Is American Capitalism Dead?

In the life cycle of an individual investor, age impacts investment decisions big time. The older the investor, the greater the caution and safety and the less growth is sought. That makes sense for aging retirees or soon-to-be retirees. When it comes to a capitalist economy that invests like an old retiree, that's a different story--an end-of-the-road story.

We are depending on the government to take care of just about everything even as we blame it for just about anything.

Capitalism--no economy for old men.

As the economy flounders, non-financial companies are sitting on $1.8 trillion in cash, which is a 25 percent greater cash reserve than existed at the start of the recession. Why don't they invest it in new job creation now?

Credit-worthy small businesses can't get to financial company capital despite their bonuses paying stock resurrection. Why won't they lend?

It will take years to receover the more than eight million jobs lost during the contraction. Remember, it took the entire decade of the '80s to create 1.3 million jobs for small businesses while Fortune 500 companies lost about two million jobs.

Only innovation generates new jobs. Not financial engineering. Historically, the times of the greatest financial stress were also the times of the greatest innovation in American history.

Nearly one third of American workers are in jobs that weren't listed in the Census Bureau's occupation codes in the 1960s.

So, eight million jobs just to get even? It can be done. During the Clinton presidency there were an average of 240,000 new jobs per month powered by the Internet, the Information Age and wireless communication. There were more than 22 million new jobs created in those eight years.

In the Bush years, three million new jobs were created, averaging 31,300 new jobs per month.

Where will the new jobs come from?

What Information Age equivalent is afoot? Name an industry or industries that can create 240,000 new jobs a month. Or 133,000 new net jobs a month, which is what it will take to recover in five years.

There isn't such an industry, and as long as the best brains in the nation are working on non-productive financial and defense innovation, there won't be one for a long, long time.

We have been engaged in the search for "certainly" in financial markets--not for new ideas, products and employment in the actual marketplace. If it were supposed to be certain, it would be called "entitlement" and not "investment."

Certainty was what derivatives and CDOs supposedly gave--the certainly of algorithms. Instead, we got the proverbial "madness of crowds" all following the same algorithmic strategies at once.

If taxes and government regulation are the determining factors n terms of successful business, then why bother with capitalism?

Evidently, capital is waiting for daddy to tell them when they will be immune from risk and have guaranteed profits. In baseball, umpires have different strike zones and all a pitcher can ask is consistency. Obama isn't doing anything he didn't promise he would do before he was elected. Elections have consequences. There are no surprises. There is empirical consistency. Play some ball. Swing away and quite hoping for a walk.