I can certainly empathize with the Occupy Wall Street Movement. While ex-Goldman guy/U.S. Treasury Secretary Henry Paulson, fellow ex-Goldman guy/New York Fed President Tim Geithner and Fed Chairman Ben Bernanke worked diligently to use taxpayer money to bail out Goldman Sachs and some other 1 percenters, the rest of us were dealing with layoffs, foreclosures and bankruptcies — with no bailouts in sight, just more circular rhetoric and broken promises.
In the midst of all this has emerged a war cry directed against capitalism itself. It is here that I feel some of my fellow 99 percenters may have been misled and have thus misdirected their fiery and very justified frustration.
It is not free-market capitalism itself that has betrayed us, but rather the cronyism and mercantilism that pervades Washington, D.C. In a private letter to Col. Mandell House written in 1933, Franklin D. Roosevelt admitted: “The real truth of the matter is, as you and I know, that a financial element in the larger centers has owned the Government ever since the days of Andrew Jackson—and I am not wholly excepting the Administration of W[oodrow] W[ilson].”
In a truly capitalist country, where the government neither favors nor disfavors particular business interests, highly leveraged risk-takers like Goldman Sachs would have failed in 2008 along with Lehman Brothers, to be replaced by more scrupulous and prudent firms. Unfortunately, however, as FDR noted in 1933, the powers in Washington are beholden to the influence of certain special business interests — special in the sense that they are wealthy, entrenched and organized. And they have a system: the two-party system.
From the very first day in office, the typical politician is thinking about re-election. This costs money — a lot of money. As we have repeatedly witnessed, the politician who spends the most money almost always wins. Where do politicians go to get money? To those who have the money, of course: the top 1 percent, through their corporations, trusts, foundations and Super PACs.
For these individuals, capitalism works perfectly. Politicians have power but need money to get elected and stay elected, and the top 1 percent have money but need the (use of) politicians’ power to further their own (usually corporate) interests.
The obvious problem here is this: You and I aren’t getting any of the money or any of the power. In fact, they’re taking our money through taxation and stealing our purchasing power through inflation.
This is not capitalism; this is mercantilism.
We often hold the naïve assumption that capitalism and other forms of government are mutually exclusive, but this is not so. Indeed, modern-day China has taught us that this is incontrovertibly false. China, as the world’s second-largest economy with bustling capitalism at almost every level of society, is run by a group of communist families who themselves profit immensely from this false ideology, thus the need for constant censorship.
At the risk of sounding “un-American,” is it not also true that our own socio-economic system is a hybrid somewhat similar to this? But instead of communism at the top, our uniquely American model of economics is a hybrid of capitalism at most levels with mercantilism reigning among the very top echelons.
The cycle of money from these elitists — through their lobbyists, corporations, foundations, and Super-Pacs to politicians on both sides of the aisle, back to these elitists through the state mechanism — is mercantilism, and anathema to free-market capitalism.
What’s worse, attacks on capitalism itself play right into their hands. A disposal of capitalism means a transition to something else, something worse. A sharing, loving world where everyone plays by the rules sounds great on campus; but the outside world just doesn’t play by the rules. Is more government regulation — more favoritism — going to help our plight?
What is needed is to sever the cycle of money from the elitists to the politicians, and thus regain ownership over our representatives’ power. That’s easier said than done.
So, again, I implore my fellow 99 percenters to stop the attacks against capitalism and redirect that energy where it belongs: toward cronyism and mercantilism. You can start by moving your tents from Wall Street in New York to K Street in Washington. That’s where they keep the “paid” lobbyists, your true representatives in Washington.
It’s not capitalism that has failed us, but we who have failed capitalism.
–J. Kevin Meaders