In America, time has come for economists to figure out a new version of capitalism lest they want history to be repeated and let the American system slowly slide towards socialism. So, let's hope for a more humane version, let's look forward to compassionate capitalism.
Ever since the mortgage crisis escalated into the current fiasco, there have been families who, by the millions, unable to fulfill their financial commitments, have become homeless overnight.
In forcing those families to vacate their homes, those houses were left abandoned, and in many instances suffered damages to property causing approximately $5,000 (Dh18,350) of devaluation per day. Thus, foreclosing does not solve the problem.
Another shortcoming of the most powerful country in the world is that it does not provide free universal health care for its citizens.
Besides, the heavy cost of a war that was not intended to become a five-year invasion, as well as, among others, the financial help to Georgia, Egypt and other countries that benefit from American largesse, represent in these precarious times, at least partly, an inadequate use of resources. This, at a time when diverting $1 billion or more is not the right thing to do. This money could instead be given to needy cases and worthy causes in the US, maybe even to Atlanta, Georgia.
Considered normal
In time of need, the government did not bail out those home owners before they lost their homes, nor did it do anything to provide health insurance to all.
Meanwhile, it was considered normal that financial firms rewarded a handful of their CEOs and others with outrageous annual bonuses.
However, now with the major financial companies crumbling, the American congress has signed a bailout plan deal of $700 billion to buy out bad debt from the private banking system. Otherwise, we are told, inaction would have "paralysed" the American economy plus the inevitable added effect on global economy.
Speaker of the House (Democrat) Nancy Pelosi declared that "we insisted in protecting tax payers in bailout bill".
But, how can anyone protect tax payers' interest when they find themselves with a $700 billion bailout that in time might probably increase to a few trillion.
Thus, we are witnessing an unprecedented effort to bailout those private companies and "help" them repair the result of their abuses. And, in light of those excesses, one need not be a leading economist to figure what has happened.
Apprehension
America, the capitalist country par excellence, has always looked with apprehension at the European system.
However, in such socialist-leaning societies, similar excesses are certainly the exception and not the rule.
The decadent direction that American society has gone in is a sign of the intensity of its troubles.
It all started with the collapse of values, as greed and corruption were rampant on Wall Street and the minds and the hearts of the business leaders were unable to differentiate right from wrong. They did not take the time to think what could be the consequences of their excesses. This is a time for change. Capitalism will never be the same after these historic events. Economists have to find ways to set up guidelines for a more humane, compassionate capitalism.
Compassionate capitalism will follow the parameters and definition of capitalism while bearing in mind the well-being and safety of others.
In a society where the cult of freedom is synonymous with "lack of responsibility", compassionate capitalism will be the call for moderation and accountability.
This is a historic moment in a country that has been so far the leading force among nations, and it will depend on the wisdom and fortitude of their leaders and theoreticians to create variations to improve capitalism as has been known and practised until now.
America has reached the zenith of materialism. The time has come now to look after the weak, the children, the old, the sick - those in need.
America needs to develop a compassionate capitalism to reach the zenith of wisdom and justice.
Eliana Benador is an independent writer based in New York and Zurich; Goodwill Ambassador to Children of Peace, UK; Senior Advisor (Science) Washington Cosmos Club, D.C.
