As Capitalism Crumbles, U.S. Taxpayers Pick Up the Pieces

~ Robert Kiyosaki

As we all know, the world changed drastically on Sept. 11, 2001, when the twin towers of the World Trade Center fell.

This year, on the eve of Sept. 11, the twin towers of Fannie Mae and Freddie Mac crumbled. Then, on Sept. 15, Lehman Brothers and Merrill Lynch disappeared. Actually, that was a triple-tower collapse if you count AIG.

In a few years, the biggest pair of towers will collapse: Social Security and Medicare. Even today, they’re looking shaky. How many ground zeros can we as people, a nation, and a world withstand before we admit something is very wrong with our global financial systems? What will it take to wake us up?

Government Can’t Fix It

Personally, I believe the biggest it’s a problem that so many Americans are looking to this year’s presidential candidates, Barack Obama and John McCain, to save our financial system. How did we become so financially weak that we surrender our economic independence to politicians? Where does it say in the Constitution that the government should solve our financial problems?

And why have so many people throughout the world come to expect financial life-support from their political leaders? It seems most people will vote for anyone who promises a chicken in every pot and a guaranteed mortgage payment.

We’re in the midst of a problem neither candidate can solve: A lack of comprehensive financial education in our school systems. What else explains the economic blunders committed by our political and financial leaders? Or why so many consumers are in debt up to their eyeballs? Or why millions of people expect a quick government fix of some kind?

Under Water

A few months ago, a friend of mine from Hawaii asked me if I wanted to buy his new powerboat with twin motors. Apparently, in late 2007, he purchased it brand new for approximately $85,000. His plan was to refinance his house when it appreciated in value and use the difference to pay for the boat.

Failing to obtain new financing, he called to ask me if I would buy the boat from him — just take over the payments and it was mine. I passed, and the bank eventually repossessed his boat. Later, his wife called to tell me he’s now having problems making his mortgage payments. Apparently, my friend planned to pay for his house the same way he planned on paying for the boat, by refinancing his debt.

I mention this story because it illustrates the problem Obama or McCain face: Limited financial education and diminished financial common sense. Apparently, my and the nation’s business leaders all went to same school of finance.

If you want to know why the towers of American capitalism are crumbling, I recommend reading “The Creature from Jekyll Island” by G. Edward Griffin. It’s not an easy book to find, but once you start reading it’s to put down. In fact, in many ways it’s a murder mystery about the financial “murder” of the middle class.

A very important lesson in the book is how political leaders use financial spin to deceive the public. The very, very rich use the system to legally steal from the rest of us by appealing to our sense of patriotism. When our leaders say, “We’re bailing out Fannie Mae and Freddie Mac because we want to protect the American people,” they really mean “We’re saving our rich friends.”

All the bankers and politicians have to do is wave the red, white, and blue, play a few bars of “Yankee Doodle,” and the masses get teary-eyed and pledge greater allegiance to legalized robbery. Yes, it’s true that ignorance is bliss — but ignorance is also expensive, and it cost us our freedom.

Freedom at Peril

A bailout can be different things. First, printing more money is a kind of bailout that leads to higher inflation. Rather than protecting people, it makes life for the poor and middle class more expensive. The other kind of bailout is protection for our rich and incompetent friends. If you or I fail at business, we fail. If we cheat and fail, we go to jail. But if you’re rich and politically connected, your incompetence may be protected by a government bailout.

As a former Marine and a Vietnam War veteran, it saddens me to see some of the freedoms I thought I went to war to protect being stolen from us by bankers and politicians. Unfortunately, few Americans know the difference between the words “nationalize” and “socialize.” Socialize means we turn more of our personal powers over to Big Brother, not free enterprise. It means we as a people grow weaker and need a higher power — the same power that got us into this mess — to protect us.

In short, when the towers of Fannie, Freddie, Merrill, Lehman, and AIG came crashing down, more came down than just money. What we’re losing is the very freedom this country was founded on, and what most of the world yearns for.

3 Replies to “As Capitalism Crumbles, U.S. Taxpayers Pick Up the Pieces

  1. I am really excited to see someone with your influence, wealth and knowledge come out and inform the public of the truth about our current economic crises. A part of me believes that most people with your kind of influence know the truth but won’t tell because they are driven by greed.
    I was introduced to “The creature from Jekyll Island” back in 2003 before Rich Dad Poor Dad (sorry) and I have read it several times. Funny enough, I bought the book on Jekyll Island. Observing how events are transpiring now, it seems G. Edward Griffin could see the future. He was dead on with most of his observations.
    Unfortunately, you are definitely right. The next president will be facing a great challenge. None of the two candidates seem to have a good grasp on our economy. Most of the law makers also seem to be out for themselves, adhering to what Tupac said in one of his songs, “You gotta get yours, I gotta get mine”. Even if they had good intentions, the lobbyists and special groups have so much influence on them, it ridiculous. They can’t effectively represent their constituents. The only candidate I did like was Ron Paul but I was disappointed when he decided to run as a republican. I knew he wouldn’t have a good chance of becoming the nominee.
    Funny enough, I was telling a friend about your financial strategy today. Invest primarily in Multi-family properties that throw off positive cashflow and then use the funds you can afford to lose to invest in the stock market. It looks like Multi-family properties are doing well in a lot of places. You were right all along, even if times are hard, people will always need a place to stay. I have one more year left in college and when I graduate, I want to start an investment firm like Ken McElroy’s investing in Multi-family units. You guys are my inspiration.
    Lastly, I would encourage you to keep up the good work. Please keep on telling people of this even on the network news channels. It seems they are not objective anymore. They have been an active tool in dumbing down the masses since most people rely on them for their information in an age where ironically information is so easy to come by. Also, if you don’t mind, write a book about it.

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