Miss Jones, you're so misguided. You do realize that we still officially live in a country where capitalism rules the day and that business operates under free markets, right? You do realize that when corporations have to lay off workers that it is business strategy, not because of disdain for the working class, right? And, fyi, corporations move and do business overseas to avoid U.S. over-regulation, not because they don't like you and me. I'm a working class type. I'm valued by my company, and I value myself along with my co-workers, so speak for yourself.

If you don't like the way our free society works here in America, well then move to somewhere like Venezuela, France, or Cuba. With your negative and bitter attitude, you're never going to be happy here, you're never going to advance yourself, you will be stuck in a rut waiting for the government to do something for you.

I do agree with you on one thing, let AIG fail.

Good post Zola. You express the feelings of helplessness and anger that many people have of an economic system that seems indifferent to the damage it causes to many people. I agree with your sentiments.

Thank you also Greg emailing me. I'm guessing that you want me to answer this post. If I've angered you by disagreeing with your opinions, I apologize for getting you angry. But I haven't changed my opinions. I've tried to disagree with you in a civil manner and to present my views while respecting your own.

From my time reading various progressive articles and blogs, I think all progressives are fairly critical of an unregulated capitalist system. Some of the more radical progressives want to replace the capitalist system with a more equitable system. Some of the more moderate progressives think that the capitalist can be reformed of its worst faults through government regulation. I agree with a lot of the criticisms of an unregulated capitalist system, but I belong in the second group in that I think the capitalist system can be reformed.

Right now the ideas of the late economist Hyman Minsky are in vogue. In the November 17, 2008 issue of The Nation, I photocopied an article by Robert Pollin on the ideas of Minsky. He wrote:

"Minsky, by contrast, explained throughout his voluminous writings that unregulated markets will always produce instability and crises. He alternately termed his approach 'the financial instability hypothesis' and 'the Wall Street paradigm'.

For Minsky, the key to understanding financial instability is to trace the shifts that occur in investors' psychology as the economy moves out of a period of crisis and recession (or depression) and into a phase of rising profits and growth. Coming out of a crisis, investors will tend to be cautious, since many of them will have been clobbered during the just-ended recession. For example, they will hold large cash reserves as a cushion to protect against future crises.

But as the economy emerges from its slump and profits rise, investors' expectations become increasingly positive. They become eager to pursue ideas such as securitized subprime mortgage loans. They also become more willing to let their cash reserves dwindle, since idle cash earns no profits, while purchasing speculative vehicles like subprime morgage securities that can produce returns of 10 percent of higher.

But these moves also mean that investors are weakening their defenses against the next downturn. This is why, in Minsky's view, economic upswings, proceeding without regulations, inevitably encourage speculative excesses in which financial bubbles emerge. Minsky explained that in an unregulated environment, the only way to stop bubbles is to let them burst. Financial markets then fall into a crisis, and a recession or depression ensues.

Here we reach one of Minsky's crucial insights- that financial crises and recessions actually serve a purpose in the operations of a free market economy, even while they wreak havoc with people's lives, including those of tens of millions of innocents who never invest a dime on Wall Street."

I've been reading these articles to try to grasp at what is going on right now, as I believe a lot of people are. I think Zola is right that a lot of our problems started with the Reagan era, when Reagan began taking away many of the regulations to protect our most vulnerable Americans from the worst effects of the capitalist system. During the 1980s, the gap between the rich and the rest of the country grew dramaticly, the number of homeless rose, and financial crisis became more frequent. There was a stock market crash in 1987, a savings-and-loans crisis in 1989, an emerging markets crisis in 1997, the dot come bust of 2001. From looking at this I think Minsky may be right in his criticism.

I'm not an economist. But I love history, and a lot of different types of people have made the same criticisms of capitalism: the Popes, the New Dealers, workers and unions, social workers, civil rights leaders, progressive leaders. The people who have been most critical of capitalism have tended to in touch with the people who are left behind the capitalist system and are most hurt by it. If you read the reactions of Mark Twain, Helen Keller, Pope Pius XI, Pope John Paul II, Franklin D. Roosevelt, Martin Luther King Jr., Jane Addams, and various people to the financial crisis of their times, all of these people made very similar criticisms of the unregulated free market system.

With all its faults, I do think capitalism has many benefits. Over the long run, I think a capitalist system can lift more people out of poverty than any other economic system. But there will always be people left behind. I think ironically Communist China offers the best example of the benefits and faults of a capitalist system. Ever since China had free market reforms in the 1970s, the Chinese economy has grown a middle class of around 200 to 300 million people. This is a good thing. But with the good comes the bad. Those millions who are left behind are exploited for their cheap labor and often work in degrading sweatshop conditions. The rush to exploit natural resources has led to terrible pollution problems. As income disparities grow, the rich become indifferent to how the sustenance of their lifestyle affects the less fortunate. Right now the Chinese goverment has been able to hold off the simmering discontent because their economy has been growing at double digit levels. Now that it is growing at a lower rate, many government officials worry that they may struggle more to hold of simmering resentment.

I think the capitalist system has many good things. But it's not perfect. I think the Zola's criticism of the economic system of the past 30 years is correct. I also agree with something Robert S. McElvaine wrote in the October 16, 2008 edition of the Washington Post Weekly. McElvaine wrote:

"Here's the main lesson the Great Depression taught us: Capitalism is the best economic system just as democracy is the best political system, but both contain inherent dangers that require checks and balances to ensure that they work properly. One of the most prominent dangers of capitalism is that income will become too concentrated at the top, undermining the functioning of a consumer-based economy. The fruits of this lesson were put into effect during the New Deal through higher taxes on the rich, support for unions to help working people get a larger share of the national income, social programs to help the poor, and such regulatory agencies as the Securities and Exchange Commission. A system of regulated capitalism was in place and worked very well from World War II to 1980.

Then economic fundamentalism staged a revival- and once again got us into a mess. The only thing that can begin to get us out of it is replacing it with the sort of reasonable, balanced policies that produced a long period of widespread prosperity through the middle of the 20th century."

I apologize Zola for the long response to Greg's comment. This is your post and I shouldn't make long winded responses that detract from your post.

Thanks Greg for your email apology. As a liberal Democrat, though, I'm not interested in receiving a forward of a conservative email. Since I made a few blogs against Prop 8 a few months ago, I've occassionally received some unwanted emails. So I'd prefer if you don't forward any more emails to me.

Angelo we all love your comments. I'm sure Zola won't mind. ;-)