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Capitalism's Greatest Hits

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As Americans we've have had it drilled into our heads that there are only three kinds of economic models:

Capitalism: Which we've been been Pavlovianly conditioned to accept as “the best, most productive and most democratic economic system ever devised. (The current meltdown we are assured is the simply that exception that proves this rule.)

Communism: Which has repeatedly proven itself the least inefficient and least productive economic system ever devised by man,

Socialism: Which fans of unfettered capitalism assure us is simply communism in a dress.

I only bring this up because today the Republican National Committee, meeting in a spider hole somewhere where they will, in the next few days, demand that the Democratic Party rename itself the, Democrat-Socialist Party.

Well, most of Europe is run by “Social Democrats;” and they seem to doing okay. I mean, no one is doing great these days, but at least Europeans don't have to worry about being unemployed AND uninsured.

But if the RNC wants to make it's case against the Democrats socialist tendencies, they first have to make a better case for their unfettered capitalist tendencies. Is pure capitalism really all that efficient? And if so, at what human costs are these “efficiencies” attained?

Fortunately history provides report card on American capitalism. And, if it were, say a bus, that broke down every 20 miles or so and left its passengers to hoof it into town, I suspect we'd of replaced this thing with something more efficient a long time ago. Here's that report card:

October 12, 1837 - The Panic of 1837 (sparked by over-extended credit/defaults.) The House sanctioned the use of Treasury notes for a bailout, provided that they didn't exceed $10 million; Congress's efforts to stabilize the nation's currency failed to lift the depression which lasted seven years.

August 24, 1857 – Panic spared by the failure of New York branch of the Ohio Life Insurance and Trust Company which had loaned $5 million to railroad builders, had been swindled out of millions by the manager of its New York branch and was unable to pay extensive debt to Eastern bankers.

September 24, 1869 - "Black Friday" crash of gold prices as Grant administration foiled attempts by financiers Jay Gould and James Fisk try to corner the gold market. Several brokerage firms went  bankrupt; national economy was severely disrupted for months.

September 18, 1873 – The Panic of 1873 began with collapse of Jay Cooke and Co., one of the country's most reputable brokerage houses of it's time, known as the "financier of the Civil War.” The Panic of 1873 exposed over-speculation which continued to wreak havoc on the nation's economy for months. The New York Stock Exchange closed for ten days to wait out the worst of the crisis. The secretary of the Treasury pumped $26 million of new currency into the economy, swelled the amount of paper money in circulation to $382 million. Panic did not subside, economy continued its slump through the end of the decade.

May 5, 1893 – Panic was once again sparked due to reckless speculation and over-leveraging. Panic swept the New York Stock Exchange and the stock market crashed; by year's end the country was in a severe depression.

November 9, 1903 - Panic of 1903 (known as the "Rich Man's Panic") reached its low; Dow dropped to 42.15; stocks of industrial companies fell to single-digit prices; fiscal crisis dragged on for the rest of the year, took severe toll on banks, many steel and iron producers.

October 1, 1907 - The nation plunged into the Panic of 1907 which lasted for a year – sparked by a run on Knickerbocker Trust in New York, which lacked resources to pay out to the demanding public, ultimately toppled the economy; President Roosevelt enlisted the aid of his one-time enemy, financier J.P. Morgan, who capitalized on his considerable reputation to borrow $1 million in gold from European countries. Outside U. S. Subtreasury building at Wall and Broad St. in October 1907

October 24, 1929 - "Black Thursday:' stock prices plummeted, a record  12,894,650 shares traded on the New York Stock Exchange Followed by "Black Tuesday" the markets tanked. Thousands of investors were wiped out as America's Great Depression began; 1932 - stocks were worth only about 20 percent of their value in the summer of 1929; 1933, nearly half of America's banks had failed, and unemployment was approaching 15 million people, or 30 percent of the workforce.

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Stephen Pizzo has been published everywhere from The New York Times to Mother Jones magazine. His book, Inside Job: The Looting of America's Savings and Loans, was nominated for a Pulitzer.

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