Free Market Capitalism

Many folks ask me what my political beliefs are. What I mean is that they ususally ask me what political group I side with. Now my friends and family know the answer to this question, but when asked this question, the individual who has inquired usually is waiting for one of two answers: Democrat or Republican.


Again, for the people close to me, they know that this is like walking on thin ice. The notion of each of these political groups make me vomit. In fact, politics in general tends to make me feel this way.

So when asked my political beliefs, my usual answer to them is that I am a free market capitalist. Sometimes I might refer to myself as a libretarian, but the beliefs of true libretarians often associate themselves with free market capitalists. Believe me dear readers, I'm not talking about the Larry Kudlow's of the world who CLAIM that they are free markets capitalists. And that's exactly what I would like to talk about in this post.


Here is a farse statement that we can often catch on the likes of CNBC of FOX news: Because the U.S. economy is a free market capitalist state, we have created the world's greatest and strongest economy.


This discussion of the U.S. economy often sounds like a discussion about the Titanic minus the final chapter of the story.


I hear all to often that the U.S. and its $11 trillion dollar economy may get rumbled every now and then, but this thing is unsinkable. It's just too big. Like I said, the final chapter hasn't been sung, but I KNOW it's coming.


I've completely disregarded the second statement of the above mentioned statement, but what about the notion of American capitalism.


Bill Bonner once said that in TRUE capitalism, consumers and investors get what they deserve, not what they desire.


For the last 6 years Americans have been getting what they wanted, while Easy Al Greenspan silently shifted one liquidity bubble to another. Ladies and gentlemen, this is not free market. When a 'independent' agency such as the Fed can manipulate markets by changing short term interest rates, we get a situations that couldn't be further from capitalism. This is keeping the U.S. economies head above water...that's all.

The insane amount of subsidies and quotas, and anything else to manipulate the market restricts us from being truly a free market economy. Notice its not called 'manipulated market capitalism.' It's because we have a name for that, and its called socialism.

There's no such thing as a bail out in free market economics, similar to the one that we are seeing enacted in the sub-prime market. If this was true capitalism, we wouldn't need a bail out in the first place.

I really could go on and on regarding this subject, but I truly understand that the philisophical side of economics can be, well...boring. Sometimes something just needs to be said on the subject, but there is one notion that needs to be taken from this...

Free market capitalism is always the path for low unemployment, high GDP growth, technilogical advancement and everything else to progress society along. It is not always the easy answer, or in our case, the politically friendly answer in the short term. But politicians can't think, or don't care beyond their next election. It would be awful easy to put all of the blame on them, but it stems from the ignorance of the American consumer.