History and current events: the economy, part 2

This is a coincidence. As I finish my morning coffee, waiting for the construction workers to start demolishing our fireplace (long story-check Not Mayberry) I read in the Washington Post an article by Robert J. Samuelson germane to our discussion of the state of the stock market, 401(b)s, and history. Here's one part of it:

But Schumpeter's question remains. Will capitalism lose its vitality? Successful capitalism presupposes three conditions: first, the legitimacy of the profit motive -- the ability to do well, even fabulously; second, widespread markets that mediate success and failure; and finally, a legal and political system that, aside from establishing property and contractual rights, also creates public acceptance. [my emphasis] Note that the last condition modifies the first two, because government can -- through taxes, laws and regulations -- weaken the profit motive and interfere with markets.

It is that public acceptance that is the problem - it plays hob with theory, expectations, and hope for those rationally inclined. It makes it a political problem. Yes, I do not doubt that one can prove on paper that investing Social Security funds into the stock market ought to work out best. But the required public acceptance brings in all kinds of unmathmatical and irrational considerations. Not to mention the fact that most people have no idea how investment works (see Madoff, Bernie).

That's all I have time for this morning.