A recent piece in the Vail Daily (Butch Mazzuca, Valley Voices, Sept. 20) extolled the virtues of capitalism. It made for interesting reading, and very few Americans would disagree that capitalism has been and is the engine driving our economy. What the commentary needs to complete the picture, however, are aspects of capitalism mostly not addressed and would have provided a much more balanced treatise. Not mentioned, for instance, was the fact that it was free market capitalism that basically brought about the bank and housing collapse, throwing the economy into a tailspin.
Consider the huge imbalance in wealth — inequality — and the diminished upward mobility. And, and, and ...
So what’s up with inequality — the extreme concentration of wealth by the very few, resulting from largely unfettered free market capitalism? The U.S. ranks higher than all the Western industrialized nations in inequality (Organization for Economic Cooperation and Development). “The gulf between the richest 1 percent and the rest of America is the widest it has been since the Roaring Twenties” (Associated Press). With corporate profits the highest in decades, and worker productivity much increased, has the average Joe been rewarded? Well, no. And average CEO compensation rose 726.7 percent between 1978 and 2011 while pay for average private sector non-supervisory workers rose a startlingly meager 5.7 percent (Economic Policy Institute). The U.S. ranks among the highest in the Western World in terms of the ratio of CEO compensation to average worker. And raising the minimum wage should be a no-brainer. These are the workers who would spend just about all of their income, right now, thus helping supply the demand that business says it needs.
Inequality hurts not only the middle class and poor, but even the very rich. Even the wealthy would do better with a smaller share of a rapidly growing economy than a large share of an economy that’s barely growing. Another problem with the vast accumulation of wealth is the influence it has on politics. Elections can now be bought!
How about the American Dream? We are actually a less mobile society now than a host of other nations, including Canada, France, Germany and most of the Scandinavian countries (Federal Reserve of Chicago).
And how will corporations adjust to a global economy? In part by building facilities abroad ... to the detriment of U.S. workers. Our capitalistic system has endorsed, big time, the acquiring of goods from countries with miserable working conditions.
Goodness, what’s a self-respecting citizen to do in the face of these problems? Well, to start off with, we can embrace well-conceived regulation of the free market. The University of Chicago professor Milton Friedman (now deceased) claimed that “the invisible hand” of the free market will ensure prosperity for all. Conservatives are loath to admit their idol has also said that regulation is OK.
It’s an old conservative talking point to denigrate welfare — the poor are that way because they aren’t willing to work hard. Their belief, “I made it, why can’t they?” is oft-repeated. In truth, there are very few who would not welcome a job opportunity so they would be able to make it on their own. Conservatives also denigrate the food stamp program. Actually, the Center on Budget Control and Policy Priorities reports the food stamp program has an error rate of less than 4 percent, and that includes both over and under payments. Capitalism has been unkind to numbers of our fellow citizens.
Congressman Paul Ryan’s proposed budget (Republicans think it’s a swell thing) would further enrich the multi-millionaires and billionaires (by lowering their taxes!). He would also kill early education programs (Head Start and other kids’ and teens’ programs) so very important for their lives and in a capitalistic country dependent on an educated and prosperous citizenry. A study by the non-partisan Congressional Research Service reported that “higher tax rates on the wealthy are statistically associated with high levels of growth.” The summary: “Rich people’s taxes have little to do with job creation.” Incidentally, some two-thirds of Americans support increasing taxes on the very wealthy.
Regarding Obamacare, a recent study showed that 54 percent of Americans oppose Obamacare. A closer look, however, shows that of those opposed, 16 percent, said that Obamacare was not liberal enough. Thus, 59 percent either support the law or want it to be more liberal. Long the province of private health care insurance companies where bottom line profit is the No. 1 priority, we will see the emergence whereby the health of the populace, not profit, is the No. 1 priority. Mandating coverage (a Republican idea originally) will ensure that almost all Americans have it. Private health insurers are yet providing insurance, with few restrictions and with the health exchanges they will compete for business. That’s capitalism. Often ignored by those opposing Obamacare is a treasured American trait — compassion.
Supporting Obamacare, supporting intelligently crafted and increased regulation of free market capitalism, supporting much-needed (right now) welfare programs without shaming those willing to work hard, supporting increased taxes on the very wealthy — all very important. The truth is, Obama does embrace capitalism and thus capitalism is certainly not dead, praise be, but let’s realize that maybe, just maybe, we can all work to ensure today’s capitalism can work better for all of us.
Ted Springer lives in Avon.