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Richard (RJ) Eskow

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David Brooks Thinks Romney's a "Modern Capitalist." He's Right.

Posted: 07/18/2012 1:11 am

David Brooks says Obama's attacks on Romney's business record are "about capitalism." That's like saying an arrest for vehicular homicide is "about driving."

Our economic "roads" are jammed with destructive drivers like Romney. They're menacing motorists with their massive semis and monster dumptrucks while the traffic laws go unenforced. And whenever there's a lethal pileup their friends say it proves we shouldn't have traffic laws at all.

Brooks says that the President's campaign rhetoric "challenges the entire logic of capitalism as it has existed over several decades." That sounds like a subliminal suggestion from the liberals' favorite conservative that Barack Obama's a socialist. But if there's anything that needs to be challenged at this point in history it's "the entire logic of capitalism as it has existed over several decades."

This decades-long wave of unchecked corporate greed was brought about by deregulation, along with other symptoms of a corrupting collusion between corporate and political leaders. That unholy marriage has been made manifest in the very being of Mitt Romney.

Brooks conflates the economic rampage this process has created with capitalism itself - or, in a phrase he uses no less than three times in an 800-word piece, "modern capitalism." Those two words embrace behaviors that include both Wall Street lawlessness and the government largesse that inflates the wealth of people like Mitt Romney, whose firm's first success was made possible by a Massachusetts tax deal and whose personal fortune has been padded by undeserved loopholes.

Today's big-corporate czars are the worst case studies in unchecked greed since the Robber Barons. You'll need a phrase like "Modern Capitalism" if you're trying to defend their misdeeds. The words resonate with entrepreneurial spirit, which the American public loves. And who could be against the "modern" except a Luddite or a fool?

(Or a socialist, of course.)

Today's big-money CEOs aren't really "capitalist." The popular American notion of "capitalism" fits Merriam-Webster's definition: "An economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market."

But that's not how it works anymore. Wall Street has deceived and defrauded courts, homeowners, account holders, shareholders, government agencies and investors on an epic scale. Market choices -- which bank to use, whether to invest in big-bank shares or purchase mortgage-backed securities -- aren't "determined by private decision" at all. They're driven by long-standing patterns of fraud and deception.

Our largest corporations survive and thrive because of government patronage, not market forces. That's especially true of the too-big-to-fail banks which the government rescued after the crisis, and which it continues to prop up with cheap Federal Reserve money, lax regulation of civil and criminal laws, and the moral hazard that comes with the implicit guarantee of future bailouts.

The LIBOR scandal reminds us that prices are often determined, not by "competition in the free market," but by price-fixing, investor fraud, and market manipulation by a very small group of "too big to fail" players.

David Brooks' conception of "modern capitalism" should repel most Americans, and according to polling data it does. Conservatives should be as outraged as anyone -- maybe more so, since it flies in the face of everything they claim to hold dear: transparency, integrity, freedom from government control, and an economy guided by "the wisdom of the markets."

In other words, what David Brooks calls "modern capitalism" isn't capitalism at all.

It's not modern, either. The government/big business cronyism Brooks defends is as ancient as the Roman and Athenian politicians who gave bribes for personal profit. It's as old as the Union Pacific/Crédit Mobilier scandal of 1872. It's as stale as J. Pierpont Morgan responding to charges of illegal restraint of trade by asking Teddy Roosevelt, "Why don't you just send your man to my man and we'll fix it up?" It's as antiquated as bank magnate Andrew Mellon, who as Hoover's Treasury Secretary articulated the credo which corporate predators re-state whenever they've caused economic disaster:

"Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate ..."

Brooks hits closer to home when he points out that, contrary to campaign rhetoric, Obama has employed or been friendly with some dubious "Modern Capitalists." He's right to say the President hasn't acted against globalization. He even missed the chance to knock Obama for supporting additional free trade agreements. The President should do a better job of matching his actions to his rhetoric.

Then there's Mitt. Seems like everybody's got some advice for him nowadays: Release your taxes. Don't release your taxes. Focus on Obama. Focus on the future. Don't focus at all. There's only one piece of advice Romney hasn't been given: Be yourself.

Think about that.

But out of all the unsolicited suggestions coming Mitt's way, none can be worse that the one offered by David Brooks. "Romney is going to have to define a vision of modern capitalism," Brooks writes. Define a vision of modern capitalism?

That's Romney's biggest problem: He already has.

 

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06:41 PM on 07/19/2012
Success is a generational effort for most Americans through the last hundred years. The immigrant comes over with nothing, works hard every day, stays out of trouble, starts a family, has children. One out of many achieves wealth in their own lifetime, but for most, their children get educated, take their parents work ethic and beliefs, and go from there. Sometimes it takes two or more generations of hard work. Ann Romneys grandfather was a Welsh Coal miner who had a kidney crushed in a mining accident in Wales, where there were no opportunities for him. He came to the US, his son went to a technical school, and became an inventor and developed a business where he became well off. His grand daughter, Ann then married a man whose background was similar. Both Mitt and Ann resisted the temptation of the 2nd generation to fall into alcohol, self indulgence, and other sins of the wealthy but instead pursued the same values as their poor grandparents. Hard work and faith and assisting others who were poor like their family once was. This is in fact the American Dream. It is possible because of the values taught by the poor passed on, along with two or more generations of hard work under the most difficult of circumstances. The credit for the Romney Wealth goes to the American system, and the Romney family over at least three generations.
04:10 PM on 07/19/2012
In general, most success is generational in a capitalist system. That's why over generations, our society as a whole has become richer. In particular, Ann Romeny's grandfather came here as a coal miner with a crushed kidney from a coal car, his father was educated at a technical institute and invented and marketed a product that made him rich, and now his daughter, who was raised with traditional respect for her grandfather, may be in the White House and have a horse in the olympics despite having cancer and MS. If the second and third generations had taken to alcohol or drugs, or had not been educated, or had not had the values of the grandfather, they surely would have fallen. This illustrates the fact that the message of hard work, perseverence, faith, and core values are transmitted from generation to generation by the family. The government cannot do that. For that reason, a whole generation fed by the government and broken up by divorce, drugs and other factors can be lost even though the govt gives them basic economic security.
03:56 PM on 07/19/2012
If all Americans, including capitalists, adopted an America first attitude when it comes to our economy things would work much better. Capitalist need to at least factor in how their decisions are going to effect their neighbors not just the bottom line. Consumers need to read labels, Made In America means something. When buying an automobile are you sure your happy with providing a well paying job for a foreigner instead of an American?
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emmanuel kalu
information is knowledge, knowledge in power
02:46 PM on 07/19/2012
great article. we in this country right now, don't have capitalism, what we have is massive unregulated greed, supported by weak regulation( or lack of them), one sided tax laws, unfair legal process, all supported by the greedy republicans. we don't have anything called capitalism, we have greed in modern day slavery. each day corporation like airlines are able to destroy contracts in court, yet homeowner can't get their home mark to market value. each day banks can borrow free money from the govt, yet qualified borrowers are made to pay an arm and leg. right now a country as big as this, only has two wireless carries? TWO.
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HUFFPOST SUPER USER
msbeal
Let no neo-con lie go unchallenged
11:23 AM on 07/19/2012
Modern capitalism has created at least two Americas, the walled compounds of the uber wealthy and this vast new America for the rest of us plunging rapidly towards third world status.

It's perfect if you think about it. Going all the way overseas to find hard up, cheap labor was always a bit of a nuisance for them. Why not just create our own uneducated, impoverished, hungry and easily manipulated massive labor force closer to home?

All they need to accomplish this is to eliminate regulations, government, and take over the military. In short, all they need is the Republican Party.
07:33 PM on 07/19/2012
"Modern capialism" and "At least two Americas". The "Uber wealthy". These are vague. Where are the definitions and the facts? Second error: "cheap labor was always a bit of a nuisance for them" . Who is "Them"? What are you talking about? "All they need to accomplish this is to eliminate regulations...." and "All they need is the Republican party". Who is "They"? Do you mean people like Bill Gates who has done more for the poor in Africa than all the socialists of all history combined? Or do you mean the fictional Mr. Burns from the Simpsons? Certainly people like Barbra Streisand are "Uber wealthy". Do you mean her?
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HUFFPOST SUPER USER
msbeal
Let no neo-con lie go unchallenged
12:36 PM on 07/20/2012
You want me to bring you up to speed on the 'they' in 250 words or less?

I'm not describing a conspiracy but more a business 'trend'. By using our military to extend corporate investment security around the globe, internationalist are investing in factories, farms and mines overseas because of the cheap labor and low regulations.

This trend has made a few extremely wealthy. For example the five Walton family members (Wal Mart) have more wealth than the entire bottom 50% of the nation. And, they are not afraid to use their power politically to either continue that accumulation of wealth or block anyone from altering that trend.

The Communications sector broke all records two years ago spending 269 million dollars lobbying congress in one year!! Do you think they spent that money to give us more innovation, cheaper prices or better service?

They spent that money to corner their markets. They will do whatever it takes to ki.ll internet upstarts that are competing with them. (see attack on bandwidth control)

American labor, on a scale from the bottom upward, has become obsolete. Out bid by easy access to international labor markets.

Bill Gates, by the way, is as bad as any of them, callously throwing his countrymen overboard, while amassing a huge personal fortune.
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Rascals Veda
Go. Do. Be.
10:55 AM on 07/19/2012
"But if there's anything that needs to be challenged at this point in history it's "the entire logic of capitalism as it has existed over several decades."

So, you agree with me.
08:37 AM on 07/19/2012
The "logic of capitalism"?
You can have an affordable car because of an American entrepreneur.
You can fly anywhere because of an American entrepreneur.
You can play on a computer because of an American entrepreneur.
You can turn on a light because of an American entrepreneur.
You can get a home mortgage because of an American entrepreneur.
You can have a career because of an American entrepreneur.
Or you can be an American entrepreneur.
Or you can depend on the government, and have nothing.
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HUFFPOST SUPER USER
DocJoseph
A bleeding heart will heal; a cold heart will not
10:13 AM on 07/19/2012
Affordable care. Hundai?
Fly anywhere. On an airbus?
Computers. Made in what country?

And so on. My career is medicine. Educated publicly, supported by Medicare and Medicaid, and the equipment I use is mostly made in Germany.

The world is not as simple as you think.
11:40 AM on 07/19/2012
A lot of people make things, but America invents everything. It is that simple.
11:46 AM on 07/19/2012
I hope you're a proctologist. That would help explain where you're head is.
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Rascals Veda
Go. Do. Be.
10:40 AM on 07/19/2012
You can't have any of those things unless there are "schlubs" building, maintaining, servicing, selling,...

And for some perspective...without Guttenberg, a nasty ol' European, a craftsman, you wouldn't have any of this. AND he based his ideas on pre-existing equipment!

Lay down the myth of the self-made person.
11:43 AM on 07/19/2012
So compare communism(socialism) and capitalism. Which invents and manufactures more? CASE CLOSED!
07:55 AM on 07/19/2012
There are a few things we know with certainty: One is unchecked power, whether political or financial, will be abused by people driven to have that power. This is why the framers of our constitution created a government of checks and balances. While this certainly does not stop all corrupt behavior, as is obvious by anyone who pays attention to politics and the working of Government, it does put a limit on that corruption. Those who argue for deregulated, unregulated, and no government intervention are not only defending the excesses and corruption of the current too minimally regulated system -- they are also promoting less regulation and thus more corruption. They should revisit Adam Smith's ideas about human nature and the importance of caring about the fortunes of others. This does not simply mean the fortunes of the other 1%.
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Allene Stucki
11:43 AM on 07/19/2012
This blogger, like most all libs and other naive folks, thinks the purpose of government regulations is to keep the greedy people from exploiting the weak.

In reality, the purpose of government regulations is to maximize the amount of bribe mon - oops, I mean "campaign donations", flowing to politicians.
08:25 PM on 07/19/2012
Your perspective is simplistic.
07:52 AM on 07/19/2012
What is missing from both fronts (business and gov't) in today's world is prudency and integrity. Whether regulation is strict or slack, the goal shouldn't be greed and breaking rules, means to an end kind of mentality. Congress needs to grow up too. I know there are hard working people in both sectors and they are probably feeling lost in this crazy environment. It is sickening to listen to the rhetoric.
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HUFFPOST SUPER USER
lisalulu
I stand for Planned Parenthood.
07:52 AM on 07/19/2012
Modern capitalism is nothing but EXPLOITATION.

Disclaimer: Not applicable to small business owners. But we already knew that.
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HUFFPOST BLOGGER
Lowell Thompson
Artist, writer, recovering adman
07:32 AM on 07/19/2012
Tell it, RJ!

But, as I've said elsewhere, Brooks (and you to some extent) confuse our economic system - Capitalism - with our governmental system - democratic republic.

Maybe that's why the public at large is so confused. The experts don't even know the difference.

The only issue we Americans need to resolve is whether our economic system should rule US, or our governmental system. It's mano v mano, Capitalism vs Democracy.

So far, it looks like Democracy is on the ropes.

Right?

http://buythecover.com

BTW: Here's a clue to the correct answer:

Did the Gettysburg address say "government of the Greedy people, by the Greedy people and for the Greedy people" or what?
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jkrowland
Hope and Change became Divide and Redistribute
03:33 AM on 07/19/2012
What a bunch of nonsense. Senior fellow of what, deceit, subterfuge, and mindless allegiance to socialistic practices? Read a book or something fella, you've got it all wrong. It's the Democrats that deregulated the financial industry under Clinton and the Democrats that said that everyone in the country should have the right to own a home (regardless of their credit) and forced the banks to make those high risk loans under regulatory penalty if the loans weren't made. That was thanks to Dodd and Frank never met a mortgage loan they didn't like and want to walk away from the whole mess now. You're an educated man, read all about it in America's Ticking Bankruptcy Bomb by Peter Ferarra...
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HUFFPOST SUPER USER
Duerksen
...but on the other side, it didn't say nothing.
07:33 AM on 07/19/2012
"Read a book or something fella (Harry Potter, perhaps?), you've got it all wrong. It's the Democrats that deregulated the financial industry under Clinton "

For the sake of argument, I will temporarily accept your facile demand that Democrats have done all the bad things to our economy. That being the case - you seem to agree that the financial industries need strong regulation. If that is the case - and if you are not simply following in Peter Ferrara's partisan footsteps - then we have no argument.

What is your recommendation for harshly regulating the financial industry?
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HUFFPOST COMMUNITY MODERATOR
phoenixdoglover
My dog loves my progressive treats agenda
07:33 AM on 07/19/2012
There is a huge flaw in the argument that the greater number of high risk loans promoted by Clinton era legislation, other than the perplexing time lag, is the fact that bad mortgages tend to take care of themselves. In other words, when serviced normally, bad mortgages get resolved rather quickly into lender actions that are a self correcting mechanism in the overall home loan market.  What happened to neutralize this self correction was, of course, CDO's. It became possible to hide risk and shift it way upstream. In the middle, financial firms specialized in this bundling and reselling of risk, and were so successful, they created demand for more mortgages than the market was naturally  producing. This is the genesis of the housing bubble.
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lisalulu
I stand for Planned Parenthood.
07:59 AM on 07/19/2012
You can tell they are missing major information when blaming homeowners. They miss the major causation of the implosion. Sad isn't' it?
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carburetor
Because money isn't everything!
02:25 AM on 07/19/2012
Richard Eskow - Nice piece. Well written and spot on. It's exactly what needs to be said and more people need to become aware of it. Obama is no saint, but Romney dances with the devil and anyone with a willingness to seek the truth, knows that your words tell it like it is. We can go four more rounds with "O" or we can take another middle class beating with Romney in the ring. My friends, the GOP is not our friend. I'd rather suffer through four of "O's" worst years than one of Romney's first years.
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HUFFPOST PUNDIT
ScreenName05
01:46 AM on 07/19/2012
I really think this is a critical point of disagreement between the left and the right.  And apparently neither side understands the real issue.  Right wing nuts really believe they don't need anyone or anything to succeed.  The are convinced that if they are just left alone they can take care of themselves and make all the money in the world.  In fact they are convinced of it.  On the extreme they are hoarding canned food in survival bunkers and waiting for the collapse or the rapture so they can at last be left alone by government and all the left wingers. 

The left is trying to make a rational argument about how societies must have infrastructure and services to produce everything, how society collapses without the underpinnings of that infrastructure.

The right actually is just waiting for those underpinnings to collapse and the left wants to save them. 

No wonder they can't understand each other.
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lisalulu
I stand for Planned Parenthood.
08:00 AM on 07/19/2012
You really don't understand either.
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HUFFPOST SUPER USER
Duerksen
...but on the other side, it didn't say nothing.
08:32 AM on 07/19/2012
By your discussion, and by observation of reality, it appears that the left actually DOES understand the real issue. Perhaps you mis-spoke in your second sentence?
zinxeb
Empathy ends cruelty
01:08 AM on 07/19/2012
Diane Rehm interviewed a man who wrote a book called "The Servant Economy", Jeff Faux...and the interview was a real eye-opener. He discussed this type of "modern capitalism" that you refer to, and it was really depressing to hear what it has done, and will do to our economy for years to come...and no happy ending if we continue on this path.