Capitalism, Not Democracy, Is The Driver of Wealth and Social Justice

[pinkwaxfish]

Twice this week I've been angered by postings on the Internet about how capitalism is undermining our democracy. One was here on these boards. Another was on Andrew Sullivan's web site, where a reader email said:

The Millennial generation can see much more clearly than Cold War generations the multitude of ways in which capitalism diverges from and is counter to true democracy. This is a HUGE shift between how Millennial voters see the world and the generation that watches Fox News. To even question the virtue of capitalism is a new and important event and question it we do.

This irks me because it is an upside down worldview. It is capitalism, it is the freedom to make voluntary associations and exchange goods as we see fit, that allows for true social justice. It is capitalism that creates wealth.

In any instance in which capitalism is counter to democracy, it is because capitalism is a virtuous system and democracy is quite flawed. I am willing to accept Churchill's maxim that democracy is the worst system of government except all the others that have been tried, but I am angered when people suggest what we need is more democracy and less capitalism. Quite the contrary! We need far less democracy so that capitalism can flourish.

 

[KissMy]

How did that deregulated free market housing bubble work out for us?

 

[pinkwaxfish]

How did that deregulated free market housing bubble work out for us?

Sorry friend. If you're into regulation and government intervention in the markets, the housing bubble's on you. The Federal Reserve held interest rates at levels well below what the market wanted and the banks had lots of money to lend. They in turn lent all that excess to the investment banks who used all that lended money to buy mortgage backed securities, which allowed for the free availability of credit to anyone and everyone who wanted as much as they could stomach.

The high cost of health care is on you too. That's a government created mess.

As is our poor educational system.

A terrible jobs market? Thank you big government.

Take some time to educate yourself. It's ignorant opinions like "How did that deregulated free market housing bubble work out for us?" that have allowed for this mess.

 

[tap4154]

How did that deregulated free market housing bubble work out for us?

Actually it was gov't intervention in the housing market that cased the housing bubble, and subsequnt CRASH. The CRA (Community Reinvestment Act), passed by Carter, led to regulations forcing banks to grant loans to folks who simply could not afford them, with low or no down payment, and no financial vetting. This policy went on for decades and was fine AS LONG as housing prices kept going up, but any sane person knew that eventually the bottom would fall out.

This also led to all the schemes banks came up with to try to make money, since they were losing so much on the bad loans theyt were forced to grant.

Had the federal gov't stayed out and let banks do their normal loan vetting process, none of this would have occurred.

So Dems cause the housing crash that put us where we are.

 

[LeftCoastVoter]

How did that deregulated free market housing bubble work out for us?

Actually it was gov't intervention in the housing market that cased the housing bubble, and subsequnt CRASH. The CRA (Community Reinvestment Act), passed by Carter, led to regulations forcing banks to grant loans to folks who simply could not afford them, with low or no down payment, and no financial vetting. This policy went on for decades and was fine AS LONG as housing prices kept going up, but any sane person knew that eventually the bottom would fall out.

This also led to all the schemes banks came up with to try to make money, since they were losing so much on the bad loans theyt were forced to grant.

Had the federal gov't stayed out and let banks do their normal loan vetting process, none of this would have occurred.

So Dems cause the housing crash that put us where we are.

The Community Reinvestment Act is a United States federal law designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods. Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.

Redlining is the practice of denying, or charging more for, services such as banking, insurance, access to health care, or even supermarkets, or denying access to jobs to residents in particular, often racially determined, areas.

if the redlining, which was a result of capitalism did not occur, then there would have been no need for the CRA.

nowhere in the CRA law does it force lenders to give out loans to those who can not afford them.

 

[KissMy]

I have researched the housing bubble. It was caused by uneven deregulation. You can't have government backed GSE's, Federal Reserve, bank bailouts, PBGC & FDIC be allowed to be defrauded by Wallstreet. The market must be totally regulated if it is going to be government backed. Otherwise we have to go completely back to a time before the Fed & taxes. Half measure deregulation is just code for lets fuck the tax payer & their dollar.

They knew this when the USG created the FDIC. They knew a few bankers would take high risk & pay higher interest to depositors. This would cause most of the depositors to remove their money from the low interest banks & deposit it into the high interest high risk banks. Because after all the FDIC insured all deposits the same, so who cares about risk when the FDIC has your back. This is why the banks were heavily regulated in order to prevent them from risking all the government backed money.

 

[PratchettFan]

Twice this week I've been angered by postings on the Internet about how capitalism is undermining our democracy. One was here on these boards. Another was on Andrew Sullivan's web site, where a reader email said:

The Millennial generation can see much more clearly than Cold War generations the multitude of ways in which capitalism diverges from and is counter to true democracy. This is a HUGE shift between how Millennial voters see the world and the generation that watches Fox News. To even question the virtue of capitalism is a new and important event and question it we do.

This irks me because it is an upside down worldview. It is capitalism, it is the freedom to make voluntary associations and exchange goods as we see fit, that allows for true social justice. It is capitalism that creates wealth.

In any instance in which capitalism is counter to democracy, it is because capitalism is a virtuous system and democracy is quite flawed. I am willing to accept Churchill's maxim that democracy is the worst system of government except all the others that have been tried, but I am angered when people suggest what we need is more democracy and less capitalism. Quite the contrary! We need far less democracy so that capitalism can flourish.

Capitalism is not virtuous. Capitalism is an economic theory. Only people can be virtuous. If people were virtuous, capitalism would be a moot issue.

I suggest you go back and take a good look at this county in the late 19th and early 20th centuries. That was when we had our experiment in pure capitalism and you can see how it worked out.

 

[bripat9643]

How did that deregulated free market housing bubble work out for us?

There was no "deregulated housing market," jackass. There were more regulations in 2008 than there were in 1999.

 

[tap4154]

How did that deregulated free market housing bubble work out for us?

Actually it was gov't intervention in the housing market that cased the housing bubble, and subsequnt CRASH. The CRA (Community Reinvestment Act), passed by Carter, led to regulations forcing banks to grant loans to folks who simply could not afford them, with low or no down payment, and no financial vetting. This policy went on for decades and was fine AS LONG as housing prices kept going up, but any sane person knew that eventually the bottom would fall out.

This also led to all the schemes banks came up with to try to make money, since they were losing so much on the bad loans theyt were forced to grant.

Had the federal gov't stayed out and let banks do their normal loan vetting process, none of this would have occurred.

So Dems cause the housing crash that put us where we are.

The Community Reinvestment Act is a United States federal law designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods. Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.

Redlining is the practice of denying, or charging more for, services such as banking, insurance, access to health care, or even supermarkets, or denying access to jobs to residents in particular, often racially determined, areas.

if the redlining, which was a result of capitalism did not occur, then there would have been no need for the CRA.

nowhere in the CRA law does it force lenders to give out loans to those who can not afford them.

Yes, the gov't DID force banks to grant loans. I know several loan officers who told me that if a group like ACORN filed a complaint, gov' t pressure was put on them to meet a quota of low income/risky loans, and if they didn't they would suffer sanctions like denying mergers etc. It got to the point that banks just complied, meeting the quota by handing out these very risky loans, to avoid the sanctions and legal costs of fighting it. Then they began coming up with "products" and bundling loans to sell etc, to try to make back what they were losing in the risky loans they were FORCED to grant.

Canada had no such gov't intervention in their banks, and didn't have the bubble or meltdown. In fact the very folks who try to blame Repubs for the housing meltdown, Barney Frank, Chris Dodd, and Maxine Waters, were the ones most guilty of pushing and enabling this insane policy.

Obama was one of the guilty parties as well!

====================================

By STANLEY KURTZ
Last Updated: 3:53 AM, September 29, 2008
Posted: 3:53 AM, September 29, 2008

WHAT exactly does a "community organizer" do? Barack Obama's rise has left many Americans asking themselves that question. Here's a big part of the answer: Community organizers intimidate banks into making high-risk loans to customers with poor credit.

In the name of fairness to minorities, community organizers occupy private offices, chant inside bank lobbies, and confront executives at their homes - and thereby force financial institutions to direct hundreds of millions of dollars in mortgages to low-credit customers.

In other words, community organizers help to undermine the US economy by pushing the banking system into a sinkhole of bad loans. And Obama has spent years training and funding the organizers who do it.

THE seeds of today's financial meltdown lie in the Commu nity Reinvestment Act - a law passed in 1977 and made riskier by unwise amendments and regulatory rulings in later decades.

CRA was meant to encourage banks to make loans to high-risk borrowers, often minorities living in unstable neighborhoods. That has provided an opening to radical groups like ACORN (the Association of Community Organizations for Reform Now) to abuse the law by forcing banks to make hundreds of millions of dollars in "subprime" loans to often uncreditworthy poor and minority customers.

Any bank that wants to expand or merge with another has to show it has complied with CRA - and approval can be held up by complaints filed by groups like ACORN.

In fact, intimidation tactics, public charges of racism and threats to use CRA to block business expansion have enabled ACORN to extract hundreds of millions of dollars in loans and contributions from America's financial institutions.

Banks already overexposed by these shaky loans were pushed still further in the wrong direction when government-sponsored Fannie Mae and Freddie Mac began buying up their bad loans and offering them for sale on world markets.

Fannie and Freddie acted in response to Clinton administration pressure to boost homeownership rates among minorities and the poor. However compassionate the motive, the result of this systematic disregard for normal credit standards has been financial disaster.

ONE key pioneer of ACORN's subprime-loan shakedown racket was Madeline Talbott - an activist with extensive ties to Barack Obama. She was also in on the ground floor of the disastrous turn in Fannie Mae's mortgage policies.

Long the director of Chicago ACORN, Talbott is a specialist in "direct action" - organizers' term for their militant tactics of intimidation and disruption. Perhaps her most famous stunt was leading a group of ACORN protesters breaking into a meeting of the Chicago City Council to push for a "living wage" law, shouting in defiance as she was arrested for mob action and disorderly conduct. But her real legacy may be her drive to push banks into making risky mortgage loans.

http://www.nypost.com/p/news/opinio...K;jsessionid=957FC72106B3EA21B38E63213692A538

 

[Soggy in NOLA]

How did that deregulated free market housing bubble work out for us?

Actually it was gov't intervention in the housing market that cased the housing bubble, and subsequnt CRASH. The CRA (Community Reinvestment Act), passed by Carter, led to regulations forcing banks to grant loans to folks who simply could not afford them, with low or no down payment, and no financial vetting. This policy went on for decades and was fine AS LONG as housing prices kept going up, but any sane person knew that eventually the bottom would fall out.

This also led to all the schemes banks came up with to try to make money, since they were losing so much on the bad loans theyt were forced to grant.

Had the federal gov't stayed out and let banks do their normal loan vetting process, none of this would have occurred.

So Dems cause the housing crash that put us where we are.

The Community Reinvestment Act is a United States federal law designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods. Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.

Redlining is the practice of denying, or charging more for, services such as banking, insurance, access to health care, or even supermarkets, or denying access to jobs to residents in particular, often racially determined, areas.

if the redlining, which was a result of capitalism did not occur, then there would have been no need for the CRA.

nowhere in the CRA law does it force lenders to give out loans to those who can not afford them.

Actually, while the CRA wasn't solely behind the meltdown, it indeed was a major factor:

Here's How The Community Reinvestment Act Led To The Housing Bubble's Lax Lending - Business Insider

 

[Bern80]

I have researched the housing bubble. It was caused by uneven deregulation. You can't have government backed GSE's, Federal Reserve, bank bailouts, PBGC & FDIC be allowed to be defrauded by Wallstreet. The market must be totally regulated if it is going to be government backed. Otherwise we have to go completely back to a time before the Fed & taxes. Half measure deregulation is just code for lets fuck the tax payer & their dollar.

What does deregulation have to do with screwing someone that pays taxes? In capitlism, YOU are supposed to be the regulator. You and I and the rest of the general public. We are the ones that are supposed to keep corporate america accountable. The problem is some of us (like you) don't seem to want that responsibility. Yet another example of liberals passing the buck. Generous....with other people's money and demand accountablity......just not of themselves.

 

[KissMy]

How did that deregulated free market housing bubble work out for us?

There was no "deregulated housing market," jackass. There were more regulations in 2008 than there were in 1999.

Lots of regs with big holes is worse than a small tight fenced in lot so the agencies can keep an eye on the tax payers money.

 

[KissMy]

I have researched the housing bubble. It was caused by uneven deregulation. You can't have government backed GSE's, Federal Reserve, bank bailouts, PBGC & FDIC be allowed to be defrauded by Wallstreet. The market must be totally regulated if it is going to be government backed. Otherwise we have to go completely back to a time before the Fed & taxes. Half measure deregulation is just code for lets fuck the tax payer & their dollar.

What does deregulation have to do with screwing someone that pays taxes? In capitlism, YOU are supposed to be the regulator. You and I and the rest of the general public. We are the ones that are supposed to keep corporate america accountable. The problem is some of us (like you) don't seem to want that responsibility. Yet another example of liberals passing the buck. Generous....with other people's money and demand accountablity......just not of themselves.

How do you & I hold them accountable when they get tax payer bail-out & have the printing press? Then there are GSE's backed by tax payers, Pensions backed by tax payers, FDIC backed by tax payers. It's huge piles of free money for them to steal by tricking someone into signing a piece of paper.

 

[SniperFire]

How did that deregulated free market housing bubble work out for us?

Actually it was gov't intervention in the housing market that cased the housing bubble, and subsequnt CRASH. The CRA (Community Reinvestment Act), passed by Carter, led to regulations forcing banks to grant loans to folks who simply could not afford them, with low or no down payment, and no financial vetting. This policy went on for decades and was fine AS LONG as housing prices kept going up, but any sane person knew that eventually the bottom would fall out.

This also led to all the schemes banks came up with to try to make money, since they were losing so much on the bad loans theyt were forced to grant.

Had the federal gov't stayed out and let banks do their normal loan vetting process, none of this would have occurred.

So Dems cause the housing crash that put us where we are.

The Community Reinvestment Act is a United States federal law designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods. Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.

Redlining is the practice of denying, or charging more for, services such as banking, insurance, access to health care, or even supermarkets, or denying access to jobs to residents in particular, often racially determined, areas.

if the redlining, which was a result of capitalism did not occur, then there would have been no need for the CRA.

nowhere in the CRA law does it force lenders to give out loans to those who can not afford them.

LOL

You could just opt to go out of business by not being permitted to participate in the mergers and acquisitions all banks participate in - based on your ensuing poor CRA score.

Intellectual dishonesty, thy name is Libtard.

 

[tap4154]

BTW, the complete MESS that gov't intervention in banks caused is a perfect example of what the gov't takeover of heatlhcare insurance will be.

One huge clusterfuck!

Our Founders knew better, and designed America to NOT have the federal gov't meddling in these issues, in our lives and businesses, but "progressives" don't seem to understand our Constitution.

 

[KissMy]

This GSE housing bubble fraud scheme has been played on us before in smaller chunks. This time they went full scale causing systemic financial disaster.

In spring 1972 under the purview of George Romney, a major scandal struck the Federal Housing Administration (FHA), which since passage of the Housing and Urban Development Act of 1968 and the creation of the Government National Mortgage Association (Ginnie Mae) had been responsible for helping the poor buy homes in inner-city areas via government-backed mortgages. This was financed by mortgage-backed securities, the first issues of which Romney had announced in 1970. A number of FHA employees, along with a number of real estate firms and lawyers, were indicted for a scheme in which the value of cheap inner city homes was inflated and sold using those government-backed mortgages to black buyers who could not really afford them, and the government was stuck for the bad loans when owners defaulted.

 

[Bern80]

I have researched the housing bubble. It was caused by uneven deregulation. You can't have government backed GSE's, Federal Reserve, bank bailouts, PBGC & FDIC be allowed to be defrauded by Wallstreet. The market must be totally regulated if it is going to be government backed. Otherwise we have to go completely back to a time before the Fed & taxes. Half measure deregulation is just code for lets fuck the tax payer & their dollar.

What does deregulation have to do with screwing someone that pays taxes? In capitlism, YOU are supposed to be the regulator. You and I and the rest of the general public. We are the ones that are supposed to keep corporate america accountable. The problem is some of us (like you) don't seem to want that responsibility. Yet another example of liberals passing the buck. Generous....with other people's money and demand accountablity......just not of themselves.

How do you & I hold them accountable when they get tax payer bail-out & have the printing press? Then there are GSE's backed by tax payers, Pensions backed by tax payers, FDIC backed by tax payers. It's huge piles of free money for them to steal by tricking someone into signing a piece of paper.

Two ways: 1) You don't do business with businesses you don't find reputable. 2) You hold your elected officials accountable by letting them know you will not re-elect them if they continue to perform acts of corporate charity.

 

[KissMy]

What does deregulation have to do with screwing someone that pays taxes? In capitlism, YOU are supposed to be the regulator. You and I and the rest of the general public. We are the ones that are supposed to keep corporate america accountable. The problem is some of us (like you) don't seem to want that responsibility. Yet another example of liberals passing the buck. Generous....with other people's money and demand accountablity......just not of themselves.

How do you & I hold them accountable when they get tax payer bail-out & have the printing press? Then there are GSE's backed by tax payers, Pensions backed by tax payers, FDIC backed by tax payers. It's huge piles of free money for them to steal by tricking someone into signing a piece of paper.

Two ways: 1) You don't do business with businesses you don't find reputable. 2) You hold your elected officials accountable by letting them know you will not re-elect them if they continue to perform acts of corporate charity.

The elected officials could care less if we fire them. They have already been paid or just go to work for the fraudsters & give them even more political leverage.

Either shut down the entire scheme or close the holes in it.

 

[peach174]

I have researched the housing bubble. It was caused by uneven deregulation. You can't have government backed GSE's, Federal Reserve, bank bailouts, PBGC & FDIC be allowed to be defrauded by Wallstreet. The market must be totally regulated if it is going to be government backed. Otherwise we have to go completely back to a time before the Fed & taxes. Half measure deregulation is just code for lets fuck the tax payer & their dollar.

They knew this when the USG created the FDIC. They knew a few bankers would take high risk & pay higher interest to depositors. This would cause most of the depositors to remove their money from the low interest banks & deposit it into the high interest high risk banks. Because after all the FDIC insured all deposits the same, so who cares about risk when the FDIC has your back. This is why the banks were heavily regulated in order to prevent them from risking all the government backed money.

Bush tried to get regulations 7 times, but 3 Dem's in the Housing Committee refused to let any of the bills proposed to pass. 2 of those Dem's were Barney Frank, Chris Dodd.
Barney Frank refused to believe that Freddie Mac was trading in illegal hedge funds.
The Housing bubble rests squarely on the Dem's.
None of this would have happened if Dem's had not relaxed the requirements to buy homes in the first place.

 

[Bern80]

How do you & I hold them accountable when they get tax payer bail-out & have the printing press? Then there are GSE's backed by tax payers, Pensions backed by tax payers, FDIC backed by tax payers. It's huge piles of free money for them to steal by tricking someone into signing a piece of paper.

Two ways: 1) You don't do business with businesses you don't find reputable. 2) You hold your elected officials accountable by letting them know you will not re-elect them if they continue to perform acts of corporate charity.

The elected officials could care less if we fire them. They have already been paid or just go to work for the fraudsters & give them even more political leverage.

Either shut down the entire scheme or close the holes in it.

That rings pretty hollow when you look at how much money gets spent on getting re-elected and how much stuff is promised to people of they vote for them.

I'm fine with either of those things. The point is when government starts medling and tinkering with this or that out of some misguided compassion or sense of duty, things usually get worse for everyone, not better.