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Friday, October 10, 2008


Mouths sputtering, heads exploding

Over lunch I heard not one but two different news people, Kyra Philips on CNN and Brit Hume on FOX News, say virtually the same thing when the subject of the "nationalization" of banks came up: "But...but...we're capitalists! How can we do that?" You could see that the idea that capitalism might be failing, or might not actually be the best system, never crossed their minds.
"The ideas of the ruling class are in every epoch the ruling ideas."

- Karl Marx
One of them, or someone else, also sputtered about how this was the very thing the U.S. is always castigating Latin American and other third-world countries for doing. At the very least, if nothing else good comes of the current crisis, perhaps this will take the wind out of the sails of such criticisms for a few years at least. OK, given the memory span of Americans, I'll settle for a few months.

On a related subject, I had to laugh listening to someone on TV yesterday talking about how supply and demand in the housing market were out of balance, that there was too much supply and not enough demand. No, there's plenty of "demand"; what there isn't, as I wrote the other day, is enough people with enough money who can act on that demand.

Update: Tee-hee. I'm reminded that that "someone on TV" I heard talking was George W. Bush. And actually, what he said was even more than I said, and rather curious:

With these actions to help to prevent foreclosures, we're addressing a key problem in the housing market: The supply of homes now exceeds demand. And as a result, home values have declined. Once supply and demand balance out, our housing market will be able to recover.
First of all, regardless of the point I made above (that there's plenty of "demand" for housing), only under capitalism could it possibly be a "problem" that the supply of housing or anything else exceeds demand. But secondly, if home values are declining (actually there's no "if" about it), wouldn't that increase demand ("demand" in the sense of a demand people could actually afford to act on), and subsequently equal out supply and demand? And while it's true that preventing foreclosures prevents an increase in the supply of available housing, it certainly doesn't decrease the supply, so if there's an "oversupply" (by capitalist definition) of housing, preventing foreclosures isn't going to solve the problem.

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