When Al Gore, a former Vice President of the United States, questions the current implementation of capitalism, it should give all a pause. To be sure, no one doubts Al Gore’s capitalist bona fides. After-all, much of his wealth can be attributed to a value not created by his intrinsic worth to society. That said he made the following salient observation.
Gore, who has transformed himself from a politician to a successful businessman with a net worth that could exceed $200 million, has spent the past years also advocating “sustainable capitalism” as parts of the global economy still struggle to emerge from the worst economic slump since the Great Depression.
“There is a continuing focus on short-term decision making in markets and that is distorting the allocation of resources,” he said. “It’s hurting the quality of decisions that are made by companies.” [source]
While Gore’s statement is true, it is incomplete. His point of view is the sustainability of capitalism for ‘non-distorted allocation of resources’ as known to Americans as opposed to the sustainability of the American middle class by using capitalism as a tool where applicable.
Gore failed to mention that there are areas where capitalism is by definition much less efficient. He failed to acknowledge that where innovation is not required as in an insurance company paying a bill, profits from said capitalist structure is an inefficiency that reduces healthcare to many.
Another case in point is an ‘infrastructure reinvestment bank’. Both Republicans and Democrats have been championing this policy. This would allow companies who legally cheat America by expatriating their earnings to avoid US taxes to repatriate $4.00 for every $1.00 they spend on buying infrastructure bonds with a nominal 1% return. It gives them an effective tax rate of 8%, a rate lower than most middle class Americans. Of course they yet again make income from the interest on the bonds paid to them by the US taxpayer.
If it looks like a duck or quacks like a duck then it is a duck. The above is a double wealth transfer engine in that monies are repatriated by given a large tax discount and interest is paid on bonds they are ‘made’ to purchase. Every American would love that deal. It is however reserved for the real unfettered movers of capital.
Having mainstream Al Gore crack the door to mainstream folks questioning capitalism is important as it puts the essence of capitalism in the forefront of news. Leaders in the grassroots must use this as segue to push the envelope and penetrate the American psyche by truth telling the ills of the kind of capitalism being practiced today, a form that is decimating the working middle class.
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