The Democratic Party has been hijacked by the radical left.

Simply citing the most basic of economic principles does not prove a point. There's so much more to economics and policy than supply and demand for commodities.

Infallibility is not the issue here...any statements referring to such are simply semantical in nature...just another form of rhetoric.

The Fed's goals are to maintain employment and keep inflation in control...NOT to interfere with markets.

The legislative branch may "interfere" with markets through the SEC/related agencies, and the law (Sherman Anti-Trust, etc). These entities exist not to prevent free markets, but to actually facilitate the freedom. Without the SEC, corporations would misreport their figures and misrepresent themselves. Without Anti-trust legislation, competition would be reduced to zero, prices would become exorbitant, laborers would have no power over pay, and corporations would attain governmental powers.

Government is not the only way for market efficiency to be diminished. If the government simply stepped back and allowed corporations to act on their own, then a large portion of our daily lives/rights would be sacrificed to and usurped by them. The environment, wages, health care, and education would all be controlled by wealthy oligarchies and monopolists. Most importantly though, technology and innovation would suffer, as competition would be nonexistent.

The American dream would die, as the descendants of the wealthy and the heads of corporations would be able to hoard the majority of the nation's wealth. Extreme scenario, yes, but the reason it is so extreme is because we have governmental entities that prevent this from occurring.

I agree that the slave trade help the U.S economy out tremendously. Outlawing slavery hurt the U.S. economy badly in the short term. But the government has no business interfering with a man's freedom just so our country can benefit economically. That's why they need to get out of the way of free men and let the market do what it does. Yes, some will be hurt in the short run. But in the long run all corrects itself naturally. Supply and demand are like hot and cold-- a recipe for equilibrium.

The fed only interferes with the market. Markets always correct themselves. Government intervention leads to problems that only more government intervention can "correct." Unfortunately they never correct anything, and just make it worse. Markets are infallable, like nature.

The US outgrew Europe for a plethora of reasons...it is unlikely that "capitalism vs socialism" was the primary reason.

The colonies were initially subsidized by a foreign government, with citizens accustomed to operating within a governmental system.

Tobacco became a highly profitable crop, and the colonies were the #1 tobacco-producing region in the world.

The slave trade ensured that this Tobacco production would also remain cheap.

The US had and continues to have more in the way of natural resources than any other nation in the world.

The US also played the neutrality card in two world wars, making large amounts of profit through arms dealing, while also avoiding the large-scale economic damage occurring to European nations as a result of the war.

All of these situational items (among many more) contributed to the US' overall success. Much more so than Europe's socialism vs US' capitalism. Remember that Western Europe was not always so pro-socialist. From a historical perspective, this is still somewhat of a recent phenomenon.

To clarify...the Federal Reserve does not enact policy. In addition, it runs independently of the government. It has a dual mandate and a limited number of options at any given point in time to ensure that this dual mandate is preserved.

This dual mandate consists of maintaining an optimal natural employment rate and of keeping prices stable. If unemployment gets too high, then consumption (a primary focus of capitalist/Keynesian economics) declines. When consumption declines, the economy suffers, business investment declines, and the government is forced to provide assistance to the populace (some would call this socialist). When prices become unstable (high levels of inflation, or even deflation), the same things can occur.

So in conclusion, the Fed probably does more to ensure the long term success of capitalism than any institution in the world.

kganchev,

"Looks like the Europe is outgrowing the US now..."

My point exactly. As we become more socialist and less capitalistic, we will eventually be no better off than our european friends.

As far as countries in western Europe, the only ones I see as good as or better than the US are Luxenbourg, Norway, and Singapore so far as PPP goes. [ http://en.wikipedia.org...(PPP)_per_capita ]

"Europe doesn't have a Fed, and they can't interfere with each countries economy because each country has its own government."

I was speaking of the US. Our dollar is only weaker because of our socialistic policies, not because of our capitalist ones.

"I didn't say they're doing better, but they're advancing quickly and their government is not socialism but Communism!"

And when did it start to do so much better? Was it when Mao established his socialist / communist policies, or was it when the reforms swept in and the PRC turned much more capitalist than it had previously been?

"Not because of capitalism, though. That's only happening because of the socialistic interference in the economy by the Fed."
Europe doesn't have a Fed, and they can't interfere with each countries economy because each country has its own government.

"The PPP of the US is much higher than the majority of Europe."
Not the majority of Western Europe, as a matter of fact it's the opposite, the majority of Western Europe has higher PPP check out the PPP map: http://en.wikipedia.org...

"They're advancing, not doing better than us."
Then we agree... I didn't say they're doing better, but they're advancing quickly and their government is not socialism but Communism! It looks like their economy is progressing just fine. Heck we even owe them money, oh sorry, not anymore! The Chinese made us wipe out 75% of our nuclear weapons and the remaining shall not be aimed at the Asian continent, all in exchange of pardoning the debt!

"The euro is beating the USD"

Not because of capitalism, though. That's only happening because of the socialistic interference in the economy by the Fed.

"Europe is uniting which will give it more leverage on the market,"

The PPP of the US is much higher than the majority of Europe.

"the US is also losing it to the Chinese who are steadily advancing."

They're advancing, not doing better than us.