The Potential Problem That We Are Facing With Capitalism

[jnug]

Well, then perhaps I should have stated "American" Capitalism.

I have no problem with Capitalism. My problem is with extremes as all extremes are bad.

Capitalism in the 70's in the U.S. was working great as it was across the board. Not so much now with this kind of a situation where 1 company can literally do to the country whatever they want to do.

Well actually if we had American Capitalism again, we would be fine. American Capitalism is and should be supported by an underpinning of empathy for the other. The entire idea of a Republic is a statement of empathy for the other at least within the borders of our own country. Without it, American Capitalism is worthless and the American Republic is on the way OUT.

The GOP has been losing ground to any understanding of the meaning of this Republic for decades. Enter Donnie Rotten and his ghoulish hordes looking to put the last nail in the coffin. Great patriots they are shouting "1776" and "this is our house" as they storm the Capitol. Hummmmmm.....I am an American Citizen and I don't remember telling anybody I wanted a bunch of hooligans to crap and piss in MY HOUSE!

As for the rest of us.....sadly we are not far behind the GOP. We are probably one Newt Gingrich behind them.

 

[Allan]

One thing that is a concern are derivatives which are currently estimated to be twice the value of everything on Earth. AIG was bailed out in 2008 not so much to save the company (although that was important to protect American's retirement nest eggs) but to prevent a cascade of failing derivatives of which AIG had the largest exposure.

Derivative products are so complex and opaque they are very hard for the average legislator to understand, much less effectively regulate.

 

[Luckyone]

I have investments with Vanguard and I'm not sure how you feel they 'control' public companies whose products they bundle. Take my investment (VTI) with Vanguard for example. VTI mirrors the overall market, they don't aggressively trade to manipulate stock price. The rest of their products are similarly passively traded to match whatever segment they are mirroring.

I have not said that these companies are doing it. I just said that there are no controls in place to prevent them from doing so.

 

[calamity]

I have investments with Vanguard and I'm not sure how you feel they 'control' public companies whose products they bundle. Take my investment (VTI) with Vanguard for example. VTI mirrors the overall market, they don't aggressively trade to manipulate stock price. The rest of their products are similarly passively traded to match whatever segment they are mirroring.

All of my equities are "bundled." Even my municipal bonds are bundled. I do not know enough to pick individual winners and losers. So, I allow the experts to do it for me. Vanguard, Blackrock, Fidelity, Nuveen...all of those companies do this stuff far better than I can.

 

[soylentgreen]

Money has no politics attached. Greed is universal and the desire for power is found in everyone. In fact, power in and by itself (without political affiliation) is more dangerous because then the "only" thing driving the person of the corporation is their own objectives;

By the way, I am not "creating" anything. The reality is that there is one corporation run by one man that has more economic power than any other country in the world than the U.S. and China. This one company (Blackrock) is real and its failure would be "our" failure and its decisions is something that can affect every one of us. This is not fantasy but reality and is the reason why it is actually "scary".

Money always attaches itself to politics. Which is why it is a problem to have such wealthy and powerful people manipulating governments.

Blackrock is in a position where it cannot fail. Money makes money at that point. the only way it fails is if the whole social structure collapses. Such as in a massive world destroying meteorite hitting earth. Its failure is not a concern. It using its power to influence is.

 

[Luckyone]

Money always attaches itself to politics. Which is why it is a problem to have such wealthy and powerful people manipulating governments.

Blackrock is in a position where it cannot fail. Money makes money at that point. the only way it fails is if the whole social structure collapses. Such as in a massive world destroying meteorite hitting earth. Its failure is not a concern. It using its power to influence is.

Wow, were you around in 2008?

Lehman Bros were too big to fail and they failed and we came within a couple of days and a couple of inches from our whole banking industry failing and you are now saying "unequivocally" that they are too big to fail?

I hope you are right but your are putting your life and the life of your entire family at risk by allowing them to continue with no controls. It really is as simple as that. You are gambling your life on your thoughts, which by the way, you have absolutely no control yourself whether they fail or not.

Then again, putting the failure possibility aside, what if they decide to run the country themselves (they certainly control enough money to do so if they want to). Are you okay with that?

 

[Good4Nothin]

In listening today to Warren asking a question of Yellen, it made me aware of a big problem the U.S. is facing today. A problem that Capitalism has created and that put us all at huge economic risk. Warren stated that Blackrock manages $9 trillion dollars in their fund and that $9 trillion dollars is more that the entire GDP of any nation other than China and the U.S. This does mean the if Blackrock for any fails for any reason, our economy will fail as well. By the same token, it also means that Blackrock itself can literally set the rules for what is done in the U.S. states. Here is an article I found that explains this a bit better.


Three Investment Banks Control More Wealth Than GDP of China – and Threaten Our Existence
January 22, 2020


It’s the inevitable product of extreme parasitical capitalism which has created activist billionaires who manipulate elections and concentrated ownership of most major corporations into massive investment firms.

The immense amounts of capital needed for the industrial and digital revolutions created unparalleled power for the big banks and financial institutions. They now own dominant positions in the industrial-military complex, fossil fuels, the media, big tech and everything else that’s important.

Huge financial services institutions have emerged as the goliaths of the sector. Sometimes called asset managers or money managers, they invest money on behalf of institutional clients like governments, pension funds, sovereign wealth funds, endowments, and very wealthy individuals.

Blackrock and Vanguard with other smaller money management firms, control 90% of the S&P 500 public companies, including fossil fuel companies, arms manufacturers and major U.S. media outlets that own ‘mainstream’ news.

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When Warren asked Yellen what they would do to control the power of these companies, Yellen had no answer other than"we will look into it".

Bottom line is that when all the money power is in the hands of one (or a couple) of firms, they literally can call the shots on what it to happen to all of us. That is the problem with Capitalism at its height. Money is in the hands of a few and if they fall, we all fall and if they decide "this or that" needs to be done, there is no one that can stop them.

Do you feel comfortable being in this kind of a situation?

I think we should get rid of capitalism. That would solve all of these problems, and it would not be difficult to design something much better. The government, which is elected by US, THE PEOPLE, can give everyone what they need, and more. The central government has the power to create as much money as is needed, and therefore it can give every citizen all the money they need.

Once capitalism is gone for good, all the problems you mention here will evaporate.