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By Al Sauastio
I enjoyed Nathan Johnson’s “Economy on the Brink.” I take issue with some of his conclusions, specifically lesson one, which states, ‘The market and free enterprise have failed by a margin over a trillion dollars. Keep in mind the U.S. has a GDP of 14 trillion.’
The real failure has been the breakdown of common sense and rationality. The case of this crisis is two-fold – the rising culture of financial illiteracy coupled with the extreme democratization of credit. Without brain-dead home buyers there would have been nothing for the mortgage companies to exploit. No economic or social system can withstand extreme ignorance and dysfunction. History is replete with examples of extinct societies that couldn’t compete. If capitalism has truly failed, how is it that social security recipients still receive their checks? How is it that retired public servants manage to receive generous pensions at age 55? By the way, these pension funds are heavily invested in the stock market. Someone is obviously making a profit to pay for all this largesse.
Capitalism simply requires greater personal responsibility, sacrifice and common sense. It is a very demanding system. When we fail to meet these demands the consequences are severe. Freedom and democracy requires a population that can learn and perform. Perhaps the author wants to soften the rough edges of capitalism. Let’s not soften our brains in the process.
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