Elusive Wealth

Many look at the current economic conditions to point out that Capitalism is failing us. They say that capitalism has taken away so much of our

Uncle Sam?

wealth. The reality though?  Capitalism has merely taken a small portion away of the vast wealth that Capitalism provided in the first place. Sure, it does not seem like a small portion. Times are tough and jobs are scarce. Only jobs aren’t as scarce as they have been in the past. And times aren’t as tough as they have been before.

Will times be as tough as they once were?  Maybe, if we keep trying hard enough. If we continue to get better at spreading the wealth around through taxing wealthy, we can get there. If we socialize health care, that will help. If our government keeps taking companies over that will help too.  We can go all the way to the dark ages and beyond if we want to.

What about the great disparity in wealth in our country? Clearly capitalism has increased the gap between the haves and have-nots, right? No again.  The haves are the have-nots employers! Take away the haves (by taking their money) and all you have are have-nots. Sure it’s just a little bit here and there, the haves won’t miss it. The haves won’t use it to hire someone either then. The government cannot hire everyone. The gap between wealthy and the middle class may be growing, so do we take the money away?  Or do we earn it by providing products they can use. And does the money of the wealthy sit under a mattress providing no value to anyone?  Sometimes, but usually it is invested in something that helps everyone produce goods that people need. If it is invested, what else might it be doing besides earning more money for the investor?  Providing jobs.

Well, take the banks — what an example of unfettered capitalism going wrong. Clearly they demonstrate that there must be regulation, right?  Sure, there must be some regulation – not everything fits into an absolute, capitalism is no different. But did capitalism really result in the mess we are in?  To a point, because with capitalism there will always be fluctuations in the marketplace. That is a good thing. But let’s look at other events that contributed to the mess:

• We, the people, borrowed any money we could get our hands on.  We, the people, bought houses we could not afford.
• We continued to be customers of mega banks that increasingly provided lower interest rates and poor customer service.
• Our U.S. Government decided that everyone deserves life, liberty, happiness, and a home. The Community Reinvestment Act encouraged banks to lend to people who could not afford homes. [This is not the cause, it is a contributor]

Do banks have an obligation to ensure that their customers can repay their loans. Absolutely. If they cannot, what happens?  The bank, its management, its shareholders, and unfortunately its employees move on to better endeavors. Why is this important?  Because this is creative destruction, where companies that fail and cannot produce go away. This is capitalism’s way of handling poor management, poor products, poor service, and corruption.

So after I say all of this, I must not care about others, right?  Me, and others that think like me, must be hoarders without empathy. No, I support capitalism because I care. Capitalism is the only system that allows the level of entrepreneurship we have seen in this country.  It is the only system that produces so many millionaires from the have-nots. Those who believe in the opportunity to create wealth for themselves must believe in capitalism, for without it that opportunity does not exist.