An interesting aspect of the current financial meltdown is that nothing has actually changed except perspectives.
Think about it. One day everything was fine, then the Bush economic guru announced the world was coming to an end if his friends in the financial sector didn’t get 700 billion dollars of the taxpayer’s money the very next day, then the financial world did come to an end, more or less.
In a capitalist economy, goods only have the value people are willing to pay for them. Paper things like mortgages and stocks have no intrinsic value and they never did, so the value of paper can go from insanely high to nothing in a moment.
What we have to remember is the capitalist system was designed with real things in mind. Houses and cars and other real goods still physically exist and they still have value. What we’re finding out now is the actual value of these things, as opposed to the paper value.
That’s exactly what capitalism is designed to do and I’m quite certain it would work, if only the bankers and the politicians would let it.
