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The Forum > Article Comments > Kevin Rudd's spin on capitalism is almost pure myth > Comments

Kevin Rudd's spin on capitalism is almost pure myth : Comments

By Leon Bertrand, published 2/2/2009

Rudd’s plan to bring back levels of spending, regulation and protectionism similar to the 70s is a betrayal of his claim that he is an economic conservative.

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As an old Aussie cockie who was able to retire well to play golf after Keynesian economics, wonders why the hell we ever changed to - the get big or get out - global free-maket deregulation scharade?

Reminds one of Adam Smith and the double E E's warning.

First the ee's in free-market, then came the double ee's in Need.

Bt as Smith went on, comes the danger with the double ee's in greed, especially when the speculator starts to lose.

Certainly that was why even Smith himself believed that loan banks should be owned and run by government.

Cheers, BB, WA.
Posted by bushbred, Tuesday, 3 February 2009 6:25:00 PM
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Extreme capitalism is NOT the cause of this economic mess. It is extreme socialism.

1) The Fed set interest rates at 1%, creating credit expansion which gave the illusion that there are "extra savings", when in fact there wasn't. With houses going up 40% per year, this sent false price signals to consumers and investors, and hence resources were (mis) allocated to that sector. The Fed then set interest rates up higher to 6%. Debt ensued. Defaults occured, houses plummeted, consumption and investment fell. There is nothing free market about a "People's central bank", which is a part of the Marxist regime. The solution is to return to a free banking system i.e. a hard currency system or let the free market set the interest rate (which would be higher than a reserve set interest rate). Government seems to employ itself, through its own mistakes.

2) Spurious lending practices (thanks to this low interest rate environment), and government intervention by allowing poor people to take up "subprimes" they could not afford. Insolvency ensued. It is thanks to centralisation and government intervention that we are in this mess!

3) Moral hazard - most of the banks knew if they screwed up, the government would bail them out. Thus, encouraging reckless lending. The government subisided bad lending practices, blaming SOCIETY when responsibility ought to be internalised with INDIVIDUALS, not SOCIETY. Again, smells like socialism to me. If we had STRICTER laws on graft, corruption and fraud, and a stronger law of torts, rather than US or Aus government bailing out immoral individuals or dodgy banks (wait, till our housing market pops over the next year)...insolvency 101.

4) Can anyone look at our tax system, level of labour regulation and say we are under a free market? HA! NO!

As such, Kevin Rudd is sprouting properganda to keep himself and his government employed, while the employment of Australians themselves drops. So much for being an "economic conservative".
Posted by AustralianWhig89, Wednesday, 4 February 2009 8:38:17 AM
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Yes indeed, and as typical as it is of Socialism, in the mastered Ponzy schemes, it is our Children and two generations of their children that will be paying for all the Socialist espionage and sabotage of Western societies.
To be honest, I don’t think we can , or ever will recover.
It is not just the loot gone ; the very principle that enabled our society to prosper has been corrupted, perverted – and near annihilated in favour of misery -- envy - and Agitprop. Much more in there ;-

I think the chronology of events is well documented, and clearly there ought to be – Yes - Ideological War Crimes trials for the purveyors and the masters – and as it has been pointed out, it is Working Families that end up paying for this outburst of incessant Idiocy and the grand Looting festivities – And you must wonder in a Religious Lawyer-ness alter ego Quran like law society, how come those responsible are given more and never held accountable for their criminality?

More of a retorical Question - most already know the answer.
Posted by All-, Wednesday, 4 February 2009 9:10:07 AM
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Ken_L (above) asks can I point to a country with a capitalist system? No, I can not.

Ayn Rand published a series of essays titled “Capitalism, The Unknown Ideal” (Signet) – and note that one of the authors was Alan Greenspan. (www.aynrand.org). Worth (re) reading in the current environment especially.

Democracy is not an ideal system of government; just better than alternatives so far tried. The concept is flawed unless the people who consent to be governed set strict bounds to the power they are delegating to their government – we have nothing like that and even the Bill of Rights is nowhere near adequate.

Example: Rather that bailing out car makers, our federal government could mandate that in the interests of an efficient country we would all drive the same government produced car built in Australia by Australians and prohibit manufacture or sale of others. We would all be driving Standard Vanguards (India??) or the like for the next hundred years. Nothing to bound the power of government!

Until we define what governments can do they will go on interfering in matters which should not be their role to the detriment of all of us. Defence to secure the national borders; police to ensure freedom from violence (the ability to exercise free will); Courts to resolve disputes, EG Fraud or dishonest dealings. Registrar to maintain title records (Land, Corporate Name etc), NO Central Bank, no ACCC, no hospital and medical services – no wonder we have such lousy medical services as in NSW when doctors have to work for only one employer who does not pay them! Slavery is back. The examples of government making things worse is inexhaustible so consider the Kruddy motive for moving in that direction.

AustralianWhig89 has stressed how government actions have brought us to where we are – not a failure of capitalism.

All- is spot on “It is not just the loot gone ; the very principle that enabled our society to prosper has been corrupted, perverted – and near annihilated in favour of misery -- envy - and Agitprop”
Posted by Milo Sisyphus, Wednesday, 4 February 2009 9:51:19 AM
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Comments of all governments are telling us we will soon be back on the road to “Growth’ and then everything will be OK.
None of them realize that it is growth alone that has brought the crisis.
It is impossible to continue to have constant growth forever in a finite world.
What will happen, like it or not, is a slowing down of growth and then a reversal down to a sustainable level.
It will not be nice, there will be a lot of pain and many will fall by the way side but it is inevitable.
All of the bailout schemes are band-aids to provide hope to the population for a short while.
None will call for “depopulation” because it would mean not winning the next election and holding on to power.
In fact governments including Rudd labour are actively encouraging increased population by increasing the baby bonus, subsidies for child minding, taxbreaks for parents Etc. They have also increased immigration using lack of skilled labour to bring in more people.
This is going to exacerbate the problems we face now with the economy falling off a cliff.
The cures for the crisis to spend billions on supposedly urgent infrastructures that are when analyzed are not doing anything to help.
Additional buildings and repairs for schools, a vote catcher for mums.
Big spending on roads, well all Australians live (and die quite often) in their cars so another vote catcher. But no money should be spent on roads at all. It should instead be spent on providing new railways and upgrading the present railway system.
Money to be spent of insulating roofs. It would cost nothing to legislate for all new buildings to have a white or light coloured roof. This would do two things, reduce heat in the buildings and reflect a large amount of heat back into space. Making up partially for the loss of albedo effect that is occurring with ice melt at the poles.
Posted by sarnian, Wednesday, 4 February 2009 2:32:42 PM
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Lets take a honest look at the economic history of capitalism. the golden age 1945-70s was underpinned by the financial system under the control of elected democratic institutions. Exchange rates were fixed. International trade flourished because the system of monetary regulation provided certainty. Companies did not have to devote huge amounts of money to hedge against potential currency movements. Deregulation of exchange rates has a cost. It creates uncertainty.

In addition fiscal policy and monetary policy development was able to be coordinated.

What changed in the 70s. There were two significant events. Firstly the world's reserve currency felt the effects of inflation induced by the Vietnam War. Additionally OPEC triggered additional inflationary pressure by ramping up oil prices.

What was the response deregulate finacial markets exchange rates etc.
What has this led to? Billions of dollars siphoned off to hedge funds to guard against exchange movements. These hedge funds triggered the property bubble in Japan, currency crisis in South East Asia, dot/com bubble and finally the property market/derivative asset.

What we need is a new Bretton Woods agreement to provide certainty in international trade risks. We need to return the control of monetary policy back to democratic institutions not the technocrats.
Posted by slasher, Wednesday, 4 February 2009 9:55:51 PM
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