[ExI] Capitalism is like a poker game

[BillK]

Much has been written about the complex causes of the Great Recession.
Sub-prime mortgages, lack of regulation, derivatives, etc.

But I like this writer's easy-to-understand point of view.

<http://www.washingtonsblog.com/2010/04/concentration-of-wealth-is-destroying.html>

Sunday, April 11, 2010
Radical Concentration of Wealth is Destroying Both Capitalism and Democracy

As I wrote in 2008:

    The economy is like a poker game ... it is human nature to want to
get all of the chips, but noted that - if one person does get all of
the chips - the game ends.

    In other words, the game of capitalism only continues as long as
everyone has some money to play with. If the government and
corporations take everyone's money, the game ends.

    The Fed and Treasury are not giving more chips to those who need
them: the American consumer. Instead, they are giving chips to the
800-pound gorillas at the poker table, such as Wall Street investment
banks.

    This is not a question of big government versus small government,
or Republican versus Democrat. It is not even a question of Keynes
versus Friedman (two influential, competing economic thinkers).

    It is a question of focusing any government funding which is made
to the majority of poker players - instead of the titans of finance -
so that the game can continue. If the hundreds of billions or
trillions spent on bailouts had instead been given to ease the burden
of consumers, we would have already recovered from the financial
crisis.

As FDR’s Fed chairman Marriner S. Eccles explained:
    As in a poker game where the chips were concentrated in fewer and
fewer hands, the other fellows could stay in the game only by
borrowing. When their credit ran out, the game stopped.
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Simple, Eh?


BillK