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WFB on the Trouble with Capitalism

There’s a piece on TheStreet.com titled, “Don’t Give Up On Capitalism, Fix It” that quotes William F. Buckley Jr. An excerpt:

Is capitalism perfect? Of course not. As the late William F. Buckley, founder of the conservative National Review, said, the worst thing about capitalism is capitalists. I agree with that sentiment. Many capitalists are narrow, greedy and dishonest. This is why it’s extremely important to maintain the integrity of a capitalist system by demanding transparency and limiting speculative excesses that create environments ripe for frauds and hucksters.

Here’s a WFB piece on executive compensation not aligned with company performance from 2005, in which he uses the entire quote to give a better understanding of what he was thinking. The article is even more relevant today than it was in 2005:

Every ten years I quote the same adage from the late Austrian analyst Willi Schlamm, and I hope that ten years from now someone will remember to quote it in my memory. It goes, “The trouble with socialism is socialism. The trouble with capitalism is capitalists.” What brought this on this time around was the published recapitulation of executive plunder featuring, but hardly limited to, Viacom. The top three executives at Viacom received total compensation last year valued at about $52 to $56 million each in salary, bonus, and stock options.

We got, in one story of these goings-on — by Geraldine Fabrikant in the New York Times — a whiff of sobriety, as from someone hanging on to a tree limb in the landslide. Ms. Fabrikant quotes Brian Foley, “a longtime compensation specialist,” and what he said was, “The compensation is beyond breathtaking.” Viacom’s share price, in the year of the gold rush for its managers, decreased by 18 percent.

And here’s a January 2008 WFB article from the archives that will be interest. Mr. Buckley called for government intervention to shore up the mortgage markets in an effort to avoid a meltdown:

If we could start from scratch, we might have managed a federal regulation that forbade giving mortgages to people without an adequate credit history. But we cannot do that in retrospect, so we are in mid-quandary, with foreclosures lowering the values of all houses, not just the ones with risky mortgages. Is there a market for, say, 30 million American homes?
The politics of the matter are at least this clear. The federal government being the only agent that can possibly intervene, it needs to do so, by forbidding the liquidation of mortgages until the disparity between true value and hypothetical value is pounded away by time and inflation — and a revitalization of the functions of the marketplace.

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