We heard Langone a couple of months ago on NPR. The interviewer, one could tell, was disgusted with the premise and title of Langone’s book, I love Capitalism. Still, the founder of Home Depot did an excellent job of making his case.
Lagone, whose new book, I Love Capitalism! was published in May, explained that the criticisms many millennials have of capitalist systems were likely borne out of growing up through the Great Recession…
…“But that wasn’t capitalism,” Langone said of the market crash and recession. “That was a system that’s gone amok.”
Though we agree with Mr. Langone generally here, the point must be made that the Crash of 2008 was a direct result of CRONY CAPITALISM enabled by the Federal Reserve. The Fed encouraged stupid bets from Wall Street and asinine social policies from government. The Fed created the housing bubble, which was great for government and specific special interests for a while, and then the Crash. That is, the central planners created the Crash. (You know like they have in socialism.) The lever pullers at the Fed thought that they were smarter than the market and, as always happens, the market showed them who is actually boss.
Then the Fed compounded the damage it created by bailing out the people on Wall Street who screwed up. So not only did the Fed wreck the economy, it gave parachutes to the pinstriped and privileged who partnered with the Fed. Meanwhile everyday families lost their homes. What is an economically unsophisticated person to think? Clearly (in many people’s minds) it was capitalism that failed.
“We live in a capitalist system right? At least that’s what we were told in school. We must do something about this. We must centrally plan the economy!”
And there you see the great danger of socialism. Central planning is built on hubris and is fundamentally unstable but it is appealing to the uninformed and politicians alike. (Often these people are one and the same.) Markets ebb and flow, but it is central planning that creates depressions and wars.