04-05-2009, 02:56 PM
Bottom line, everything one needs to understand about economics and capitalism can be inferred from a solid understanding of supply and demand.
Our economic woes were entirely predictable, some might say even inevitable. Capitalism is by far the best economic system, but it has one significant flaw in its current form; it only has one criterion for measuring success, profit. Just as a shark is not "bad" or "good" for chomping off your leg (it's just being true to its nature), so too is capitalism neither "good" or "moral" or "bad" or "immoral." It just is what it is...
A CEO who can make his company $50 billion profit while bespoiling the environment, or $20 billion while not damaging the environment, had better choose the $50 billion course or his board of directors will vote him out and get somebody else. And if that company owns the local media outlets who might report on the environmental damage caused by the company, all the better!
Growth is a great way to boost profit, and if the demand side of the economy can't afford to buy more goods and services, you get consumers addicted to credit, enabling them to live far beyond their means. Some day, far off in the future, all of that overextended credit will come back to haunt us all...
Welcome to that day!
Our economic woes were entirely predictable, some might say even inevitable. Capitalism is by far the best economic system, but it has one significant flaw in its current form; it only has one criterion for measuring success, profit. Just as a shark is not "bad" or "good" for chomping off your leg (it's just being true to its nature), so too is capitalism neither "good" or "moral" or "bad" or "immoral." It just is what it is...
A CEO who can make his company $50 billion profit while bespoiling the environment, or $20 billion while not damaging the environment, had better choose the $50 billion course or his board of directors will vote him out and get somebody else. And if that company owns the local media outlets who might report on the environmental damage caused by the company, all the better!
Growth is a great way to boost profit, and if the demand side of the economy can't afford to buy more goods and services, you get consumers addicted to credit, enabling them to live far beyond their means. Some day, far off in the future, all of that overextended credit will come back to haunt us all...
Welcome to that day!