Greed

The Price of Greed

The Price of Greed (Photo credit: Wikipedia)

In his book A Failure of Capitalism, Richard Posner denies that greed played a part in causing the Great Recession. I disagree. First let’s define greed as milking the system for excessive and undeserved income, as Mitt did with his 401K north of $100 million. In my opinion, no one is worth or deserves $100s millions or billions in income or net worth. It is true that $1 million doesn’t go as far as it used to, but $1 billion certainly does. Nations that don’t mimic our income inequality do not have the social problems that we do. We won’t solve all our problems with greater income equality, but we will lessen their severity as nations in Scandinavia prove.

The greatest danger of vast differences in income equality lies in the threat to our democratic institutions. Some people with vast wealth will use that wealth to buy favors from government that will increase their wealth at the expense of the rest of us. Louis Brandeis was better able to explain the pernicious effect of income inequality better than I can. He said that we could have democracy or vast concentrations of wealth, but not both at the same time. Please see Freedom and Supreme Court

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A Failure of Capitalism

Richard Posner, one of the Chicago School, run...

Richard Posner, one of the Chicago School, runs a blog with Nobel laureate Gary Becker. “The Becker-Posner Blog” . . Retrieved 2010-05-20 . (Photo credit: Wikipedia)

A Failure of Capitalism, The Crisis of ’08 and the Descent into Depression by Richard A. Posner. He believes that the Great Recession is actually a depression, but not as severe, so far, as the Great Depression.

“Some conservatives believe that the depression is the result of unwise government policies. I believe it is a market failure. The government’s myopia, passivity, and blunders played a critical role in allowing the recession to balloon into a depression, and so have several fortuitous factors. But without any government regulation of the financial industry, the economy would still, in all likelihood, be in a depression. We are learning from it that we need a more active and intelligent government to keep our model of a capitalist economy from running off the rails. The movement to deregulate the financial industry went too far by exaggerating the resilience–the self-healing powers–of laissez-faire capitalism.”

Amen!