Fareed Zakaria at PostGlobal

Fareed Zakaria

Editor of Newsweek International, columnist

PostGlobal co-moderator Fareed Zakaria is editor of Newsweek International, overseeing all Newsweek's editions abroad. He writes a regular column for Newsweek, which also appears in Newsweek International and often The Washington Post. He is a member of the roundtable of ABC News' "This Week with George Stephanapoulos" as well as an analyst for ABC News. And he is the host of a new weekly PBS show, "Foreign Exchange" which focuses on international affairs. His most recent book, "The Future of Freedom," was published in the spring of 2003 and was a New York Times bestseller and is being translated into eighteen languages. He is also the author of "From Wealth to Power: The Unusual Origins of America's World Role" (Princeton University Press), and co-editor of "The American Encounter: The United States and the Making of the Modern World" (Basic Books). Close.

Fareed Zakaria

Editor of Newsweek International, columnist

PostGlobal co-moderator Fareed Zakaria is editor of Newsweek International, overseeing all Newsweek's editions abroad. He writes a regular column for Newsweek, which also appears in Newsweek International and often The Washington Post. more »

Main Page | Fareed Zakaria Archives | PostGlobal Archives

Can Obama Save Capitalism?

The great sociologist Max Weber described the power of charisma as "a
certain quality of an individual personality, by virtue of which he is set
apart from ordinary men and treated as endowed with supernatural,
superhuman, or at least specifically exceptional powers or qualities." Some
of Barack Obama's supporters have at times sounded as if they saw "the one"
in these terms. There's no doubt that Obama is intensely charismatic and
that it provides him with unusual political capital. But very soon -- say on
Jan. 20, 2009 -- his powers will start to mutate, and they will derive less
from his persona and more from his office. He will shift, in Weber's
terminology, from wielding charismatic authority to legal authority.

Presidents cannot simply remain charismatic symbols. They are forced
to tackle the problems at hand and their influence then grows -- or ebbs --
based on how they handle those challenges. However impressive they were as
human beings, it was not in being but in doing that George Washington,
Abraham Lincoln and Franklin Roosevelt built their enormous reputations.
Whatever Obama may have thought when he began this journey, at a time when
the war in Iraq was foremost in many voters' minds, whatever his campaign
promises, his presidency will be judged on how he handles the economic
crisis that envelops the United States and the world. For Obama to be
remembered as a great president, he has to do nothing less than rescue

The first task is perhaps the most difficult: to restore confidence to
Americans and indeed to the world. While there has been much elation over
Obama's election, there remains a deep pessimism across the country that is
having ruinous effects on the economy. People and corporations are still
not doing much in the way of buying, borrowing or lending -- the heartbeats
of modern capitalism. The political system has moved on to the automobile
bailouts and the fiscal stimulus, but the original problem of trust in the
financial system has still not been fixed. "Credit markets are still
fundamentally broken," says David Swensen, chief investment officer of Yale

How to restore confidence? It's not as easy as it sounds. After all,
George W. Bush has pretty consistently projected an air of confidence, one
that tends to get people even more worried than they need to be. Perhaps
this is because Bush's calm often seems utterly disconnected from the
realities around him; he appears thoroughly unaware of the facts on the
ground, whether in Iraq, Louisiana or Afghanistan. Like Bush, Roosevelt
also projected optimism, but he took great pains to recognize and describe
the depth of the difficulties the country faced. In his first fireside
chat, Roosevelt explained the basics of banking to the American people and
then asked for their help in getting the system working again. "It is your
problem no less than mine," he said, enlisting them in the cause at hand.

The next step is to give people a sense that the financial system is
stable and predictable. Swensen, who after Warren Buffett is perhaps the
most successful investor in recent decades, argues that this has been the
crucial flaw in the Bush administration's actions. "Markets need certainty
and predictability," he says. "And the administration's actions have
actually increased uncertainty and unpredictability. Its measures have been
ad hoc, its response to each institution has been different, its reasoning
has been opaque -- all this creates confusion, and that drives capital
away." Swensen's own solution is simple and systemic -- have the government
guarantee all money-market funds, with no limits, for six months. "Right
now the government is not facilitating private capital flows; it is
substituting for private capital flows. That doesn't solve anything."

The final way that Obama can create confidence is to reform the system
itself. His administration will inherit a government that has taken on an
extraordinary set of obligations in the private sector -- ownership in
banks, guarantees of commercial debts, loans to the automobile industry.
Carefully retreating from these obligations to restore a market economy
will be as complex an exit strategy as the one from Iraq. But if Obama is
able to reform government rules and regulation -- and thus the American
economy -- it will give people around the world renewed confidence in the
American system. It was only after Japan was able to put in place a new
system of tough auditing that its own banking crisis abated.

Obama will find many dire challenges in his inbox, but none -- not
Iraq, not Russia, not Pakistan, China, Afghanistan -- is as important as
this one huge task: to restore confidence, certainty and reform to America.
It's a lot easier said than done. But if he manages to pull it off, people
might well start wondering whether Barack Obama has some supernatural
powers after all.

The writer is editor of Newsweek International and co-host of PostGlobal,
an online discussion of international issues. His e-mail address is

Comments (65)

macdoodle1 Author Profile Page:

first we must learn WHAT MADE AMERICA GREAT was not pure capitalism. ATTEMPTING THAT these last 8 years. BANKRUPTED US DOLLAR AND SOUL.

seconD we must learn about what really wnet wrong.
the real estate example.:THE LOAN PROBLEM WAS JUST A SYMPTOM.
real estate with regualtion on tHE DEMAND SIDE AND NOT On the supply. ALLOWED 500KHOMES FOR 100K PEOPLE.
teh bad loans were to fix the problem The RE INDUSTRY CREATED.
orange county, ca is prime example - most Rentals at over $2 sq' and no utilities included? and what is minimum wage?

and then to help fill it govt assited housing for people make over 60k to rent ? WHAT? and more very low income disabled in the road.. meaning more govt services for longer for many more.
Another spiral of more and more gov't creating less and less real help where its needed.

Capitalism tempered by socialism for those who need it. to help make them ABLE.
this run away middle class and wealthy welfare Replacing the r services cut to the poor.. MUST END.



we must determine who can pull them selves up by thier own bootstraps, who can be able with help and who never will.

and THEN plan with realistic goals and information in mind.

We must allow government ask and assure industry to Not control supply of anything AMERICANS NEED on the bottom two rungs of Maslow's HierARchy of Needs.

ZZim Author Profile Page:

Fareed, Capitalism doesn't need Obama to save it. Capitalism is a force of Nature, Human Nature. Might as well ask if Obama can "save the sunrise".

Mary_Cunningham Author Profile Page:

"Capitalism is a socio-economic system in which private ownership means profit [or loss--MC]to the owner. The owner controls the means of production, so the profit belongs to the private business owner. In capitalism, the free market determines the production, distribution and price of goods and services.

A free market is unregulated supply and demand with little government interference in matters of trade. Price agreements are made by buyers and sellers and the market dictates supply and demand. Competition policies may exist in a free market capitalist system."

Unfortunately pundits like economies to be capitalistic on the upside, when growth is strong, and socialistic on the downside, when growth disappears. This is probably because, whilst capitalism is capable of producing great wealth, it is also inherently unstable.

It's just that the socialist alternative is much worse.

argo Author Profile Page:

On a lighter note, exorcise capitalism Mr.Obama.

MPatalinjug Author Profile Page:

Yonkers, New York
28 December 2008

If you define "capitalism" as that economic system which has had its heyday during the last eight years or so--characterized in bold relief by such conservative principles or mantras as "laissez faire," "no government regulation or oversight," "trickle-down economics," "the invisible hand as the automatic fixer of economic problems--then it is a system that has to let die and get buried ad perpetuum.

Under that system, inordinate and obsessive greed, which lurks naturally in the human breast, is allowed absolutely free rein.

The present financial and economic crisis bedevilling the United States--which has metastasized to Europe and to Asia like an aggresive and malignant cancer, and which has now turned into a deflationary spiral which in turns threatens to mutate into a Second Great Depression--is the consequence of such a system gone wild.

Mariano Patalinjug

argo Author Profile Page:

Is anything expected of capitalism itself, of capitalists, for the process of rescuing it by purging the bastardized version of the last twenty years? The version which has become worse than the capitalism of the industrial revolution?

Capitalism needs to reform itself, to produce real wealth, honorably, and yes, to spread the wealth not to grab it for the benefit of the very few who speculate with it and overindulge it.

It has been said by ignorant people during this last presidential elections in America
that “spreading the wealth around” smacks of Socialism; in fact Socialism does not spread wealth, rather equalizes the misery for the majority while a few hold on to the wealth, much like they do in present-day America. The promise of “the plenty for all” or the “American dream”, makes little difference, both mean to keep the ignorant fooled long enough beyond the present and the immediate future.
What is wrong about Socialism is wrong about Capitalism: there is no equality, the privileged, the crooks and the powerful have the lion’s share of all resources and all pleasure.

We need to rescue DEMOCRACY at home, make it meaningful in the sense that it must work towards some reasonable equality in resources allocation, not equality of misery, for the productive majority. It's the middle class,(stupid) which must be restored to power. Not just the power to elect but to govern.
And therein can be found a role for the government, more relevant than rescuing Capitalism from its crooked self that it has become.

ravitchn Author Profile Page:

FDR saved capitalism and for his effort was declared a socialist, a communist, and a fascist, depending on the accuser. He really had no successful plan -- just to do "something." What finally worked was Japanese and Nazi imperialism which began the war which cured the depression and saved capitalism. Capitalism is not the best system, nor the worst. We need regulated capitalism with a touch of socialism from time to time. Obama sounds like he understands this. But be ready to have him vilified like FDR was.

SPARK1 Author Profile Page:


ShahzadaSherSaddozai Author Profile Page:

With The GLOBAL ECONOMY Globalisation Nations wont need to punish their public with 'Usury' .See what India Pakistan are getting themselves into through the Venture Capital crowd that includes Gen Musharaff's clonies and the infamous Society Generale an illicit banker ofd Military Generals and Defense Departments.
Obama will InShahAllah go for GLOBALISATION or how will send home some good news!

Happy Holidays Season..Zack!

Billy1932 Author Profile Page:

For decades world capitalism has been an illusion of smoke and mirrors, based on credit and debt... there is no real wealth there.

Hypocrite1 Author Profile Page:

Can Obama Save Capitalism? God knows. However, I know, at least, that Obama has already deployed the traditional Chinese Communist's tactics, consciously or unconsciously, to grab the power successfully.

Back in the old days when Chairman Mao ruled, Chinese students were brainwashed begining in elementary school with stories in textbook how the communists helped poors. The classical story would be titled as "Smash the landlords and spread their wealth" In those textbook, the stories typically went that the communists came into the village and round up the riches, as always the landlords. "how much you have been suffering in the past years?" "what you could afford for your meals after your lifetime hard work (off course this alwayse compared with the lanlord's luxurious diet?" "How much you were physically abused because you caould not pay the landlord?" Questions like these that could stoke hatred were raised. Very soon everyone in the townhall meeting became angry. The documents of landowership and debt would be burned by the mob and landlords would get a bullit in the head after the townhall meeting.

Half a century later, I encountered a not so dissimilar townhall meeting where Mr. Obama asked the crowds: how many of you make $250,000 a year? (Of course no one dared to raise hand). Moreover he would not forget to remind people how they suffered in the past years under the Bush economic policies. He promised that he will reduce the tax for the crowds as the communist promised the free land and better food for the poor. He also promised to punish those riches earning $250,000 or more (even thought majority of these riches are merely being employed). The crowds cheerd while "spread the wealth" was lingering in the air.

I have to give Mr. Obama a high mark for his beautiful job done. I also believe that Chaiman Mao would be very pleased with him. Can Obama Save Capitalism? You bet!

dahuanzhou Author Profile Page:

Can Obama Save Capitalism?
Obviously Mr. Zakaria wants Obama to save capitalism like a great savior.
Out of three main forms of domination described by Weber, namely traditional, charismatic and rational-legal domination, Mr. Zakaria believes that Obama has charismatic symbols. I agree that Obama has powerful potential in initiating important social changes, and challenging the existing order by virtue of his charismatic charming. But his mission is full of difficulties and obstacles.
Before Obama takes measurements to rescue capitalism, he need to know what the fundamental reasons for economics crisis are:
1. Did the government take strong actions to fight economic fraud?
2. Is the gap between CEO of public companies and millions small shareholders rational?
3. Is the philosophy of “spending your future money “ encouraged widespread?
4. With 5% of world population, is it necessary to have 50% military expenditures of the whole world?
If Obama takes appropriate action to make a change as he pledged at the campaign, he will certainly rescue American economy and become a great President

llouthean Author Profile Page:


"BAH HUMBUG" to BIS and its "dynastic hierarchical structure" of world central bankers, lacking human integrity, common decency and improper "purchase of political influence", who created the economic pain caused to a majority of World citizens, through “Wall Streets” sub-prime loans and derivatives markets.

The system is NOW BROKE (unsurprisingly, based on “obscene CEO-director greed for UNEARNED annual remuneration") and in rapid need of fixing.

Until the banks of the World and Auditing structures are compelled by EFFECTIVE Governmental regulation to publicly declare all OFF-BOOK activities and provide FULL and OPEN disclosure (all at a common date) of "bank loan losses and valueless securitised paper" - ALL Governments will continue to "FLY BLIND" when seeking resolutions to the greed and corrupt driven breakdown in worldwide Interbank and public investment TRUST.

Removal of the current group of bank sector office bearers (directors and CEO's) is seen as a pre-requisite to cleansing a system, corrupted by charlatans and unsustainable cultural business practices.

FURTHERMORE, the FASB (Financial Accounting Standards Board) operations should be re-constituted under strict INDEPENDENT control of the CFAI (Certified Financial Analysts Institute). Elected members of the CFA Institute MUST be appointed to the controlling Boards of the World Bank, BIS (Bank of International Settlements) and other world fiscal bodies deemed necessary.
SEE: CFA Institute = http://www.cfainstitute.org/

There is still US$ trillions in unrevealed skeletons throughout the cupboards of the worldwide banking sector? The fiscal pain for citizens of most Nations has a significant period yet to run, before reaching their historical cyclical bottom.

World markets need ethical fiscal stability, NOT unsustainable economic booms driven by corrupt business practices.

If effective inter-governmental regulatory action is not undertaken, I suggest that a majority of "fiscally knowledgeable honest citizens", will likely question National political support for the pursuit and value of "open fiscal and trade markets"?

Lewis Louthean

Usama1 Author Profile Page:

Zakariya fails to see the forest for the trees. Capitalism, laissez faire capitalism, liberalist capitalism, which has shaped the past 30 years of globalization, are part of the problem.

Saving IT is sure to harm more people while bring billions more to the elite rich.

Usama1 Author Profile Page:

"Let business people run business, not the government?"

The American health care system is near collapse, ecspecially the emergency medicine section, and America spends more per person on health care with less service and less 'care' than any other country because business people are running the health care system.
The DOD military budget continues to balloon and explode pushing American military expenditures and pushing American militarism and warmongering because business people are running/influencing the military/defense policies and goals more than the average person and his political leaders. (Rumsfeld, a Milton Friedman economic liberal, declared war on the Pentagon to make it more subservient and dependent on private contractors).

The housing market is in recession as a result of massive fraud in mortgage brokerage and lending because business people ran the housing market and the government didnt regulate and govern.

The financial industry is in chaos because business people were allowed to run unregulated securities markets while the government did nothing.

The cost of living has far outpaced income, savings, and the dollar has lost value, because business people have been allowed to run the economy. College tuitions, housing prices, auto prices, are growing beyond the reach of more and more people eventhough their price is not equal to the actual value.

to those Dittohead Limbaughesque ideologues: Capitalism, ecspecially liberalist economy theories, are against the reality.

kengelhart Author Profile Page:

peterfoges : "These alternate models of society give the citizens of those countries great comfort when they go to bed at night, and arise the next day. And what is wrong with that?"

US residents are made comfortable by the idea that, no matter what tribulations they have to endure, their neighbors have to endure more.

bevjims1 Author Profile Page:

dgblueswrote: "Bailing out capitalism is contrary to capitalism itself. I say, let the market decide. Maybe its time has run its course. One thing is for certain: unbridled, it will certainly make the US a third world nation exactly in the model of Mexico: a few wealthy at the top and millions of destitute trying to scratch out a living."

It would take a lot more than Wall Street running amok to do that. See how many roads Mexico has, how many universities, and more importantly, how hard it is to borrow money and get a license/permit to start a business. As we Americans know well, Mexicans and others in central America can be hard workers once they get to America, but in central America if you can't get a business started because bribes are needed to get a license and funding, then no matter how smart or able you are you will get nothing done. And the Mexican government does not just allow this to happen through neglect, it also supports this corrupt system. It also does little to enable business growth. Bridges, roads and other infrastructure are ignored until the wealthy need it.

America is far from that though we should always guard against moving in that direction. Bailouts are not sending us there since they will end one day. But what the Bush administration and the Mexican government have in common is a respect only for the wealthy, an inability to understand the need for government supported infrastructure, and the need to enforce laws equally. Once we have a government that is more like an American government our economy should once again start to be like an American economy. I take heart in seeing that Americans are not willing to live under a government and economy like Mexicos, which the Bush administration has pushed America to.

bevjims1 Author Profile Page:

Fareed, it seems you answered your own question when you said: "[...] if Obama is able to reform government rules and regulation -- and thus the American economy -- it will give people around the world renewed confidence in the American system. It was only after Japan was able to put in place a new system of tough auditing that its own banking crisis abated."

All Obama has to do is have his agencies enforce existing laws and regulations, the same laws and regulations the Bush administration ignored allowing Madoff to build a ponzi scheme, allowing hedge funds to go unregulated, allowing subprime mortgages to be given out willy-nilly and all sorts of "creative" financial structures created with the sole putpose of making money, not providing new services.

What we have is akin to a lazy sheriff who allows crime to run rampant being replaced with an honest sheriff who plans to clean up the town. Obama does not need to build confidence in capitalism, he needs to build confidence in the government's regulation of capitalism.

Like a new sheriff, we should see confidence return quickly once people see laws and regulations being enforced as they are suppose to be. For that to happen we need to see the Obama administration crack down on the lawlessness. When we see more than just Madoff being led off in handcuffs, the confidence will start to return. Don't expect that until after Jan 20th however.

dgblues Author Profile Page:

"For Obama to be remembered as a great president, he can do nothing less [than bail out capitalism.]


I say, let the free market decide, just like those that put us in this situation, and those that now scream bloody murder about any attempts to give it life support, unless it's a bank or insurance outfit of course.

Bailing out capitalism is contrary to capitalism itself. I say, let the market decide. Maybe its time has run its course. One thing is for certain: unbridled, it will certainly make the US a third world nation exactly in the model of Mexico: a few wealthy at the top and millions of destitute trying to scratch out a living.

Before you start planning your illegal emigration northward, remember: Canada isn't big enough for all of us. We have to fix it here.

If we socialize health care like we socialize police and fire departments, if we socialize the auto companies and have them build transportation as part of a renaissance in American technology on par with the Industrial Revolution, if we protect jobs here in America with just the same fervor as is done in every last free industrial power on Earth -- if we do all this and it doesn't work, then try something else, sure.

But trying to save capitalism (the greed-driven unregulated cowboy kind?) That's nuts. Einstein defined insanity as doing the same thing and expecting a different result.

Let's not let red-baiting fascist rhetoric from the right dissuade us now -- let's not let our lack of imagination as a nation stifle us now -- let's not let a corporate-controlled media bamboozle us now -- we need change on a scale that is far beyond what most who voted for Obama could conceive.

We are at the beginning of a grand metamorphosis. For a new dawn to begin, the old day must die. The only question is not whether Obama can save the dwindling twilight, but whether he can seize that new day and bring us all into that light. Carpe diem!

sudhirprannath Author Profile Page:

Obama can't save capitalism in the US, because they wants to see the accounts book line by line of every one whom they bail out, even CNN is monitoring where the Big companies are spending the dollars, what they are eating and where?, This is like Govt. inferring in Private business. Everyone news channel is saying tax payer money.
When do big financial institutions have their own money? It’s always the public money they have. Please stop creating a wedge between big business and working people, during last two and half years
Our politician had already created mistrust about business houses. Even the president elect had called the big oil companies "Bandit". It seems instead saving capitalism in the US industry will become semi public undertaking. Politician will nominate their own directors in the board of directors to oversee the working of business, which they will bail out and they are bailing out every industry one by one. How they nominate board of directors by now every American must know. Illinois Gov. Case is not an isolated one.....
The best way is let the business people run the business not politicians.

waheedmurad Author Profile Page:

why should obama even try such a thing?

sbvbj Author Profile Page:

And another thing, Fareed!

I absolutely look forward to your GPS program on CNN, Sundays @1 pm ET.

Finally a program with substance and not just the already served topic du jour.

sbvbj Author Profile Page:

The fear and uncertainty which paralyzed the lending is still there. One bank thinks another bank had more hidden bad debts to clear, etc.

A good open honest airing and clearing of all bad apples would be a good start for trust to flourish again. As long as there is a lingering, I don't know about what is still hidden there, they are not being open attitude there is absolutely nothing anyone can do to correct the problem.

Get to the root of the problem. Let banks be banks and investment houses be investment houses again. It worked for a long time so why not give it a try again.

wwt101 Author Profile Page:

Can Obama save capitalism? This is addressed to Mr. Fareed Zakaria and all interested.

This is not to invite Mr. Zakaria to a debate on economic systems - but what is capitalism?

If one truthfully believes that people will abide by the rules when there is no regulation, then we badly need a new dictionary written on the melting sand.

For me, our real problem is not "ism" but the lack of "ism" – the case of neocon gang rape under the cloak of neolib haze – to burn the Nero fire in order to chasten mortality.

When was it when oil price went up five dollars because the temperature went up five degrees, to be followed by another five-dollar increase when the temperature went down five degrees a couple of days later? When two vice presidents ran a country without a president?

Can President-Elect Obama succeed? By re-inflating the financial bubble? Pretty soon, they’d be selling bottled air, just like how they are selling bottled water today.

jiaming Author Profile Page:

Capitalism works only when businesses are controlled by people with significant stake in them. Only then will the interests of the executives be inline with those of the company. Huge corporations like Lehman, AIG and GM are owned by millions of people with tiny shares and therefore ceased to behave like truly private enterprises. Their top executives own very small shares of the company which can be sold off at any time. They are not liable for a penny of the debts they borrowed on behalf of the company. The fundamental premise of Capitalism cease to exist with these giant public corporations. This is what Alan Greenspan and many other free-market purists did not see or did not want to see.

hsnkhwj Author Profile Page:

Capitalism and free market economy are the two sides of the same coin. No interference (including bail outs) from the State.

Seeking help from the State means a shift in this paradigm.

If the State helps by way of giving capital to private or publicly traded companies means that capitalism has not worked as it should have.

I happen to believe that it is the abuse of capitalism by the CEOs and CFOs that has caused the problem. It is not the fault of free market economy.

The question is: Is the "free market" economy really free? Free trade agreements between different nations reveal that the so-called "free" trade is filled with loopholes and issues such as working conditions of the workers, the human rights issues, or environmental damage caused by questionable practices.

dahuanzhou Author Profile Page:

What is capitalism? What is socialism? we don't have the generally accepted definition. So,we are often confused that we find there might be more socialism in a "capitalist country", or there might be more capitalism in a "socialist country". I think it is not so important to save capitalism or socialism.President Obama need to save the people and the economics of USA first.If he can make it, he saved everything.

nativson Author Profile Page:

I correct a reader: Capitalism is not buying things and selling them at a higher price-Capitalism is selling money, or in other words, interest. In that respect, Capitalism is indeed dead and deserves to be so. A system that sells or rents money for a profit is evil. Jesus and everybody else condemed the practice, and it is time to construct a new system, or adopt an existing one, one that does not provide greedy and dishonest people a place of honor in a society.

beckdude2 Author Profile Page:

I'm going to agree with MSREGINA...this is a really stupid statement. Perhaps what we need is not so much to hem our views to fit an ideology, but determine what works. As someone else mentioned, pure capitalism would be akin to pure communism...unable to function. Still, instead of talking about 'Obama's socialist friends in France,' perhaps we ought to consider what works best from all systems. We're not fighting the Cold War anymore. Those who still think with such a mindset should become hermits for the public good, so people with a grasp on contemporary geopolitical systems of government can make responsible decisions that aren't based on the (often wrong and stupid) conceptions of economics created during the Cold War. I respect you, Fareed, but this column is a little off the mark.

peterfoges Author Profile Page:

I write as a European who has lived here -- and admired America -- for decades.

Fareed Zakaria, in my view, gets it wrong.

Any American with a passport and an open mind must notice as they travel the world that there are almost as many "models" and "isms" out there as there are nations.

This American model -- the one that causes so many of my American friends to defend with a blind passion and aggression that borders on mania -- shows signs of failure.

All systems fail in the end and need reform.

If you fell sick in France, drove on a German highway, or sent your kids to college in Britain, you would have a different experience than Americans have at home. Similarly if you were retired in Japan.

In these places the social contract ordinary citizens have with their governments as well as each other is different than America's version. It is one that many Americans denounce as "socialism" -- as if spouting labels like kids in a school yard can substitute for thought. Who among us -- ordinary folks, members of the middle class -- would not opt for French medical care and pharmaceuticals for free, or a national infrastructure and transportation as good as Germany has, or the low cost of college in Britain, or the guaranteed pensions provided in Japan? To forgo these, were they on offer, would be masochistic and mad. Yet Americans do.

These alternate models of society give the citizens of those countries great comfort when they go to bed at night, and arise the next day. And what is wrong with that?

These differing models, for which folks in those countries would fight to preserve, were not handed down from on high. They were won as a result of struggle, centuries long in many cases. And yes, along the way, the strugglers often called themselves "liberals" or "socialists", and were called such by their "conservative" opponents. And yes, these models restrained capitalism, and took away it sting. And yes, they did cause a diminution of growth, and the share awarded to the wealthy. But it was a choice made over generations at the ballot box. And almost all the French, Germans, Brits and Japanese accept the trade off willingly.

So -- what Obama needs to do in my opinion is wean middle class Americans away from silly labels, and begin a process of leading them towards a more rational, fairer, and more civilized way of life. To help achieve new social contract -- give it whatever label you want. One for the many rather than the few. That is what is sorely needed to bring America back, and guide her forward. Obama ought not to "save" the system. It's not worth saving. Rather he ought -- indeed must -- start the vast public education program required to "reform" it.

pKrishna43 Author Profile Page:

Obama can't save capitalism in the US, because it simply doesn't exist. How long have there been agricultural subsidies? Sugar embargo from Cuba? Ethanol from Brazil?

That the US embraces Capitalism and "Free Enterprise" is a carefully fabricated and guarded myth, and it has been shattered ever by the recent round of crprate bail-outs.

Obama and all his mythical powers, are a creation oof the fawning media, Fareed included. The problems facing the country are enormous, multi-faceted, thanks to the Clown Prince of Crawford who is only now beginning to realize the gravity of his misfeasance, malfeasance, and non-feasance.
Meanwhile, his puppet master is blithely ignorant of it, and will be so to his grave.

The Emperor will be revealed soon. The days of papering over problems, domestic and international, by throwing government paper are over.

byrdland49 Author Profile Page:

Interesting variety of comments on Mr. Zakaria's article....some thoughtful analysis of the multitude of economic problems facing the incoming administration...but of course the haters have to climb out from the slime to spread their vitriol.

Get over it folks....Obama won the election with more votes than any other candidate in American history...he has done a remarkable job of reaching across the political and cultural aisles as PE and you might, just might, consider that working together to solve our many problems is a better strategy than hatred. But I don't hold out much hope for the haters...they have their cheerleaders in the Limbaughs, O'Reillys and Malkins of the world inspiring them to new levels of anger and stupidity. Sigh.....

Cdgaman Author Profile Page:

I suppose I'm not on the same page with the rest of you folks. I've never seen Obama as a man with charisma. In fact, I find him to be challenged by simple concepts. That concerns me.

As as for FDR understanding what was happening, I guess I come from another planet there also. My goodness man, get a grip on you feelings for Democrats. On the economy, anyone who can starve his fellow citizens while cheerfully maintaining a thriving depression for eight years should have been put to pasture, not lionized.

michaelfairbanks Author Profile Page:

Capitalism will never die.

As long as humans are alive they will buy things and sell them at higher prices.

maxfli68 Author Profile Page:

In a word, competence. Managing government agencies does not require an intricate knowledge of how business operates. Private sector business knowledge does not translate well into running federal programs that require an extensive knowledge of federal laws and regulations. Private sector expertise alone can be disastrous. I offer up Robert S. McNamara as Exhibit A. What good public sector management does require is a knowledge of the consequences of government programs and policies on the private sector. This can be achieved by a willingness to be informed by the unique needs and concerns of private sector experts before policy decisions are made. There is nothing wrong with capitalism provided it is properly regulated by honest, competent people. There is niothing wrong with government provided it is as limited as possible and run by intelligent, pragmatic and realistic people. Both must co-exist and work together. In my opinion, with Obama we will pass from a period of abject incompetence to a period of effective competence.

ppease5 Author Profile Page:

Capitalism achieved it's growth as a result of cheap energy (Oil). That allowed for tremendous growth in manufacturing and transportation. Out of this environment grew big international corporations.

That was then; not now. Now some of us understand that fossil fuels not only have a finite supply but are causing warming of our planet that will devastate civilization. In short the foundation on which global capitalism was built is crumbling. Only if a replacement for fossil fuels is implemented can global capitalism be saved.

While global capitalism allows big international corporations to become rich it is doing so at the expense of developed nations. That is global corporations in obtaining ever greater profits move jobs to poorer nations where slave wages and no worker benefits are provided. When developed nations loose enough jobs those nations begin an economic collapse.

When a large majority of the people feel threatened (loss of jobs, shelter, food, or water) a revolution becomes likely. Anger among those threatened (hearing that big corporations give million dollar bonuses from our tax dollars or anger at bankers who refuse to even account for the money our government gave them) will lead toward a desire to tear down the capitalist system. Greed is hated by those who struggle to survive.

In summary, there are various factors that are moving toward killing capitalism rather than saving it. I have a gut feeling that capitalism will be replaced with a more socialist democracy and I urge President Obama to move our nation in that direction.

TheMan66 Author Profile Page:

I don't think that an Obama administration, or any administration, has the ability to save or kill capitalism. I believe that th entrepreneurial spirit is too strong in Americans to ever die.

That being said, I hope the current crisis is enough to shock our system into some changes. Among them, a move away from so much paper pushing and a move back to producing products and services that people will want to buy all over the world.

As to those conspiracy theorists who are obsessed with accusations of false birth certificates for Obama and who also accuse him of being a communist or worse, get over yourselves and your foolishness. You are the same people who wouldn't tolerate any criticism of Bush "during a time of war". Show that you aren't hypocrites and back Obama now.

ShalomFreedman Author Profile Page:

Fareed Zakaria's way of stating the problems the Economy faces is far too simplistic. There are structural problems , not simply psychological ones. The system whereby American consumers live on credit supplied by China, Japan, and to a lesser degree Saudi Arabia, and others has gone bankrupt. The United States with many industries already outsourced, with major industries like the auto- industry on the ropes has to create new industries and products, new sources of wealth. This depends on more than any leader, however inspirational can supply. It depends on the character and quality of the American people.
The fact that great challenges have been met by the United States in the past does give a certain hope, but it cannot provide perfect reassurance.
The United States is an older, and growing older society in a world in which competitor- nations and civilizations have emerged which have replaced it in certain economic areas.
Obama does very much appear to be the right man for the crisis, but the crisis is one in which very many negative factors are at play. He will need a lot of help from Above if he is to bring America to the new level of economic action it needs to come if it is to truly get out of this situation.

pkhenry Author Profile Page:

What business experience does Mr. Obama have?

The Governor of Illinois has been doing a bit of enterprising with Obama's Senate seat, but that may be the closest exposure to capitalism which Obama has encountered during his short career.

truthhurts Author Profile Page:

Perhaps Obama should seek to contain first and prosecute later Extremist Capitalists. Extremist Capitalists have caused a global recession. The rhetoric of derivatives and bundling only mask a true motive of capitalistic extremism, greed. Some of these filthy, greedy bass-turds now stand accused of ripping off charities, how low can one go ?

There is a great line from a movie that comes to my mind here. A well-to-do villian escapes prosecution through death due to old age. The detective solving the crime foresnically, asks of his wife, "Why did he do it ?" Her reply was, "Because he could". Or, absolute power corrupts absolutely. The rich man got away with murder.

So, to me, restoring capitalism as a noble objective enjoyed by nearly all the world is not so much restoring confidence in domestic and international markets as it is in defeating an "evil" contained within mankind. I see evil deeds being committed in the name of Religion too. That's an old one.

paultaylor1 Author Profile Page:

Can Obama save capitalism?

Interesting question in the light of a particular Italian Nativity revelation that Obama has come here to save mankind.

And assuming that Obama does save our artifical world, and not destroy it with a final war in the Middle East, are we sure what aspects of capitalism he will find worth saving?

bnd4tx Author Profile Page:

You don't save Capitalism with Socialism!

What socialist goals Obama seeks to try have continually failed world wide. Learn to "stop our fear of socialism"? I will wager none of the writers of such silly comments ever lived under it. Try it. You won't like it.

swabygw Author Profile Page:

I think that he must redefine what capitalism means in America. For years now, it has meant getting as much as you can from everyone else, i.e., winner-take-all. It has not meant anything to society on a whole. Part of a redefinition would include creating opportunities while considering the societal impact. Imagine this: you can get rich (or, at least, make yourself comfortable) and improve society at the same time. We don't have to live with the winner-vs.-loser mentality. But, this is a big leap for Americans. Especially those who think that George Bush (and, ostensibly, the Republican ideology) isn't at all responsible for at least some of our current woes.

hgcsato Author Profile Page:

It is high time to let go of the Batman and Superman image of the president of USA, as the "most powerful man in the world", etc. and look the problem squarely in the eye. This economic problem is a BIG, GIANT problem and it is not going to go away with charm and talk.

It is a completely new era for America. Look into Britain after WWII and its decline, the dismissal of the Pound as the world reserve currency, the industrial demise during the 1960s and you might, just might, have a grip of the problems ahead.

Also using foreign policy diversions is a dead gimmick... the TARP program plus the bailouts (which are all the tip of the iceberg) are greater than the aggregate GDP of Iran, Iraq, North Korea, Pakistan, Afghanistan, UAE. It is a giant problem!

OneMoreDrunk Author Profile Page:

Man does not live by coffee alone!

Few years ago, as luck would have it, I found plenty of time on my hand with very little to do with it.

I decided it was time to learn from Gurus of financial and industrial world.

I chose Warren Buffet and Toyota, since both of them were leaders in their respective worlds.

Surprisingly, I found a certain relationships between my own operations and that of Warren Buffet and Toyota.

A single event in 2006 in Warren Buffet's financial actions was an eye opener to the direction the US economy was headed. Today's US economic state is a clear indicator that Warren Buffet truly knows the financial game. US feds were too late to catch up to his action plans, as we now know.

The 2007 sale of Petro-China was the highlight of the accuracy of Warren Buffet's methods and I had the pleasure to watch it as it happened. I believe, he still could not have foreseen the current crisis, because US Fed action as always is unpredictable.

If the two titans state is any indication, we have not yet seen the end of this cycle, because Toyota and BRK.A have yet to bottom out, much less turnaround in an upward trend.

In next four years, Obama can only hope to stem the current tide and lay foundation of the next leg up in economy. It is impossible for anyone to create miracle in current state of affairs. Obama’s only hope is people will have lower expectations and he will have the opportunity for another term. The outcome of second term will actually vindicate his super natural powers.

For the non believers - Toyota projects first loss in 70 years

Toyota said yesterday it will post its first operating loss in seven decades, providing a vivid example of how some of the world's most profitable companies have been quickly humbled by the global recession.

rusty3 Author Profile Page:

Interesting article, quite good responses. I wish my college students had thought about issues with the intelligence and maturity shown here; usually they are more in tune with the wild and crazy typo-rants seen elsewhere in the WP.

reasonisstupid Author Profile Page:

Yes, capitalism will always survive as long as human nature remains what it is. And this is not a bad thing. While we're headed into a pretty rough patch for the next few years, there's been far more suffering experienced by those living under other political and economic ideologies. I'll take booms and busts over some state controlled economy and its inevitable waste, statis and bureuacratic corruption.

skylerdurden Author Profile Page:

I have to say, I am more impressed with most of the comments on this article than the actual article itself -- most, not all. I would definitely exclude the one about the legitimacy of Obama's birth certificate.

Freeing markets was obviously a huge mistake, but this could have been realized long before the current crisis -- and in fact was by many critiques of capitalism. Of coarse, one had to dig pretty deep to find any such critique; however, they were there. Alternative economic models are out there for those inclined to look into such a thing.

I know that Mr. Zakaria isn't unfamiliar with many of the alternatives out there, so it is very curious that he is still convinced that merely reforming a flawed system is a sufficient argument.

edbyronadams Author Profile Page:

Capitalism requires perpetual growth. World capitalism ran into an empirical limit this year, namely the supply of petroleum. Unless Obama can wave a magic wand and increase the supply, the total world economy will run into that limit again.

The challenge is not to "rescue captialism" but to find a new paradigm that structures growth on some other principle than cheap energy. Good luck with that.

rmlwj1 Author Profile Page:

Capitalism has only been around for the eight years of Mr. Bush's administration?

Wow. Should be headlines on that one.

I suppose I was practising benevolent socialism when I was self-employed, way back in the dark 20th Century.

Quoting a prior poster: "The role of government, as established by the constitution, is to act as a constraint against the passions of men. This means regulation and oversight of the financial markets."

Umm. Last I read through the Constitution, the government's sole involvement in business was to ensure interstate commerce, which clause has been the subject of more Federal abuse and has been ignored by the Judicial part of our government for decades.

kengelhart Author Profile Page:

"the interest of society is progress towards wealth accumulation and affluence"

No. The interests of society are survival and prosperity. This does not mean just for some. History has shown that any majority whose survival or prosperity is threatened by a minority will eventually act to correct that condition.

"the passions of men will not conform to the dictates of reason and justice without constraint"

No. This is only true of some people. Democratic government is intended to keep people like this from acquiring and monopolizing power.

realityvision Author Profile Page:

I think what is missing in Mr. Zakaria’s editorial is a context for capitalism. The best way to understand capitalism is to examine the relationship between production and consumption. In a capitalist society consumers have no social relation with the people that produce the goods they use. People are defined by products they buy rather than what they produce. The car you drive, the house you live in, the purse you carry determines who you are in society.

It is not clear to me that America has abandoned the consumerism described above in spite of the recent republican campaign emphasis on “Joe the Plumber”. Another key aspect of capitalism is the role of the individual. A basic underlying theme is that individuals pursuing their own interests will guarantee the interests of society as a whole. And the interest of society is progress towards wealth accumulation and affluence.

Again, I don’t think that America has abandoned the goal of wealth accumulation and affluence but the theme of individuals pursuing their own interests guarantying the interests of society has not proven reliable. This relationship between public and private ownership has been tested recently and as it was during the FDR years, found wanting.

So what is the role that the president can play in restoring the confidence that individuals in private ownership can be trusted to act in the interest of society as a whole? That role for government was stated clearly by Alexander Hamilton in Federalist papers as he argued the merits of our constitution:

Why has government been instituted at all? Because the passions of men will not conform to the dictates of reason and justice without constraint.
Alexander Hamilton, Federalist No. 15

The role of government, as established by the constitution, is to act as a constraint against the passions of men. This means regulation and oversight of the financial markets. This oversight will not require the actions of a “superman” or even “superhuman” charisma. It will just require abandoning the economic philosophy of Laissez-faire capitalism and replacing it with regulated capitalism and even state capitalism. You see, capitalism does not need to be restored in America it just needs to be forced to act responsibly. In this regard, I think our new president will perform just fine.

kengelhart Author Profile Page:

Charisma isn't what it used to be, and neither is capitalism. Capitalism is a religion after all and religions in general are taking a back seat to science and global markets. Marx was the transcriber of the divine revelations that created capitalism along with the two adversarial groups that, theoretically, would be forever at each others' throats. Most capitalists would deny they are Marxists but only because of Marx's premature prediction that the majority (wage slaves) would prevail. We now know the majority is much more gullible. Besides, the majority has discovered how to put democratic government to work for them. They no longer need violence to accomplish revolution. Let's hope Obama's administration is more of a friend to democracy than the previous administration.

blueball Author Profile Page:

Capitalism is simply a name for the mixed system we have. Pure capitalism, as has been said, does not exist. It is essentially inhuman; social darwinism, and a capitalist system always depends on government for the safety of its capital in the first place.
What you call capitalism is not in danger. It needs honorable guardians again; locking up a few crooks would be in order, too. But people with iles of pictures of dead presidents in a vault will want to put them to work again, don't worry.

Archarito Author Profile Page:

The REAL QUESTION IS Can Barack keep himself from getting arrested and prosecuted by the Feds for committing felony document identification fraud of his alleged "birth certificate" when such COLB was allegedly manufactured from his younger half sister Maya Soetoro's legal Hawaiian COLB?


"Do you remember, or ever hear about, the "Watergate Conspiracy?" Do you remember, or ever hear about, what happened to President Richard Nixon as a result?

I would tell all of you who think that "conspiracies" are a joke and that the people who claim to have found them are "idiots wearing tinfoil hats," to just ask an FBI agent what he or she thinks about "conspiracy." Or, go ahead and ask a federal judge what he or she thinks about "conspiracy."

"Conspiracy" is no laughing matter, ladies and gentlemen, and neither is "document fraud," as in creating and passing a counterfeit birth certificate.

I should now alert you to the fact that I have been using the phrase, "Bogus birth certificate," as a euphemism for "Counterfeit birth certificate," which is defined as, "A copy or imitation of a state-issued birth certificate that is intended to be taken as authentic and genuine in order to deceive another.""


isedudia Author Profile Page:

What was Lenin's NEP?

andetcetera Author Profile Page:

For Obama to be remembered as a great president, he must disabuse Americans of their irrational fear of socialism. He must shift the very framework of the political discourse in this country away from the ossified assumptions that have prevailed since Reagan. He needs to reclaim the word liberal, and wear it as a badge of honor. He needs to challenge the notion that this is a conservative nation. Instead of parroting GOP talking points like, "this isn't France," or "the government isn't good at running business," he needs to talk about what we can learn from the progressive nations of Western Europe. In short, he needs to return reality to the debates we are having in our society. If a different system (say a different health care system) works better than our own, we need to take a long hard look at it, rather than dismissing it based on foolhardy dogmas, or the "we're number 1ism" that has been the hallmark of America for the last quarter century.

I've always respected you Mr Zakaria, despite the marked differences in our political views. But I don't think even someone of your considerable intelligence can make a cogent argument that Obama should be fighting for this broken system. What we desperately need is for him to start creating a new one. Democratic socialism can preserve that which is good about a market economy, while fulfilling the true mandate of the government...which is to serve the many rather than the few.

hsnkhwj Author Profile Page:

The real issue for America is the abuse of capitalism.

The current financial crisis started when the CEOs and CFOs started manipulating figures and engage in questionable practices to produce fake profits so that they could earn fat bonuses.

America's corporations are her national assets. Congress should act to impose limits on CEO compensation and give shareholders greater say in making compensation decisions.

The abuse of one company has implications for other companies. The automobile companies and banks financial bail out to restore confidence and help employment situation means that our national assets are interlinked. Congress must act to regulate CEO compensation.

There is no reason for CEOs to earn greater than 20 times the lowest paid employee. No one is worth more than that.

The threat of flight of talent from corporations because of limits of pay is false. Where are they going to go?

If they leave and start their own private businesses, that would be great for America.

Jaymand Author Profile Page:

Capitalism will survive whether Obama turns out to be our worst president or not. So many tend to think that our government or our president will lead us to prosperity or can save us from the worst of times. But this is false thinking. The president in reality has very little influence over the economy in the world economy we live with today. Rather it is the thousands of small and large businesses who through free market capitalism will find a way to produce goods and services that people need and want to buy and can buy. These business will find a way even in the toughest of times to invovate and find new ways of producing products. Products and services that serve our economy better. Products that save money or that help the environment. This will be done by individuals in busineses - Not government.

The role of the government needs to be to help businesses and then get out of the way when appropriate. Certainly capitalism cannot thrive without smart regulation. Somethinig we seem to have forgotten that over the last few decades. But it's not Obama or government that will save capitalism it's free markets and smart business people.

csintala79 Author Profile Page:

Pure capitalism, as with pure communism, has never existed. Take your pick, statism or cronyism; there has always been interference with the markets. What is humorous is the statement that the Neal Deal didn't end the depression, WWII did. What was it about the war that changed things? Well, the government had power over the economy that was undreamed of by the Neal Dealers. Unregulated capitalism didn't get us out of the depression; it was the almost absolute control of the economy by the government that did. What fueled the tremendous growth after the war? Government programs like FHA had a lot to do with it. Capitalism is appealed to when fat cats want justification for the obscene recompense they receive in relation to the pittance the workers get and price fixing collusion. Business men run pell mell to DC to feed at the trough any chance they get. The private sector failed in the 30s and is close to failure now due to the dismantling of the New Deal protections by successive Republican administration over the past several decades. What happened when the government regulators stepped off the neck of the private sector? The Great Depression redux. Neither pure capitalism nor pure communism works in the real world. Roosevelt "saved" capitalism by instituting government controls on its excesses. Obama seems to be trying the same thing. Dogmatic adherence to an economic formula is a recipie for disaster.

mibrooks27 Author Profile Page:

If by "capitalism" you mean the sort of free enterprise envisioned by this nationals Founding Fathers - small businesses run by their honest founders, run in the public interest and regulated - then, by all means, bring that back! If, instead, yo mean these bloated, corrupt, self serving monstrosities that are todays multinationals, with overpaid corrupt swine running them, sociopaths hat should stopped on the streets and beaten to death, then NO, hell no, consign them to the garbage heap of history and put every single executive you can lay hands on in prison or (better) in the ground. Free trade is treason. It is the reason for the collapse of our country and it is very easy to identify the treasonous swine from decent stewards of our business - if they support or practice free trade, they deserve to be loathed and treated as the terrorist monsters they are. Compared the the executives at Lehmann or Bank of America or any Wall Street banker or investor, Osama Bin Laudin is a boy scout.

vincecoit Author Profile Page:

Capitalism should not be saved, unless the alternative possibility is an economic system less egalitarian; it should not be presumed, as I have heard people proclaiming we are becoming a socialist state as to say it is a certainty. The holders of all this recently created debt, and of the future debt, are going to be a significantly more major player, and, the government must deal with it by adding progressivity to the tax code as soon as possible. If this is not done, what we get to replace capitalism, as a shift takes place, may look more like feudalism, than socialism.

Patriot3 Author Profile Page:

Do you mean the capitalism that has served so few so well at the expense of many over the past eight years?

Do you mean putting people in charge of gifting their country club buddies with other peoples' money?

Do you mean the few, the proud, the bloodsucking captains of Wall Street?

Do you mean saving our system of capitalism that is so disgustingly corrupt now (See, the bailout giveaways) because our supposed elected representatives do nothing other than enable and perpetuate the robbery?

WylieD Author Profile Page:

Fareed, stop hyperventilating.

Sure, you work in the dying print media, so things seems particularly dire, and your angst clouds your judgment. But get a grip and try to take a perspective measured in years, not weeks. And try to recall, "The only thing we have to fear is fear itself."

Capitalism is robust. Even if Obama does nothing, it will survive and eventually thrive again.

msreginacomcastnet Author Profile Page:

"For Obama to be remembered as a great president, he has to do nothing less than rescue
capitalism." This is an absolutly stupid statement. Capitalism as we know it is what got us into this problem. I hope Obama changes the defination of capitalism - that might save us and the rest of the world.

PostGlobal is an interactive conversation on global issues moderated by Newsweek International Editor Fareed Zakaria and David Ignatius of The Washington Post. It is produced jointly by Newsweek and washingtonpost.com, as is On Faith, a conversation on religion. Please send us your comments, questions and suggestions.