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A Broken System That Is Beyond Repair?

Very informative discussion between the NYT’s Joe Nocera and Jon Stewart on TDS the other night.  Watch all three parts of the interview.  What they keep getting back to is what I’ve been saying for some time now — free market capitalism is dead, but no one wants to talk about that fact, much less discuss solutions.  Some points well taken:

1) The tax rate on capital investments (15%) is much lower than what the majority of Americans pay on their wages (about 20%).  We’ve somehow turned the whole system upside down, where plain old hard work is actually discouraged by the tax system.  The “American Dream” — go to school, study hard, then get a job and work hard — is dead on arrival these days.  All it’s going to do is get you another day older and deeper in debt.

2) Republicans are continually gaming the system, and that’s all quite “fair” until the system is gamed on them, and then they are up in arms.  That’s what is going on right now with the Gingrich followers turning on Romney.  And there’s no better example than Dick Cheney’s all of a sudden becoming pro-gay rights once he discovered his daughter was gay.  This is the selfishness aspect of the right-wing that runs so deep — as long as a problem doesn’t affect them, it’s not a problem.  There’s no concept whatsoever of the “common good”.

3) In the “Simple Solutions to Big Problems” department, Nocera reminds us that the oh-so-easy way to avoid another Wall St. meltdown is to split up banks in to separate entities devoted to commercial banking and investment banking.  That’s the way it was back in the 1930’s up until the repeal of Glass-Steagal, and that was not only the number one cause of the 2008 crash, it was the only cause.  Yet here we are three plus years after the fact, and nothing’s been done to prevent yet another disaster.  Idiot Nation at it’s best.

4) Finally, they point out that the main reason why you have such complex regulation of business is that big business is forever making things complex so that they can continually game the system.  The more complex the lawyers and financial wizards make the system, the harder it is to regulate so that the system can’t be gamed.  It’s a no-win situation with no solutions.  Well, other than what William S. suggested many years ago.