Who Do You Believe?
by James Glaser
October 10, 2008

Both Barack Obama and John McCain are telling us they know how to get America out of the financial mess we are in. They both say the same thing, "Vote for ME!" If either one of them had a plan, it would be nice if they would tell us about it now. We can't wait until next year to do something.

Meanwhile, Nancy Pelosi, the Speaker of the House, has decided that we haven't spent enough of our grandchildren's money, and she is calling for another $150 billion stimulus package. Is that like buying votes?

Henry Paulson is saying, wait a minute with that Wall Street Bail Out, I don't want to spend the money like Congress voted it to be spent. Now I want to take that money, and buy banks with it. Obviously, Henry doesn't know what to do either. John McCain made a change in the homeowner bailout he proposed at Tuesday's presidential debate, making it more generous to financial institutions and more costly for taxpayers. Do you have faith that John knows what he is doing?

I Googled "Obama's Bailout Plan," but all I could find were stories like this from the Miami Herald — "Obama Slams McCain's Mortgage Relief Plan" or this one from Reuters, "Obama Attacks McCain Mortgage Bail Out Plan." So, I guess Barack is out of real ideas, too.

Well, I have an idea. How about we do nothing. We keep going to work as long as our place of employment still wants us, and we watch as the market continues to fall. Then when stocks get to a price we think is good, we start buying them again. Prices will start going up, and the business cycle will start all over again.

I don't know if my idea will work, but it doesn't cost our grandchildren any money. Does anyone think that just maybe, like housing, the stock market was a wee bit inflated? Maybe everything is priced a little too high, and the "market" has decided to lower prices.

I have always figured that the thing you have to sell is only worth whatever someone is willing to pay for it. The price of a house is coming down, and the price of stocks are coming down because people are not willing to pay the price asked.

Definition of Capitalism

Capitalism is an economic system dedicated to production for profit and to the accumulation of value by private business firms. In the fully developed form of industrial capitalism, firms advance money to hire wage laborers and to buy means of production such as machinery and raw materials. If the firm can sell its products for a greater sum of value than that originally advanced, the firm grows and can advance more money for a new round of accumulation.

I had that definition sitting in my desk drawer. I don't know who wrote it, or if it is the best one, but it does explain our system pretty well. I think the key line is, "If the firm can sell its product for a greater sum of value than originally advanced, the firm grows."

No place does government fit into the equation. Washington got us into this mess by trying to make things work better, and that failed. Now they want to stay in the mess, and try and "fix" things.

Right now, many companies can't sell their product at a profit, and if you can't do that, then you should close the doors or lower your price until your product sells. If it sells at a loss, and you want to stay in business, you have to figure out a way to cut your costs, or make your product more desirable so people will pay that higher price.

It really is a simple system, but when government steps in it becomes complex.

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