Is this the End of Capitalism in Germany?

Very good article, thanks.

Personally, I think capitalism will crash and burn and a new system will come up where we live in cooperation with each other and the planet. There will still be democracy, actually even moreso because we will not be controlled by money or by people with money.

As in my article,April 27, the summit meeting of the Americas, many blamed capitalism for the present day economic crises. I tend to agree.

The abuses of the government have got to stop and as our consciousness increases, people will not tolerate it anymore. Like in Canada, why is it after after four years in government office you get a full pension, and have your medical totally covered, such as pharmaceuticals? All paid for by you and me, yet we don't get any of it. How is that in our best interest? And who else gets away with such corruption? Just crazy.

And this bailout money... lending taxpayers' money to the banks so they can loan back our own money. It is beyond Ludicrious. This is what will make the system collapse. And all that will be left is cooperation.

P:aschen thank you for this post.  I would venture to say, that no system is perfect,.  The problem with capitalism is greed and the assumption that the sky is the limit.  Socialism makes the assumption that everything can be fixed through the government. 

In hard times, as this global economic turndown, it is natural for people to look to the government to fix all their woes.  Governments, unfortunately, have, at the very least, a mediocre record when it comes to social programs.  Most EU countries and Canada have a mixed system of Captalism and Socialism.  I point to universal health care, a safety net for the elderly in programs such as the Canada Pension Plan, Old Age Security and Unemployment Insurance.  Governments have been quick to cut services when budgetary restraints have dictated this.  The present discussion on Employment Insurance at the Canadian Federal level and Health Care at provincial levels are examples of this. 

The fact is business creates jobs, not government.  Ustinov.s book Inside the Soviet Army is a book describing the rise of an individual from peasant status and he describes examples of five year plans.  One example comes to mind, where the flavour of the day was fertilizer.  He was sent from his commune to pick up fertilizer.  He found that there was a long line up of trucks but some returned quickly.  When he checked it out, he found that the fertilizer was dumped in the Dnieper River. 

All this to say, that in theory either system works well.  However, when it comes to practice both systems are lacking.  A good mix of both systems, along with regulation and oversight is needed.

The present crisis was caused by greed and the lack of oversight in the US Congress regardless of political affiliation.  There is a lot of finger pointing going on, but a lot of politicians should put their ego aside and look in the mirror.  We have seen the enemy and the enemy is US.

Just my thoughts on this, a very complicated issue in social structuring.

BMC thanks for your comments.  A definite balance is required and that's where governments get it wrong most.  In the US you have two ideologies.  It is either a market based economy without government interference and every man woman and child on their own (the Conservative version) or Government controls everything (far left Democratic version).  The answer is someplace in the middle.  I know my American friends will disagree with me on this, but I think they need a third party (Centrist) to unite their very split country.

"Don't make the workers pay for the capitalists' mistakes," was seen on a placard during a recent demonstration. The protesters wanted the government to "do something." But what can it do, but interfere with free markets, and shift the burden of the losses from those who deserve them (the greedy ones) to those who don't with other words let the taxpayers pay.
In continuation Mr. Obama is going to straighten out the U.S. auto business. In this world of collapsing asset values and depression, it looks like a laugh.

I wrote this earlier last month in an article touching the same subject. I thought first it should be named co-operatatism or corporatism but finally decided to call it collectivism see: Capitalism versus Collectivism

http://my.nowpublic.com/world/capitalism-versus-collectivism

"Democracy is the worst form of Government" said Churchill, "however there is no better".

The problem with majority elections that the majority is less informed and educated about what Government should do, so they vote on the best image and talk show. Once elected and in Government, it are not the elected people who make the decisions but the back office staff and there starts the problem. Obama wanted change, but is bound by hands and feet to make that change. Demonstrations are unfortunately the only way to become heard. But other more descent forms should be an improvement. Who knows one day in our information age we will get that tool? At least discussions like here on the nowpublic board are a first step in the right direction. But not that many are sufficient literate to express there meaning and feeling. Maybe via questionnaires, I'm just thinking loud.

And to continue: Capitalism does its work it is demolishing a quarter century’s worth of mistakes. There are always mistakes made. Investments go bad. Businesses go under. People go broke. When many mistakes are corrected at once, it’s called a ‘recession.’ And when an entire economic model goes bad, it’s called a ‘depression.’ The economic model of the last quarter century caused more mistakes than usual. It encouraged people to spend, borrow, and speculate. And each time Mr. Market tried to make some corrections, the authorities came along with more money and easier credit. Businesses that should have gone under years ago kept digging themselves in deeper. Homeowners kept running up more debt. Speculators kept taking bigger and bigger gambles. And now we have landed in an economic mess that is going to take many years before it is solved.

Actually, we could have broken up GM years ago and Microsoft as well.

We have all the laws we need to do it. We don't have the political will to do it anymore. When Clinton and the democrats under Rubin and Larry Sommers embraced laissez-faire markets, anti-trust died.

We did put Microsoft under some kind of trial, at the same time we were investigating Clinton lying under oath. So, as I said, we could do it.

Tax cuts work as a Keynesian stimulus to create jobs, and would be a very good plan now combined with public works projects that we have to do anyway, but tax cuts are not a panacea, which is how the republican party tends to see them.

The second part of Keynes' idea was to raise taxes once the economy got out of the doldrums to collect money to pay off the incurred debt while slowing the rise of the rate of growth so as to prevent over-heating of the economy.

The second part has been forgotten entirely.

Your point is well taken Sara.  On a lighter note, the sun would warm me up right about now:)

I tend to agree with you Paschen.  But then we both know the Grundgesetz :)

I agree with everything you said asterix611, but the term you are looking for is not Capitalism, it is Corporatism. You got the Imperialism right though.

PIM I agree with you, it doesn't make sense to reward those that caused the problem with taxpayer money.  Of course governments will attempt to keep the economy going,.  It.s the nature of the beast to save ones political life. 

Government is not totally without blame.  After all they asked the banks to make those risky mortagage loans.  This, perhaps, obligates them to try to fix it. 

In any case, a very complicated problem, which makes me glad I'm not the President or Prime Minister.

The entire speculative bubble that underlay this economy could have been prevented by forcing people getting mortgages to document their income, by requiring a 20% down payment by law, and by forcing the ratings agencies, such as Moody's, to have civil responsibility and to be criminally responsible when ratings didn't reflect the real value of the asset.

These rules are still needed, by the way.

That would have prevented the whole running up of bad assets and the inflation of house prices.

We can't blame "capitalism" for this, as such. This is a failure of democracy to regulate business, pure and simple, due to egomaniacal commitments to ideals such as "free markets" whose only regulation would be CAVEAT EMPTOR.

we are living in a material world and always will Capitalism is never going to just go away.No more than socialism. get the balance the thing in the middle of these two and bingo at the very least things will be just and even. Thats ma dreamworld.

Thank you Sara for this well researched comment and the links. 

I think we need well reflected and wise reforms and those rather sooner then later or we may very well end up with serious Social unrest and a move into new extremes wish may be as negative as the present Capitalistic abuses that have caused this crisis.

Those ideas of Socialism and Capitalism are well imbedded into the German and Swedish Constitutions and laws.

Why Microsoft for instance lost a law suit in Germany and why it could not exist either in in Europe as it does in the US.

I agree with you PIM, reforms are needed, and those better be well tough out and well balanced as well.

However Tax cut do not work as past experiences show, yet taxes can be an instrumental tool to force changes not only in the environment, more so in business and marketing.

I don't think so: in the UK the economy is already rebounding and people are back shopping and eating out etc. again. People are realising this is not another Great Depression, but just a correction after two bubbles. Check Germany in six months, when the order books are back up again. Normal will be the new normal.

The American brand of "Democracy" is in fact Capitalism/Imperialism. The current global financial crisis shows that the US business model doesn't work as it is mainly based on Credit, Greed and Fraud.  The US economy is now sinking fast and will continue to plunge despite the billion dollar credit line from China, Japan and other western countries.  The excesses and affluence of American society can now be explained through the poverty of third world countries.  US imperialism over stretched the American empire and spread itself thinly all over and caused its own impending demise.  US capitalism/imperialism has peaked and spawned a culture of corruption all over the world.  The future now belongs to countries willing to resist US intervention in their own sovereignty.

I think many share your views here asterix, however I think we are all some what guilty of that, even in the so called third World, Which has also played the game and tried to copy the US dream or illusion, to their own detriment though. We are all wiser after the facts, yet most would have defended this abusive system with their lives, still only a few month ago.

What about the Chinese brand? What about the Japanese brand?

This is just demonization of the US, where, in any case, almost 40% of the economy is from the government, and we, too, are a mixture of capitalism and socialism.

I think it goes deeper than seeking a combined third party which supports both Capitalism and Socialism as Star mentioned. We have an American system that failed because of lies, and greed. People broke the laws, and nothing comes to the fore to deal with those people.

And let's not blame working people accused of lying about income to qualify for loans. More than ample evidence proves that derivatives, and the shut down of the Glass Stengall Act proved to be the catalyst of the failure.... Bank CEO's certainly lied about their income as well, and their loans went into the toilet, so to blame ordinary working people is without a doubt disingenuious 

War crimes were committed, and answers to 911 never fully resolved. A President who took a nation to war based on 911 that no one knows really who did it, is hardly a plan to root out terrorism and usher in renewed hope for capitalism and Democracy.

When society see's this.....there is no confidence, no bridge, or attempt to make a bridge to get over to the side of creditability. .. As the bad guys pillaged the American taxpayers to bailout the banks....they go on as if nothing happened....neither taking responsibilty or engineering a system that someone needs to be held accountable.

That is the rule of law...at least that is what everyone believed in when working and investing in a Capitalist system and Democracy. When the very idea of the Law is ignored, is not supported by the Representatives...because, obviously they are the guilty party in this mess.....the entire system is flushed down the toilet in to the sewer......now we are basing our hope that bailouts and the stimulus will make it get better....is like thinking the defecation we just flushed down the toilet is good for something......such as making methane gas and fertilizer.....but we really know that is not the real answer.

When the world see's that people are held accoutable for their lies and corruption.....there is a renewed sense that the system does work....that people are not going to get away with it. That is the price. People who go into the work world to be greedy Bank CEO's , or Politicians know that is the price.... If they screw up....they need to face the law, courts, and face jail time.

As we hide and cower from this reality...the rest of the world goes mad with riots, demonstrations, distrust, and the ever reality of more terrorism. Obama is not smart enough to realize this. His idea is to turn on water pumps to keep the ship from sinking...and not fixing the gnashing hole to keep the flood from rising. He can't get the materials to do it, because the guys who made the faulty hull, have closed shop...and nothing is done to them for their mismanagement , lack of quality, or making them be held accountable; and now the ship has thousands dead, and will probably hit the ocean bottom soon.

Think anyone wants to travel with them again? No accountability, no one brought to justice...is a sure sign that the US government is a crime organization....not an honest bonafide national government where it assures your investments and wealth are protected from scoundrels.

Face it,...and I am sure people do.......the shift is moving away from America...Money is not being trusted in US banks...and people are distancing themselves from the American Model. I know I saw it back when 911 hit...got out of the US....because they don't do the right things to make things better.

Republicans need to step up and seek the new Republican Leadership, by actually supporting the indictment of Bush, Cheney, Rove, and Rumsfeld, and Powell for their egregious irresponsibility. Upon a conviction......I believe the people in the world will have a renewed belief in the system, and that it works.....A dead Bush is actually uprooted...along with all the other dead branches and burned to allow a new landscaping effort to proceed for a renewed America.

Obama will not do this.....and so I am already predicting he will not be President in the future.....Mark my words.....America will not come back until this accountablity process proceeds for the future of America in the world.....If not:  well we know what will happen... chaos.

Rev. Jermano

This is a great article and tells the truth.

Capitalism will become a history. No more captialism.

I also feel that there is going to be a big changes in world politics, that a Social democratic system of governance in most nations will be the norm. 

I agree.

Whether capitalism or communism - everything has its own problems and advantagous. A mixed kind of a ism can make difference. 

Labors should get for their work. at the same time development should not be one sided.

Now - those who has money they get more . Those who didn't are getting poor further.

There is some logical error in most of our system.

Capitalism isn't the problem, however.

It's greed and corruption and the ability of Wall Street to make up new financial instruments to gamble with. The lack of REGULATION is the problem.

Wherever there is greed and corruption in any type of government, there will be problems.

It's amazing that 100,000 people could protest like that in Germany and it doesn't make the evening news in the States....

Thanks for this info.

It's amazing that 100,000 people could protest like that in Germany and it doesn't make the evening news in the States..../

If it is in the news , then only you should be surprised.

Now a days media is  reporting the stories of their interest.

We live in intensely interesting times  - each day a page to turn and sometimes even dreaded .

I do not know what is going to develop but there  feels to be a powerful confluence of large events both in our lives and around the global corner which point to excess and de-localisations of power and a lack of sensible sustainable ways forwards ..

It appears,  since we cannot re-run history,  that we have needed to arrive at the point of our own fattening ways - where greed and neurotic wants have painted our world in filth,  pollution,  and excess .. We are clearly very flawed ..

If someone said to me :   "How shall we form a future ? "  I would say we have to relocalise production and simplify it ... We have to,  or we die from lives that are overdriven with wants .

In the UK we need a better democracy and we need better boundaries for sensible life in our country and dare I say it  (I dare) we need to stop overrewarding some people and classes of people  - at the bottom of the pile in Britain we are creating severe alienation  in the so called redundant underclasses..

There's also a good case for a new form of foreign policies that aids every country towards sustainable development .. God knows there are million details and arguments with this  but the time has come to face we can jointly destroy our own lives , economies , and lives on a planet we have altered the chemical cocktail of .. 

I am afraid for us .. Yes . I feel fear for the future .

We all can be afraid about what is ahead of us, as I wrote yesterday in The Drain is in Spain, an avalanche of unpleasant situations will be upon us: All governments around the world at the same time are responding to the global recession by running massive deficits, so there are not many, if at all, places to go for a loan. In addition to the US, the UK, Japan, Russia, Spain, and Ireland are all running deficits of over 10%, while Japan's economy will stagnate. Banks are cutting back on lending. Home prices are dropping all over the world. Commercial real estate is rolling over, exposing banks all over the world. "Recession turns malls into ghost towns" is the headline in the Wall Street Journal. Personal savings are rising and retail sales are flat to down. Unemployment still is rising. Not too good prospective at all.
England has been put on negative watch for its debt rating the US could lose its AAA rating. “Total debt-relieve in Europe and US together is estimated at $15 trillion in the coming years. And could top $21 trillion by 2019”, is said. The interest alone on this amount could cost $1 trillion/year. Mind you apart from finding all that money that is needed to bailout every government in need is impossible. And we will be in that situation sooner than we might expect.

The sky is not falling. No, I don't think capitalism is in any great danger in Germany or elsewhere. It's far too complete, elegant and ruthless a narrative to die off or morph into something gentler.

The poor workers in Germany and elsewhere are demonstrating against the fear of a falling standard of living. They aren't offering up anything new. They just don't want to live with less. Who does? But when has it ever been normal for so many people on the planet to enjoy such a deluxe standard of living? Never. It's unprecedented and unsustainable, but what a feast it has been... cheque please. (sadly most of us will be dead long before this orgy of spending is paid for - by our children's children.)