Sunday, February 21, 2010

Death of a Small Bank .....

In the US small banks are not recovering so well as their bigger brothers and sisters who received billions in taxpayer funded bailouts.

Unfortunately, this is a symptom of a larger problem with capitalism; the distribution of wealth.

Yes, capitalism and free markets allow JUST about anyone who has a business idea to make a go of it, but when it comes to issues of inflation and cost of living increases in relation to wealth distribution, its no surprise that the lower and middle classes are paying more to get by then the wealthy.

You need to look only at years of cuts to social programs coupled with shrinking wages, salaries, and disappearing benefits to see how inflation increases hit the lower and middle classes the hardest.

It might be a cliche to say that plain old greed is the culprit, but there are individuals more responsible then others. A large portion of free market zealots believed that absolutism in free markets would manifest itself in a short period of time into a Utopian capitalist paradise in economic experiments around the world from China, to Bolivia, and the former Soviet Union.

What has instead happened is hoarding of wealth by a few percent of the populations with minimal trickle-down to the other social strata's.

And so now, even though the free market zealots core beliefs were shaken to the very foundations during the Credit Crisis of just a few years ago, the heroin addicts that are the large financial institutions that got high on their on supply of liquidity, were given sickly sweet doses of methadone via large bailouts.

Whose to say that someone won't try to pull the same high risk for short term gain economic stunts again?

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