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[EdHeisler]

The Crisis of American Capitalism
by Lawrence Velvel
Lawrence Velvel, Dean of Massachusetts School of Law, an honors graduate of the University of Michigan Law School, has practiced law in the public and private sectors, and been a law professor.
September 19, 2008

You don't have to be a socialist (and I certainly am not) to understand that this capitalistic country is confronting a crisis of capitalism. This is not merely a matter of the huge losses and meltdowns that have taken place and have threatened to bring down the whole system with them. It is also a matter of the failure of a culture, a culture that has grown and grown since the sainted Reagan introduced the twin pillars of his morning in America: unchecked greed and militarism.

Militarism today holds high carnival: in Iraq, on somewhere between 700 and 1,100 American bases around the world (the exact number being a secret, even if known to the Pentagon), on huge carriers patrolling seas all over the world, in Bush/Cheney ideas that we should intervene all over the world, in a Pentagon budget of what -- something in the neighborhood of 500 billion dollars or more, I suppose?

Unchecked greed also held high carnival, as it drove the housing market ever higher by means visibly pregnant with failure because they defied history, economics, human comprehension and sense: Adjustable rate mortgages, with initially low rates that one knew -- I certainly knew, often said, acted accordingly, and wholly fail to grasp why everyone didn't know -- were pregnant with disaster because they would be unsustainable for the buyers when the interest rates increased, as inevitably they would because rates always rise and fall; securitization that gave rise to so-called tranches so complicated that nobody could understand what the risks and rights were; derivatives which may be even more complicated and which nobody has a real handle on apparently. It was all nuts (as this writer often said to people), and now it has come crashing down, as was inevitable. The acclaimed geniuses -- like Alan Greenspan (who led the way) -- who lived in and loved celebrification, who profited from it, have been shown the fools that they are. In Greenspan's case, this is at least the second burst bubble he promoted, the other being the high tech stock market which melted down at the beginning of the 2000s. (Of course, in America, where nothing succeeds like failure, as is oft typified by celebrified coaches, baseball managers and university presidents, Greenspan remains a great man.)

For the present, we are seeing the meltdown of a culture of unchecked greed and stupidity that has been the driving force in American capitalism since Reagan took office and began 27 years of propagandizing for this. Government is now seeking to lessen the effects of this capitalistic crisis by bailing out the big boys, the Wall Streeters. We are told, of course, that they have to be bailed out lest the whole economy, and maybe even the world's economy, undergo collapse. And what we are told is true, I would guess. But also noticeable -- and, as always, expected -- is who is getting the short end of the stick. It is the small guys, the small people who get no relief on the mortgages whose interest rates are now way too high for them, the small investors who are losing their shirts, and the like. This, too, of course, is a despicable part of American culture: help the big boys and screw the small man. And this too has been ever more prevalent since the days -- dare I say it yet again -- of the falsely sainted Reagan.

Real the full article at:
http://www.commondre...ew/2008/09/19-0