First Trust: Morning Monday Outlook. Capitalism vs. Socialism

FT Advisors ^ | 11-3-2025 | Brian Wesbury

[Old West Conservative]

History is absolutely clear – Capitalism is the best system ever developed (actually evolved by human experiment) to boost living standards. At the same time, Socialism has a seriously lousy record.

In the most recent attempt, Venezuela has gone from one of the wealthiest countries in South America, to one of the poorest.

In spite of the very clear record of capitalism’s success, many want to “bite the invisible hand” that feeds us.

On Tuesday, it appears that New Yorkers – who live arguably at the historic center of American capitalism – will elect an avowed “democratic socialist” as mayor, who wants to use the visible hand of government to direct resources.

It’s not like capitalism hasn’t faced intellectual challenges before. Historically, they tend to fall into three categories. First, capitalism leads to excess and then collapse – citing the Great Depression and the Subprime Panic of 2008 as example. Second, it ignores environmental costs (“externalities”) which may hurt the earth, like “climate change.” Third, it causes inequality – houses are unaffordable, while billionaires proliferate.

We don’t have the space to deal with each of these in depth. But it is well documented that the Great Depression was caused by a series of government mistakes, most important lousy Federal Reserve policy, which caused deflation and bank failures. It wasn’t capitalism’s fault.

Again in 2008 subprime problems were caused by overly loose monetary policy between 2001 and 2006, which boosted riskier mortgages and drove up home prices. In the meantime, government-sponsored enterprises stoked lending to meet political goals. Then when the losses appeared, mark-to-market accounting made the multiples worse by forcing banks to price and sell assets in an illiquid market at less than their actual cash-flowing value.

[Old West Conservative]

Brian Wesbury gets it. He's a conservative and a brilliant economist, and he gets it.

[HIDEK6]

The point of socialism is not to improve the citizen’s situation. It is to enslave him.

[ProtectOurFreedom]

He partially gets it. He wrote “...subprime problems were caused by overly loose monetary policy between 2001 and 2006”

He ignores the far bigger factor that the Community Reinvestment Act MANDATED that lenders loan to unqualified borrowers so everybody could get into a house. It lead to the totally predictable “subprime” mortgage collapse.

It’s the same bad intentions of the damned government that everybody must go to college leaving us with trillions of dollars of bad debt.

[yefragetuwrabrumuy]

Eugene V. Debs

https://en.wikipedia.org/wiki/Eugene_V._Debs

Eugene Victor Debs (November 5, 1855 – October 20, 1926) was an American socialist, political activist, trade unionist, one of the founding members of the Industrial Workers of the World (IWW), and five-time candidate of the Socialist Party of America for President of the United States. Through his presidential candidacies as well as his work with labor movements, Debs eventually became one of the best-known socialists living in the United States.

Always an anti-American loser.