[wombtotomb]

Agreed. But this is the part most forget. Capitalism is greed tempered by fear. If you make one or the other non existent, capitalism ceases to exist.....

[21twelve]

“Capitalism is greed tempered by fear. If you make one or the other non existent, capitalism ceases to exist.....”

It would seem that some fear is instilled into businesses by the government. OSHA laws, EPA Rules, the IRS, etc. The “fear factor” goes down quite a bit I imagine when the business is run by the government. Post Offices and GM today, Health Care tomorrow.

Of course the fear of NOT making a profit is huge, and that too goes away when the government runs the business. (Profit? Heck, that’s what taxes are for!)

[WallStreetCapitalist]

There is tremendous wisdom in what you just said. The defining characteristic of capitalism is that you must be willing to risk wipeout or severe financial loss. This causes you to only invest in projects that have a higher than better average possibility of producing gains for you (and thus, the economy).

The problem with what happened on Wall Street is there was zero downside risk in the bonus calculations for traders. Warren Buffett has said he would have had the same upside bonus potential but would have required a contract that forced the trader into near or actual bankruptcy if they ruined the firm. He said that an enforceable contract such as that alone would have solved the entire problem without the need for any additional legislation because they are on the hook with you, the shareholders, and the tax payers. Rational self interest would kick-in not only on the trader's own positions, but he would be watching the positions of his coworkers, too.