Our economy tanked, because it is no longer real. The prosperity of the 1990s was due solely to speculative venture capitalism on the stock market and periodic infusion of retirement funds. That's right...all of our big jumps in the stock market were generally when retirement funds were infused in, but it was natural that there would be a point when there would really be no more significant funds added to make an impact--which happened in 2000/2001--and we would have a fairly long period of stagnation, followed by a decline, because speculation is never happy with the status-quo. It always wants *more.*
And there belies the problem. When you have an economy based solely on constant *more*s, you will inevitably flounder. When one would joke of the disposability of the 1980s, it was perhaps most accurate. What would be the easiest way for our economy to collapse indefinitely? If consumers no longer bought anything; and, hence, that is why we've created a system that forces us to buy *constantly.* With automobiles, for instance, leasing is now a large fraction of the market, rather than outright buying, because it has now become cost-prohibitive to the general working class, which, on average, made only $35,000-40,000 a year. Cars, though, have continually spiked up over the last two decades; a $10,000 car is virtually unheard of now, but was a reality in 1990, if you bought a small car. Leasing, however, ensures a constant demand; after 2-4 years, depending on the lease, you surrender your car and get another one. In essence, we've created a subscription-based car service.
Feudalism's main vehicle for suppression was the guise of security, coupled with keeping serfs all in abject poverty / enslavement. Capitalism's main vehicle, in contrast, is credit, and what a system we have created! No incentive to save, a retirement system so bad that we're required to put it in the stock market to even be able to retire (government bonds and money market funds, as a good banker once told me, will barely outpace inflation in the long run), less benefits, and a whole bunch of debt. Serfs may have been tied to the land by force, but we're tied to the land by mortgage.
Marx, as I learned, believed that capitalism would fail in the long run on its own (the ideas of forcing the defeat of capitalism through revolutionary action is falsely attributed to Marx and should be attributed to Leninism more appropriately). Lately, I question as to whether he is correct, as the polarization of our economy has only gotten worse since the massive deregulation of the 1980s. The only hope for capitalism, perhaps, is regulation, which, though, goes contrary to our ideals of unimpeded greed.
And here lies the ultimate truth about economics: you can't have it all. Is it acceptable to limit capitalism, if it benefitted the whole of society? Or are our delusions of grandeur of someday being mega-wealthy that powerful? The other question, though, is why they have to be mutually exclusive; there were quite a few millionaires and billionaires even in progressively regulated capitalism...and then we go back to an issue of propaganda...
...and I've rambled enough.
Melon
