords from their Mother Elizabeth Alexandra Mary.

RossAnderson :

A $700 billion financial rescue plan was sent to Congress Saturday, and Democrats moved quickly to propose changes—including possible help for homeowners and a salary cap for CEOs.
---------
Even President George W. Bush has a cap on his income so why should CEOs be exempt.

I am a bit amused by Wall Street peddlers who can only live by rule of the Queen Elizabeth Alexandra Mary - UK did this so we have to do this. UK fu*ks the wrong way, we should fuc*k the wrong too. More women in UK use vibrators than washing machine, why should US be left behind?

Will these Wall Street sissies ever grow to cut their Umbilical Chords from their Mother Elizabeth Alexandra Mary.

Anonymous :

A $700 billion financial rescue plan was sent to Congress Saturday, and Democrats moved quickly to propose changes—including possible help for homeowners and a salary cap for CEOs.
----------
I love the part about cap for CEOs. Thank you democrats, atleast you are doing some work.

BeerBellyBuddah :

How could a domestic economic system that perennially witnesses an increase in the gap between rich and poor, and repeatedly fails to advance the lot of the middle class possibly be seen as a model for the rest of the world?

Better it should be viewed as a cautionary tale of what happens when noble democratic ideals become subordinated to the narrow expediency associated with speculation and short-term capital gains.

Nitin Joshi :

A economic system that privatises gains but socialises losses is definitely on weak wicket,the argument that this public distribution of losses is in larger public interests is definitely questionable and the pains that will unfold for over the next few months or years will be the real test for American Capitalism.Gorbachev' perstroika initiated the demise of communism, this crisis will definitely make American model for capitalism walk along the same road.

Serr Grandi :

I think the question has multiple answers.

For some people who have been exposed to other systems the American version was never a choice.

For some people who have never been exposed to the American system and they have no other choice than the American version of capitalism, it might still be a choice.

But one thing is sure, for those 80% at the bottom line of the society, especially in the US but also worldwide, who have to work long hours to make the ends meet, the American capitalism as they knew it prior to this crisis is no longer a choice.

The reason is very simple, in the new version of the Amercian capitalim the gains are privatized (which is normal) BUT the losses are nationalized (which is new).

JOAODAROCHA :

PRESIDENTE BUSH TENTA EXPLICAR O INEXPLICÁVEL

Depois de envolver + de USD 800 bilhões de recursos do tesouro americano ( do povo) , para salvar os especuladores do capital volátil, quem de fato esperaria do presidente Bush outra explicaçao ?

A fala do presidente, para iludir os cidadãos, não é fácil atingir os objetivos. E a minoria de privilegiados devem estar comemorando com champagne Cristal ou uma mais cara ainda e não falsificada, como falsificaram os dados do mercado financeiro mundial.

A crise americana vai ficar na história e por que :

- Pagando jrs, negativos para uma dívida de USD 9,5 trilhão, o país está economizando em encargos financeiros anuais mais de USD 400 bilhões.

- A especulação financeira, com base no territorio americano, volta , a partir de agora, bem capitalizada, a monitorar e agredir mercados como o brasileiro , para usufruir de ganhos bem fáceis, em titulos do governo, em ações e comodities.

Tem exemplo~melhor para incentivar o crime financeiro, do que a decisão americana ? Os bobos estão no mundo todo.
----------------------------------------------------------------
A DECISÃO AMERICANA, DE ONTEM, CRIANDO UM FUNDO,
PARA A GARANTIA DOS GANHOS DE ESPECULADORES, DEVE
ACOMODAR ALGUNS BILHÕES EM TÍTULOS POBRES DE ORIGEM DUVIDOSA.

Os americanos resolveram acabar definitivamente com a crise, porque já conseguiram se beneficiar de tudo o que era possível extrair dela.Mas os ganhos será de uma minoria e as perdas da grande maioria de seus cidadãos.

A decisão de ontem à noite, criando um fundo para acomodar os títulos pobres, acabou de sacramentar a valorização do capital especulativo e improdutivo, em detrimento dos interesses da sociedade.

Os Bancos Centrais mostraram, mais uma vez, que realmente continuarão a serviço dos cartéis especuladores, que voltaram com força redobrada para cometerem os mesmos abusos e erros, pq estão imunes à penalidades. Cuidado, BRASIL.

Enquanto isso, mais de 900 milhões de pessoas estão passando fome no mundo inteiro e mais 4 bilhões trabalhando e pagando impostos para garantir as fortunas dos mais ricos.

E o mundo vai sair dessa crise bem fabricada e administrada pelo sistema financeiro americano, com OS RICOS MAIS RICOS E OS POBRES + POBRES.

A auto-regulamentação do sistema financeiro deverá continuar intocável. Voltou o excesso de liquidez para as especulações …
E os Bancos Centrais, mantidos pelo povo, mostraram que realmente estão a serviço da agiotagem mundial.
A maracutaia dos títulos podres, que serão jogados nesse Fundo, deve parir novos bilionários no mundo da fantasia.
----------------------------------------------------------------
TESOURO AMERICANO ASSUME ATIVOS INCOBRAVÉIS, MAS PASSIVOS COBRAVÉIS.

Telvez essse seja o melhor negócio do século XXI para os especuladores. Jogaram nos cassinos sabendo antecipadamente que iriam ganhar às custas de sacrifícios de milhões de pessoas. Ñ existe loteria melhor no planeta.

E como serão analisados os Bancos Centrais e as empresas de avaliação de Riscos que mostraram que estão a serviço do sistema financeiro e não a serviço da sociedade para a sua fiscalização e monitoramento ?.

E os bilhões e bilhões de USD ganhos desonestamente, o governo oficializou como “honestos” e, a partir de hoje, com auto regulamentação intocável, novos bilionários continuarão surgindo do dia para a noite na especulação financeira.

O impressionante é que a sociedade civil realmente é desorganizada e sempre paga a conta dos outros, sem cobrar ou exigir explicação.

A euforia agora chegou com o reinicio da manipulação da cotação do dólar, das bolsas de valores e de mercadorias e das taxas referenciais de juros, em paises como o Brasil. Crime é para ladrao d galinha ou d prato d comida
------------------------------------------------------------------
A certeza que ficou é a de que os bancos centrais e as empresas de avaliações de riscos, se uniram para salvar os ganhos e a atuação tranquila do capital volátil.

Essa mesma agilidade que tiveram para salvar ganhos dos especuladores, tambem deveria existir para limitar os ágios para as taxs referenciais de jrs; para agilizar o monitoramento correto do sistema financeiro; para fiscalizar as comodities cartelizadas e, principalmente, aumentar a produção mundial de grãos, para que mais de 900 milhões de pessoas não continuem vivendo em absoluto estado de miséria.

Resumindo essa novela de crise fabricada e administrada pelos americanos, o Estado está se mostrando cada vez mais impotente para defender os interesses do cidadão (ã).

E qual é a diferença entre comunismo social e capitalismo democrático ?.
Tem mais, quais as empresas brasileiras que reduziram a produção em função da crise americana ?

Quanto o BC brasileiro ainda deve do Proer para os controladores de Bancos Falidos ? !!!

roboturkey :

Now that we are trying Soviet-style central economic "management", why not
Tax The Rich.

A :

My naive fellow Americans,
We the people are getting $%$#up. The rich are making the decisions to save their like (survival of the fittest? just because the have the means to make changes) We the people are not part of that group. We are not in that board room. So wait to see how else we are going to get $%^&up. We should have let the banks fail. They have not learned their lesson. Just for meeting of the crooks overnight to discuss possible solutions, the speculators have made the markets go up? On what? Just speculations!!!
Unless the revolution of Dr. Ron Paul gets established say good bye to America.

These crooks do not say it but THEY ARE IN LOVE WITH THE MODEL RUN BY CHINA!!! (slavery? But hush, that is not something to talk about, as long as these crooks get rich!!!)

Peter Roach :

No, this is not the death of American Capitalism.
However, the illegal behaviors of politicians from Watergate onward, have weakened America.
The accounting profession from the 1970s onward began to do audits to prove the client correct, rather than objective examination to determine conformity to accounting and reporting requirments. Over time C.P.A.s and corporate financial accounts and internal auditors become senior documentation clerk rather than accountants and auditors. When cat is away, the mice play. Public accounting reports simply became part of the marketing department.
From all this, the financial system is coming apart.
First, from the politicians on down, the rule of law must enforced,
second, public accountants should be paid by stock exchanges, underwriters, and other public agencies rather then individual clients - there must a revolving door policy as well,
third, from two clean up the financial statements of public corporations
finally, some of accounting opinions of F A S B need to be cleaned up, particularly oil and gas accounting, and pension accounting. There are loopholes that defy common sense such as amortizing to income the excess of pension assets over projected benefit obligations for example.
If we have the MORAL will, the prophesy of DAS CAPITAL will NOT be fulfilled.

Ohio :

From day one of GWB's administration, he has had the attitude that he is "in charge" (i.e. ruler of us all). Will these people wake up and realize that a President is to lead, not rule. That is why we also have Congress, I admit they have been totally disappointing. The big guys with money get theirs before they slink out the door and never suffer a minute like the rest of us who have lost our retirement savings in all this whoopla. If the big companies can go under, then the people who have been given loans only to suffer ballooning interest rates should be cut a break. What about people who have lost homes in foreclosure and have nothing to fall back on to begin again. It seems this is another thing to make people in this society one or the other, either rich or poverty, middle class, lower middle class are done for. We need a big clean up in Washington, throw them all out and start over, maybe we can get a President and Congress who can put the people who are paying them first.

Anju Chandel :

There is too much of generalization here.

The current problem got precipitated primarily due to absence of required regulations and, therefore, unfettered functioning of the financial markets in America.

BRUSSELSSPROUT :

I wholeheartedly agree with Rob's comments (earlier) that, hopefully, this Wall Street crisis will somehow move us away from Reaganomics/supply-side-trickle capitalism.

But it's not a given!

Clearly, the "de-regulation" begun with Reagan and Sen. Phil Gramm [yes, the ex-McCain adviser who has called us whiners, etc., and who, while in office, started dismantling Glass-Steagall, etc.] was a major factor in allowing the market to get so OUT OF CONTROL that we are now paying with this crisis.

Clearly, then, the same soundrels who CAUSED the problem should not, cannot, be allowed to be in charge of the CLEAN-UP. Puhleeze.

It is scandalous that it is mostly Republicans who are going onto CNBC with their crocodile tears saying, "Who knew? Who knew? . . . . We need government help." Good golly, even I knewthere was a problem a long time ago (how hard is it to see a problem when you LET people buy a house with NO money down?!). . . .

Now, today, the GOP's friends -- the executives of Fannie, Freddie, AIG, etc. -- are blaming the crisis on, get this, lack of "governmental" oversight. What hypocrisy!

Well, yes, we DO need better governmental oversight, but it's the Democrats' "turn," since the Republicans have demonstrated their INABILITY to do the job --under 8years/6years in control of gov/White House control.

Moreover, Sen. Obama's proposed plans -- business/economic/etc. -- seem to have broader approval throughout the business community. After all, we DO need the help of the business community to succeed.

(Since McCain thinks the economy is "fundamentally strong," well -- I don't even want to go there!)

Plus, importantly, I think that Wall Streethas indicated that it would be willing to work with a President Obama -- even the wizards on Wall Street must worry about killing the goose that keeps laying their golden eggs.

So, in conclusion:

YES -- I HOPE that the crisis will help move the market AWAY from the current "American" model. This crisis shows how unsustainable the current model is for the welfare (both economic and humanitarian) of the entire country.

The optimal new model would take the best from the US model and fuse it with elements from other systems -- to make a sustainable, conscientious capitalism model that we can live with and productively/happily work with, too!

Yousuf Hashmi :

Capitalism was never the role model for the whole world neither it is possible that it will achieve this position.

The nations preferred capitalism with socialism because it was a better option.However it need to be tuned as and when local environment demands.

market economy will grow and continue to remain basic fundamental instrument to manage the money. The basic logic is that there is no other strong competitor available.

When President bush says that US economic fundamentals are strong he is correct. US economy in fact is very large and robust.

But once such large economies shakes then like hurricanes they cause strong waves to far away shores.

US economy sustained the war in middle east for long time, longer than world war -2. Now the impact is visible not only in US but whole world now shaking.

US think tanks must realize that when they talk about attack on Iran then they shatter the confidence of business community. they become an instrument in raising the energy prices and slow down the world economies. The people lose confidence in future stability and then the money markets start shrinking.

Once you over dose the fear of danger from all quarters then the economy will slow down and that is what is happening.

Market just need the news of a better and peaceful tomorrow. Once they are confident then you will see them back in business.


Bert Caris :

It is not about the end of the "American style" neoclassical (150 years old philosophy), but rather about the role of the government. A system which fundamentally operates from the assumption of a privatisation (free-market)of the profits, but the nationalising (government regulation)of the losses is as such fundamentally wrong (and hypocritical. When the government plays a role in fessing up the mess, it should also have a say in how to play the free market in a fair and balanced way. The idea of a government who's only responsibility is to provide for security for the citizens as to minimising the risks of theft and violence, is a very, very old idea. Providing security to the citizens has a greater implication, as we can see recently. As far as this is concerned it has not been a model for the world for a long time.

Prof.Carlos Vieira :

US is becoming paternalistic.
No longer protestant values but something more sentimentalistic.
Would it be a more Latin than anglo-saxon approach?
Is Madona better than Faith Hill?
Is it time to start a new witch-hunting process?
Only time will tell...!
Carlos Vieira from Rio de Janeiro

crich520@aol.com :

I have read the listed comments and I agree with the premise that our capitalist system is slowly failing, Greed and oversight, some reasons as well as the supply side economics in the Reagan era.
12 years of giving tax breaks to large corporations has contributed to this and then Wall Street speculation. Sooner or later it had to have a consequence.
It is sad to admit that we many lose our place in history as a great power and leader. People may believe we were great because of our military but I think it has been because of our economy.
We have been slowly giving our treasure for oil making the Middle East rich while trying to support a war that is depleting our treasury.
Add to this trying to hold up major corporations. I am sad for our country.
The question is can we save capitalism and recover from this mess? Does anyone have ideas to get us back on track or is it too far gone?
Do we have some insight into whether OBama or Mccain understands what is happening and how to start to fix it?

ghostcommander :

Autocratic capitalism is almost dead, slain by it's own unregulated hand.

Rob :

Well, this better be the end of "Reagan" capitalism, the one that preaches a trickle-down economy; it clearly doesn't work, hasn't worked, and will never work. It doesn't take a business degree to know that the only way a country goes from so-so to great is to build a prosperous middle class, something which Republicans, for all their posturing, are loath to do. Now that this Republican experiment has come crashing down to earth, it's time to go back to the FDR model of capitalism: a stronger, more pro-active federal government; upper-classes that pay their fair share of taxes; and job security and opportunities for advancement for the middle-class. Sadly, the party of FDR doesn't seem to be up to the task...what are we to do?

H William Batt :

The American economy, as are many of those in the rest of the world, is trapped by the neoclassical paradigm that has increasingly been shown to be both false and harmful. Several candidates are growing to take its place -- my preference is a renewed interest in the ideas of Henry George, now testable by available computer power. There are many sites; one favorite of mine is www.wealthandwant.com. The emerging school of ecological economics shows great promise in its ability to address issues which neoclassical thought ignores.

John :

The existence of the crisis itself does not signal the end of capitalism but the federal response to the crisis probably does. Not four days ago the government (Paulison et al) was speaking of the moral hazard of rescuing these companies. Now, with RTC II on the horizon, it seems all that talk was fluff. Without the freedom to fail there is no capitalism. If they do this they might as well nationalize every single company and we can all can stop pretending that we are anything other than a Socialist State.

david wayne osedach :

American style capitalism is not dead but it is dying. Look for China to be the Global economic leader in 10 years.

Pete :

The death of American Capitalism, PLEASE!!! The problem with the system is not with traditional American Capitalism but what has manifested itself to be. American Capitalism is about hope but rules, laws and barriers for small and medium size business have been put in place to weaken this fundamental area of our economy. A sound SMB market could have balanced big business' mistakes. We need to go back to fundamental programs that truly build an efficient market place for the SMB. The SMB was a truly remarkable American fabric that could quickly change it's resources to meet current demands. Big business truly cannot and will not change their habits so it is up to the American people to start looking for officials that support changes that will enhance SMB not just the big guys. The first source of change should be the tax laws and filings that the SMB has to go through every month/quarter and year. The resources wasted on this is tremendous. The large businesses do not need tax break it is the SMB that need these breaks.

I ask one question. Who is the biggest employer in the US? The SMB are the largest employers cumulatively. I will not even get into the cultural scarring that our law makers have created in destroying this market nor will I start to discuss the family farm and it's demise.

swlewis :

greed and incompetence are timeless and know no borders - there will always be capitalism as a way to organize and efficiently distribute capital - but it will also always suffer from excess.

Citizen of the post-American world :

Succinctly, only a few points:

1. Capitalism never was a model, only an integral part (the economic one) of the old, yet relatively recent, Western world order.

2. In modern times, capitalism has been at the source of colonialism, then imperialism, through which it developed and spread worldwide.

3. Ever since the U.S. replaced (Great) Britain as the world leading imperialist nation, American capitalism has become the latest, most recent cloned version of the beast.

4. Far from having been adopted as a model worldwide, capitalism (including its American clone) had to be and was, quite generally, imposed most brutally, upon other nations, by the leading colonialist and imperialist nations of the day, at the cost of millions upon millions of victims.

5. At the beginning of the XXth century, revolutionaries and reformers debated and documented, ad nauseam, whether a viable alternative to capitalism a) could best see the light of day alongside and separate from capitalism, or b) had to be developed through capitalism itself. Russia (then the USSR) chose route a and failed; but now that the growth of Western capitalism has made cheap labour, together with the "conquest" of new, gigantic markets, a more pressing necessity, now that imperialism has been renamed "globalization" (by no means a humanitarian endeavour...), communist China can be seen, on route b, developing at an unprecedented pace in the history of mankind.

6. We are therefore witnessing the painful birth of a new world order, post-American, indeed post-Western, characterized by an "irresistible shift of power to the East" (Kishore Mahbubani). The current severe financial crisis originating in the U.S., the substantial loss of American credibility, prestige and influence in the world, following disastrous, illegitimate military adventures, can only accentuate and accelerate that shift, away from U.S. hegemony.

7. There is still a long way to go. Geopolitical earthquakes generally need a long time to take effect, which is a good thing. After all, the West's decline ought to be "managed" carefully and wisely, so as to "prevent the USA from declining too quickly?"(Wang Yiwei)

8. One more reason why it is essential the rising rest be perceived subscribing wholeheartedly to that so-called win-win philosophy. Those who, under the new world order, will ultimately prevail, must indeed be perceived as true "win-winners".

9. The current Wall Street débâcle is only an unmistakable sign of things to come: yesterday's "hollow men" cannot even stand on their own two feet anymore. They need to beg for mercy... and social welfare. The day that for all intents and purposes it will be all over, losers will not even know what hit them.

10. T.S. Eliot: "Not in a bang, but a whimper".

The model for the world!

Anonymous :

American capitalism is alive an dkicking.

When businesses like Lehman Brothers, Freddie & Fannie, AIG loose and have to be bailed out by US government, the real loosers are CEOs & their nitwits, the lobbyist whom CEOs hired, and those employees who will be laid off etc.

The customer survives, after a great deal of pain.

The positive effect of this stock market and economic downturn, will be that CEOs & such will have much much reduced pay packages for a while atleast.

The stock market will keep conducting its usual business, may be withh less capital and players around.

The smart money always wins. It is the titwits that groan.

Richard :

Thirty-to-one leveraged investment banks issuing derivatives implicitly guaranteed by the Federal government and paying out profits in massive bonuses, all supported for five years or so by a real estate bubble is -- get this -- NOT synonymous with "American capitalism". The demise of those excesses is, rather, an indication of the ability of the natural selection built into markets to (eventually) cleanse the economy -- what Schumpeter called creative destruction. The primary purpose of a financial system is to professionally invest private savings. Of course, financial intermediation is an important service, but a contraction in the current bloated financial industry is economically sensible and healthy. Unfortunately, because of policy errors, this correction (which is not solely an American one) has generated spillover effects on the entire global economy during the transition to a post-bubble equilibrium. What policymakers need to do going forward is seek means of limiting systemic risk (such as runs on banks) without reliance on massive Federal taxpayer-funded deposit or counterparty insurance. That is the challenge.

Anonymous :

The old guard is falling!! But not because of the death of Capitalism but because of capitalism and the new paradigm of internet trading.

Just as the Print media is passing away so to is the old brokerage concept of Stock Trading.

RIP!!

DANIAL FAROOQ :

U. S has not practiced in a long time free market capitalism. In 1980s S & L crisies was bailed out by tax payers. In recent fianacial crises B & S a few weeks earlier,and now AIG and a few more banks may be bailed out by tax payers . There was never any rescue for small investors who have lost most of their life time savings in 401K in 1987,2001, 2002 and now 2008 due to market temoil. If in the final analyses Feds have to intervene with billions of tax payers funds to bail out and rescue big banks and insurance giants from market failures, this should not be callled capitalism ! It is selected theivery. Why not have a rescue plan for those who have lost their 401K savings because of the wall street and fund managers adventures ? There is no market fairness and no fair accountability. U.S. Congress should look into this mess.

roboturkey :

with an ostensibly dogmatic free-market Republican administration nationalizing pieces of the US economy, I'd say that any "normal" paradigm for the US economy is rapidly evolving from whatever label you might have wanted to pin on it.

"American style capitalism" was clearly a plutocracy. That just crashed. Now we have a vigorously socialistic impulse at work, under the authoritarian control of H. Paulson. We look kind of like Venezuela right now.

The prols are screwed. Wall Street decision makers get a pass and their golden parachutes. THe economy is on auto-search without a rudder.

Roism007 :

American Style of Capitalism in theory is practical.

However, the GOP Midnight Terrorism in 2000 prior to Christmas Recess, slipping in an amendment without debate to deregulate the over sight on Financial Institution got us into this mess that caused the financial markets to go into tail spin is unacceptable not only to the American people but other countries of the world.

If anything, it makes the socialist countries with their red tapes look saner then the free willy financial experiments done by the Bush Administration


Bush Administration mark on the world and America, down the road will be comparable to Hitler. Not only for the million of civilians they have killed or displaced in past 8 years under the guise of war on terror but the financial terrorism that they unleashed on the middle class around the world with their failed economic policies - rising energy cost, food etc

I wonder why the Bush Administration is not crediting India or China for falling oil prices as they were blaming them for the rise in oil prices

What a butt of a joke this adminstration has become and will continue to be the butts of all jokes


MikeB :

There is nothing wrong with traditional American capitalism. What went wrong was a collection of NeoMarxists, fuzzy minded one worlders, got control of Reagan's Party and dressed by their Leninist nonsense in Republican clothing and foisted it off on us. And, they aren't done yet!

Any intelligent observer knows that the real damage from this collapse is due to the failing of huge corporations and firms. Teddy Roosevelt know this. Heck, the Depress of the 1890's was caused by it! It was the primary reason the Sherman Anti-trust Act was passed into law. But, what have we done? We have allowed for mergers and acquisitions, growing ever more enormous, bloated dinosaurs that, when they die, and all corporations fail at some point, take the government down with them. The Fed's response to the current debacle has been to actually encourage even more acquisitions and mergers, even encourage like future enemy foreign acquisitions. All of this is so dangerous, so foolhardy, so utterly insane, that it defies any sort of explanation outside of outright treason. The Bush economic team has done this and has poured close to one trillion dollars into this insanity, actually encouraging it, and it was all done with no Congressional oversight, no input by the public. It was a backroom deal by the NeoMarxist lunatics that are the current crop of fools controlling the GOP. I just bet Jefferson, all of the Founding Fathers, Theodore Roosevelt, along with Ronald Reagan and Barry Goldwater, are spinning in their graves right now.

Writing Frontier :

I don't think by any means this current crisis spells the end of American sytle capitalism or our way of life. I do, however, believe that since 9/11 we are on a course that involves the "Europeaniztion of America." For more on this topic, your readers might be interested in seeing

http://writingfrontier.com/2008/07/27/the-europeanization-of-america/

Chagasman :

American capitalism was hijacked by the greed pigs of the Republican party back in 1982 when Reagan was elected. Ever since then they have been robbing the American people and American businesses blind. The Republicans are the party of reckless irresponsibility and greed, and thanks to them, American capitalism is becoming a dirty word. When the United States is reduced to a third world oligarchy and the poor die in the streets, the Republicans will have finally achieved their goals.

Ellie :

It never was.

Zoltan :

Yes.

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