Google Says Break Up Companies Too Big To Fail

[stueyG]

That is 100% FALSE. This is the result of over-regulation.

Look up the Community Re-investment Act. It's a federal law that FORCES lenders to operate in areas that they have previously avoided as poor/risky. (Oh look, the government was wrong and the businesses were right). With Clinton strengthening it in 1994 the lenders were in a "lend-or-be-sued" situation. As a result all these lenders began packaging these loans and selling them because they sure as hell didn't want a huge pile of risky debt. This blame for this situation falls directly on the government. They are the ones that forced a huge amount of toxic debt to be created.

Its certainly not 100% false, AIG was regulated by the Office of Thrift Supervision for chrisssakes. The Community Re-investment Act is just a fox talking point. The reality of the situation was that banks took on toxic debts (some regulated, yes), however then they were able to chop this debt up, trade it, sell it, move it, slice it and dice it - until no-one had any idea exactly who owed what where. The whole house of cards grew, grew and eventually collapsed under its own weight. A bank dosen't intentionally acquire tens of billions of dollars of debt without knowing about it.

Also - from the CRA wikipedia page

"During a 2008 House Committee on Oversight and Government Reform hearing on the role of Fannie Mae and Freddie Mac in the financial crisis, including in relation to the Community Reinvestment Act, asked if the CRA provided the “fuel” for increasing subprime loans, former Fannie Mae CEO Franklin Raines said it might have been a catalyst encouraging bad behavior, but it was difficult to know. Raines also cited information that only a small percentage of risky loans originated as a result of the CRA."

It dosen't take a genius to go look at house prices in California in 2007 and to see they were unsustainable.

 

[stueyG]

Huh? Unless you're assuming that I'm referring to Obama twice and therefor am being racists, I don't see what's wrong with this statement. Bush gets called a chimp all the time, mainly because he looks like one. (P.S. I love how we're allowed to call Bush a chimp but it's instantly racism when you call Obama a chimp.) The current and the previous presidents have been horrible. The only question to be seen is which is worse.

*sigh* "President Teleprompter" is a rather amusing reference to Bush, President Chimp can only really be seen as a racist slur. You wouldn't call obama president jungle bunny would you?

 

[w1ngzer0]

Does this mean google is willing to split?

 

[Nemesis999]

Its certainly not 100% false, AIG was regulated by the Office of Thrift Supervision for chrisssakes. The Community Re-investment Act is just a fox talking point. The reality of the situation was that banks took on toxic debts (some regulated, yes), however then they were able to chop this debt up, trade it, sell it, move it, slice it and dice it - until no-one had any idea exactly who owed what where. The whole house of cards grew, grew and eventually collapsed under its own weight. A bank dosen't intentionally acquire tens of billions of dollars of debt without knowing about it.

Of course they took on all kinds of risky debt. They forced lenders to operate in areas they normally wouldn't, and they need to be profitable there too. They can't run a business only lending to those they're forced to, they'd lose money. Did they make stupid choices? Sure, but "when in Rome". If you're already being pushed to make these loans, why not? Make them, package them, and get them the hell off your books.

"During a 2008 House Committee on Oversight and Government Reform hearing on the role of Fannie Mae and Freddie Mac in the financial crisis, including in relation to the Community Reinvestment Act, asked if the CRA provided the “fuel” for increasing subprime loans, former Fannie Mae CEO Franklin Raines said it might have been a catalyst encouraging bad behavior, but it was difficult to know. Raines also cited information that only a small percentage of risky loans originated as a result of the CRA."

Risky in good times != risky in bad times. Just because a loan wasn't deemed sub-prime doesn't make it a good bet to make. The CRA's entire target group is the market that collapsed.

Speaking to the February 2008 Congressional Committee on Financial Services hearing on the CRA, Sandra L. Thompson, Director of the Division of Supervision and Consumer Protection at the FDIC, lauded the positive impact of CRA, noting that, "studies have pointed to increases in lending to low- and moderate-income customers and minorities in the decades since the CRA's passage." She cited a study by the Joint Center for Housing Studies at Harvard University, that found that "data for 1993 through 2000 show home purchase lending to low- and moderate-income people living in low- and moderate-income neighborhoods grew by 94 percent – more than in any of the other income categories".

It dosen't take a genius to go look at house prices in California in 2007 and to see they were unsustainable.

And what drives up prices? Demand.
And what drives up demand? Huge mortgages for everyone! YAY!

Of course it was unsustainable, they created temporary demand by pushing loans that couldn't survive a recession. The fed kept rates too low for too long, then raised them far to fast. They fueled this huge demand, then nuked it. They held rates below 2% (and mostly around 1%) for 3 years, then jacked them up to 4% in under a year.

I'm sure a lot of the problem was speculators, but the fact is the "mortgages-for-everyone" push and the dirt-cheap credit was a massive component of not only the bubble, but the recession itself.

 

[Nemesis999]

*sigh* "President Teleprompter" is a rather amusing reference to Bush, President Chimp can only really be seen as a racist slur. You wouldn't call obama president jungle bunny would you?

Ummm... Obama is president teleprompter. Bush is president Chimp.

Notice that he never speaks without it? Well, there is that one time where he did something other then read a prepared speech, it ended with him becoming the first president to make a retard joke on national television. Obama is an awful public speaker without his teleprompter, or more recently, a giant fucking LCD with his speech on it behind the audience. The man actually thanked himself in front of a live audience because the teleprompter had someone else's speech on it.

 

[eeyrjmr]

*sigh* "President Teleprompter" is a rather amusing reference to Bush, President Chimp can only really be seen as a racist slur. You wouldn't call obama president jungle bunny would you?

please explain how calling someone a chimp is racist? I call my 2yo son "monkey" does that make me a racist?

if someone is going to take offence at something that is their problem. I cannot see anything racial in calling someone a chimp, concidering ALL humans are primates and evolved from apes

 

[Nemesis999]

please explain how calling someone a chimp is racist? I call my 2yo son "monkey" does that make me a racist?

if someone is going to take offence at something that is their problem. I cannot see anything racial in calling someone a chimp, concidering ALL humans are primates and evolved from apes

Exactly. Calling someone a chimp is, and always has been, an insult to their intelligence.

The people complaining about racism are, in fact, the racists. They are treating a situation differently because of the race of those involved. That is what racism is.

 

[supaspoon]

please explain how calling someone a chimp is racist? I call my 2yo son "monkey" does that make me a racist?

if someone is going to take offence at something that is their problem. I cannot see anything racial in calling someone a chimp, concidering ALL humans are primates and evolved from apes

For one, using your son for example doesn't work to well. Point is though, if you're ignorant of the historical context, which you seem to be, then no it does not make you a racist. However, given the historical context, it is silly to 'not understand' it's offensiveness if you 'are' aware of it.

You may follow the evolution line of thinking. But in the past the vast majority of society believed humans are superior beings to animals, including primates. During and after the slavery days africans were often referred to as primates (monkey, chimp..whatever) as a means of establishing superiority to justify injust actions.

 

[cnick79]

...

The fact is that the people who are bitching about the businesses are the greedy ones. The ones that became wealthy by creating that new wealth deserve every penny of it, they already pay 90% of the taxes and 95% of the salaries, now the greedy masses want to steal more of their money because they didn't bother saving for bad times?

...

I do agree with most of what you are saying in your long post. It is survival of the fittest dog-eat-dog world. However, the lower and middle class is what drives this economy. Without a middle class spending your businesses are not taking in money, therefore not getting paid. Sure you can say, if company X goes under because the middle class is spending less then they have to close their doors and layoff all of those middle class workers. So what happens? Those middle class workers go work for a competitor or they start their own company by building off the mistakes for company X. It's a vicious cycle but that's capitalism for you. If a big company fails a smaller one will take it's place.

Again, it's the middle class people that drive this economy, not the rich. I do believe in the trickle down approach. There will always be people on top but they can't get to the top without us.

I can see why middle class folks are pissed about taxes. The middle class lose 30% of their wages to taxes. The upper class folk lose nearly half of that percentage. Just ask Warren Buffet who gets taxed at 17%. So the upper class may be handing back more money, the percentage of what they get taxed to what they take in is not the same as the middle class.

 

[UrielDagda]

People like to complain that the rich take and take and never give anything back. They're under this idiotic delusion that companies "take" wealth from others. Companies CREATE wealth. 99% of the wealth in the world is a result of business. The evil rich people (the ones that are actually rich) are the ones that create jobs. P.S. Before someone starts debating whether trickle-down economics actually works, I would suggest you look up this small group of people called the MIDDLE CLASS. Ya know, the hundreds of millions of people around the world that work for these evil money-hoarding people that have never given anything back. Oh wait, you're entitled to be middle class, lets demand the businesses do more!

The fact is that the people who are bitching about the businesses are the greedy ones. The ones that became wealthy by creating that new wealth deserve every penny of it, they already pay 90% of the taxes and 95% of the salaries, now the greedy masses want to steal more of their money because they didn't bother saving for bad times?

Bullshit. The relationship is symbiotic. The middle class has big hand in helping create that wealth. What we have had since the 1960s is the rich soaking up more and more of that wealth compared to the middle class, so the average income of the wealthy has gone up much, much faster, forcing the middle class to eventually have to deal more and more in the credit market to maintain the same standard of living over the years, while the standard of living rose greatly for the wealthy.

Take the housing bubble for instance, no wonder more and more people were getting houses they couldn't afford, and winding up with exotic balloon loans.. In 1995 the average cost of a home was roughly 2.4 times the average middle class income. In 2004, the cost of the average home was nearly 5 times the average income.

I guess the middle class should have just kept doing the same work, and kept their wallets shut and just resigned themselves to living in ever shrinking shitholes or tenements.

Look up the Community Re-investment Act. It's a federal law that FORCES lenders to operate in areas that they have previously avoided as poor/risky. (Oh look, the government was wrong and the businesses were right). With Clinton strengthening it in 1994 the lenders were in a "lend-or-be-sued" situation. As a result all these lenders began packaging these loans and selling them because they sure as hell didn't want a huge pile of risky debt. This blame for this situation falls directly on the government. They are the ones that forced a huge amount of toxic debt to be created.

Oh yeah, that old canard. Forcing lenders to lend to black and latinos that were in the same income tax bracket as a white person was what caused the entire collapse.. That still never was designed to have loans made that they knew would be defaulted on, yet was a convenient way for unscrupulous lenders to justify just about anything they did.

Regardless, that's just plainly misleading, as it was the housing bubble driving prices up to the stratosphere, combined with collateralized debt obligations and credit default swaps based on these, and many other mortgages, being all chopped up and played on the stock market like it was a big casino that caused the entire mess. The economy would have taken a good jolt from the deflating housing market as it was, but these other financial instruments caused it to bleed from the housing market into, and throughout the entire financial system. If people hadn't been gambling and leveraging these mortgages five, ten, twenty times over, we wouldn't have had the huge domino effect that started raping the job market (and hence creating a whole new round of housing loan defaults), it would have stopped with the people who had gotten the bad loans to begin with, which was a fraction of 1% of the total amount of outstanding loans in the first place.

You basically had rich people trying to wave their hands and make $2 million out of $100,000 loans.. Attempting to create vast wealth out of thin air. And it failed, spectacularly. And it was perfectly legal. And people try to say we have too much regulation.. If so, maybe we have the wrong regulations. Or maybe they just aren't strict enough to keep shysters from exploiting loopholes.

 

[Nemesis999]

I can see why middle class folks are pissed about taxes. The middle class lose 30% of their wages to taxes. The upper class folk lose nearly half of that percentage. Just ask Warren Buffet who gets taxed at 17%. So the upper class may be handing back more money, the percentage of what they get taxed to what they take in is not the same as the middle class.

But the point is, that 30% is provided by the businesses. The people paying 17%? They also paid the salary that you're paying that 30% out of. They also created the items of value that you would rather spend that 30% on. They also lowered the prices on pretty much everything you've ever purchased through increased competition. The fact is that business taxes just get passed onto the consumer anyway, they're simply hidden. The businesses, in fact, create almost everything of value.

Once you've reached this ultra-wealthy level there is little distinction between taxing businesses and taxing people. Money flows freely between them. Most of what they don't pay in taxes gets re-invested in the businesses that employ the middle class that is doing the bitching and moaning. These people didn't get rich by stuffing the money in mattresses, they got rich by turning ideas into wealth, a process that creates jobs.

You know what happens when you raise taxes on businesses? Unemployment rises. You know what happens when unemployment rises? Wages fall. And when wages and employment both fall what happens? Business income falls. And when business income and wages and employment fall? Tax revenue falls. And then you get some genius politician that thinks "Hey, lets just raise taxes again1!!1!" and you repeat the entire process over and over and over. All the while these same politicians continue to increase spending rather then using the good times to slash away at the debt.

 

[UrielDagda]

Of course they took on all kinds of risky debt. They forced lenders to operate in areas they normally wouldn't, and they need to be profitable there too. They can't run a business only lending to those they're forced to, they'd lose money. Did they make stupid choices? Sure, but "when in Rome". If you're already being pushed to make these loans, why not? Make them, package them, and get them the hell off your books.

Oh, come on. That's just an excuse for bad behavior. They made decent profits before these CDOs and CDSs came along. Then they saw a way to make huge profits while eliminating their risk, so they just start giving out loans to anybody, regardless of qualification, even lying to people to get them to take the loans, so they could get another loan to ship off as a security, and make instant profit. They knew what they were doing was wrong, and chose to do it anyway because there were no regulations with those kinds of securities.

It was pure greed.

 

[UrielDagda]

But the point is, that 30% is provided by the businesses. The people paying 17%? They also paid the salary that you're paying that 30% out of. They also created the items of value that you would rather spend that 30% on. They also lowered the prices on pretty much everything you've ever purchased through increased competition. The fact is that business taxes just get passed onto the consumer anyway, they're simply hidden. The businesses, in fact, create almost everything of value.

You are confusing "business" with "individual". The take home taxes of the middle class and rich have zero to do with the argument. The rich aren't personally paying people out of their own take home money, unless you are talking about hired servants or something.

I see this argument over and over, that make it sound like rich people pay their business employees directly out of their own pockets or something, when the amount actually comes from the businesses revenue (a pool from which said rich person also draws from for his own compensation).

It sucks ass when they both draw from the same income pool, and the people that make less, ultimately pay a higher percentage in tax.

 

[Nemesis999]

Bullshit. The relationship is symbiotic. The middle class has big hand in helping create that wealth. What we have had since the 1960s is the rich soaking up more and more of that wealth compared to the middle class, so the average income of the wealthy has gone up much, much faster, forcing the middle class to eventually have to deal more and more in the credit market to maintain the same standard of living over the years, while the standard of living rose greatly for the wealthy.

Symbiotic in what sense? That the people are willing to do work in exchange for food and shelter and everything else they want? Guess what. There are a hell of a lot more people willing to work then there are with the idea and the willpower. That makes them a hell of a lot more valuable then the masses.

Take the housing bubble for instance, no wonder more and more people were getting houses they couldn't afford, and winding up with exotic balloon loans.. In 1995 the average cost of a home was roughly 2.4 times the average middle class income. In 2004, the cost of the average home was nearly 5 times the average income.

And the housing bubble was created by... The greedy corporations buying all the property? No. The bubble was created by the middle class paying far more for things then they were actually worth. Your statement in no way links back to your previous paragraph so I'm really not sure what your point is here. Did big mean Microsoft tell Bob that he should pay far more for the house then it was worth? No, that was Bob the dumbass making a stupid decision. (In the business world these decisions are what is called FAILURE.

I guess the middle class should have just kept doing the same work, and kept their wallets shut and just resigned themselves to living in ever shrinking shitholes or tenements.

Because they deserve more!11!! They deserve precisely jack-shit. They get what the level of competition provides. If their isn't enough competition they get less. This delusion that simply because you used to have something, or that your parents have something that you too deserve it is just that, a delusion. There are billions of other people willing to do the same menial labour for less money.

Oh yeah, that old canard. Forcing lenders to lend to black and latinos that were in the same income tax bracket as a white person was what caused the entire collapse.. That still never was designed to have loans made that they knew would be defaulted on, yet was a convenient way for unscrupulous lenders to justify just about anything they did.

Ya.... no.

The bill forced banks to move into neighborhoods that they had deemed unprofitable and too risky. If those happened to be minority neighborhoods then so be it. The delusion that these businesses are simultaneously extremely greedy and want any money they can get while at the same time were sacrificing profits for the sole purpose of racism is rather amusing.

Regardless, that's just plainly misleading, as it was the housing bubble driving prices up to the stratosphere, combined with collateralized debt obligations and credit default swaps based on these, and many other mortgages, being all chopped up and played on the stock market like it was a big casino that caused the entire mess. The economy would have taken a good jolt from the deflating housing market as it was, but these other financial instruments caused it to bleed from the housing market into, and throughout the entire financial system. If people hadn't been gambling and leveraging these mortgages five, ten, twenty times over, we wouldn't have had the huge domino effect that started raping the job market (and hence creating a whole new round of housing loan defaults), it would have stopped with the people who had gotten the bad loans to begin with, which was a fraction of 1% of the total amount of outstanding loans in the first place.

Agreed. Maybe we should blame the banks for lending money to someone who financed his down-payment with a government loan. Or maybe it's the banks fault that people took on loans they couldn't afford. Or maybe...

Or maybe it's the same fucking idiots that took the loans in the first place that created the problem? Maybe, just maybe, owning a house is a stupid idea when you can't handle it. Maybe, just maybe, living life in debt is a bad idea. Maybe, just maybe, these bankruptcies are the result of people living a life of debt for the sole reason that they want it NOW instead of actually earning it.

No, it's the bank's fault.

You basically had rich people trying to wave their hands and make $2 million out of $100,000 loans.. Attempting to create vast wealth out of thin air. And it failed, spectacularly. And it was perfectly legal. And people try to say we have too much regulation.. If so, maybe we have the wrong regulations. Or maybe they just aren't strict enough to keep shysters from exploiting loopholes.

$2M out of a $100k loan is perfectly fine... if the person taking the loan could actually handle it. Most of them couldn't. They lied, they didn't understand the mortgage, they borrowed money for down payments, they did all kinds of shit. These are the people that knocked down the house of cards.

P.S., $2M value on 100k loan would mean the mortgage was ~400 years long @ 5%. Try $250k value on a $100k loan, which is, here's a shocker, one of the main sources of wealth in the world.

 

[Nemesis999]

You are confusing "business" with "individual". The take home taxes of the middle class and rich have zero to do with the argument. The rich aren't personally paying people out of their own take home money, unless you are talking about hired servants or something.

When someone's wealth is so great that a vast majority of their disposable income is placed in investments there is very little difference. Increase business taxes directly decreases their income. Decreasing business taxes directly increases there income.

I see this argument over and over, that make it sound like rich people pay their business employees directly out of their own pockets or something, when the amount actually comes from the businesses revenue (a pool from which said rich person also draws from for his own compensation).

And...? You just pointed out that your first paragraph is wrong. Their own compensation depends on the business's net profit. Since most/all of their income is this compensation you can say that they do in fact pay these salaries out of their income.

It sucks ass when they both draw from the same income pool, and the people that make less, ultimately pay a higher percentage in tax.

Again, the wealthy pay taxes twice. The first time is reflected in the decreased value of their investments (which in turn is decreased income), and the second is the person income tax that they pay.

 

[Mav451]

Huh? Unless you're assuming that I'm referring to Obama twice and therefor am being racists, I don't see what's wrong with this statement. Bush gets called a chimp all the time, mainly because he looks like one. (P.S. I love how we're allowed to call Bush a chimp but it's instantly racism when you call Obama a chimp.) The current and the previous presidents have been horrible. The only question to be seen is which is worse.

Hah interesting point. Yeah I didn't realize you were talking about Bush - usually people refer to him as W or "Dubya". I don't use the "chimp" nickname for that very reason.

 

[zoulias]

Can I borrow your crystal ball for awhile? Its humorous how people seem to think they can predict the future.

You know what? I would welcome all that doom and gloom you speak of. Because then we can rebuild it, hopefully better this time.... rather than all this ridiculous patchwork and handing control to the government.

It isn't some fanciful prediction, it isa fact. Many of those on thelist (andmany othersnot on it) would have failed, fact, had it not been for bailout money.

Now, if you understood how interlinked credit markets are, with counterparties, insurers etc, you would understand that FACT countless others would have followed in a domino effect. Credit markets would not only completely evaporate, but existing loans would be called in and liquidated resulting in cashflow problems across the board. Even "safe" companies couldnt escape,when their suppliers, their courriers, there customers, their storage guys etc etc go bust.

You may proudly boast of utopian virtue in "rebuilding" - rebuilding from a position of complete disorder would be far more difficult than rebuilding gradully as we are now. And I would love to ask you how you feel when you have 0 savings (dont think when your bank goes under your are first creditor in line - you arent - and of course you dont agree with government backing debt right? After all you made the mistake of depositing with an institution that went under? You wouldnt hypocritically want the gov to bail out your savings??) and no job, whilst rebuilding your new perfect world.

And to those who think new companies will simply rise out of the ashes you speak of normal arket conditions. There is no start up capital available in the world i describe - no partner firms, few customers, unstable prices....


You can go on for ever.

 

[UrielDagda]

Well there is really no use arguing with somebody who seems to think that fraud, greed, manipulation and lawlessness should be the foundation of our financial system.

I don't really see a single response that would lead me to think that you believe that any entity has any responsibility to anybody but to themselves. It's the view that large corporations should just suck what they can out of this country, and not be expected to give anything back into it.. The same view which has corporations dumping jobs here, so they can access slave labor elsewhere.

A view completely devoid of morals or ethics. Just grab what you can, and get out.

Well, the rich won't be rich for long, if nobody else has any money to buy anything. Capitalists are devouring their own system, so if we actually ever wind up with true socialism, it'll be at the hands of those that are most against it.

Personally, I'd rather have a sensibly regulated capitalist system where the greed is kept in check, just for the sake of having a more stable system. That'll never happen, though, as long as there are people who think that "the rich are rich, and deserve to rule the world' mentality.

 

[zoulias]

Except AIG failing doesn't hurt their competition, it helps them.

Where do you think all AIG's customers go if AIG fails? There are millions of people that pay for their services. Think it's going to hurt everyone else when they suddenly have millions of people looking for a new service provider? .

Your entire post displays a horrendous lack of understanding, but I will just elaborate a little on this bit. When a big player in the financial world goes down, customers dont just "go elsewhere". They:

Find they lose their investments / insurance policies / hedge deals / loans right out and or have them locked up in insolvency proceedings for a long time.

Let me give an example - A farmer needs to plan for his business so he enters into a future agreement so that he can "fix" the price of his wheat crop which is growing to sell in 9 months time. Wheat prices plummet - but farmer joe is OK cos he has locked in his prices. Oh shit. Lehman's just went bust. Wheres the counterparty to the hedge deal now? Dead - is some other bank going to kindly offer to pay him over the odds for his wheat? No.
Now suddenly, Joe can only sell his crop (he cant just keep it) for 50% than he planned for. So that loan he took out, justifiably, he can no longer repay because he has less cashflow.
Of course, his bank will understand and ease the repayment period right?
No.

His bank is sh*t scared that they had a million agreements with Lehmans that have just defaulted. Bank needs to stabilise the balance sheet right away and stop lending - who knows who else has assets linked to Lehmans? Who is safe to lend to now? No one. Let us call in our consumer loans right away. Poor farmer Joe.


You simply completely misunderstand how things work. Half the prolem is that half the banks are still unable to calculate the scale of the toxicity of the assets they hold. There are some very, very complicatedstructured products out there and eveyone is linked to everyone else in the financial world.

Before you spout more political ideology, look at crredit spreads pre and post lehman. These indicate investor concern in the lending markets. Take a look, and then shut up.

 

[Nemesis999]

It's the view that large corporations should just suck what they can out of this country, and not be expected to give anything back into it..

It's called a salary. They pay them to people. That is what they give back. This whole "middle class" thing? Ya, that's them "not giving back".

The same view which has corporations dumping jobs here, so they can access slave labor elsewhere.

Ah, so voluntary labour outside the US is now slave labour. I see, and how American must someone be before they're no longer a slave? Maybe they have to meet some American minimum wage law? Or perhaps they have to have standard American levels of job benefits? Lets just ignore the fact that these things are not rights in any way, shape, or form. Nope, these are human rights!

Here's a hint. You. Deserve. NOTHING. You are worth what the market decides. If Yang is willing to do the same job for less, you're worth less. Plain and simple. You do not deserve anything better because your parents had it, you do not deserve anything better because you used to have it, and you do not deserver anything simply because you are American. Your self-centered delusions of grandeur do not make your menial labour more valuable.

A view completely devoid of morals or ethics. Just grab what you can, and get out.

Funny, seems like that is the principal that made the US extraordinarily wealthy.... But those were other people that were harmed, not you, so it's not really a lack of morals or ethics in that case.

Well, the rich won't be rich for long, if nobody else has any money to buy anything. Capitalists are devouring their own system, so if we actually ever wind up with true socialism, it'll be at the hands of those that are most against it.

Uhuh. Sure. I'm sure they're all quaking in their boots. Guess what. America is quickly losing ground on the "world's largest economy" list. Guess who's taking the spots. All those countries that these stupid businessmen are investing in. Your lack of foresight doesn't scare them at all, sorry.

The fact that the value of American labour experienced a multi-century bubble due to physical boundaries doesn't mean it's going to stay that way.

Personally, I'd rather have a sensibly regulated capitalist system where the greed is kept in check, just for the sake of having a more stable system. That'll never happen, though, as long as there are people who think that "the rich are rich, and deserve to rule the world' mentality.

And this is what it always comes down to. The people that want always believe they can do it better then the people who are successful. Greed is what turned the US economy into the largest in the world.

Guess what. They're smarter then you, they're better then you, and they will always be more prosperous then you. They deserve to rule the world because they had the brains and the will to make something of themselves, while you sit around whining about their success.

 

[Nemesis999]

Your entire post displays a horrendous lack of understanding, but I will just elaborate a little on this bit. When a big player in the financial world goes down, customers dont just "go elsewhere". They:

Find they lose their investments / insurance policies / hedge deals / loans right out and or have them locked up in insolvency proceedings for a long time.

Let me give an example - A farmer needs to plan for his business so he enters into a future agreement so that he can "fix" the price of his wheat crop which is growing to sell in 9 months time. Wheat prices plummet - but farmer joe is OK cos he has locked in his prices. Oh shit. Lehman's just went bust. Wheres the counterparty to the hedge deal now? Dead - is some other bank going to kindly offer to pay him over the odds for his wheat? No.

So the valid solution to this problem is that the government should pay? Or more idiotically, that the government should support the FAILED BUSINESS instead of supporting the successful ones? Under what delusion does that solve the problem? Under what delusion is this a better idea then paying the successful businesses to take on the contracts of the failed one? The point is, the failures should fail. If government intervention is required it should be to the profit of those that made the smart choices, not the ones that made the stupid choices.

Farmer Joe gets the exact same result if the government give a bunch of successful businesses money to support the absorption of the failed business as he does when the government pumps piles of money into the hands of the failures.

 

[Nemesis999]

Before you spout more political ideology, look at crredit spreads pre and post lehman. These indicate investor concern in the lending markets. Take a look, and then shut up.

Whoops, you're an idiot.

If the government had bailed out Lehman there would be no difference in credit spreads. Lehman demonstrated the underlying weaknesses in some firms. Had the government stepped in the result would have been the same at best, or possibly worse as such government intervention is just as scary to them as a bankrupt Lehman.

 

[UrielDagda]

Guess what. They're smarter then you, they're better then you, and they will always be more prosperous then you. They deserve to rule the world because they had the brains and the will to make something of themselves, while you sit around whining about their success.

And they claim the people on the left are 'elitist'.

So, if I, say, hit the lottery for $100 million tomorrow, are you saying I should suddenly get all of the same tax considerations, special treatment, etc.. Or does all of that require a special handshake of some kind?

Jesus Christ, you act as if the rich would be completely impoverished if they had to actually have a soul.

So, are you actually filthy rich, or just somebody who dreams of becoming so, and thinks any kind of regulation or taxing will deny you that? It just seems that the most vehement arguments I've had have been with people who I wouldn't even consider substantially wealthy.

 

[eeyrjmr]

For one, using your son for example doesn't work to well. Point is though, if you're ignorant of the historical context, which you seem to be, then no it does not make you a racist. However, given the historical context, it is silly to 'not understand' it's offensiveness if you 'are' aware of it.

You may follow the evolution line of thinking. But in the past the vast majority of society believed humans are superior beings to animals, including primates. During and after the slavery days africans were often referred to as primates (monkey, chimp..whatever) as a means of establishing superiority to justify injust actions.

only a racist would see such a angle.
I on the hand see it as an insult to apes

 

[mstersmith1]

And they claim the people on the left are 'elitist'.

So, if I, say, hit the lottery for $100 million tomorrow, are you saying I should suddenly get all of the same tax considerations, special treatment, etc.. Or does all of that require a special handshake of some kind?

Jesus Christ, you act as if the rich would be completely impoverished if they had to actually have a soul.

So, are you actually filthy rich, or just somebody who dreams of becoming so, and thinks any kind of regulation or taxing will deny you that? It just seems that the most vehement arguments I've had have been with people who I wouldn't even consider substantially wealthy.

I dream of becoming so and know the only person who can hold me back is me. For those wishing to have to Gov. come give them a hand out I guess you wont become filthy rich you will be waiting. I only hope ass hats like you dont take away my abilitie to do so. No shit the most vehement arguments are with those with asperations of becoming wealthy. Sorry if you see money as evil, but most of do not.. I will trample the weak in order to achieve my goals and ensure my family has the means to live a prosperous life and hope that I can leave a bit for them. I guess I should want to be taxed at 50% or more so lazy fucks and musicians can lounge around. Damn I hope it all crashes and Obama fails completely. Some in this Nation need to learn what true poverty and suffering is.

 

[Nemesis999]

And they claim the people on the left are 'elitist'.

You do realize that most of my viewpoints are far right... right? The left are the ones that think that anyone who earns their own living should be paying for everyone that doesn't.

So, if I, say, hit the lottery for $100 million tomorrow, are you saying I should suddenly get all of the same tax considerations, special treatment, etc.. Or does all of that require a special handshake of some kind?

Well that wouldn't make you successful, that would make you lucky. Very few of the people that "rule the world" are there because of luck. They're there because they had the talent it took to get there. Now if you took that $100M and started turning huge profits on it then no, you shouldn't be taxed through the nose for that.

Jesus Christ, you act as if the rich would be completely impoverished if they had to actually have a soul.

You know what the problem with socialism is? Eventually you run out of other people's money to spend. Socialism is all about greed. It's the people who are too greedy and impatient to wait for improvements, and simply want everyone else to pay for it.

Guess what? The less money in the hands of these rich, soulless people, the less the economy grows, and the less there is for your children. Socialism is about enriching the current generation at the cost of their children's economy.

So, are you actually filthy rich, or just somebody who dreams of becoming so, and thinks any kind of regulation or taxing will deny you that? It just seems that the most vehement arguments I've had have been with people who I wouldn't even consider substantially wealthy.

Nope, I'm not substantially wealthy. I get what my work is worth. If I'm not happy with that I can find another job, or start myself a business and go for the gold. But whatever the choice, it's MY choice and taxes do nothing but stand in the way of my potential. With every cent of additional tax that Risk vs Reward situation becomes a little less appealing. Is the government going to pay out if I fail? No? So they cripple the reward without dampening the risk, not exactly the formula for economic success.

What you won't see me doing is bitching and moaning that Gates or Buffett or Page isn't buying me a Ferrari. They earned their money and they are, undoubtedly better at what they do then I will ever be. I have the exact same right to his money as the high-school dropout has to mine. NONE.

If someone is legitimately disabled, or is otherwise unable to participate in the normal economy then I'm all for providing subsistence, but that's a small percentage of the people actually receiving my tax money. The rest of them? Why should my taxes pay for them? Not only does that reduce my earnings, but it also reduces the growth of my income by artificially limiting the job market and thereby increasing unemployment (and thereby decreasing competition for employees). A government should provide the tools and security for prosperity, not the prosperity itself, that is crippling and unsustainable.

Taxes rarely do more good then harm. The government is flat-out awful at spending money intelligently since their interest is satisfying the masses rather then enabling the people that actually make the country work.

 

[Fendrix]

So the valid solution to this problem is that the government should pay? Or more idiotically, that the government should support the FAILED BUSINESS instead of supporting the successful ones? Under what delusion does that solve the problem? Under what delusion is this a better idea then paying the successful businesses to take on the contracts of the failed one? The point is, the failures should fail. If government intervention is required it should be to the profit of those that made the smart choices, not the ones that made the stupid choices.

To further expound on that, if Farmer Joe was making good decisions he would diversify his investment portfolio. Investments are risks. The American auto industry is a good example of a stubborn business model that is resistance to change and got beat by foreign competitors. Propping up a failing business not only creates inflation but delays the inevitable... we can't call ourselves a capitalist country when we bailout failing businesses, so how can people say blame capitalism when we don't even have it?

 

[Nemesis999]

I dream of becoming so and know the only person who can hold me back is me. For those wishing to have to Gov. come give them a hand out I guess you wont become filthy rich you will be waiting. I only hope ass hats like you dont take away my abilitie to do so. No shit the most vehement arguments are with those with asperations of becoming wealthy. Sorry if you see money as evil, but most of do not.. I will trample the weak in order to achieve my goals and ensure my family has the means to live a prosperous life and hope that I can leave a bit for them. I guess I should want to be taxed at 50% or more so lazy fucks and musicians can lounge around. Damn I hope it all crashes and Obama fails completely.

And most importantly, those who truly succeed in their pursuit of great wealth will provide JOBS for the masses that whine about your greed, which is the entire (and extremely successful) idea behind capitalism. If you stop restraining the great their actions will enrich the rest. It's not a coincidence that the standard of living has risen sharply over the last century, it's the result of the evil capitalists pursuing their evil selfish goals of wealth.

Some in this Nation need to learn what true poverty and suffering is.

But that single mother needs more of your money! It's not HER fault she had sex! It's not HER fault she spent all the money on those sweet $25 baby-gap pants for her kid! It's not HER fault she never finished highschool! It's all the evil corporations! They're forcing her into this horrible horrible suffering! She can't even afford a car or her own house! How horrible!

 

[UrielDagda]

I dream of becoming so and know the only person who can hold me back is me. For those wishing to have to Gov. come give them a hand out I guess you wont become filthy rich you will be waiting. I only hope ass hats like you dont take away my abilitie to do so. No shit the most vehement arguments are with those with asperations of becoming wealthy. Sorry if you see money as evil, but most of do not.. I will trample the weak in order to achieve my goals and ensure my family has the means to live a prosperous life and hope that I can leave a bit for them. I guess I should want to be taxed at 50% or more so lazy fucks and musicians can lounge around. Damn I hope it all crashes and Obama fails completely. Some in this Nation need to learn what true poverty and suffering is.

Prosperous or preposterous? We aren't talking about people making a decent living, we're talking about people who cry out in pain at the prospect of having to have less than 7 houses, two fleets of luxury cars and a bunch of Learjets.

If you are working at a company and making $50,000 a year, and the CEO is making $20 million.. And then the next year, they forgo increasing your wage to $52,000 so the CEO can get $35 million instead, all while driving the company into the ground, you aren't going to ever become wealthy, you'll just wind up unemployed.

There is a vast difference between being prosperous and being excessively greedy. Too bad too many people buy into that Limbaugh crap that attacking any form of wealth accumulation, no matter how excessive it is, is an attack on ALL wealth accumulation. The bullshit socialist bogeyman that serves as Astroglide while the truly greedy just bugger you in the ass.

 

[Fendrix]

But that single mother needs more of your money! It's not HER fault she had sex! It's not HER fault she spent all the money on those sweet $25 baby-gap pants for her kid! It's not HER fault she never finished highschool! It's all the evil corporations! They're forcing her into this horrible horrible suffering! She can't even afford a car or her own house! How horrible!

Whether you like her or not, Oprah is one of the most important and influential people in this country. She had 12 brothers and sisters, was raped at the age of 12, had her father leave her to grow up in the slums of Chicago, and as a BLACK WOMAN still managed to turn herself into arguably the most successful woman in the world.

I'd be willing to bet .001% of people in this country had a harder life than her, but she was still able to be successful in this evil, capitalist country because of her hard work and determination. What if we had just taken other rich people's money and given it to her instead?

 

[Nemesis999]

Prosperous or preposterous? We aren't talking about people making a decent living, we're talking about people who cry out in pain at the prospect of having to have less than 7 houses, two fleets of luxury cars and a bunch of Learjets.

The people that are that rich created their own businesses, provided the funds for a venture, or joined the business well before it's success was ensured.

They rolled the dice and won. They put their life savings on the line and won. They won at life. It's as simple as that.

In doing so, they created immense wealth. Tens or hundreds of thousands of people were directly or indirectly employed by their risks. And you know what these people do with their money? They invest it. They provide the capital for the next generation of successful business people who will create thousands more jobs, and will in turn re-invest their money in the next generation, etc, etc. The point is, sure, they're filthy rich, but they help far more people in the process then the other 99.99999% of the rest of the people in the world ever will.

The simple fact that this achievement of fabulous wealth is possible is the driving ambition behind a Capitalistic economy and anything that dampens it even slightly (and yes, 6 houses is less appealing then 7) serves only to dissuade the next generation from rolling the dice.

If you are working at a company and making $50,000 a year, and the CEO is making $20 million.. And then the next year, they forgo increasing your wage to $52,000 so the CEO can get $35 million instead, all while driving the company into the ground, you aren't going to ever become wealthy, you'll just wind up unemployed.

I love this scenario. Do you think that the people that own these companies like losing money? They hate taxes, so obviously not. If they decide to give this person a raise then, in their judgment, this person is doing a good job. Not surprisingly, the people making these decisions are usually right, they happen to be very good with money.

There will ALWAYS be people who get paid more then they're worth, but they're a small exception. There will also always be people winning the lottery, should we hate them too because they made the right choice when it came to numbers? A vast majority of businesses are headed by a team of very talented people that are doing a job difficult enough that the MARKET places their worth in the millions. These people don't graduate and jump to CEO of a major corporation, they've been evaluated dozens of times and promoted up the ladder. Some of them shouldn't get that last promotion, they're not fit for the job, but they sure as hell earned a lot of their steps on the way up.

There is a vast difference between being prosperous and being excessively greedy. Too bad too many people buy into that Limbaugh crap that attacking any form of wealth accumulation, no matter how excessive it is, is an attack on ALL wealth accumulation. The bullshit socialist bogeyman that serves as Astroglide while the truly greedy just bugger you in the ass.

I think you need to read up on what wealth is. They're not piling up cash, they're investing in the companies that pay your salary. Want to take that money from them? Go for it, the stock market will plummet and millions of people will be other of work. These people's money isn't idling, it's providing the foundation of the economy.

 

[UrielDagda]

What you won't see me doing is bitching and moaning that Gates or Buffett or Page isn't buying me a Ferrari. They earned their money and they are, undoubtedly better at what they do then I will ever be. I have the exact same right to his money as the high-school dropout has to mine. NONE.

If someone is legitimately disabled, or is otherwise unable to participate in the normal economy then I'm all for providing subsistence, but that's a small percentage of the people actually receiving my tax money. The rest of them? Why should my taxes pay for them? Not only does that reduce my earnings, but it also reduces the growth of my income by artificially limiting the job market and thereby increasing unemployment (and thereby decreasing competition for employees). A government should provide the tools and security for prosperity, not the prosperity itself, that is crippling and unsustainable.

Taxes rarely do more good then harm. The government is flat-out awful at spending money intelligently since their interest is satisfying the masses rather then enabling the people that actually make the country work.

Well, finally something we agree on. But that's not what was the original issue.. The issue was a regulatory framework that would keep excessive greed from basically sucking so much money from the bottom, that it eventually caves in on itself. Government is in bad need of reform also, so we could save billions of dollars needlessly being sucked into oblivion. Something that neither Democrats or Republicans seem willing to do... But that's another issue (albeit a large one).

Another problem is education. You want to say that people should have known that they couldn't afford some complicated loan? Our educational system is in such terrible shape, we have multitudes of poorly educated people out there. To say they should have known, when the people giving the loans definitely knew, is basically putting the trust of the entire financial system into the hands of the lowest denominator. Put on top of that the issue of derivatives based off of those loans (and credit default swaps multiplying those amounts by a dozen) turning it into one big unregulated gambling racket and that pretty much guarantees a huge financial disaster.

Which is preferable? $1 billion helping one company make one greedy CEO who milks it dry, letting it collapse, retiring with $300+ million, or having it help 50 companies compete while the heads of each of them become reasonably wealthy and most of them staying solvent because they aren't being sucked on savagely, but being nurtured. Because the US is just becoming a country full of huge conglomerated ubercompanies that are systematically sucked dry, sold off, much less competition to keep any of it in check.. At this point, even without regulation there is no longer a free market economy. Just a bunch of hulks buying out their competition, slugging it out in a big financial bloodbath.

 

[Dreaz]

It's kinda' hard to have a debate when all the case examples are made-up or theorized by couch-economists. Not to mention all the logical fallacies most of these examples base themselves off of.

In short, this thread is devolving fast. Let's try to bring it back from the gutter or drop the issue =p

 

[Nemesis999]

Which is preferable? $1 billion helping one company make one greedy CEO who milks it dry, letting it collapse, retiring with $300+ million, or having it help 50 companies compete while the heads of each of them become reasonably wealthy and most of them staying solvent because they aren't being sucked on savagely, but being nurtured.

Except the problem is those options make no sense.

If the CEO is the controlling owner, then sucking the company dry is of no benefit, they're killing the goose, they get no more eggs, and most of what they get they lose in dropping stock values.

If the CEO is not the controlling owner then they're not the one that had the ability to suck the company dry, their income is approved by someone else. If the controller allows this to happen it results in them losing money to the CEO, something they're unlikely to willingly let happen.

In reality, when businesses are dismembered it is usually because the company is worth more in parts as it is while whole. Furthermore, the fact that someone purchased the part signifies that they intend to attempt to further increase its worth. Both of these situations result in higher stock values. It's been a long time since only the rich held stock. A vast majority of people hold some interest in the markets. If a company is dismembered and sold these people get a portion of the windfall. If a company is sold as a whole these people get a portion of the windfall. If anything increases the value of this company, these people get a portion of the windfall. Regardless of how it happens, a legal sell-off of a business provides profits for those that own shares in it, that money doesn't just disappear into the pocket of the CEO.

As for competition laws, I would agree that they're needed. But the few markets that lack local competition usually have international competition and with a shrinking world it won't be long before they end up butting heads. In the end, if there is only one left that would indicate that they're able to do what they do better/cheaper then the competition (assuming they adhered to competition laws), and I can't really fault them for that.

 

[spacetrader]

I'll take 100% capitalism over any percentage of socialism/communism any day.

no. because 100% capitalism is what got us here. when you let the reigns loose you let GREED thrive. and not everything should be run as a cut-throat industry...

 

[spacetrader]

to add, i think most markets should be capitalist... but things like mail, healthcare, national highways... those are things everyone should have equal access too and i believe it is ok for things of that nature to be socialized.

 

[WhyYouLoveMe]

no. because 100% capitalism is what got us here. when you let the reigns loose you let GREED thrive. and not everything should be run as a cut-throat industry...

Then can I have your permission to rather live in a 100% capitalistic society? If I can get your permission then I can have my opinion back.

 

[Nemesis999]

to add, i think most markets should be capitalist... but things like mail, healthcare, national highways... those are things everyone should have equal access too and i believe it is ok for things of that nature to be socialized.

Basic Mail and Highways, healthcare? LOL

Advances in the healthcare industry cost a fortune, and pays out similarly. Sure, you can do it, if you either want to A) pay MASSIVE taxes to cover the cost of the service, or B) Stop healthcare advances dead in their tracks. Who's going to do the research if the government isn't willing to pay out the massive amounts of money it requires? No one.

Healthcare is one of the worst industries to nationalize. Highways are generally one of the best simply because all you really have to do is decide where they go and auction off the contract to build it.

 

[Nemesis999]

Basic Mail and Highways, sure. Healthcare? LOL

"edit"

 

[Nemesis999]

no. because 100% capitalism is what got us here. when you let the reigns loose you let GREED thrive. and not everything should be run as a cut-throat industry...

Again, no it didn't. Much of the problems were caused by government meddling in the financial industry. Fannie May/Freddie Mac are great examples. Their huge pile of bad mortgages was a result of the government leaning on them to forward the "Houses-for-everyone" agenda that created this mess in the first place.

The more the government meddles in any sector the less productive it is. Period. Politicians care very little about good business practices and much much more about keeping themselves in office. Congress needs term limits. The current dinosaurs that run the show have waaaayyyy too many favours to repay and far too little interest in anything but the next election.