g5000
Diamond Member
- Nov 26, 2011
- 127,147
- 70,886
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This topic will have a little bit for everyone.
We live in a complicated world and we cannot solve our problems with incessant parroting of pundits' bumper sticker inanities. This is going to take some heavy lifting. So bear with me, and don't form your response until you have read to the end.
We hear a lot lately about the increasing concentration of wealth with most people seeming to be found in one of two groups. One group believes the concentration of wealth is almost always a bad thing and the solution to the problem is to increase taxes on the rich. The other group does not see anything wrong with the concentration of wealth. The former seems to believe when wealth has been concentrated, it is usually by evil means and thus should be taxed heavily. The latter seems to believe wealth is rarely accumulated by wrongdoing and should be taxed lightly, as it is well deserved.
Perhaps if we look at the means by which wealth may be concentrated into the hands of a few we may see the folly within both polarized positions. For it is the processes by which wealth is transferred which is flawed in some cases.
1. Invention, Innovation. If you invent a better mousetrap, the world will beat a path to your door. Steve Jobs, Bill Gates, Steve Wozniak, Henry Ford, Thomas Edison, and so forth. You get the idea. This is the stuff that makes America great and is the most honest means by which people get very, very, very rich.
2. Excess Speculation. To compress and simplify an example I used in another topic even further, imagine every food product in the world as a single item, an apple. And imagine every food producer in the world as a single person, Farmer Jones. And imagine every supermarket outlet in the world as a single person, Grocer Smith. For many years, Farmer Jones sells his apples to Grocer Smith for a nickel apiece. Then one day, Speculator Adams approaches Farmer Jones and offers to buy his apples for seven cents apiece. His mother not having raised any fools, Jones sells all of his apples to Adams.
Now Grocer Smith has to go to Adams for his apples. Adams can charge whatever he likes for his apples since he has "cornered the market".
This causes the price we pay for apples to skyrocket. Since we need apples to survive, this has a ripple effect.
The defenders of speculators do not want to interfere with this process, but they seem to be forgetting something.
When our government borrows money from banks, conservatives point out that every dollar the government borrows is one less dollar available in the private market, and this is a bad thing.
Well, every extra dollar we have to spend on our necessities is one less dollar we will spend elsewhere. Those extra dollars will be concentrated into Adams' hands, while we put off purchases of other items. And that means less demand for those other items, and that means less commerce, which leads to unemployment. So wealth is transferred and concentrated into the hands of a few, the speculators, at the expense of the mass of others engaged in commerce, while still others are thrown into poverty because they are unemployed.
3. Fraud. Make a bunch of loans to people you know will never be able to pay them back, then sell the loans by means of complicated financial derivatives to idiot investors who manage 401k funds, pension funds, and city treasuries. Do this on a MASSIVE scale. All the wealth of every working person in America will be transferred into your pockets. And then when all your toxic loans blow up, the investors to whom you sold them lose money while you fly to the Bahamas in your private jet to golf. And the taxpayers will be involuntarily put on the hook.
4. Entrepreneurship. Open a business with a successful business model. Parlay into a chain of stores across the nation. Laugh all the way to the bank. Or, provide venture capital to someone with an idea for a better mousetrap. Rake in the capital gains.
Some of these methods are immoral or criminal, while others are the kind of behavior we want to reward.
In this context, it is nonsensical to “tax the rich more” out of some misplaced belief that all concentration of wealth is the cause of misery.
If a thief was allowed to come into your house at will and take what he likes with the blessings of the police, how would taxing everyone on your street more solve this problem?
It clearly wouldn't.
Hopefully, this helps all of you realize that if there is an unhealthy imbalance of wealth, it is foolish to punish everyone who happens to have wealth. The reason the imbalance exists is because of legislative tilting of the field and lack of enforcement of the law in the criminals' favor.
Therefore, raising taxes on the just and unjust alike will do nothing to eliminate the imbalance. Rather, it will actually incentivize the thieves to steal even more from your pocket to offset their taxes.
Unfortunately, the means by which today's thieves steal money from your pocket are so complex that most Americans are incapable or unwilling to discover these causes. They swallow and parrot whatever their favorite media pundits tell them, without realizing their idols are just as ignorant as they. In many cases, the methods by which they are robbed are so subtle that most Americans are not even aware they are being robbed. If they are aware, the criminals are so far removed from the robbed that the victims can only feel a sense of anger with no idea toward whom to properly direct it. So they settle their sights on whatever favorite target their idols aim them. The Jews, blacks, Democrats, etc.
It is time to wake up. Stop throwing the wrong people into the ovens. All of you. It isn't “the rich”. It isn't blacks who bought houses through the CRA.
You want some names?
Here is a list of names of people who belong in prison that can be provided to every Senator and Congressman:
1. Daniel Sparks and Tom Montag: Goldman Sachs. Constructed the fraudulent Timberwolf billion dollar toxic mortgage security and sold it to investors, then profited by betting against it. Deliberately stuffed the security with mortgages they knew were toxic so they could be on its failure while also profiting from its sale it to investors.
2. Brian H. Stoker: Citigroup. Constructed the fraudulent Class V Funding III CDO-squared which ripped off investors for over $700 million.
3. Fabrice Tourre: Goldman Sachs. Constructed the fraudulent Abacus 2007-ac1 CDO for which GS was fined but no one went to prison. Tourre allowed hedge fund manager John Paulson to select the toxic mortgages to be placed in the CDO so Goldman Sachs and Paulson could bet against it. Paulson believes when it comes to this kind of business, we should be supporting them and encouraging them.
4. Angelo Mozillo: Countrywide CEO. This guy and his financial officers committed the exact same kind of crime the Enron CEO and financial officers did, and yet he walks free. Mozillo kept telling investors that Countrywide was "consitently producing quality mortgages" while his internal memos show that he was well aware his company was creating the most toxic mortgages on the planet. The SEC originally demanded a jury trial for Mozillo, but he ultimately walked away with a fine and no admission of wrongdoing. This guy is the scummiest of the scum.
That's a good start.
Some legislative measures needed to level the field:
1. Outlaw naked credit default swaps.
2. Force OTC derivatives onto public exchanges
3. Repeal the Commodities Futures Modernization Act of 2000
3. Repeal the Gramm–Leach–Bliley Act
4. Start sending CDO fraudsters to prison
We live in a complicated world and we cannot solve our problems with incessant parroting of pundits' bumper sticker inanities. This is going to take some heavy lifting. So bear with me, and don't form your response until you have read to the end.
We hear a lot lately about the increasing concentration of wealth with most people seeming to be found in one of two groups. One group believes the concentration of wealth is almost always a bad thing and the solution to the problem is to increase taxes on the rich. The other group does not see anything wrong with the concentration of wealth. The former seems to believe when wealth has been concentrated, it is usually by evil means and thus should be taxed heavily. The latter seems to believe wealth is rarely accumulated by wrongdoing and should be taxed lightly, as it is well deserved.
Perhaps if we look at the means by which wealth may be concentrated into the hands of a few we may see the folly within both polarized positions. For it is the processes by which wealth is transferred which is flawed in some cases.
1. Invention, Innovation. If you invent a better mousetrap, the world will beat a path to your door. Steve Jobs, Bill Gates, Steve Wozniak, Henry Ford, Thomas Edison, and so forth. You get the idea. This is the stuff that makes America great and is the most honest means by which people get very, very, very rich.
2. Excess Speculation. To compress and simplify an example I used in another topic even further, imagine every food product in the world as a single item, an apple. And imagine every food producer in the world as a single person, Farmer Jones. And imagine every supermarket outlet in the world as a single person, Grocer Smith. For many years, Farmer Jones sells his apples to Grocer Smith for a nickel apiece. Then one day, Speculator Adams approaches Farmer Jones and offers to buy his apples for seven cents apiece. His mother not having raised any fools, Jones sells all of his apples to Adams.
Now Grocer Smith has to go to Adams for his apples. Adams can charge whatever he likes for his apples since he has "cornered the market".
This causes the price we pay for apples to skyrocket. Since we need apples to survive, this has a ripple effect.
The defenders of speculators do not want to interfere with this process, but they seem to be forgetting something.
When our government borrows money from banks, conservatives point out that every dollar the government borrows is one less dollar available in the private market, and this is a bad thing.
Well, every extra dollar we have to spend on our necessities is one less dollar we will spend elsewhere. Those extra dollars will be concentrated into Adams' hands, while we put off purchases of other items. And that means less demand for those other items, and that means less commerce, which leads to unemployment. So wealth is transferred and concentrated into the hands of a few, the speculators, at the expense of the mass of others engaged in commerce, while still others are thrown into poverty because they are unemployed.
3. Fraud. Make a bunch of loans to people you know will never be able to pay them back, then sell the loans by means of complicated financial derivatives to idiot investors who manage 401k funds, pension funds, and city treasuries. Do this on a MASSIVE scale. All the wealth of every working person in America will be transferred into your pockets. And then when all your toxic loans blow up, the investors to whom you sold them lose money while you fly to the Bahamas in your private jet to golf. And the taxpayers will be involuntarily put on the hook.
4. Entrepreneurship. Open a business with a successful business model. Parlay into a chain of stores across the nation. Laugh all the way to the bank. Or, provide venture capital to someone with an idea for a better mousetrap. Rake in the capital gains.
Some of these methods are immoral or criminal, while others are the kind of behavior we want to reward.
In this context, it is nonsensical to “tax the rich more” out of some misplaced belief that all concentration of wealth is the cause of misery.
If a thief was allowed to come into your house at will and take what he likes with the blessings of the police, how would taxing everyone on your street more solve this problem?
It clearly wouldn't.
Hopefully, this helps all of you realize that if there is an unhealthy imbalance of wealth, it is foolish to punish everyone who happens to have wealth. The reason the imbalance exists is because of legislative tilting of the field and lack of enforcement of the law in the criminals' favor.
Therefore, raising taxes on the just and unjust alike will do nothing to eliminate the imbalance. Rather, it will actually incentivize the thieves to steal even more from your pocket to offset their taxes.
Unfortunately, the means by which today's thieves steal money from your pocket are so complex that most Americans are incapable or unwilling to discover these causes. They swallow and parrot whatever their favorite media pundits tell them, without realizing their idols are just as ignorant as they. In many cases, the methods by which they are robbed are so subtle that most Americans are not even aware they are being robbed. If they are aware, the criminals are so far removed from the robbed that the victims can only feel a sense of anger with no idea toward whom to properly direct it. So they settle their sights on whatever favorite target their idols aim them. The Jews, blacks, Democrats, etc.
It is time to wake up. Stop throwing the wrong people into the ovens. All of you. It isn't “the rich”. It isn't blacks who bought houses through the CRA.
You want some names?
Here is a list of names of people who belong in prison that can be provided to every Senator and Congressman:
1. Daniel Sparks and Tom Montag: Goldman Sachs. Constructed the fraudulent Timberwolf billion dollar toxic mortgage security and sold it to investors, then profited by betting against it. Deliberately stuffed the security with mortgages they knew were toxic so they could be on its failure while also profiting from its sale it to investors.
2. Brian H. Stoker: Citigroup. Constructed the fraudulent Class V Funding III CDO-squared which ripped off investors for over $700 million.
3. Fabrice Tourre: Goldman Sachs. Constructed the fraudulent Abacus 2007-ac1 CDO for which GS was fined but no one went to prison. Tourre allowed hedge fund manager John Paulson to select the toxic mortgages to be placed in the CDO so Goldman Sachs and Paulson could bet against it. Paulson believes when it comes to this kind of business, we should be supporting them and encouraging them.
4. Angelo Mozillo: Countrywide CEO. This guy and his financial officers committed the exact same kind of crime the Enron CEO and financial officers did, and yet he walks free. Mozillo kept telling investors that Countrywide was "consitently producing quality mortgages" while his internal memos show that he was well aware his company was creating the most toxic mortgages on the planet. The SEC originally demanded a jury trial for Mozillo, but he ultimately walked away with a fine and no admission of wrongdoing. This guy is the scummiest of the scum.
That's a good start.
Some legislative measures needed to level the field:
1. Outlaw naked credit default swaps.
2. Force OTC derivatives onto public exchanges
3. Repeal the Commodities Futures Modernization Act of 2000
3. Repeal the Gramm–Leach–Bliley Act
4. Start sending CDO fraudsters to prison
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