PDA

View Full Version : Economics Newt Gingrich explains why bailout is wrong on NPR


NewChief
09-22-2008, 08:16 PM
I heard this interview today on the way home from work. I admit that it made me think quite a bit. It made me ponder the role of government in this mess, actually making me question the way we view the role of government in society as a whole. Liberals definitely tend to be much more in favor of government intervention in their lives, but I notice quite a few conservatives these days who are looking to government to step in immediately and save the day in this mess. Yesterday, I had a realization that I don't see a whole lot of "conservatives in foxholes." There are definitely idealists out there holding the line, but now that we appear to be screwed many conservatives who give lip service to the free market are all about a government bailout.

On the other hand, Newt's take is definitely not politically expedient. The American public, evidently, wants the government to take immediate action to fix this mess and provide enough consumer and investor confidence to shore up the market. They don't want to hear someone say that there is no quick fix for the disaster.

Anyway, I'm no longer sure that the government should step in to fix this shit. It really made me question the fact that, when the shit hits the fan, the first place we turn is to our government to come in and fix things.


http://www.npr.org/templates/story/story.php?storyId=94900671

All Things Considered, September 22, 2008 · One prominent conservative urging Congress to step hard on the brakes in the $700 billion bailout plan is Newt Gingrich, the former speaker of the House of Representatives.

In Sunday's National Review online, Gingrich writes: "Congress was designed by the Founding Fathers to move slowly, precisely to avoid the sudden panic of a one-week solution that becomes a 20-year mess."

In a conversation with NPR's Melissa Block, Gingrich says he thinks the bailout plan is "just wrong," and that "it's likely to fail, and it's likely to make the situation worse over time." A transcript of their conversation follows.

This $700 billion bailout plan, this potential 20-year mess that you're talking about, comes from a Republican administration, comes from your own party. What's happened to Republican faith in small government and free markets?

Well, I think you have a Goldman Sachs chief of staff to the president and the Goldman Sachs secretary of the Treasury. And they convinced the president that the American people ought to send $700 billion to Wall Street, which I think is a very, very bad idea, and I would argue is a very un-Republican idea. I don't understand what they think they're doing.

Do you feel betrayed by the Bush administration and by the president?

Well, betrayed is too strong a word. I think what they're doing is just wrong. And I think that it's likely to fail, and it's likely to make the situation worse over time. And I think that [U.S. Treasury] Secretary [Henry] Paulson has shown almost no understanding of how a democracy operates. His initial draft would have given him $700 billion of your tax money with no oversight, no judicial review, no accountability. I mean, we're not a dictatorship.

But the idea, obviously, is that this goes to Congress and that provisions are written in — and that's just what they're doing now. Are you not reassured by what the debate is in Congress right now?

Well, the last time we were promised they were going to save us, it was $300 billion; it was a housing bill. Now we have brand-new liberal Democrats, many of whom — for example [Connecticut Sen.] Chris Dodd — was the largest single recipient of money from Fannie Mae and Freddie Mac, and he is the chairman of the Banking Committee. So the guy who got the most money is now going to write a bill to give taxpayers' money to the people who gave him money. Somehow, I am not reassured.

But Mr. Gingrich, a lot of the Republicans in Congress seem to be saying this needs to go forward.

Well, I think they're just wrong. I think we need to slow down, take a deep breath, hold public hearings, have experts testify, understand exactly what the agreement would be, where the money would go, how we would account for it. I don't think the taxpayers should be socked for $700 billion for welfare for Wall Street. I think it's fundamentally wrong, and I think that it is very likely to create a bureaucratic control of our financial system in a way that will cripple us for 20 years.

You know, when congressional leaders met on Thursday night with Secretary Paulson and with the Fed chair, Ben Bernanke, the message was dire. You heard Sen. Chris Dodd saying they were told we are maybe days away from a complete meltdown of our financial system. Don't you think that there's an imminent crisis here, that if they were to wait, there could be really drastic results?

To be honest, I don't know. Secretary Paulson has been consistently wrong for a year-and-a-half. He told us for a year-and-a-half this wasn't a dire crisis; this wasn't going to happen. So the very people who told us for a long time not to worry about it are — I know they're panicked. Whether that means that we should be panicked, I'm not sure. And I think the purpose of the Congress, the purpose of the House and Senate, is to be a check and balance on the executive branch, not to automatically write blank checks.

What if you're wrong?

Well, if I'm wrong, then we're going to have a significant problem. And if I'm right, we're going to have a bigger problem. So I think part of the question is, why can't this be done out in an open debate, have an openly marked-up bill, have the American people know what's being asked of them?

I was just reading an analysis by a very sophisticated person who said that there's been at least one leak from a congressional staff briefing by Secretary Paulson, in which he clearly indicated he intended to buy assets at above their market value. And that — why should the taxpayer do that? I mean, why are we not saying, 'We'll provide enough capital to avoid collapse, but we're not going to provide enough capital to guarantee the profits of Wall Street people' — who, after all, last year, at Goldman Sachs alone had three people each earning $73 million a year. Now, why should we bail them out?

What are you saying the incentive would be for, say, Secretary Paulson or Ben Bernanke to be rushing something through if it weren't urgently needed? What would their motivation be for that?

A couple of things — first of all, they're probably genuinely panicked. And I think that's real. I think they're tired; I think they've been consistently wrong, and now they're looking at a precipice that's very frightening. I think, second, that they have a very Wall Street-centric view of the world. And I think that rather than saying, 'What are the big, profound changes we need to fix America?,' they are saying, 'What are the immediate quick fixes for Wall Street?' — which I think, in the long run, just makes us weaker and sicker.

I think, third, they know that if they don't rush it through, it has no hope, because as the American people learn the details, they're just going to scream at their House and Senate members.

Friendo
09-22-2008, 08:18 PM
I heard part of it too and had the same reservations.

'Hamas' Jenkins
09-22-2008, 08:23 PM
What makes you think that true liberals are for government subsidization of private profits?

NewChief
09-22-2008, 08:24 PM
I heard part of it too and had the same reservations.

Our society is a teenager with a credit card who has been spending like crazy without any regard for the eventual bills to be paid. Now, that the reckoning has come, we're expecting daddy government to step in and pay our bills. We don't really care that daddy government is spending our inheritance and risking his well being in doing so. What matters, to us, is that we can maintain our lifestyle without having to pay the piper immediately. Nevermind a trillion dollars here and there, because that's all abstract. What matters to us is the instant gratification of the here and now.

NewChief
09-22-2008, 08:26 PM
What makes you think that true liberals are for government subsidization of private profits?

I'm certainly not for such. I guess my point was that liberals get characterized as the ones who want a nanny state, but conservatives certainly don't seem to mind it when the shit hits the fan, either.

'Hamas' Jenkins
09-22-2008, 08:26 PM
I personally think we need a new, reinvigorated labor movement, we need to remove corporate personhood and strip them of their bullshit protections given to them by the legislature and Supreme Court. We also need to reinvestigate free trade movements that allow companies to sue governments when they advocate for basic human rights and give their workers freedom of assembly.

NewChief
09-22-2008, 08:27 PM
I personally think we need a new, reinvigorated labor movement, we need to remove corporate personhood and strip them of their bullshit protections given to them by the legislature and Supreme Court. We also need to reinvestigate free trade movements that allow companies to sue governments when they advocate for basic human rights and give their workers freedom of assembly.

I agree with this, but what constitutes "labor" in our post-industrial society?

'Hamas' Jenkins
09-22-2008, 08:28 PM
I'm certainly not for such. I guess my point was that liberals get characterized as the ones who want a nanny state, but conservatives certainly don't seem to mind it when the shit hits the fan, either.

Well of course that's how they get characterized because they allow themselves to be characterized as such.

There is no such thing as conservatism, and there hasn't been for decades. True "conservatives" are classic liberal humanists.

Conservatism is an empty signifier.

'Hamas' Jenkins
09-22-2008, 08:29 PM
I agree with this, but what constitutes "labor" in our post-industrial society?

Wage earning.

Nightfyre
09-22-2008, 08:31 PM
I certainly agree that the process needs to be slowed down. for precedent, we needn't look any further than the patriot act.

Friendo
09-22-2008, 08:31 PM
I personally think we need a new, reinvigorated labor movement, we need to remove corporate personhood and strip them of their bullshit protections given to them by the legislature and Supreme Court. We also need to reinvestigate free trade movements that allow companies to sue governments when they advocate for basic human rights and give their workers freedom of assembly.

well I certainly agree that the fears of unemployment and how it might accelerate are well-founded, but to bring about that kind of reform it might require a real meltdown.

'Hamas' Jenkins
09-22-2008, 08:32 PM
Our society is a teenager with a credit card who has been spending like crazy without any regard for the eventual bills to be paid. Now, that the reckoning has come, we're expecting daddy government to step in and pay our bills. We don't really care that daddy government is spending our inheritance and risking his well being in doing so. What matters, to us, is that we can maintain our lifestyle without having to pay the piper immediately. Nevermind a trillion dollars here and there, because that's all abstract. What matters to us is the instant gratification of the here and now.

That's what happens when you have a political philosophy that is by definition, sociopathic, running the country.

They will act in the best interests of themselves and their short term interests.

People seem to forget about businesses, like say the dairy industry, that argued we shouldn't pasteurize milk because of the costs associated to them, despite the fact that 10% of samples had TB bacteria in them in 1906.

That is classic psychopathy.

Logical
09-22-2008, 08:33 PM
I think Newt is an excellent politician (one of the best Republicans) and also quite smart when it comes to the role National Government should play.

NewChief
09-22-2008, 08:33 PM
Wage earning.

Gotcha. I'm all for it, but it's a long, uphill slog after the PR beatdown that unions have been given over the last 20 years or so.

'Hamas' Jenkins
09-22-2008, 08:35 PM
well I certainly agree that the fears of unemployment and how it might accelerate are well-founded, but to bring about that kind of reform it might require a real meltdown.

I fully agree. I really think that this country needs a meltdown. I don't want to see people starving in the streets, nor do I think that should happen, but something absolutely has to happen about the wild discrepancy between the haves and have nots in this society. It is unsustainable. We are essentially reverting to a feudalist system.

max sleeper
09-22-2008, 08:36 PM
Our society is a teenager with a credit card who has been spending like crazy without any regard for the eventual bills to be paid. Now, that the reckoning has come, we're expecting daddy government to step in and pay our bills. We don't really care that daddy government is spending our inheritance and risking his well being in doing so. What matters, to us, is that we can maintain our lifestyle without having to pay the piper immediately. Nevermind a trillion dollars here and there, because that's all abstract. What matters to us is the instant gratification of the here and now.

:thumb: Bull's Eye! Go Chiefs!

Logical
09-22-2008, 08:36 PM
I'm certainly not for such. I guess my point was that liberals get characterized as the ones who want a nanny state, but conservatives certainly don't seem to mind it when the shit hits the fan, either.This is when BEP would chime in and rightly say it is not true Conservatives.

'Hamas' Jenkins
09-22-2008, 08:37 PM
Gotcha. I'm all for it, but it's a long, uphill slog after the PR beatdown that unions have been given over the last 20 years or so.

That's going to happen when corporations, who are inimical to the existence of unions, control the means of dissemination of media. People become indoctrinated into voting against their own self interests, and the 80% of the country whose job it is to follow orders, do so without asking.

The propaganda model that our society created is incredibly effective and very complex, but it needs to be destroyed.

'Hamas' Jenkins
09-22-2008, 08:39 PM
Daddy government isn't paying our bills, NewPhin. They are paying the bills of the people who run the country and ruined the economy.

Friendo
09-22-2008, 08:44 PM
I fully agree. I really think that this country needs a meltdown. I don't want to see people starving in the streets, nor do I think that should happen, but something absolutely has to happen about the wild discrepancy between the haves and have nots in this society. It is unsustainable. We are essentially reverting to a feudalist system.

http://www.chiefsplanet.com/BB/showthread.php?p=5034202#post5034202

clemensol
09-22-2008, 09:08 PM
Conservatives in the US have never really been for small government. They've historically been for a government that supports the wealthy over the poor.

Logical
09-22-2008, 09:31 PM
Conservatives in the US have never really been for small government. They've historically been for a government that supports the wealthy over the poor.I think the point about supporting wealth (not the same thing as wealthy) over building the lower class into the middle class would be true. The older conservatives only wanted bigger government when it comes to the Military/Defense portion of government.

jAZ
09-22-2008, 10:15 PM
Republicans are going to pressure Dems to support this bailout quickly and then attack them for supporting in the rest of the election cycle.

You watch.

Newt is entirely about politics. This is the setup.

ClevelandBronco
09-22-2008, 10:18 PM
Gingrich is right.

It's a good thing that he doesn't want to try to get votes.

jAZ
09-22-2008, 10:26 PM
Republicans are going to pressure Dems to support this bailout quickly and then attack them for supporting in the rest of the election cycle.

You watch.

Newt is entirely about politics. This is the setup.

Gingrich is right.

It's a good thing that he doesn't want to try to get votes.
Gengrich is an a-moral pig.

http://www.thenextright.com/patrick-ruffini/republicans-should-vote-against-the-bailout

Republicans Should Vote Against the Bailout
by Patrick Ruffini | September 21, 2008 at 9:25 PM

Republican incumbents in close races have the easiest vote of their lives coming up this week: No on the Bush-Pelosi Wall Street bailout.

God Himself couldn't have given rank-and-file Republicans a better opportunity to create political space between themselves and the Administration. That's why I want to see 40 Republican No votes in the Senate, and 150+ in the House. If a bailout is to pass, let it be with Democratic votes. Let this be the political establishment (Bush Republicans in the White House + Democrats in Congress) saddling the taxpayers with hundreds of billions in debt (more than the Iraq War, conjured up in a single weekend, and enabled by Pelosi, btw), while principled Republicans say "No" and go to the country with a stinging indictment of the majority in Congress.

This creates pressure on the "change" message. If this issue is made controversial, and Obama is not the first to make it an issue, how exactly is a Washington deal backed by Bush's Treasury Secretary "change?"

But for this to be actionable, it has to be controversial. So this can't be a few lonely voices like Coburn and DeMint. It needs to be the bulk of the Republican conference. In an ideal world, McCain opposes this because of all the Democratic add-ons and shows up to vote Nay while Obama punts.

History has shown us that "inevitable" "emergency" legislation like the Patriot Act or Sarbanes-Oxley is never more popular than on the day it is passed -- and this isn't all that popular to begin with. All the upside comes with voting against it.

A bailout may be inevitable, but so to can be the political benefit for Congressional Republicans if played correctly.

Silock
09-22-2008, 11:18 PM
Gengrich is an a-moral pig.

http://www.thenextright.com/patrick-ruffini/republicans-should-vote-against-the-bailout

Republicans Should Vote Against the Bailout
by Patrick Ruffini | September 21, 2008 at 9:25 PM

Republican incumbents in close races have the easiest vote of their lives coming up this week: No on the Bush-Pelosi Wall Street bailout.

God Himself couldn't have given rank-and-file Republicans a better opportunity to create political space between themselves and the Administration. That's why I want to see 40 Republican No votes in the Senate, and 150+ in the House. If a bailout is to pass, let it be with Democratic votes. Let this be the political establishment (Bush Republicans in the White House + Democrats in Congress) saddling the taxpayers with hundreds of billions in debt (more than the Iraq War, conjured up in a single weekend, and enabled by Pelosi, btw), while principled Republicans say "No" and go to the country with a stinging indictment of the majority in Congress.

This creates pressure on the "change" message. If this issue is made controversial, and Obama is not the first to make it an issue, how exactly is a Washington deal backed by Bush's Treasury Secretary "change?"

But for this to be actionable, it has to be controversial. So this can't be a few lonely voices like Coburn and DeMint. It needs to be the bulk of the Republican conference. In an ideal world, McCain opposes this because of all the Democratic add-ons and shows up to vote Nay while Obama punts.

History has shown us that "inevitable" "emergency" legislation like the Patriot Act or Sarbanes-Oxley is never more popular than on the day it is passed -- and this isn't all that popular to begin with. All the upside comes with voting against it.

A bailout may be inevitable, but so to can be the political benefit for Congressional Republicans if played correctly.

<object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/CMwdAc1Dzfg&hl=en&fs=1"></param><param name="allowFullScreen" value="true"></param><embed src="http://www.youtube.com/v/CMwdAc1Dzfg&hl=en&fs=1" type="application/x-shockwave-flash" allowfullscreen="true" width="425" height="344"></embed></object>

SBK
09-22-2008, 11:34 PM
The government is screwing up by showing companies they can fail. When you allow companies to fail they will make better decisions. When you bail them out they will continue to make horrible decisions.

This is stupid all the way around, and it's not a new problem at all. Politicians have short term goals instead of a long term view for what's best for the country.

Nightfyre
09-22-2008, 11:36 PM
The government is screwing up by showing companies they can fail. When you allow companies to fail they will make better decisions. When you bail them out they will continue to make horrible decisions.

This is stupid all the way around, and it's not a new problem at all. Politicians have short term goals instead of a long term view for what's best for the country.
+1

'Hamas' Jenkins
09-22-2008, 11:38 PM
This is stupid all the way around, and it's not a new problem at all. Politicians have short term goals instead of a long term view for what's best for the country.

And corporations don't? They are fundamentally amoral, corrupt organizations.

Guru
09-22-2008, 11:45 PM
Let them fail.

SBK
09-23-2008, 01:34 AM
And corporations don't? They are fundamentally amoral, corrupt organizations.

I didn't say anything about corporations other than the government should allow them to fail.

How did you get this from what I posted?

'Hamas' Jenkins
09-23-2008, 02:17 AM
I didn't say anything about corporations other than the government should allow them to fail.

How did you get this from what I posted?

Because it's fundamental to an understanding of the problem. Corporations are the main culprits here, not government. Government is responsible because they allowed the corporate tentacles to hook themselves, but if you are talking about orgs that have short term goals, Corps are far more guilty of this than government.

SBK
09-23-2008, 02:33 AM
Because it's fundamental to an understanding of the problem. Corporations are the main culprits here, not government. Government is responsible because they allowed the corporate tentacles to hook themselves, but if you are talking about orgs that have short term goals, Corps are far more guilty of this than government.

What I meant by government having short term goals was to get elected. They don't care about 10-20-50 years from now, it's all about getting elected now.

If the right thing to do for the country would be the thing that might get them voted out of office they won't do it. That's the governmental problem.

Bailing out Wall Street to get re-elected is retarded.

'Hamas' Jenkins
09-23-2008, 02:37 AM
What I meant by government having short term goals was to get elected. They don't care about 10-20-50 years from now, it's all about getting elected now.

If the right thing to do for the country would be the thing that might get them voted out of office they won't do it. That's the governmental problem.

Bailing out Wall Street to get re-elected is retarded.

I know exactly what you meant, but if you are looking at the real culprits here, the real short-term thinkers, it is the entities that only think about the next quarter, ethics or long term be damned, that got us into this mess.

The same ****s who bought off Congress so that executive bonuses don't have to count against corporate earnings, which is exactly why these CEOs get millions after ****ing up.

And if you should think anyone is in need of getting re-elected in Congress and is doing this for short-term political gain, it is the Republicans. They are already staring at a 50 seat deficit in the House and 44 Senate seats, max. People trust Dems far more on the economy. The D's aren't the ones who have to drive down the field with two minutes left, the Republicans do.

BucEyedPea
09-23-2008, 04:41 AM
Because it's fundamental to an understanding of the problem. Corporations are the main culprits here, not government. Government is responsible because they allowed the corporate tentacles to hook themselves, but if you are talking about orgs that have short term goals, Corps are far more guilty of this than government.

The fundamental core of the problem has been the loose monetary policy of the Federal Reserve. The Greenspan/Bernanke era. It has had more to do with our economy than any sitting president. But the Fed was formed by an act of govt in order to make monetary policy independent of the politicians. Remember?

Who makes us independent of the Fed though? That would be a free market in banking with sound money and no fractional reserve banking.

Get the right causes, things will correct. Loose monetary policy leads to bad choices and malinvestments by all not just CEO's and Wall Street. Everyone got addicted to the cheap easy credit and lived high on the hog above their means: the govt and the private sector. The govt's liberals loved the monetarization of debt so they could spend on their programs and buy themselves votes. The govt's cons and NCs loved the monetarization of debt to pay for it's wars for progressive purposes. Everyone got addicted like drunks. How 'bout a "War on Debt and Cheap Credit!" Instead of drugs, proverty and terror.

I don't like Newt as a chief NC, advocate of WWIII and getting rid of free speech on the net, but I saw him tonight and thought he sounded reasonable.

BucEyedPea
09-23-2008, 04:45 AM
Because it's fundamental to an understanding of the problem. Corporations are the main culprits here, not government. Government is responsible because they allowed the corporate tentacles to hook themselves, but if you are talking about orgs that have short term goals, Corps are far more guilty of this than government.

Baloney. Nothing but communist thinking here. Overgeneralization about corps. There are good and bad corps.

In the meantime a high govt bureaucrat named Paulson kept telling us our banking system was sound for over a year, when there were others out there saying otherwise.Yet some continue to hail him as the hero who would save our system. What's that? That's govt.

BucEyedPea
09-23-2008, 04:55 AM
Congress on September 10, 2003


Despite the long-term damage to the economy inflicted by the government's interference in the housing market, the government's policy of diverting capital to other uses creates a short-term boom in housing. Like all artificially-created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing. Perhaps the Federal Reserve can stave off the day of reckoning by purchasing GSE debt and pumping liquidity into the housing market, but this cannot hold off the inevitable drop in the housing market forever. In fact, postponing the necessary, but painful market corrections will only deepen the inevitable fall. The more people invested in the market, the greater the effects across the economy when the bubble bursts."-- RON PAUL

BucEyedPea
09-23-2008, 05:37 AM
I think there should be criminal prosecutions of certain people in our govt and elsewhere for this mess too. From the president on down.

NewChief
09-23-2008, 05:44 AM
Daddy government is paying our bills, NewPhin. They are paying the bills of the people who run the country and ruined the economy.

If you meant to say "isn't paying our bills" I agree. That's the part of the picture that wasn't drawn in by my analogy. While I think many citizens have indirectly and innocently profited from the mistakes, there are powerful figures, both political and private, who have knowingly squeezed this lemon for all its worth.

'Hamas' Jenkins
09-23-2008, 06:29 AM
If you meant to say "isn't paying our bills" I agree. That's the part of the picture that wasn't drawn in by my analogy. While I think many citizens have indirectly and innocently profited from the mistakes, there are powerful figures, both political and private, who have knowingly squeezed this lemon for all its worth.

Correct.

'Hamas' Jenkins
09-23-2008, 06:38 AM
Baloney. Nothing but communist thinking here. Overgeneralization about corps. There are good and bad corps.

In the meantime a high govt bureaucrat named Paulson kept telling us our banking system was sound for over a year, when there were others out there saying otherwise.Yet some continue to hail him as the hero who would save our system. What's that? That's govt.

Do you find that this kind of compartmentalized thinking ever presents you with an existential crisis?

What do you do if a stoplight is out and your aren't faced with one of two choices that you seem to lump everything into? Do you freeze like an unpatched version of Vista?


Anti-corporatism does not mean that you are a statist. It means that you are against corporatism.

The 20th century gave rise to three large authoritarian systems: Fascism, Bolshevism, and Corporatism. They have slightly different ideologies, but they all function in the same manner.

And I'm sorry, but no organization whose raison de etre is "make absolutely as much money for your stockholders as possible" can be described as "good". Corporations are not guided by principle, nor are they guided by long term thinking. They are guided by the bottom line and the next shareholder meeting.

And Paulson is not acting in the interest of government. He's acting in the interest of the Chicago School of economics that got us in this mess. He's using the government as a trojan horse--this is a publicly funded bailout of private institutions who will give nothing back to the public once they pull the ripcord on the parachute.

Are you really surprised that an administration put into power by big business is doing everything in their power to bail them out?

Yet, like a typical Republican, you get into power, **** up the government and say "Hey, look, this doesn't work."

'Hamas' Jenkins
09-23-2008, 06:41 AM
The fundamental core of the problem has been the loose monetary policy of the Federal Reserve. The Greenspan/Bernanke era. It has had more to do with our economy than any sitting president. But the Fed was formed by an act of govt in order to make monetary policy independent of the politicians. Remember?

Who makes us independent of the Fed though? That would be a free market in banking with sound money and no fractional reserve banking.

Get the right causes, things will correct. Loose monetary policy leads to bad choices and malinvestments by all not just CEO's and Wall Street. Everyone got addicted to the cheap easy credit and lived high on the hog above their means: the govt and the private sector. The govt's liberals loved the monetarization of debt so they could spend on their programs and buy themselves votes. The govt's cons and NCs loved the monetarization of debt to pay for it's wars for progressive purposes. Everyone got addicted like drunks. How 'bout a "War on Debt and Cheap Credit!" Instead of drugs, proverty and terror.

I don't like Newt as a chief NC, advocate of WWIII and getting rid of free speech on the net, but I saw him tonight and thought he sounded reasonable.

Yes, because all those liberals have just been languishing in pork the last 8 years. Look at how well funded welfare is, and all those negroes--by god, the inner city is sparkling like the Taj Mahal. And the country's road system--i-****ing-macculate.

Do you ever actually stop to think about what you are posting before you engage in such asinine demagoguery?

penchief
09-23-2008, 06:41 AM
Well of course that's how they get characterized because they allow themselves to be characterized as such.

There is no such thing as conservatism, and there hasn't been for decades. True "conservatives" are classic liberal humanists.

Conservatism is an empty signifier.

I agree. I've always said that I believe I'm more conservative the most righties who call themselves conservative.

penchief
09-23-2008, 06:48 AM
I think Newt is an excellent politician (one of the best Republicans) and also quite smart when it comes to the role National Government should play.

Newt was also a major player in the debasing of the political process. He was one of the early attack dogs of the Reagan revolution who helped pioneer the divisive political strategy that has ultimately rendered the people impotent against the impending corporate takeover of government. Many of Newt's proteges like Tom Delay have carried on his legacy of bullying and corruption within the halls of congress. I'm no fan of Newt Gingrich. He's helped create the political environment that has ruined our country.

JMO.

penchief
09-23-2008, 06:51 AM
That's going to happen when corporations, who are inimical to the existence of unions, control the means of dissemination of media. People become indoctrinated into voting against their own self interests, and the 80% of the country whose job it is to follow orders, do so without asking.

The propaganda model that our society created is incredibly effective and very complex, but it needs to be destroyed.

You're 100% on the money today.

penchief
09-23-2008, 07:04 AM
Baloney. Nothing but communist thinking here. Overgeneralization about corps. There are good and bad corps.

In the meantime a high govt bureaucrat named Paulson kept telling us our banking system was sound for over a year, when there were others out there saying otherwise.Yet some continue to hail him as the hero who would save our system. What's that? That's govt.

Wasn't Paulson a bigwig in the banking industry?

The problem here is that the government has been corrupted by corporate greed and the dark side of capitalism. The side that you are incapable of recognizing as being destructive to fair markets and a free democracy. In other words, the fascist side of your ideology.

The right wing corporate fascists that have corrupted government have exposed the fallacy of your ideology. It has nothing to do with communism or the evil nature of government. A government is only as well-intended or corrupt as the people running it. And we the people have let ourselves down by allowing us to be taken for a ride by a bunch of business crooks and war profiteers who suscribe to your ideology, not the liberal ideology.

Friendo
09-23-2008, 07:45 AM
Eric Hoffer

Contrary to popular belief, there is no such thing as an educated person. You are either learning or you are not. In today's world, it is vitally important that you see the truth in Eric Hoffer's statement. The win or loss, which is waiting in the wings for every person, is enormous. You get to choose which you will experience.

Examine what Mr. Hoffer said. There are two obvious parts to his statement. The first part is very clear; how well it is understood is another subject.

"The learners will inherit the earth."

That's pretty straightforward. I want to come back and elaborate on that statement because it is exciting, full of promise and possibility. However it would probably be wise to look at the second part of his advice first. Then, if you happen to fall into the category Eric Hoffer referred to, you can change your situation and win.

"The learned find themselves beautifully equipped to deal with a world that no longer exists."

In virtually every country of the world you can find individuals, thousands of them, walking the streets with degrees in their hands...degrees from prestigious universities. They cannot find work. Why? These individuals view the conditions and circumstances that surround them as very frightening. They are the people who Eric Hoffer referred to who "are beautifully equipped to deal with a world that no longer exists."

Look around, the world is definitely changing, and it will never be the same again. Power is slipping away, disappearing from some circles, and reappearing in others. Countries, companies and individuals who have held the power in the past are quickly losing it, if in fact, they have not already watched it melt in their hands. Their often smug, sometimes selfish, domineering, complacent attitude has cost them dearly. They are confused and this confusion is frequently fueled by their own ignorance. When that happens it ultimately leads to anger or resentment - sometimes both. This negative energy is then quite frequently misdirected, possibly at their loved ones, which then causes an entirely new set of problems.

These people are clutched by an unseen enemy and their frustration is endless because they are not sure what has happened or what is happening. Their world seems to be turning upside down.

The entire world is in the midst of a paradigm shift, which is unprecedented. There have been transitions in the past but nothing to equal what we are presently experiencing. The world is moving from an intellectual to a spiritual vibration. The rules for winning have changed dramatically and the majority of the populations are still living with the old rules. There are an enormous number of people in every community who have worked hard and disciplined themselves to follow the only rules they know...still they are losing. They are bewildered, confused and in many cases, angry and most feel their anger is justified, whether it is or not matters little. They are doing what they were taught by their parents, teachers, and employers. Unfortunately they too, were working with the old rules.

In the past, individuals were recognized and rewarded for what they knew. Corporations waited on the sidelines dangling monetary rewards attempting to attract the graduates from the big name universities of the world. There were the multi-million dollar MBA management development programs that corporations placed their hope in for years. Most everyone was conditioned to deify the intellect. Individuals were not properly recognized and rewarded for what they did.

Rather than focusing on what is or was wrong, we should let it go. Let the dead bury the dead. The world I grew up in is gone, forever. The world has changed. We live in the new era. This is a spiritual world governed by exact laws. Everyone who studies these laws and incorporates them into every aspect of their life will be richly rewarded. I believe we would be wise to go back to the promise Eric Hoffer shared, "In times of change, the learners inherit the earth."

The learners are continually preparing themselves to adapt to the changes. Rather than reacting they are responding to these changes and they are responding in an appropriate manner. The learners are excited with the prospects of what this paradigm shift is bringing.

Mecca
09-23-2008, 07:47 AM
Eric Hoffer......what if his name was Jack?

tiptap
09-23-2008, 07:50 AM
Princes "I offer my honor" Prince "I honor your offer" and it was like that the rest of the night offer honor offer honor

Friendo
09-23-2008, 07:54 AM
Eric Hoffer......what if his name was Jack?

that would make him head of the Treasury

BigChiefFan
09-23-2008, 08:08 AM
Wasn't Paulson a bigwig in the banking industry?

The problem here is that the government has been corrupted by corporate greed and the dark side of capitalism. The side that you are incapable of recognizing as being destructive to fair markets and a free democracy. In other words, the fascist side of your ideology.

The right wing corporate fascists that have corrupted government have exposed the fallacy of your ideology. It has nothing to do with communism or the evil nature of government. A government is only as well-intended or corrupt as the people running it. And we the people have let ourselves down by allowing us to be taken for a ride by a bunch of business crooks and war profiteers who suscribe to your ideology, not the liberal ideology.

Great post, as usual.

oldandslow
09-23-2008, 08:22 AM
Hamas...

I want to congradulate you on some of the best posts I have seen on the topic....

Rep

penchief
09-23-2008, 08:25 AM
Hamas...

I want to congradulate you on some of the best posts I have seen on the topic....

Rep

Agreed. He's on a roll.

Nightfyre
09-23-2008, 08:49 AM
Wasn't Paulson a bigwig in the banking industry?

The problem here is that the government has been corrupted by corporate greed and the dark side of capitalism. The side that you are incapable of recognizing as being destructive to fair markets and a free democracy. In other words, the fascist side of your ideology.
Hi. There is no fascist side to true capitalism because it is devoid of government intervention by definition. The principles of capitalism have nothing to do with corporatists usurping power. That would be a flaw of your democracy in action.

The right wing corporate fascists that have corrupted government have exposed the fallacy of your ideology. It has nothing to do with communism or the evil nature of government. A government is only as well-intended or corrupt as the people running it. And we the people have let ourselves down by allowing us to be taken for a ride by a bunch of business crooks and war profiteers who suscribe to your ideology, not the liberal ideology.
Right-wing has nothing to do with it, and neither does BEP's ideology. It has everything to do with a socialistic policy being put into play by government acting as government does, which supports BEP's ideology. In fact, the only thing you got right in this entire post was this:
And we the people have let ourselves down by allowing us to be taken for a ride by a bunch of business crooks and war profiteers
So you have to ask yourself: Why did you post the rest?

penchief
09-23-2008, 09:27 AM
Hi. There is no fascist side to true capitalism because it is devoid of government intervention by definition. The principles of capitalism have nothing to do with corporatists usurping power. That would be a flaw of your democracy in action.

Right-wing has nothing to do with it, and neither does BEP's ideology. It has everything to do with a socialistic policy being put into play by government acting as government does, which supports BEP's ideology. In fact, the only thing you got right in this entire post was this:

So you have to ask yourself: Why did you post the rest?

It has as more to do with right wing ideology than it does socialism or communism. I agree that this corrupt goverment has aided and abetted the corporate crooks and the war profiteers in perpetuating their fraud against America. But that fraud has been perpetuated in the name of unfettered greed, Darwinian "free markets," and the military industrial complex. Not socialism, or even marxism.

The government is corrupt because it has been infiltrated by corporate interests that advocate the destruction of government by means of "starving the beast." Which is why great gobs of taxpayer money is being transferred to private entities. Which is why we are throwing our future prosperity away in Iraq. Which is why we are letting our infrastructure crumble around us.

The "deregulators" and the so-called "free-marketeers" have been given their wish over the past 30 years thanks to Reagan, Bush, trickle down, and deregulation but the results haven't matched the promises. So for you or anyone else to claim that liberalism, socialism, or marxism is the culprit responsible for the reactionary and imperialistic right wing policies of the Reagan/Bush neocons is disingenous, IMO.

At some point you have to own up to the failures of your ideology. You have to own up to the fact that, when applied, your ideology always produces the same corrupt, destructive, anti-social outcomes.

Give me one example in history where your ideology has ever worked? Just one.

Nightfyre
09-23-2008, 09:45 AM
It has as more to do with right wing ideology than it does socialism or communism. I agree that this corrupt goverment has aided and abetted the corporate crooks and the war profiteers in perpetuating their fraud against America. But that fraud has been perpetuated in the name of unfettered greed, Darwinian "free markets," and the military industrial complex. Not socialism, or even marxism.
so·cial·ism (sō'shə-lĭz'əm) Pronunciation Key
n.

1. Any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government that often plans and controls the economy.

Now apply definition. kthx.

The government is corrupt because it has been infiltrated by corporate interests that advocate the destruction of government by means of "starving the beast." Which is why great gobs of taxpayer money is being transferred to private entities. Which is why we are throwing our future prosperity away in Iraq. Which is why we are letting our infrastructure crumble around us.

The "deregulators" and the so-called "free-marketeers" have been given their wish over the past 30 years thanks to Reagan, Bush, trickle down, and deregulation but the results haven't matched the promises. So for you or anyone else to claim that liberalism, socialism, or marxism is the culprit responsible for the reactionary and imperialistic right wing policies of the Reagan/Bush neocons is disingenous, IMO.
so·cial·ism (sō'shə-lĭz'əm) Pronunciation Key
n.

1. Any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government that often plans and controls the economy.

Now apply definition. kthx.

At some point you have to own up to the failures of your ideology. You have to own up to the fact that, when applied, your ideology always produces the same corrupt, destructive, anti-social outcomes.

Give me one example in history where your ideology has ever worked? Just one.
All I see is a failure of right-wing ideology, which is a far cry different from true capitalism, which is certainly what BEP and I have been saying, well ever since we started posting here.

My ideology will work when it is actually applied. But that is unlikely to occur since the government seems to feel the need to interject itself into everything. Additionally, my ideology calls for regulation to protect the right to the pursuit of property by individuals. Manipulation of the markets by collusion, financial bubbles created by extreme credit acceleration simultaneously paired with drastically reduced standards in the mortgage industry (which was caused by a reduction in the required standard of mortgages freddie and fannie would guarantee, which was defined by the government) and bailouts are certainly not consistent with my ideology.

All I see is government mucking it up. But let's not let facts get in the way of your wild claims.

tiptap
09-23-2008, 09:58 AM
If pure capitalism is so great and if the markets can't be overturned, then why hasn't there a been a good example of these principles being used by some country. It could be because humans and the sins are involved. I mean if we were just machines. . . but the whole point is that WANT drives human action. It is a evolutionary force. Then to turn around and let it drive capitalism rather than recognizing it has to be tamed to meet ends beyond the immediate lust, is to miss the point of reasoning and recognition of the tension between animal instinct and human symbolic understanding.

patteeu
09-23-2008, 10:14 AM
I was just reading an analysis by a very sophisticated person who said that there's been at least one leak from a congressional staff briefing by Secretary Paulson, in which he clearly indicated he intended to buy assets at above their market value.

I heard Ben Bernake testifying this morning and he said something that made this sentence seem to make more sense. He said that, because of accounting rules, some of these questionable assets have a current book value than their likely hold-to-maturity value (which ought to be the floor value). He is suggesting that the government purchase these securities at something close to the likely hold-to-maturity value which could be described as buying them at "above their market value" even though it's supposedly close to their true value.

Having said that, I don't know why they can't just change the accounting rules to let the banks revalue these assets to the hold-to-maturity value. :shrug:

patteeu
09-23-2008, 10:18 AM
I'm certainly not for such. I guess my point was that liberals get characterized as the ones who want a nanny state, but conservatives certainly don't seem to mind it when the shit hits the fan, either.

Another way to say that might be that liberals want to push us in the direction of socialism all the time, not just when crisis circumstances force us into a position where we have to choose from among bad options. :p

penchief
09-23-2008, 11:15 AM
so·cial·ism (sō'shə-lĭz'əm) Pronunciation Key
n.

1. Any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government that often plans and controls the economy.

Now apply definition. kthx.

so·cial·ism (sō'shə-lĭz'əm) Pronunciation Key
n.

1. Any of various theories or systems of social organization in which the means of producing and distributing goods is owned collectively or by a centralized government that often plans and controls the economy.

Now apply definition. kthx.

All I see is a failure of right-wing ideology, which is a far cry different from true capitalism, which is certainly what BEP and I have been saying, well ever since we started posting here.

My ideology will work when it is actually applied. But that is unlikely to occur since the government seems to feel the need to interject itself into everything. Additionally, my ideology calls for regulation to protect the right to the pursuit of property by individuals. Manipulation of the markets by collusion, financial bubbles created by extreme credit acceleration simultaneously paired with drastically reduced standards in the mortgage industry (which was caused by a reduction in the required standard of mortgages freddie and fannie would guarantee, which was defined by the government) and bailouts are certainly not consistent with my ideology.

All I see is government mucking it up. But let's not let facts get in the way of your wild claims.

Representative government is designed to represent the will of the people. The absence of representative government has historically enabled oppression and inhumanity. Laws and regulations implemented by representative governments are tools intended to promote the will of the people.

The absence of laws and regulations designed to promote and protect the oppurtunity of all citizens to live free and prosper has traditionally facilitated the suppression of individual liberty and stifled individual prosperity. Unchecked power runs counter to the ideal of universal liberty.

Pure capitalism does not guarantee a free market because dominant forces can corrupt the market in ways that eliminate competition and promote monopolies, gouge the consumer, manipulate supply and demand, suppress wages, or exploit the market through unethical practices. A corrupted market is not a free market. Only a fair market can be a free market. A fair market is one in which dominant forces are prohibited from corrupting the market.

Regulation is the tool by which the people, through their representative government, ensure that dominant forces are not corrupting the market and, thereby, not suppressing the opportunity for individual prosperity. The corruption of the people's government is a strategy by which dominant forces will try to evade the will of the people. Deregulation is a method by which those forces undermine laws that have been established by the people to promote the general welfare and preserve the individual's opportunity to prosper unimpeded by dominant forces exercising unchecked power.

Unchecked power in markets is no different than unchecked power in governments. It will lead to the suppression of freedom. So the solution is not to eliminate regulations that promote universal freedom or to tear down the people's government which represents the people's will. That would only leave us with unchecked power.

The absence of representative goverment will only yield the same results as a corrupted government. The solution is to clean up government by electing people who actually represent the will of the people and promote the general welfare. The solution is to elect people who advocate rules that promote and protect our right to life, liberty, and the pursuit of happiness. The solution is to hold accountable those who betray those ideals.

IMO, the absence of regulation in the market would only worsen the situation that we have now.

Nightfyre
09-23-2008, 11:18 AM
Representative government is designed to represent the will of the people. The absence of representative government has historically enabled oppression and inhumanity. Laws and regulations are tools implemented by representative governments intended to promote the will of the people.

The absence of laws and regulations designed to promote and protect the oppurtunity of all citizens to live free and prosper has traditionally facilitated the suppression of individual liberty and stifled individual prosperity. Unchecked power runs counter to the ideal of universal liberty.

Pure capitalism does not guarantee a free market because dominant forces can corrupt the market in ways that eliminate competition and promote monopolies, gouge the consumer, manipulate supply and demand, suppress wages, or exploit the market through unethical practices. A corrupted market is not a free market. Only a fair market can be a free market. A fair market is one in which dominant forces are prohibited from corrupting the market.

Regulation is the tool by which the people, through their representative government, ensure that dominant forces are not corrupting the market and, thereby, suppressing their opportunity for individual prosperity. The corruption of the people's government is a strategy by which those dominant forces will try to evade the will of the people. Deregulation is a method by which those forces have undermined the laws that have been established to promote the general welfare and preserve the individual's opportunity to prosper unimpeded by unchecked power.

Unchecked power in markets is no different than unchecked power in governments. It will lead to the suppression of freedom. So the solution is not to eliminate regulations that promote freedom or to tear down the people's government which represents the people's will. That would only leave us with unchecked power.

No government at all will only yield the same results as a corrupted government. The solution is to clean up government by electing people who actually represent the will of the people and promote the general welfare. The solution is to elect people who advocate rules that promote and protect our right to life, liberty, and the pursuit of happiness. The absence of regulation in the market would only worsen the situation that we have now.
Thanks for explaining why you can't possibly understand my ideology (you don't read my posts.)

penchief
09-23-2008, 11:34 AM
Thanks for explaining why you can't possibly understand my ideology (you don't read my posts.)

Well, I confess that I didn't read the very end. I am glad to see that you are one "libertarian" that doesn't deride all regulation. Has that always been your stance or have you softened due to the reality of the day? It seems like I've had this argument with you before and you didn't concede the regulation thing so readily.

I guess I still don't understand why you insist that just because government is corrupt that it is socialist or marxist. Or why you would defend BEP when she says that the right wing tendencies of the neocons are liberal or nature.

Corrupted government designed to cater to private entities does not equate to left-wing, liberal, or socialist ideology. I don't know how anyone can even say that with a straight face considering the policies of the Reagan/Bush neocon regime.

BucEyedPea
09-23-2008, 11:58 AM
I heard Ben Bernake testifying this morning and he said something that made this sentence seem to make more sense. He said that, because of accounting rules, some of these questionable assets have a current book value than their likely hold-to-maturity value (which ought to be the floor value). He is suggesting that the government purchase these securities at something close to the likely hold-to-maturity value which could be described as buying them at "above their market value" even though it's supposedly close to their true value.

Having said that, I don't know why they can't just change the accounting rules to let the banks revalue these assets to the hold-to-maturity value. :shrug:

I wouldn't go by anything Bernanke says. The value of these assets, in reality is much less than they really are and they are trying to prop up these values. They're disguising reality.

plbrdude
09-23-2008, 12:05 PM
Let them fail.

this has been my opinion as well. besides, doesn't a bailout effectively go against the principals of capitalism? i fear it inches us just a little closer to socialism.

Nightfyre
09-23-2008, 12:08 PM
Well, I confess that I didn't read the very end. I am glad to see that you are one "libertarian" that doesn't deride all regulation. Has that always been your stance or have you softened due to the reality of the day? It seems like I've had this argument with you before and you didn't concede the regulation thing so readily.

I guess I still don't understand why you insist that just because government is corrupt that it is socialist or marxist. Or why you would defend BEP when she says that the right wing tendencies of the neocons are liberal or nature.

Corrupted government designed to cater to private entities does not equate to left-wing, liberal, or socialist ideology. I don't know how anyone can even say that with a straight face considering the policies of the Reagan/Bush neocon regime.
BEP looks at it as liberal on the axis of economics, where government intervention of any type is liberal and non-intervention is conservative. It's a much more aged definition.

Calcountry
09-23-2008, 12:11 PM
Gengrich is an a-moral pig.

http://www.thenextright.com/patrick-ruffini/republicans-should-vote-against-the-bailout
Republicans Should Vote Against the Bailout
by Patrick Ruffini | September 21, 2008 at 9:25 PM

Republican incumbents in close races have the easiest vote of their lives coming up this week: No on the Bush-Pelosi Wall Street bailout.

God Himself couldn't have given rank-and-file Republicans a better opportunity to create political space between themselves and the Administration. That's why I want to see 40 Republican No votes in the Senate, and 150+ in the House. If a bailout is to pass, let it be with Democratic votes. Let this be the political establishment (Bush Republicans in the White House + Democrats in Congress) saddling the taxpayers with hundreds of billions in debt (more than the Iraq War, conjured up in a single weekend, and enabled by Pelosi, btw), while principled Republicans say "No" and go to the country with a stinging indictment of the majority in Congress.

This creates pressure on the "change" message. If this issue is made controversial, and Obama is not the first to make it an issue, how exactly is a Washington deal backed by Bush's Treasury Secretary "change?"

But for this to be actionable, it has to be controversial. So this can't be a few lonely voices like Coburn and DeMint. It needs to be the bulk of the Republican conference. In an ideal world, McCain opposes this because of all the Democratic add-ons and shows up to vote Nay while Obama punts.

History has shown us that "inevitable" "emergency" legislation like the Patriot Act or Sarbanes-Oxley is never more popular than on the day it is passed -- and this isn't all that popular to begin with. All the upside comes with voting against it.

A bailout may be inevitable, but so to can be the political benefit for Congressional Republicans if played correctly.
It sucks to be the majority when the shit hits the fan, doesn't it?

pssst, it's a conspiracy, Franklin Rains deliberately set this up to give Obama's sec of Treasury a slush fund.

Calcountry
09-23-2008, 12:41 PM
BEP looks at it as liberal on the axis of economics, where government intervention of any type is liberal and non-intervention is conservative. It's a much more aged definition.For those on the left who support this, do you realize that it is a tantamount admission to "trickle down" economics?

RJ
09-23-2008, 12:49 PM
For those on the left who support this, do you realize that it is a tantamount admission to "trickle down" economics?


By "support this", you mean the bailout?

penchief
09-23-2008, 01:08 PM
For those on the left who support this, do you realize that it is a tantamount admission to "trickle down" economics?

At this point, I'm not supporting it. I think it's a huge transfer of taxpayer money to private entities as a means of further enriching the very crooks who committed the fraud. I think it will utimately be another domino in the intentional bankrupting and dismantling of our representive government. I fear that it is one step closer to the fullfillment of the right wing's Reaganite dream of "starving the beast."

RJ
09-23-2008, 03:29 PM
http://www.cnn.com/2008/POLITICS/09/23/congress.bailout.reax/index.html


Conservatives: 'Take a breath' before passing bailout
Story Highlights
Conservatives want Congress to consider alternative before passing bailout

Limitations on CEO pay could be added to $700 billion plan

"Party is over" for companies aided by the bailout, House Speaker Pelosi says

It is "unthinkable" that legislation would not pass by end of week, White House says

WASHINGTON (CNN) -- House conservatives urged Congress on Tuesday to "take a breath" and consider other alternatives before rushing to pass a $700 billion plan to bail out Wall Street, a measure the White House says must pass by the end of the week.

"I must tell you, there are those in the public debate who have said that we must act now. The last time I heard that, I was on a used-car lot," said Rep. Mike Pence, R-Indiana. "The truth is, every time somebody tells you that you've got to do the deal right now, it usually means they're going to get the better part of the deal."

Congress is rushing to finalize legislation that would authorize Treasury Secretary Henry Paulson to buy up to $700 billion worth of mortgage-related securities and other assets that are dragging down Wall Street institutions and freezing up credit markets.

When Paulson and Federal Reserve Chairman Ben Bernanke proposed the bailout last week, congressional leaders gave initial support for the measure and said they would work to pass it quickly. Watch Bernanke call for urgent action »

But after the Treasury proposal arrived on Capitol Hill last weekend, lawmakers vowed to modify the plan.

The changes being floated include adding oversight of the program by an independent board, helping homeowners who are facing foreclosure, allowing the government to take an equity stake in the companies it helps, and limiting the CEO pay of companies that are aided by the bailout to the $400,000 salary of the top elected official in the land: the president.

An aide to Rep. Barney Frank, the chairman of the House Financial Services Committee, said negotiators had agreement on an oversight board and some form of help for homeowners facing foreclosure. The aide said the negotiators were "not there yet" on whether the government could take a stake in the companies it help. Watch Paulson call for bipartisan action »

CEOs of companies aided by the taxpayers could continue to bring down multimillion-dollar salaries, and that has sparked widespread anger on Capitol Hill. House Speaker Nancy Pelosi said that if the bailout passes, "the party is over" for the companies that it helps. Watch Pelosi use tough language on Wall Street »

"The party is over for this compensation for CEOs who take the golden parachute as they drive their companies into the ground. ... The party is over for financial institutions taking risks [and] at the same time privatizing any gain they may have while they nationalize the risk, asking the taxpayer to pick up the tab," Pelosi said.

When asked by a reporter what would happen to the economy if the measure were not passed by the end of the week, White House spokesman Tony Fratto said, "I think you should think of that as unthinkable."

"I mean, every business, every employer and so every employee in America depends every day on the flow of money coming through our financial system to sustain their normal business operations," Fratto said.

However, many lawmakers on both the left and the right are asking how they can justify risking $700 billion of the taxpayers' money to help out Wall Street when many Americans are hurting economically.

And conservatives, in particular, object to the large departure from free-market principles. Watch more about Secretary Paulson »

"They are saying this is failure of the free markets of capitalism when, in fact, this is a failure because government injected itself into the free market, created this easy credit, these guaranteed loans, and these loans are what have turned into the bad paper that are bringing all these financial institutions down," said Sen. Jim DeMint, R-South Carolina. Watch DeMint slam the bailout »

Rep. Jim McDermott, D-Washington, also asked why Congress should trust the administration to administer the bailout plan properly when, in his view, it has lost its credibility with the American people.

"Trust is something that is already bankrupt. The bank of trust in this administration is absolutely bankrupt," McDermott said. "They have misled, lied, misrepresented, whatever word you want to use, on issue after issue. And now they give us seven days to come back, take out your wallet and give them everything that's in it."

But Rep. John Boehner of Ohio, the top Republican in the House, said the gravity of the situation requires quick action.

"Nobody wants to do this. Nobody wants to be involved in this. Nobody wants to take the chance, but I would argue... if we do nothing, we are jeopardizing our economy, jobs and people's retirement security," he said.

WilliamTheIrish
09-23-2008, 03:55 PM
I fully agree. I really think that this country needs a meltdown. I don't want to see people starving in the streets, nor do I think that should happen, but something absolutely has to happen about the wild discrepancy between the haves and have nots in this society. It is unsustainable. We are essentially reverting to a feudalist system.

This is absolutely correct. This bailout will do nothing to forestall the eventual bottoming out of the economy that HAS to happen. Once we reach the bottom (and it will entail hard times for many people) only then can it begin to get better.

***SPRAYER
09-23-2008, 05:39 PM
I agree with this, but what constitutes "labor" in our post-industrial society?

You ever drive a truck?

eazyb81
09-23-2008, 05:46 PM
I heard Ben Bernake testifying this morning and he said something that made this sentence seem to make more sense. He said that, because of accounting rules, some of these questionable assets have a current book value than their likely hold-to-maturity value (which ought to be the floor value). He is suggesting that the government purchase these securities at something close to the likely hold-to-maturity value which could be described as buying them at "above their market value" even though it's supposedly close to their true value.

Having said that, I don't know why they can't just change the accounting rules to let the banks revalue these assets to the hold-to-maturity value. :shrug:

Yep, it's called FAS 157, aka mark-to-market, and I've brought it up many times on this board. When there is no market due to an illiquid market, the new rule forces banks to write these assets down and it crushes their balance sheet. That's why a place like Merrill Lynch was forced to sell packages of MBS to Lone Star for pennies on the dollar. But don't worry, Stewie says Bernanke, Steve Schwartzman, and everyone else w/ a brain that has worked a day in high finance is wrong. LMAO

jidar
09-23-2008, 06:02 PM
Yep, it's called FAS 157, aka mark-to-market, and I've brought it up many times on this board. When there is no market due to an illiquid market, the new rule forces banks to write these assets down and it crushes their balance sheet. That's why a place like Merrill Lynch was forced to sell packages of MBS to Lone Star for pennies on the dollar. But don't worry, Stewie says Bernanke, Steve Schwartzman, and everyone else w/ a brain that has worked a day in high finance is wrong. LMAO

Of course that rule is there for a good reason, so balance sheets can't be abused to show value in failed future endeavors. Enron anyone?

Here look, those assets are worth more than nothing, but at the same time they aren't worth their projected matured valued either, especially considering the fact that those projected values that we would come up with are complete bullshit now that the market is going through this. The truth is somewhere in between and if you're going to buy them out I guess this is where the compromise has to happen.

As for me, hell I don't know what we should do. One day I think we should let the whole thing fail and not buy them out then the next day I think we have to. How the hell can anyone really know?

Nightfyre
09-23-2008, 06:04 PM
Yep, it's called FAS 157, aka mark-to-market, and I've brought it up many times on this board. When there is no market due to an illiquid market, the new rule forces banks to write these assets down and it crushes their balance sheet. That's why a place like Merrill Lynch was forced to sell packages of MBS to Lone Star for pennies on the dollar. But don't worry, Stewie says Bernanke, Steve Schwartzman, and everyone else w/ a brain that has worked a day in high finance is wrong. LMAO
Yes, god forbid a balance sheet represent the actual value of assets at their present time. And god forbid companies be diversified enough to handle non-systematic risk.

NewChief
09-23-2008, 06:12 PM
You ever drive a truck?

I drive a Toyota Tundra currently. My point is that we aren't dependent enough on our internal manual labor force for them to effectively organize like in the old days. So much of our labor force consists of illegal immigrants who, for obvious reasons, can't really organize in any effective way. This has sapped the lifeblood of organize labor. I realize that others will claim that organized labor has sapped the lifeblood of the manual job market in the US, but you're getting into a chicken/egg scenario at that point.

Maybe I totally missed the point, and you were talking about the trucking industry. In that case, no, I don't drive a truck. But you're right that they probably represent one of the larger more traditional "labor" industries in our society.

eazyb81
09-23-2008, 06:43 PM
Of course that rule is there for a good reason, so balance sheets can't be abused to show value in failed future endeavors. Enron anyone?

It's good in theory, but poor in practice. If the current crisis isn't enough evidence for you, I think finance might be over your head.

Here look, those assets are worth more than nothing, but at the same time they aren't worth their projected matured valued either, especially considering the fact that those projected values that we would come up with are complete bullshit now that the market is going through this. The truth is somewhere in between and if you're going to buy them out I guess this is where the compromise has to happen.

There's a reason many intelligent people with a clue are saying the taxpayers in all likelihood will make out like bandits in this deal. We're buying assets for pennies on the dollar, and when the housing market turns around in early/mid 2009, these MBS will increase in value. The banks simply can't afford to hold these on their balance sheet anymore because of additional writedowns, and the Fed is taking advantage of this. This isn't even getting into the issue of warrants.

As for me, hell I don't know what we should do. One day I think we should let the whole thing fail and not buy them out then the next day I think we have to. How the hell can anyone really know?

If you ever truly think that then I would point you back to my initial quote. If we don't go through with this plan, our financial system will completely collapse and life as we know it in western civilization will change for the worse. Unbeknownst to most on this board, banks serve a purpose besides getting Ivy league grads filthy rich; they give regular joes loans for mortgages, cars, education, etc. If the banks completely seize up, our economic growth will literally grind to a halt. This "bailout" is as much of a bailout for blue-collar America as it is for Wall Street.

Hydrae
09-23-2008, 06:49 PM
It's good in theory, but poor in practice. If the current crisis isn't enough evidence for you, I think finance might be over your head.



There's a reason many intelligent people with a clue are saying the taxpayers in all likelihood will make out like bandits in this deal. We're buying assets for pennies on the dollar, and when the housing market turns around in early/mid 2009, these MBS will increase in value. The banks simply can't afford to hold these on their balance sheet anymore because of additional writedowns, and the Fed is taking advantage of this. This isn't even getting into the issue of warrants.

As for me, hell I don't know what we should do. One day I think we should let the whole thing fail and not buy them out then the next day I think we have to. How the hell can anyone really know?

If you ever truly think that then I would point you back to my initial quote. If we don't go through with this plan, our financial system will completely collapse and life as we know it in western civilization will change for the worse. Unbeknownst to most on this board, banks serve a purpose besides getting Ivy league grads filthy rich; they give regular joes loans for mortgages, cars, education, etc. If the banks completely seize up, our economic growth will literally grind to a halt. This "bailout" is as much of a bailout for blue-collar America as it is for Wall Street.

So sometime mid to late next year I should expect a nice check in the mail from the feds with a note of thanks for my willingness to invest in this manner?

$700B is $2100 per person, I have a family of 4. How much should I be expecting next year in return for my $8400 total investment? 10-15K sound about right?

eazyb81
09-23-2008, 06:53 PM
So sometime mid to late next year I should expect a nice check in the mail from the feds with a note of thanks for my willingness to invest in this manner?

$700B is $2100 per person, I have a family of 4. How much should I be expecting next year in return for my $8400 total investment? 10-15K sound about right?

Can you read?

If you ever truly think that then I would point you back to my initial quote. If we don't go through with this plan, our financial system will completely collapse and life as we know it in western civilization will change for the worse. Unbeknownst to most on this board, banks serve a purpose besides getting Ivy league grads filthy rich; they give regular joes loans for mortgages, cars, education, etc. If the banks completely seize up, our economic growth will literally grind to a halt. This "bailout" is as much of a bailout for blue-collar America as it is for Wall Street.

What about this statement made you write the point implying that somone....anyone.....should write you a check? Your benefit is that you just might not have to have a 750 FICO to get a $2000 loan for the next 10 years.

'Hamas' Jenkins
09-23-2008, 07:14 PM
Thanks for explaining why you can't possibly understand my ideology (you don't read my posts.)

That is so intellectually dishonest it's just sickening. You are the one who has been wholly unable to offer a substantial counterargument or rebuttal, you just put your fingers in your ears and cried, "Na na na na na Socialism Socialism."

Sooner or later, people are going to have to realize that unfettered, deregulated capitalism is just as fallacious as Soviet communism. Yeah, it works in theory, but theory and praxis are wholly divergent aspects of life.

Hydrae
09-23-2008, 07:21 PM
Can you read?



What about this statement made you write the point implying that somone....anyone.....should write you a check? Your benefit is that you just might not have to have a 750 FICO to get a $2000 loan for the next 10 years.

You said "the taxpayers in all likelihood will make out like bandits in this deal". Not having to jump through hoops for a loan for the next 10 years if making out like a bandit???

eazyb81
09-23-2008, 07:23 PM
Sooner or later, people are going to have to realize that unfettered, deregulated capitalism is just as fallacious as Soviet communism. Yeah, it works in theory, but theory and praxis are wholly divergent aspects of life.

Do you think regulated capitalism can produce extended periods of consistent economic growth like this country has experienced in recent history? If not, do you feel this country is prepared to handle a substantial slowdown? Not trying to argue, just interested in your take.

eazyb81
09-23-2008, 07:28 PM
You said "the taxpayers in all likelihood will make out like bandits in this deal". Not having to jump through hoops for a loan for the next 10 years if making out like a bandit???

The Fed isn't directly taking money out of your wallet to fund this, so why would you expect them to directly put money in there if this is profitable? I understand where you're coming from in theory, but if we're staying with that line of thought, if this plan is successful it will be paid back to taxpayers via normal government actions. You will not get a check because you did not write a check to begin with.

Hydrae
09-23-2008, 07:36 PM
The Fed isn't directly taking money out of your wallet to fund this, so why would you expect them to directly put money in there if this is profitable? I understand where you're coming from in theory, but if we're staying with that line of thought, if this plan is successful it will be paid back to taxpayers via normal government actions. You will not get a check because you did not write a check to begin with.

If it fails I guarantee you I will be required to write a check.


Sorry, IMO we should let this die a natural death and take the ensuing lumps. Otherwise when this fails again in 10 years it will be even worse. It is past time to burst this cyst.

eazyb81
09-23-2008, 07:42 PM
If it fails I guarantee you I will be required to write a check.

Sorry, IMO we should let this die a natural death and take the ensuing lumps. Otherwise when this fails again in 10 years it will be even worse. It is past time to burst this cyst.

Everyone is entitled to an opinion, but I just hope you realize what the magnitude of letting this die a "natural death" would be. It would affect every industry and every consumer. Unemployment would skyrocket, not only here but globally.

jidar
09-23-2008, 07:43 PM
The Fed isn't directly taking money out of your wallet to fund this, so why would you expect them to directly put money in there if this is profitable? I understand where you're coming from in theory, but if we're staying with that line of thought, if this plan is successful it will be paid back to taxpayers via normal government actions. You will not get a check because you did not write a check to begin with.

No they most certainly are taking money out of our pockets when they take action like this that devalues the dollar.

'Hamas' Jenkins
09-23-2008, 07:43 PM
Do you think regulated capitalism can produce extended periods of consistent economic growth like this country has experienced in recent history? If not, do you feel this country is prepared to handle a substantial slowdown? Not trying to argue, just interested in your take.

Our sustained "growth" was a complete farce. It had nothing to do with sound economic policy, it was about deferral and a concentration of wealth.

We are already going to enter a protracted economic slowdown, because the sheer amount of interest, as well as the continued devaluation of the dollar will make our deficit even harder to pay off (just the interest portion) and our assets will become cheaper and cheaper for outside countries to gobble up like a box of Nerds.

Think about the major growth drivers in the 80's--The Military-Industrial-Complex, and the stock market.

What did investing in the Iron Triangle do? It enriched the companies who got the lucrative contracts and quadrupled our debt. It was a massive transfer of wealth from the ordinary citizens of the country (3-5000 dollars per family, per year) to an insular group of people who would never be satiated no matter how many contracts they received. Every defense system has a countermeasure which begets another system. It's a bottomless pit.

The slash and burn tactics of the top tax rates and the enactment of the AMT, as well as increasing the payroll tax, only served to further concentrate wealth among the top wage earners. Of course the stock market benefits, but when 1% of people hold 50% of the stock, and 4% hold 80%, who really benefits from a robust market? It's not you and me. We merely subsidize their opulent lifestyles.

The 90's saw a further increase in lax corporate regulation, which led to huge corporate fraud, combine that with the tech bubble, and you had a short term period of extreme economic growth that was fundamentally unsound. It was like the Vermeil Chiefs--built to succeed in the short term, ruinous when the bill came due.

The 00's saw even more deregulation and the pimping of the "ownership" society. Individuals and corps got huge commissions and bonuses through these bullshit mortgages (modern junk bonds), and the short term infusion of phony capital helped propel the market and the economy far beyond what was healthy and sustainable.

Now the bill is coming due, and what do we want to do? We want to bail out the very people who ****ed this country in the first place.

As I've alluded to earlier, Stalin once said, "When one man dies, it's a tragedy, when one million die, it's a statistic."

It seems as though our modern philosophy is "when a corporation dies, that's a tragedy, when a person gets foreclosed on, that's a statistic."

jidar
09-23-2008, 07:46 PM
Do you think regulated capitalism can produce extended periods of consistent economic growth like this country has experienced in recent history? If not, do you feel this country is prepared to handle a substantial slowdown? Not trying to argue, just interested in your take.

Minimal regulation is a requirement in my mind. If nothing else just having laws that separate the entities that take these types of risks from the rest of the economic system would go a long way. To me that's a good start, and ultimately I think you can improve on that even more.

eazyb81
09-23-2008, 07:49 PM
No they most certainly are taking money out of our pockets when they take action like this that devalues the dollar.

So devaluing the dollar for the time being trumps keeping the global banking system alive? :shake:

eazyb81
09-23-2008, 07:52 PM
Minimal regulation is a requirement in my mind. If nothing else just having laws that separate the entities that take these types of risks from the rest of the economic system would go a long way. To me that's a good start, and ultimately I think you can improve on that even more.

I agree that some regulation is probably required, I'm just not sure how much. We need to make sure firms that have so much counterparty risk don't have such huge leverage multiples again, but at the same time we could push too far, which is going to drastically affect growth in this country.

Friendo
09-23-2008, 07:57 PM
Our sustained "growth" was a complete farce. It had nothing to do with sound economic policy, it was about deferral and a concentration of wealth.

We are already going to enter a protracted economic slowdown, because the sheer amount of interest, as well as the continued devaluation of the dollar will make our deficit even harder to pay off (just the interest portion) and our assets will become cheaper and cheaper for outside countries to gobble up like a box of Nerds.

Think about the major growth drivers in the 80's--The Military-Industrial-Complex, and the stock market.

What did investing in the Iron Triangle do? It enriched the companies who got the lucrative contracts and quadrupled our debt. It was a massive transfer of wealth from the ordinary citizens of the country (3-5000 dollars per family, per year) to an insular group of people who would never be satiated no matter how many contracts they received. Every defense system has a countermeasure which begets another system. It's a bottomless pit.

The slash and burn tactics of the top tax rates and the enactment of the AMT, as well as increasing the payroll tax, only served to further concentrate wealth among the top wage earners. Of course the stock market benefits, but when 1% of people hold 50% of the stock, and 4% hold 80%, who really benefits from a robust market? It's not you and me. We merely subsidize their opulent lifestyles.

The 90's saw a further increase in lax corporate regulation, which led to huge corporate fraud, combine that with the tech bubble, and you had a short term period of extreme economic growth that was fundamentally unsound. It was like the Vermeil Chiefs--built to succeed in the short term, ruinous when the bill came due.

The 00's saw even more deregulation and the pimping of the "ownership" society. Individuals and corps got huge commissions and bonuses through these bullshit mortgages (modern junk bonds), and the short term infusion of phony capital helped propel the market and the economy far beyond what was healthy and sustainable.

Now the bill is coming due, and what do we want to do? We want to bail out the very people who ****ed this country in the first place.

As I've alluded to earlier, Stalin once said, "When one man dies, it's a tragedy, when one million die, it's a statistic."

It seems as though our modern philosophy is "when a corporation dies, that's a tragedy, when a person gets foreclosed on, that's a statistic."

might as well pile on--perhaps even further depressing is the fact that as we rebuilt in the post WWII world, we did so basically unchallenged industrially...of course like Jim said, there's always WWIII.

eazyb81
09-23-2008, 08:31 PM
Thought this was interesting but didn't want to start a new thread on it.

Buffett to invest $5 billion in Goldman Sachs:

http://online.wsj.com/article/SB122220798359168765.html

"Goldman Sachs Group (http://online.wsj.com/public/quotes/main.html?symbol=gs) Inc. said it will get a $5 billion investment from billionaire Warren Buffett, marking one of the biggest expressions of confidence in the financial system since the credit crisis intensified early this month."

---

In my opinion, this is either truly the bottom for financial services, with nowhere to go but up, or the absolute, final sign that the old rules are entirely defunct, and even Buffett has misjudged a withering institution as sound.

I don't see any other way to look at it. Buffett is either super-smart, or has been lulled into formerly-sound conventional wisdom that is now wholly-defunct.

I get a bad feeling about this. I think of how top LEH shareholders at the end included some of the smartest value investors out there. Hopefully the Oracle knows what he's doing.

Nightfyre
09-23-2008, 09:56 PM
That is so intellectually dishonest it's just sickening. You are the one who has been wholly unable to offer a substantial counterargument or rebuttal, you just put your fingers in your ears and cried, "Na na na na na Socialism Socialism."

Sooner or later, people are going to have to realize that unfettered, deregulated capitalism is just as fallacious as Soviet communism. Yeah, it works in theory, but theory and praxis are wholly divergent aspects of life.

Thanks for explaining why you can't possibly understand my ideology (you don't read my posts.)

Hydrae
09-23-2008, 09:58 PM
Everyone is entitled to an opinion, but I just hope you realize what the magnitude of letting this die a "natural death" would be. It would affect every industry and every consumer. Unemployment would skyrocket, not only here but globally.

IMO the problems are systemic. No bandaid will solve this problem, just push the inevitable into the future and it will be worse then. Yes, it will be extremely ugly now but it will be much worse in 10, 20, 50 years. I don't want my children to have to deal with that legacy, thanks anyway.

'Hamas' Jenkins
09-23-2008, 09:59 PM
Thanks for explaining why you can't possibly understand my ideology (you don't read my posts.)

I'm not the one tossing out dictionary definitions, of a slanted interpretation nonetheless, to rebut someone else's stance.

You claim that your ideology hasn't been given a fair chance to work. How is that different from a statist-socialist claiming that Soviet, Cuban, or Chinese style communism weren't really communism. There comes a point when theory must become praxis, or the theory is debunked. Of course, like a true ideologue, you didn't read either one of these aforementioned points when I made them earlier in this very thread.

Nightfyre
09-23-2008, 10:00 PM
I'm not the one tossing out dictionary definitions, of a slanted interpretation nonetheless, to rebut someone else's stance.

No, instead you are ignoring what they said altogether. Central economic planning is a socialistic measure. The government interceding in our markets is socialistic. Who's being intellectually dishonest here? Further, point to where I stated unregulated capitalism in that post. Go ahead, read it.

'Hamas' Jenkins
09-23-2008, 10:17 PM
No, instead you are ignoring what they said altogether. Central economic planning is a socialistic measure. The government interceding in our markets is socialistic. Who's being intellectually dishonest here? Further, point to where I stated unregulated capitalism in that post. Go ahead, read it.

1) penchief's post was a critique of the current system and it's lack of oversight and regulation. He said nothing about the government holding all the assets or being the sole arbiter of who receives what funds and how. You are extrapolating what you want him to believe. That's BEP, 101.

They don't agree with me=Neocon or socialist

2) The only ideology that you have thus far espoused concretely is the pursuit of private property, which is axiomatic of a general understanding of capitalism. It's an incredibly reductive claim that offers you all kinds of argumentative outs, but no real substance from which to build a case.

(For the sake of argumentation, we'll also ignore that property ownership is already vastly unequal).

The only thing that you've said is "my ideology will work if properly applied."

What is it then? Minarchism? Anarcho-capitalism? Simply saying that "I support true capitalism" and then offering no foundation behind your claim leaves you out on an island.

Make a claim, support it with specific evidence. Otherwise, all you are doing is espousing ideology.

How can "true capitalism" be "devoid of government intervention by definition" and yet need the government to interact in cases of collusion and need it to perform some regulatory services?

You are contradicting yourself.

Nightfyre
09-23-2008, 10:35 PM
1) penchief's post was a critique of the current system and it's lack of oversight and regulation. He said nothing about the government holding all the assets or being the sole arbiter of who receives what funds and how. You are extrapolating what you want him to believe. That's BEP, 101.

They don't agree with me=Neocon or socialist

2) The only ideology that you have thus far espoused concretely is the pursuit of private property, which is axiomatic of a general understanding of capitalism. It's an incredibly reductive claim that offers you all kinds of argumentative outs, but no real substance from which to build a case.

(For the sake of argumentation, we'll also ignore that property ownership is already vastly unequal).

The only thing that you've said is "my ideology will work if properly applied."

What is it then? Minarchism? Anarcho-capitalism? Simply saying that "I support true capitalism" and then offering no foundation behind your claim leaves you out on an island.

Make a claim, support it with specific evidence. Otherwise, all you are doing is espousing ideology.

How can "true capitalism" be "devoid of government intervention by definition" and yet need the government to interact in cases of collusion and need it to perform some regulatory services?

You are contradicting yourself.
It is certainly the governments job to protect people from other people. It is not the governments job to protect people from themselves, as they are doing here. Anyone with a half a brain saw the housing bubble being built. It's been talked about for the greater part of a decade. Yet rather than protecting themselves, these companies overexposed themselves and got their ass handed to them. Now we are bailing them and irresponsible lendees out?

No, in "true capitalism" there would have been no bubble because the loans wouldn't have been bought up by an already bastardly over-leveraged government backed institution and we wouldn't be encouraging over-lending through low interest rates. So my solution to the entire crisis? Avert it before it starts by removing central economic planning (socialism) from the system. And certainly don't propagate the problem by doing even MORE central economic planning now.

Additionally, I am calling for regulations to bring about complete transparency to end the naked short-sellers we can't see (hedge funds) from colluding to destroy otherwise solvent companies. As BEP so eloquently put it, there is no freedom in chaos and that is exactly what these entities are sowing.

edit: All of this gets away from the main point: Right wing ideology, as penchief put it, is not true capitalism. Right wing ideology is an alternative form of socialism that favors bailing out institutions and controlling the economy through reckless government deficits. And that was posted in the original response, which evidently you didn't get to before popping.

'Hamas' Jenkins
09-23-2008, 11:45 PM
It is certainly the governments job to protect people from other people. It is not the governments job to protect people from themselves, as they are doing here. Anyone with a half a brain saw the housing bubble being built. It's been talked about for the greater part of a decade. Yet rather than protecting themselves, these companies overexposed themselves and got their ass handed to them. Now we are bailing them and irresponsible lendees out?

No, in "true capitalism" there would have been no bubble because the loans wouldn't have been bought up by an already bastardly over-leveraged government backed institution and we wouldn't be encouraging over-lending through low interest rates. So my solution to the entire crisis? Avert it before it starts by removing central economic planning (socialism) from the system. And certainly don't propagate the problem by doing even MORE central economic planning now.

Additionally, I am calling for regulations to bring about complete transparency to end the naked short-sellers we can't see (hedge funds) from colluding to destroy otherwise solvent companies. As BEP so eloquently put it, there is no freedom in chaos and that is exactly what these entities are sowing.

edit: All of this gets away from the main point: Right wing ideology, as penchief put it, is not true capitalism. Right wing ideology is an alternative form of socialism that favors bailing out institutions and controlling the economy through reckless government deficits. And that was posted in the original response, which evidently you didn't get to before popping.

You seem to be conflating my viewpoints with those of someone else.

I don't disagree that this bailout is reckless and unnecessary. Nor do I support the bailout But I don't see it as a failure of the government, I see it as a systemic failure. The economic system, the individuals in government, the media have all failed the individual. True capitalism has an ugly underbelly unless you curtail its excesses. We have seen those excesses here, because it gives a glimpse into a system where capitalists can exert influence over the political process. First of all, corporations have become too big. When that happens, they can exert undue influence over the democratic system and create a government that works for the corporations because that's where the individual law makers get their money.

People saw the writing on the wall, but law makers aren't going to go after Fannie and Freddy or Lehman because the sonsofbitches have been bought off. They aren't going to bite the hand that feeds them. Moreover, because of their influence, they were able to corrupt the democratic system by passing laws that removed restrictions and oversight and allowed them to function like Hungry Hungry Hippos.

Moreover, because capitalism is a short-sighted and Zero sum system, you will continue to have people leverage long term security for short term gain, because they can quickly liquidate their assets and they get huge golden parachutes once the shit hits the fan.


It's a problem of several things.

1) Campaign finance. I believe that if all candidates were required to get x number of signatures per office and then were given a set of funds with which to conduct their campaign, you could largely avert these conflicts of interest. (Boogeyman, socialism).

2) Corporate personhood. Corporate entities do not deserve the rights of the person under the 14th amendment because they are not people. Yet time after time, the courts have misread and misinterpreted this law.


3) Capitalism is a zero-sum game. Unless you have government restrictions in place that curtail the size of a company, eventually they become so large that they can squash their competition and co-opt the innovations of the small man buy buying him out. Once this happens, they become so large and have so much concentrated wealth, that they are essentially unassailable.

Companies can and will eventually become so large that they can destroy the concept of a free market. It is inevitable.

Again, like an ideologue, you wholly exempt your preferred theory from any blame.

No one is saying the government should own the means of production. That is communism. What I am advocating is that the government control the size of these companies, allow for greater regulation of what they can and cannot do legally, and remove their undeserved rights of personhood along with radically changing the campaign finance system so that they cannot influence the electoral process.

Nightfyre
09-24-2008, 12:07 AM
You seem to be conflating my viewpoints with those of someone else.

I don't disagree that this bailout is reckless and unnecessary. Nor do I support the bailout But I don't see it as a failure of the government, I see it as a systemic failure. The economic system, the individuals in government, the media have all failed the individual. True capitalism has an ugly underbelly unless you curtail its excesses. We have seen those excesses here. First of all, corporations have become too big. When that happens, they can exert undue influence over the democratic system and create a government that works for the corporations because that's where the individual law makers get their money.

People saw the writing on the wall, but law makers aren't going to go after Fannie and Freddy or Lehman because the sonsofbitches have been bought off. They aren't going to bite the hand that feeds them. Moreover, because of their influence, they were able to corrupt the democratic system by passing laws that removed restrictions and oversight and allowed them to function like Hungry Hungry Hippos.

Moreover, because capitalism is a short-sighted and Zero sum system, you will continue to have people leverage long term security for short term gain, because they can quickly liquidate their assets and they get huge golden parachutes once the shit hits the fan.


It's a problem of several things.

1) Campaign finance. I believe that if all candidates were required to get x number of signatures per office and then were given a set of funds with which to conduct their campaign, you could largely avert these conflicts of interest. (Boogeyman, socialism).

2) Corporate personhood. Corporate entities do not deserve the rights of the person under the 14th amendment because they are not people. Yet time after time, the courts have misread and misinterpreted this law.


3) Capitalism is a zero-sum game. Unless you have government restrictions in place that curtail the size of a company, eventually they become so large that they can squash their competition and co-opt the innovations of the small man buy buying him out. Once this happens, they become so large and have so much concentrated wealth, that they are essentially unassailable.

Companies can and will eventually become so large that they can destroy the concept of a free market. It is inevitable.

Again, like an ideologue, you wholly exempt your preferred theory from any blame.

No one is saying the government should own the means of production. That is communism. What I am advocating is that the government control the size of these companies, allow for greater regulation of what they can and cannot do legally, and remove their undeserved rights of personhood along with radically changing the campaign finance system so that they cannot influence the electoral process.

I don't seem to recall making any extrapolations about your viewpoints. Therefore, I do not see how I conflated them.

Additionally, I certainly agree that corporations do not deserve the rights of personhood and should be excluded from campaign financing. I'm not sure if I've ever elaborated on that here, but I certainly have written about it in the past. But these are problems of government, not the financial system.

As for corporate bigness, I am not sure why you would need to curtail it. The economies of scale certainly benefit consumers as well. Furthermore, if a corporation can get super big without government assistance, it is doing so because it is satisfying consumers. They are obviously using resources better than there competitors and therefore merit managing more resources. That is the beauty of the system.

If such a company were to collapse, their other competitors will fill the gap. Sure, it may cause a small downturn, but nothing nearly as large and convoluted as what we are seeing here.

Also, I think you need to separate the ideas of communism and socialism. They are not one in the same.

'Hamas' Jenkins
09-24-2008, 01:02 AM
I don't seem to recall making any extrapolations about your viewpoints. Therefore, I do not see how I conflated them.

Additionally, I certainly agree that corporations do not deserve the rights of personhood and should be excluded from campaign financing. I'm not sure if I've ever elaborated on that here, but I certainly have written about it in the past. But these are problems of government, not the financial system.

As for corporate bigness, I am not sure why you would need to curtail it. The economies of scale certainly benefit consumers as well. Furthermore, if a corporation can get super big without government assistance, it is doing so because it is satisfying consumers. They are obviously using resources better than there competitors and therefore merit managing more resources. That is the beauty of the system.

If such a company were to collapse, their other competitors will fill the gap. Sure, it may cause a small downturn, but nothing nearly as large and convoluted as what we are seeing here.

Also, I think you need to separate the ideas of communism and socialism. They are not one in the same.

I know that communism and socialism are different ideas, I've had to explain that to BEP numerous times in this forum..

I don't care if large companies collapse, nor do I find that to be particularly troublesome for any economy. What does concern me is the fact that corporations can easily quash competition once they reach a certain size.

If not, why do oil companies own so many patents for alternative fuels that are rotting away in storage facilities? Why do so many towns no longer have mom and pop stores, but one Wal-Mart and a Hypermart Grocery store?

Yeah, in theory someone could create a viable alternative, but in reality, what will happen is a lot like what Microsoft has done with the computer world. You find an individual innovator, buy him out, and then co opt his product into your existing line.

In theory you could have a labor union at Wal-Mart. In reality, corporate lawyers and higher ups in management crush that in its infancy...yet I don't find a lot of people from Wal-Mart leaving for other jobs, because there aren't any others.

They also tend to produce lower quality goods because they are only concerned with the bottom line. It extends from Department stores to electronics.

Go to a local computer store and then go to a Best Buy or Circuit City. Have the individual look at your computer. The former is going to do a much better job, but he's being crushed out of existence because someone else does the job cheaper, albeit less efficiently, and he cannot compete with their marketing ability. Yeah, you may benefit initially from a lower price, but if you have a problem, the latter is not trained to deal with significant computer repairs, nor do you have oversight as to what they are doing, because they then outsource the repair to another repair center that often does an inadequate job. In the end it doesn't really matter, because goods and services don't matter in this form of capitalism, it's ultimately about marketing and brand prominence.

Corporations get large because they are ruthlessly aggressive. If we are in a purely Darwinian system, that's a survival advantage, but it's a lot murkier water when human rights, labor laws, and other externalities are involved.

BucEyedPea
09-24-2008, 08:09 AM
I know that communism and socialism are different ideas, I've had to explain that to BEP numerous times in this forum.
Depends on the context and who's doing the talking—technical or the lay person.

If you study Marx, which I would think you have claiming to be an anarcho-socialist, then you'd see he used those two terms interchangeably. So did the people of the 20th century. They both aim to end up in the same place. No two ways about it. Whether or not the socialist dictatorship phase withers away to no state or no.—a utopian idea that's never happened anywhere except in some religious orders.

Again, one need not directly own the means of production, you can pass too many laws, controls, progressive income taxes, regs or have massive interventions in the market process distorting them while maintaining an apparency of ownership and that's the same thing despite the labels. Not to mention centralization of education,certifying home schoolers,enforcing a left-wing curriculum on the impressionable youth, banking, transportation and police because some crisis demands it. Ownership means the right to control something. You and I are also the "means of production" too. It's not just businesses and machinery.

Look beyond the label and see what they both do and where they both end up. They share a commonality of purpose no matter the final form they take. Actually the socialist phase is worse as there is more force used by govt and less freedom. That's why I say what I do because of these things.

I agree with the rest of Nightfrye's post including economies of scale being beneficial. Bigness in itself is not necessarily bad. Intermingling with govt and left progressive aims is.


Corporations get large because they are ruthlessly aggressive. If we are in a purely Darwinian system, that's a survival advantage, but it's a lot murkier water when human rights, labor laws, and other externalities are involved.
That can happen if there's no rational laws to guide how the game is played in which case you have no free market. And it can happen if they’re in bed with govt using law to protect them from competition. You can’t make a blanket statement like this. So it depends on how they get large. I really don’t get the bogus human rights claim though. Are they killing, kidnapping or holding people against their will—the way a socialist govt would. That’s just socialist demagoguery.

BucEyedPea
09-24-2008, 08:30 AM
I heard Ben Bernake testifying this morning and he said something that made this sentence seem to make more sense. He said that, because of accounting rules, some of these questionable assets have a current book value than their likely hold-to-maturity value (which ought to be the floor value). He is suggesting that the government purchase these securities at something close to the likely hold-to-maturity value which could be described as buying them at "above their market value" even though it's supposedly close to their true value.

Having said that, I don't know why they can't just change the accounting rules to let the banks revalue these assets to the hold-to-maturity value. :shrug:

The problem with Bernanke is that he believes The Great Depression was caused by a lack of liquidity, when it was caused by too much preceding the eventual crash. The damage gets done during the "BOOM" but everyone thinks things are great. That boom was fueled by the flood of money by the central bank creating false signals that distort the markets. The "BUST" is when the correction occurs. But it was Hoover and later FDR who felt that govt interference was necessary to keep values up....that just caused the whole thing to last ten years instead of one or two like the one that preceded it in 1920/21. Only there was no govt interference in that one which corrected in one year. What's being recommended won't make something more valuable. It's false economic theories that are still being held as truth that's the error here. Like Dr Semmelweis we Austrians must howl in the wind for awhile longer, or like the flat-earthers versus the oval-earthers, until the truth is acknowledged.

patteeu
09-24-2008, 08:42 AM
The problem with Bernanke is that he believes The Great Depression was caused by a lack of liquidity, when it was caused by too much preceding the eventual crash. The damage gets done during the "BOOM" but everyone thinks things are great. That boom was fueled by the flood of money by the central bank creating a false signals that distort the markets. The Bust is when the correction occurs. But it was Hoover and later FDR who felt that govt interference was necessary to keep values up....that just caused the whole thing to last ten years instead of one or two like the one that preceded it in 1920/21. It won't make something more valuable. It's false economic theories that are still being held as truth that's the error here.

That may be the problem with Bernake, but I don't think it's related to the point I was talking about.

If you've got $100 worth of outstanding loans and only a fraction of them are going to default (let's say 50% of them), then they are actually worth a fraction of that $100 (in this case $50). But that value is hard to determine because it depends on how many of the loans don't end up defaulting at some point in the future. If accounting rules are forcing these loan holders to value the loans at something close to $0 even though the reality is that they are worth $50, it would be a win-win for someone to buy the loans for $40 because the original loan holder would now have a $40 asset instead of a $0 asset on it's balance sheet and the buyer would have an asset that would ultimately generate a $10 profit. That's what I think he was saying, in a nutshell.

BucEyedPea
09-24-2008, 09:14 AM
That may be the problem with Bernake, but I don't think it's related to the point I was talking about.
No it's not. I wasn't addressing that. I quoted it to let you know I was just addressing you, but about Bernanke's ideas as I point I wanted to add that for thought.

If you've got $100 worth of outstanding loans and only a fraction of them are going to default (let's say 50% of them), then they are actually worth a fraction of that $100 (in this case $50). But that value is hard to determine because it depends on how many of the loans don't end up defaulting at some point in the future. If accounting rules are forcing these loan holders to value the loans at something close to $0 even though the reality is that they are worth $50, it would be a win-win for someone to buy the loans for $40 because the original loan holder would now have a $40 asset instead of a $0 asset on it's balance sheet and the buyer would have an asset that would ultimately generate a $10 profit. That's what I think he was saying, in a nutshell.

Well, I would think the value is what the market is willing to pay for them so long as the accounting is accurate, honest and not fudged or based on what someone says their worth. We all know how that can go. The market should really have final say on that. It just may be lower too.