How Capitalism is Supposed to Work

Yesterday’s announcement of JPMorgan Chase’s buyout of Bear Stearns has still got me bothered. Not because of the fact that this is was America’s 5th largest global investment banks, but because somehow, inside of just 10 months, their value plummeted from a high of 159.36 per share to 2.84 per share before being bought out for just $2 per share.

Now, this was supposed to be an organization chocked full of some of the best financial management minds this country has to offer. How something like this could happen to a company that
survived the Great Depression is beyond me. What I believe will hurt the most in the end is the effect that this implosion will have on the employees who were relying on their Bear Stearns employee stock for their retirement and those employees who are now in fear of losing their jobs on top of it all.

Fortunately, we have the FDIC to protect our checking and savings accounts should this continue to happen to other banks, right?

Sure, but having our government pump money into the economy by bailing out banks will only serve to lengthen our current recession (incase you didn’t know we are in one), devalue the dollar and create inflation like we have never seen before. It might not be the great depression, but it will be darn close.

Remember 2000-2001 stock market crash as a result of the dot-com boom? That “recession” was short lived, do you know why? Because businesses were allowed to fail without being bailed out by the US Government. When the dust settled, new opportunities were formed, which rejuvenated the US economy…which is how capitalism is supposed to work.

So where did
all of those people across the country end up after their homes were foreclosed on?

This piece produced by BBC News might give you some indication:

While the state of affairs depicted in this video are both sad and bothersome, what really gets me is that it was a foreign news source that broke the story, and not one of our own. I suppose we can all thank our
consolidated media powerhouse for protecting us from the truth behind what is happening to these American people and our economy overall.