Real Capitalism

[Dancing David]

I saw on CNN that part of President Bush's war package includes money (7.2 million) for the airline industry for losses due to the war.
Hmmm, now I seem to recall that the airline industry begged to be deregulated and have 'an open market place', and we were told that the capitalist system would bring down airfares.
Isn't this kind of violating the whole principal of capitalism, I mean if they loose money aren't the supposed to adjust thier practises to make themselves more competitive (and profitable)?
As Gore Vidal (celebrated leftist dupe) said 'Here in America we have capitalism for the poor and socialism for the rich.'
Peace
dancing David

 

[Supercharts]

The Fed Reserve can manipulate the economy by raising and lowering interest rates. I'm sure everyone understands that process.
This manipulation can help business expand or contract. It can improve home buyers, students and your local M&P store.

Is this capitalism? I wouldn't call it socialism for big business. But capitalism requires - at least by definition - to be rid of government controls and to rely on the market forces.

I can understand NASD and the SEC ensuring a fair market for equities and debt. In this sense it ensures fair play in the markets. And in the sense that equities and debt instruments are derivatives of capital it isn't conta-capitalism but regulatory for efficiency.

Back to your starting thread - excellent question and I have no idea.

 

[Michael Redman]

I don't think socialism is the right term. When there is an artificial influence on the market, such as when the government ordered all airlines to stop flying on 9/11, it is argually good for free market competition to compensate the airlines, so they don't go under due to this non-market situation. Maybe the government hurting the airlines by starting a war would be the same. It's not like those losses are due to the airlines not efficiently competing in the market. They are due to the government deciding to effect the market in some way, and perhaps they should compensate the airlines to bring the business back into line with how they should be, had the market not been effected.

I don't know if it's good or bad, or if the airlines' problems are really due to government action or war (versus mismanagement), but I do think this kind of government support is quite different from, for example, subsidizing tobacco producers, simply to keep them in business.

 

[Q-Source]

I don't know if it's good or bad, or if the airlines' problems are really due to government action or war (versus mismanagement), but I do think this kind of government support is quite different from, for example, subsidizing tobacco producers, simply to keep them in business.

There is no real capitalism in the USA.

The US government is one of the most interventionist in the world. At the end of the day, someone has to pay for the subsidies that commercial enterprises received from the Government.

 

[Samus]

I don't think bailing out the airlines was a bad idea. After all, as Michael said, the government did forcibly grind their business to a halt.

With a federal budget that tops two trillion dollars (man, I can't even conceptualize how much money that is!), you're going to have a lot of waste, and a lot of spending on things the government shouldn't be spending on.

As for the government interference, I believe Ronald Reagan said it best:

government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.