While I'm the furthest thing from an economic expert that could possibly exist, what I have read has always made me feel a little queasy about American-style capitalism. While there was a time that I believed in the free market, it was half-assed and short lived. At some point I just admitted to myself that I have no idea what the hell I'm talking about. One thing that I've always argued, again, not very confidently, is that I see no reason to invest in mutual funds or stocks. A lot of my friends do, of course, and one even said it was 'irresponsible' to not invest. Nonetheless, my feelings on this have come from a few things. First, I don't understand why, in our culture, we expect something for nothing by way of investing. It seems to me that you cannot gain something without some risk. Of course, the more you want to gain the more risk you take on, but you cannot invest in an economy with no risk at all. Too many people, including my friend who thinks people are irresponsible for abstaining from investments, assume there is little to no risk. The second, and probably more important, reason for me personally not to invest is that I really don't care much for personal wealth. I'm no Gandhi, but I'm more than happy with going to work, earning $5, then spending my $5 or putting in my bank account. Whether or not I'm gaining any interest on my $5 I really don't care. Earning $5 does not entitle me to $6. I did X amount of work and earned $X, and I'm comfortable and plenty happy with that situation. I don't want to be rich, and I'm more than happy with my situation as it is and will likely remain for the foreseeable future.
In an article today, Anthony Faiola from The Washington Post writes
"Given that the United States has held itself up as a global economic
model, the change could shift the balance of how governments around the
globe conduct free enterprise. Over the past three decades, the United
States led the crusade to persuade much of the world, especially
developing countries, to lift the heavy hand of government from finance
and industry."
"But the hands-off brand of capitalism in the United States is now
being blamed for the easy credit that sickened the housing market and
allowed a freewheeling Wall Street to create a pool of toxic
investments that has infected the global financial system. Heavy
intervention by the government, critics say, is further robbing
Washington of the moral authority to spread the gospel of laissez-faire
capitalism."
In short, the article makes the point that I have been thinking since the start of this mess; governmental deregulation is at the center of this crisis, and laissez-faire capitalism needs to be reconsidered. It's never really been the fix-all that hard-line Republicans and Libertarians would argue it is. It always has seemed more like a religion to me than an economic theory. I don't know how many times some E4 or E5 who plays trumpet or saxophone in the Navy has told me how international debts and free-market economies actually work, if left completely alone by the government - a topic on which many ECONOMISTS disagree. Yet, some Joe Shmoe who is lightly educated and heavily politically biased has the answers and an unshakeable faith in the power of the free-market to correct itself. Every time something like enron would happen, I would be told that it wasn't a failing of capitalism - it was a rogue CEO who didn't understand the way it should work, or whatever....it's never the failing of the markets. It's the government, or whoever else.
Well, people are starting to wake up to that fact that capitalism may not be the end-all be-all that these people argue religiously that it is. In fact, our government just made a push in passing this $700 billion bail-out to socialize the banking system. A hard-line Republican administration has pushed to socialize the banking system. How many options do you figure they had? And socialism is the big bad word in politics. To be called a socialist is synonymous with communism, which is synonmous with "you ain't no 'Merrcan."
I don't know if it was luck or wisdom, but none of my money disappeared when the market plummeted - I don't invest.
