The End of Capitalism?

The media are proclaiming the end of capitalism. Once again, reports of its death are greatly exaggerated.

In a recent Larry King interview Michael Moore said that capitalism was “over.” After all, capitalism gave us liar loans where we lent a million bucks to some poor guy making $15 / hour. Wall Street’s culture of greed combined with Washington’s lasses-faire attitude to give us the credit crunch. So goes the story.

Right now the government is engaged in a massive effort to fix the crisis—through bank capital injections, tax cuts, and spending increases. It even looks like we’ll lend some money to Detroit. But that’s not nationalization. Shoot, it’s not even Japan-style industrial policy. Right now it just looks like crisis management.

The overshoot and collapse that resulted in the current crisis is endemic to human society—capitalist or otherwise. This crisis won’t lead to the end of capitalism, any more than hanging chads in Florida in 2000 led to the end of democracy. Once more, the alarmists have it wrong.

Douglas R. Tengdin, CFA
Chief Investment Officer
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