backtocrappie

[bigE]

I read this article this week and it has explained in the simplest of terms how the current financial crisis came to be and who the real culprits are. You might be suprised to find out that both sides of the aisle contributed to this mess and that politically, there's no safe team to be on right now where the skeletons in the closet are concerned. It is pretty long but hang in there. It is very very informative and the author (one of my favorites) has no problem naming names and calling out the guilty. Enjoy.....


http://www.rollingstone.com/politics/story/26793903/the_big_takeover

[fishingpox]

 Capitalism didn't fail. Human's fail. Humans, whether in private industry or government are capable of failing. True capitalism punishes unethical behavior, it doesn't reward it. True socialism tries to force equality by forcing an otherwise capitilistic institution to lend money to people who can't afford it. Then capitalism is blamed when the inevitable failure occurs.

Capitalism would prevent the government-mandated lending practices of lending to high-risk borrowers. The government interfered with Capitalism; the popular (and utterly incorrect) conclusion is that Capitalism is to blame. Capitalism allows companies that are poorly run to fail. Capitalism rewards well-run companies. Individuals act unethically. Some say Capitalism is to blame. I say they're wrong.

I respectfully submit that anger and frustration toward Capitalism is misplaced; indeed, capitalism itself seems to be misunderstood by many. Because when you really look at the root of what caused some of these huge market dips, it's something other than capitalism at the root of it.

[bigE]

Did you read the article? You'll see that the guys at these banks did this to themselves and that government mandated lending had nothing to do with it. These guys wanted very much to make those bad loans and they consistantly invented new ways to circumvent regulation so that they could continue to make these bad loans. It has nothing to do with capitolism failing or succeeding, it has to do with very rich guys rolling the dice at the wall street crap tables while betting money they really didn't have in the first place. They bundled bad assets into blocks and then manipulated the credit rating of these bundles telling investors that they were 1000% safe and no one could lose. By selling off all these bad assets , they were able to free themselves up to lend more money which is how the pig gets fed. It really is very informative if you give it a read. Capitolism works just fine as long as everyone plays by the rules. It's this idea that de-regulation is a good thing that gets us in trouble. You cant expect those guys to care about your money if they have a choice. That is evident now in the bonuses that are still being passed out to the scum who allowed this all to go down in the first place namely (AIG FINACNIAL PRODUCTS DIVISION).

[fishingpox]

Thats what I'm getting ar Eric, I don't think those guys understand true capitalism. They do however understand their own greed.

[LBM]

Wow! I finally managed to get through the article. There was a lot of info there and I’ve yet to complete the digestion and mulling required for meaningful comprehension.  Thanks for the link Eric.

I don’t think Capitalism has taken the slightest hit with his article. I hold that Capitalism is the only economic system that has undeniably demonstrated its capabilities for increasing wealth and human well being, on a previously unimaginable scale, with out attempting to alter or deny the innate nature and characteristics of humankind. All the other systems have all failed miserably resulting in poverty and human suffering.

The failures that I see are a result of government interventions and laws and regulations and agencies imposed on Capitalism. Impositions sold to us by statist wizards as things necessary to prevent business cycles from going into its economic down cycle. The economic cycles of Capitalism is inherent in how it functions and how it requires people to better allocate and use it resources while striving for prosperity where winners and losers are determined by the market place and not by politicians, regulators, agencies or presidents.

Some people say that Capitalism is a failure because of its cyclical nature and an ever increasing level of prosperity is possible if only the Ivy League wizards could have their way with how it all could be managed.  I would suggest that there is no one individual or committee or party possessing the omniscience necessary to be able to remotely handle the myriad details in the market place in hopes for a good outcome of economic improvement for the masses.

I would also suggest that it is just because of government intrusions that prevents Capitalism from proper functioning causing delays in necessary corrections. The delays in corrections cause much greater misallocations and more pain and suffering during the correction process. With all the regulation in place people enter the market place with much less prudence thinking that all the regulations will protect them from failure.

Fishingpox I couldn’t agree with you more with this “I respectfully submit that anger and frustration toward Capitalism is misplaced; indeed, capitalism itself seems to be misunderstood by many. Because when you really look at the root of what caused some of these huge market dips, it's something other than capitalism at the root of it.” And I would add this comment that at every turn of a perceived problem with our mixed system with freedoms and controls it is always the free parts found at fault and in need of elimination to be replaced with more controls. I also would suggest our public school systems have no incentives towards ever correcting the misunderstandings about Capitalism.

Eric
I’m not happy about the bonus situation but I don’t harbor the populist rage about it. If for  the sake of understanding this and if this is a accurate comparison that the total moneys given AIG is comparable to say  100 dollars  then the bonus amounts being talked about is something like 10 to 12 cents of that total. My rage goes to the ones that initially gave the hundred dollars in the first place and those folks that gave that money are wiping the sweat off their brows at dodging a bullet by seeing all the populist rage being directed at the bonus recipients and not where the real blame lies.

In closing I would just say Capitalism works period and any erosion of it is an erosion of liberty.