Not all bankers and private equity firms create wealth, because some make bad decisions. But if government does not bestow privileges, those that don't create wealth go out of business, and those that fund good ideas grow. Some may call that "vulture capitalism" and sneer at "hostile" takeovers, but if the takeover is not enabled by government force, it is likely to be a good thing. It makes America more prosperous.
Michael Moore says, "Capitalism has no moral core."
Is that right? Since the word "capitalism" is ambiguous, the answer depends on what we mean. If it's crony capitalism -- well, yeah. It stinks. Handouts to Solyndra and special deals for Goldman Sachs and GM are not capitalism. That's "crapitalism."
Many people hate banks, private-equity firms and mortgage brokers. In light of the last few years, this isn't totally unjustified. I resent the bankers who got rich by taking foolish risks and then, when they failed, got bailed out with our tax money.
I guess I shouldn't blame bankers. I should blame the politicians. They gave our tax money away. If someone offered me money to cover my losses, I'd take it, too.
The real evil bankers are the government cronies, like those at Fannie Mae and Freddie Mac. They took our money by force, our taxes, then paid themselves fat salaries and promised us that none of our money was at risk. And then they squandered more than $100 billion, betting that housing prices would always rise and few people would default.
I resent them and their backers in government.
But in a real free market -- no government privileges or barriers to competition -- capitalism is great. It's the only system with a moral core because it's based on freedom, not force.
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