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Nothing To Fear But Fearlessness Itself?
theodp writes "In a post last August, Robert X. Cringely voiced fears that Goldman Sachs and others were not so much evil as 'clueless about the implications of their work,' leaving it up to the government to fix any mess they leave behind. 'But what if government runs out of options,' worried Cringely. 'Our economic policy doesn't imagine it, nor does our foreign policy, because superpowers don't acknowledge weakness.' And now his fears are echoed in a WSJ opinion piece by Peggy Noonan titled 'We're Governed by Callous Children.' She writes, 'We are governed at all levels by America's luckiest children, sons and daughters of the abundance, and they call themselves optimists but they're not optimists — they're unimaginative. They don't have faith, they've just never been foreclosed on. They are stupid and they are callous, and they don't mind it when people become disheartened. They don't even notice.' With apologies to FDR, do we have nothing to fear but fearlessness itself?"
If any employee caused this kind of damage the customers/consumers would sue and employees would be terminated. Yet in this case, we have companies (and hence employees) that are "too big|valuable|important too fail" so they get bailed out.
If I did this at my company (I manage a large mainframe storage environment at a recognizable financial institution on WallStreet), say by blowing away a ton of customer data, I can guarantee I would be walked to the door before the end of the day.
People in peer departments of mine (like those than manage the networks, server admins etc) that have no input to the investment direction of this company's holdings, have lost bonuses, haven't been able to purchase equipment and staff has been cut. We had nothing to do with this bullsh!t, and yet us like the rest of American's are having to suffer while the MBAs reap in the dollars that the Federal Gov't is handing out.
I wish I could get a $200k bonus for blowing away a PetaByte of mainframe storage. Maybe I'll go power off the z10 and see if Obama will bail out my unemployed ass.
The "top" people in both government and business are spoiled children. From Bill Gates to GW Bush, they had everything handed to them, and when things got tough, their parents bailed them out. In the socio-economic stratosphere of the US, it has never been about merit. It's always been about money, and now we can see what that has bred.
We hear a lot about the sense of entitlement among the baby boomers, but it's almost always in the context of Medicare and welfare for the relatively poor. Now we see what this sense of entitlement does on the grand scale. It's ridiculous when GM assembly line workers expect health care in perpetuity. It's mind blowing to see the same attitude applied to C level executives who think they are entitled to year over year growth, and bonuses, regardless of how bad things really are.
And things are bad. The financial wizards of Wall St. have, almost literally, destroyed trillions of dollar in wealth over the last year. None of them think they did anything wrong, and any who are taken to task for this colossal screw up will cry about how unjust it is. When will people realize that handing the reigns of power to spoiled brats, who have no concept of the consequences of failure, is a stupid idea? Doesn't look like they've learned it this time. Maybe in 10 more years when the next economic crisis is screws everyone but the people who caused it.
Silence is Foo!
The real problem, is that there is no simple answer. Only a complex one.
Is capitalism or socialism the answer? Yes.
Yes, because BOTH are the answer, at the same time.
Allow me to try to explain this, before you explode.
There are things government does well and things private individuals do well, but they are NOT restricted each to a field.
This means that private individuals should be free to engage in business, but not without any controls and limitations. And government should be allowed to interfere if it serves society as a whole better.
You had a little while ago the laughable story about the US press. You saw several posts commenting that either a state run media or a company run media are the only alternatives.
How idiotic, everyone knows that in Europe, BOTH exists, besides each other, fighting each other tooth and nail. THAT is how you get progress. If you think a state run media alone can be independent, you are insane, although not nearly as insane as the idea that company run media will be independent. Fox News is company owned. Case closed.
The US needs to accept that you need a healthy balance between the state and the individual and that this balance can NEVER be achieved, you always will end up with a pendulum swinging back and forth. Things only go wrong if the pendulum is either hanging still or doesn't swing back.
The problem is that you can't get elected with this policy. You need to pick a side and that means in the US that the pendulum can be pulled to far of the center. That is what happened with the credit crisis, to many administrations, from both sides, who did not excersise the control of the state on the financial institutions.
We need to get away from the idea that their is ONE ideology that is the answer. Uncontrolled financial markets are clearly not the answer but neither is total control. What you need to have is the right control at the right time but that can't be achieved, so you need to accept the situation that sometimes there is a bit to much control and sometimes to little without going to extremes.
This middle path is NOT taking the road of least resistance, on the contrary, you will face opposition from all sides, but it is the only one that has been proven to work.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
I think you'll find that the people who actually make the decisions are decidedly not strictly anti-government types. They're whatever benefits me at the moment types and if weaker government furthers that then they'll push for it and if stronger government furthers their goals, they'll push for that. Everyone to some extent is the same way, they try to further their own interests in the ways that they can. The problem comes when the two major power groups feed off of one another and screw the populace. The lesson here is that concentrated power in both its major forms is generally dangerous.
Sigs are too short to say anything truly profound so read the above post instead.
Here is an example ... my son won't eat honey because it 'exploits' bees. I explained to him then that he had better stop eating many fruits, because the fruits are also pollinated by those same exploited bees. He simply grabbed onto an idea without really looking at what 'exploited' really means because it suited his purpose, not eating honey.
This is a really stupid example. Fruit is not the product of a bee's labor. They are out there pollinating plants, so that they can make their own food. Which is then "stolen" by a beekeeper. This is very different from what humans do when they eat fruit, even though bees are often tangentially related to that process.
Here's what "exploit" means:
1.To employ to the greatest possible advantage: exploit one's talents.
2.To make use of selfishly or unethically: a country that exploited peasant labor. See synonyms at manipulate.
3.To advertise; promote
Which of these do you think your kid meant? Obviously, number two. You seem to think number one is the ONLY definition that matters. You said as much when you insinuated that your kid "latched on" to an idea without even understanding what the words meant. Your son has an ethical issue with stealing food from animals. There is no contradiction between that and still wanting to eat the products animals help produce but do not consume.
In short, your kid is right. And you are wrong. And an insincere debater, at best.
I think she was talking about the Wall Street bankers and stock brokers who disproportionately come from wealthy families, go to prep schools, get degrees from ivy league schools and then go work at Goldman Sachs, Citi and JP Morgan. They also end being treasury secretaries, on the Federal Reserve and New York Fed (which is the body that actually runs Wall Street though its more like Wall Street runs it) and the President's economic advisors.
If you remember the resignation letter of Andrew Lahde after making a killing of the ivy leaguers and quitting rich:
"The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking. These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government. All of this behavior supporting the Aristocracy, only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America."
The U.S. Senate also tends to be a rich kids club and is also the place that tends to do the most looking out for the rich, since one senator can often block legislation in the public interest to the benefit of special interest. John McCain for instance wasn't really rich enough so once he got out of Vietnam he dumped the wife that had stood by him while he was a POW and married a more attractive women who happened to be an heir to a sizable fortune of an Arizona beer distributor, and who were politically connected enough in Arizon to get him elected to the Senate.
And of course the Bush clan are the epitome of the stereotype though they've only been a part of America's new aristocracy for about a century.
One reason Carter, Clinton and Obama were so skewered in the White House is the rich WASP/Jewish aristocracy considers them to be poor trash and not worthy of running their piggy bank. Clinton and Obama in particular had stellar educations but were born to poverty so aren't acceptable by "the establishment".
@de_machina
I've recently read on another forum that California is also hampered by a large negative balance of payment between it and the federal government
"Last year, Californians sent nearly $20 billion more to Washington in federal taxes than the state received back in federal spending. The state’s 1998 deficit of $19.4 billion marked the largest such imbalance for any single state in the history of the nation, eclipsing the previous record of $14.3 billion, set also by California in 1997"
So it seems California is bankrolling the federal level even while going bankrupt itself.
If all else fails, immortality can always be assured by spectacular error.
No. In capitalism, the aristocrats -- the owners of capital -- are left free to make their own choices, and succeed by them, or be rescued by their cronies. The working classes -- including the professionals, all the folks who actual do productive work rather then skim off the top -- are left to scurry around in the footsteps of the giants, trying not to get crushed.
Tom Swiss | the infamous tms | my blog
You cannot wash away blood with blood
This is the conservative view on every topic of import: the status quo is the best system possible. (That the capitalist his or her self enjoys some privilege under the status quo is, of course, merely co-incidental.) "I can't imagine any system better than our slave plantations. It's always been this way and people don't change."
"I can't imagine any system better than keeping women in the kitchen barefoot and pregnant. It's always been this way and people don't change."
"I can't imagine any system better the segregation. It's always been this way and people don't change."
This is always the heart of the conservative view -- at least, that of mainstream American conservatism, of the sort that stands athwart history yelling "Stop!". It's always wrong, and always gets bowled over.
I suggest Tim Kreider's essay on the subject:
Tom Swiss | the infamous tms | my blog
You cannot wash away blood with blood
One of the more basic reasons "governing wont work" is that politicians and regulators are easily captured by special interests who have the money, the time, the connections and the motivation to manipulate the government. A few million well placed lobbying dollars and campaign contributions can yield multi-billion dollar windfalls at the expense of the American people.
You kind of have to wonder why the conservative Republicans complain so much about big government because for at least the last 10 years, and really a lot longer than that, they have been the most adept at exploiting it for their own gain. Only reason they are complaining about lately is they aren't in power as of 2006/2008. The potency of their vitriol against big government only spikes when they aren't in power. When they are in power they tend to be more OK with it, and their complaining about is empty rhetoric which acts as cover while they are looting it.
I often shudder to think what this country would be like if the Libertarians won and everything was completely deregulated. Chances are the foxes would devour all the chickens. But, when you see how our government actually works, especially lately, the Libertarians actually have a point. Much of the pillaging and devastation is being aided, abetted or actually initiated by politicians and regulators who have been captured by special interest, so they give legal cover to the pillaging, and trillions of dollars are transferred from unlucky powerless groups to lucky powerful ones. For example, senior citizens are completely looting younger working people to get 20, 30 and 40 years of Medicare and Social Security though they actually paid very little in to the system. Oayroll taxes were jacked up from nothing to 12.5% in the early 80s so most seniors didn't pay anything in but are taking huge sums out.
It is quite possible things might actually work better under real Libertarianism where Wall Street bankers get absolutely no assistance from the Fed, Treasury, Congress or the President. They get no tax shelters, no government backed loan programs and most importantly NO bailouts when they screw up and should fail. The absolute worst thing done in the last couple years was the complete destruction of moral hazard which is the most crucial foundation of Capitalism. If you know that if you fail the government will bail you out you don't have free market capitalism any more, you have state capitalism(i.e. Fascism) which is what I think we have now.
Chances are a few banks like JP Morgan and Goldman Sachs would still end up running the world under Libertarianism but I have reached a point that I would like to see the government get the hell out of it and let them sink or swim on their own. It couldn't be any worst than what we have now.
Unfortunately I've come to the conclusion there is NO political/economic philosophy that actually works in practice. Every one devolves in to some small group acquiring all the wealth and power and screwing it out of everyone else. In some systems its party members and bureaucrats, in others it politicians, and in others its bankers and CEO's. As Shakespeare thoroughly outlines a long time ago, we are a species with vicious tendencies that spiral completely out of control in the people who aspire to power and wealth and there seems to be no way to stop those people.
@de_machina
Right; because there's no difference between someone who supports a family on $50k per year with no inheritance and someone who:
a) is supported their whole life and gets $millions in inheritance/giveaways
or
b) gets a job that pays $hundreds of thousands per year (or millions) because of who they/their parents know
All of those people have equal opportunity to invest, by which I mean be owners of the expensive things necessary to get work done rather than the people actually doing work.
I'm not saying people who start with no money can't succeed, or people who start with money are guaranteed to succeed. I'm saying people with a healthy start (or ludicrously easy start) discount just how many times they can fail without consequences, and how much easier it is to succeed, in comparison to people with a middling or disadvantaged start.
It's funny how that didn't happen in the 1800s. We had all kinds of parties in Congress, like the Anti Masonic, Nullifier, Whig, Conservative, Law and Order, American, Free Soil, Greenback, Labor, Populist, Liberal Republican, and so on.
Today's Congress has none of them. Not one. What's changed? The Lie. "Don't vote third party," is the lie. Third parties won seats in Congress in the past and most-certainly can win seats today.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
"How is it that, with such easy access to information, people still think the crash had anything to do with business? "
More right wing lies.
As the economy worsens and Election Day approaches, a conservative campaign that blames the global financial crisis on a government push to make housing more affordable to lower-class Americans has taken off on talk radio and e-mail.
Commentators say that's what triggered the stock market meltdown and the freeze on credit. They've specifically targeted the mortgage finance giants Fannie Mae and Freddie Mac, which the federal government seized on Sept. 6, contending that lending to poor and minority Americans caused Fannie's and Freddie's financial problems.
Federal housing data reveal that the charges aren't true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.
Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height vrom 2004 to 2006.
Federal Reserve Board data show that:
_ More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
_ Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
_ Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.
In Slate, Daniel Gross, senior editor of Newsweek, lays out the right wing mantra on the financial crisis:
http://www.slate.com/id/2201641
On the Republican side of Congress, in the right-wing financial media (which is to say the financial media), and in certain parts of the op-ed-o-sphere, there's a consensus emerging that the whole mess should be laid at the feet of Fannie Mae and Freddie Mac, the failed mortgage giants, and the Community Reinvestment Act, a law passed during the Carter administration. The CRA, which was amended in the 1990s and this decade, requires banks—which had a long, distinguished history of not making loans to minorities—to make more efforts to do so.
The thesis is laid out almost daily on the Wall Street Journal editorial page, in the National Review, and on the campaign trail. John McCain said yesterday, "Bad mortgages were being backed by Fannie Mae and Freddie Mac, and it was only a matter of time before a contagion of unsustainable debt began to spread." Washington Post columnist Charles Krauthammer provides an excellent example, writing that "much of this crisis was brought upon us by the good intentions of good people." He continues: "For decades, starting with Jimmy Carter's Community Reinvestment Act of 1977, there has been bipartisan agreement to use government power to expand homeownership to people who had been shut out for economic reasons or, sometimes, because of racial and ethnic discrimination. What could be a more worthy cause? But it led to tremendous pressure on Fannie Mae and Freddie Mac—which in turn pressured banks and other lenders—to extend mortgages to people who were borrowing over their heads. That's called subprime lending. It lies at the root of our current calamity." The subtext: If only Congress didn't force banks to lend money to poor minorities, the Dow would be well on its way to 36,000. Or, as Fox Business Channel's Neil Cavuto put it, "I don't remember a clarion call that said: Fannie and Freddie are a disaster. Loaning to minorities and risky folks is a disaster."
* * * * * * * *
The Community Reinvestment Act applies to depository banks. But many of the institutions that spurred the massive growth of the subprime market weren't regulated banks. They were outfits such as Argent and American Home Mortgage, which were generally not regulated by the Federal Reserve or other entities that monitored compliance with CRA. These institutions worked hand in glo