You really do have an incredibly idealized view of capitalism.Bail-outs, and less direct aid from governments, have been an integral part of capitalism for a long time, including in the U.S. The glory days of Versailles were made possible by bailing out the Company of 100, whose investment in New France had failed, partly because the court had not given promised military aid. The British empire, and the Dutch spice trade (not to mention the U.S. with oil and Banana Republics), were subsidized by militaries and bureaucracies. Much of our technical innovation over the last 60 years is a direct result of government spending on the bomb, the space program, and military research. Every government contract that keeps a company up and running (often with no real immediate need for what that company makes) is a bail-out of sorts.The failure to deal with international debt is one reason why the U.S. gets so little political support around the world. Companies can file for ch. 11, if they are unable to re-structure debt without court protection. There is now a lot of talk about a need for that with international debt. In many countries, debt that was supposed to produce growth, allowing the debt to be paid off, has become more and more burdensome, stifling growth, just as happens with companies with overly heavy debt loads. With companies, in the end you get a choice between ch. 11 and ch. 7; countries like Argentina, and maybe, eventually, Brazil, get stuck with choosing something like ch.7, if they can't renegotiate debt in a way that allows it to be paid off on less burdensome terms. Ch. 7 is very ugly, but sometimes it is the only option left.As to Crony Capitalism, no, Shrub is hardly the first. But he is its poster child: born to privilege, history of incompetence and profligacy, whose wealth and career were based primarily on his usefulness for his family connections and insider trading. This is hardly a role model for the U.S. to hold up to other countries when it wants to complain about their Crony Capitalism. Of course, when our leading brokerages defraud their own small clients to help themselves and their big clients, and when our largest banks, including those holding substantial amounts of foreign debt, collaborate with giant corporations in cooking their books, it is hard to imagine how the U.S. can continue to tell other countries how to follow our supposed vision of capitalist economics without being laughed at.
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