A couple more pages relevant to my page on why plutocracy sucks.
First, this fascinating NYT article about Venice, one of the first capitalist states. The basics, in case you’re run down your free NYT quota: Venice created the biggest trade network in the medieval Mediterranean. The trading expeditions were handled by colleganze, essentially one-off joint-stock enterprises. They were open to anyone who had the money to invest.
Until 1315, when Venice’s upper class– its 1%– instituted a change known as La Serrata, the closing. Desiring to preserve their privileges, they created a formal list of who was in the oligarchy and banned new additions. The power monopoly was soon extended to economic matters; the colleganze were banned.
The result was economic decline. By 1500 the city was smaller than it had been in 1330, and it continued to shrink. Meanwhile other cities overtook it in economic influence. What the 1% think is good for them is usually a lousy idea for the general population, and ultimately even for themselves.
The other article is David Stockman’s devastating takedown of Mitt Romney’s “business experience”.
Except Mitt Romney was not a businessman; he was a master financial speculator who bought, sold, flipped, and stripped businesses. He did not build enterprises the old-fashioned way—out of inspiration, perspiration, and a long slog in the free market fostering a new product, service, or process of production. Instead, he spent his 15 years raising debt in prodigious amounts on Wall Street so that Bain could purchase the pots and pans and castoffs of corporate America, leverage them to the hilt, gussy them up as reborn “roll-ups,” and then deliver them back to Wall Street for resale—the faster the better.
That is the modus operandi of the leveraged-buyout business, and in an honest free-market economy, there wouldn’t be much scope for it because it creates little of economic value. But we have a rigged system—a regime of crony capitalism—where the tax code heavily favors debt and capital gains, and the central bank purposefully enables rampant speculation by propping up the price of financial assets and battering down the cost of leveraged finance….
In truth, LBOs are capitalism’s natural undertakers—vulture investors who feed on failing businesses. Due to bad policy, however, they have now become monsters of the financial midway that strip-mine cash from healthy businesses and recycle it mostly to the top 1 percent.
I wonder how the Randians convince themselves that Romney’s way of making money– mining companies, firing workers, leaving them highly indebted and letting them go bankrupt– is “making” rather than “taking”.