Public Credit?

Paul B. Farrell at MarketWatch.com offers 20 reasons America has lost its soul and collapse is inevitable. I'm always hopeful when someone talks about "soul." But then he says, "Go see Michael Moore's documentary, 'Capitalism: A Love Story.'" Oh well. He explains:

Greed's OK, within limits, like the 10 Commandments. Yes, the soul can thrive around greed, if there are structures and restrictions to keep it from going out of control. But Moore warns: "Capitalism does the opposite of that. It not only doesn't really put any structure or restrictions on it. It encourages it, it rewards" greed, creating bigger, more frequent bubble/bust cycles.

Does he mean the Ten Commandments are good, within limits? Is adultery good "within limits?"

Greed (or "avarice") is one of the "seven deadly sins." It's always wrong, it's never right. But capitalism, as defined by those who defend it, is not based on greed. It's based on productivity and service of consumers. It's the exercise of dominion, for which we were created.

Back in 2002, in the days of Enron and WorldCom, the NewYorkTimes (July 21, 2002) focused on Alan Greenspan’s remarks to the effect that “infectious greed” is responsible for "recent business scandals," and that more government regulation might be needed. Greenspan was obviously no longer a follower of Ayn Rand.

Political philosopher and Ayn Rand expert, Dr. Edward Hudgins notes, “Rand was virtually alone in celebrating the virtues of productive, innovative individuals and the wealth they create. She emphasized that businessmen at their best will first and foremost love their work and the challenge of creating products and services that earn them profits. If that’s greed, it’s to be praised! Rand also singled out for condemnation businessmen who seek money by any means, including fraud, or government handouts and special favors. If that’s greed, it’s to be damned!”
The Atlas Society, Release: Is Greed Good?

Greed, contrary to Michael Moore, is not the cause of the boom/bust cycle. That honor rests with the Federal Reserve.

“THE PRAGMATIC CAPITALIST” responds to the MarketWatch article, asking, Is This the Death of Capitalism? No, he says, but hopes it is the end of "crony capitalism" run by bankers instead of producers. He leads with this quote from Woodrow Wilson:

“A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the Nation, therefore, and all our activities are in the hands of a few men… We have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world — no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men.”

The first sentence is a fountain of toxic errors. Credit is not necessary for industrialism. It is only necessary for rapid industrialization:

Credit and Rewarding Losers

Production, savings, inheritance and the absence of government confiscation and redistribution of wealth are all that's needed to accumulate capital. Credit is only needed routinely by those who are greedy for that which they have not already earned, or whose parents did not earn it through production and service, and lack the patience to accumulate capital through production and savings.

Relying on credit for day-to-day expenses is an indicator of incompetence or slavery.

The rest of the quotation has been used to attack the Federal Reserve. Wilson wrote these words in 1912, before the Federal Reserve was formed, and the sentiment of the quotation formed the basis for the justification for the Fed, which was sold to Democrats as a “public” guardian of credit.

And how's that working for you?