Why Americans Are Losing Faith in Capitalism, and Why Wall Street Is Part of the Problem

The Numbers Don’t Lie, But the Narrative Does

A new survey shows that just under half of Americans say capitalism is working very well or even somewhat well. A decade ago, that number was 60%. On the surface, you might think Americans are turning against free markets. I’m telling you right now, that’s the wrong read.

What people are rejecting isn’t capitalism. It’s the crony corporatism that has been masquerading as capitalism for decades. There is a massive difference between a free market system where competition rewards the best ideas and hardest workers, and the rigged game we actually have today, where big business is fused at the hip with government and the rules are written by the people with the most lobbyists.

The American Dream Is Fading, and Here’s the Data

Let’s look at what the data actually shows over time:

• In 2011, 44% of Americans believed hard work still gets you ahead. That number jumped to 53% in 2012, likely a post-recession optimism bounce.
• Ten years ago that sat at 48%. Today it’s only 35%.
• When asked whether America is in a state of decline, 68% of Americans today say yes.
• That same number hit 74% during the Great Recession in 2008.
• The fact that we are approaching Great Recession levels of despair without an acute financial crisis should alarm every single person reading this.

And here’s something worth noting. The belief that America offers people the ability to get good jobs and achieve the American dream sits at only 35% today. These aren’t the numbers of a thriving republic. These are the numbers of a country that has been mismanaged at every level.

What Actually Killed Confidence in the System

I have been saying this for decades. The rot didn’t come from capitalism. It came from the merger of big business and big government. When corporations can buy policy outcomes, you no longer have a free market. You have a system that privatizes the gains and socializes the losses, and the American worker foots the bill every single time.

Healthcare costs are a perfect example. They have skyrocketed over the last decade, eating into wages and household budgets in ways that don’t show up in the official inflation figures but absolutely show up at the kitchen table. People feel it. That’s why the numbers look the way they do.

On the democracy side, only 12% say democracy is working very well or extremely well. Let me be clear on something. We are not a democracy. We are a representative republic. And no, I don’t think it’s functioning the way it was designed to function either. But that’s a conversation about the choices we make at the ballot box, not a flaw in the original architecture.

What This Means for Your Financial Life

When public confidence in economic and political institutions falls this sharply, it has real consequences for investors and savers:

• Political risk rises. Policy swings become more extreme when populations feel the system isn’t working for them.
• Market volatility increases. Uncertainty about the rules of the game makes long-term capital allocation harder.
• Populist economic policies get traction, and those policies often hurt the very people they claim to protect.
• Healthcare and cost-of-living pressures erode real returns on savings even when nominal portfolio numbers look fine.

The Bottom Line

Don’t let anyone sell you the idea that Americans have turned against free markets. What they’ve turned against is a system that calls itself capitalism while operating nothing like it. Real capitalism, the kind where competition, accountability, and merit actually drive outcomes, hasn’t been tried in a very long time. Until we separate the government’s hand from the corporate pocket, these confidence numbers are going to keep heading in the wrong direction.