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

[KissMy]

If your city sewer district has been saving up for 15 years to replace their $300 million dollar treatment plant the EPA demands be replaced & the treasurer was persuaded to invest it in those "safe AAA rated MBS". Guess who pays??? Now they must barrow that money to build the plant at high rates from the same Wallstreet bank that screwed them on the MBS. Guess who pays??? It will now cost you billions.

Sure - Go right ahead & try to hold them accountable. They will cut off your sewer. They will not issue you a permit to install a septic tank. You will just be living in a steaming pile of shit.

 

[Oldstyle]

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 **** 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.

Wait a second...the root cause of the housing bubble and crash was government pressuring lending institutions to give mortgages to people who would never have qualified before in the name of "fairness". How can you then turn around and blame a lack of government regulation for the subsequent cratering of the real estate market? Canada didn't experience the same bubble and crash in THEIR real estate market simply because their lending institutions typically asked for 20% down on a mortgage. Let's be honest with ourselves here...if you put governmental pressure on banks to make loans that they shouldn't, it shouldn't shock you when those loans are defaulted on. When you pressure banks legislatively to pursue unwise banking practices or face the wrath of the Federal Government it's ludicrous to then turn around and say that MORE pressure is the answer to the resulting crash.

 

[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 **** 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.

Wait a second...the root cause of the housing bubble and crash was government pressuring lending institutions to give mortgages to people who would never have qualified before in the name of "fairness". How can you then turn around and blame a lack of government regulation for the subsequent cratering of the real estate market? Canada didn't experience the same bubble and crash in THEIR real estate market simply because their lending institutions typically asked for 20% down on a mortgage. Let's be honest with ourselves here...if you put governmental pressure on banks to make loans that they shouldn't, it shouldn't shock you when those loans are defaulted on. When you pressure banks legislatively to pursue unwise banking practices or face the wrath of the Federal Government it's ludicrous to then turn around and say that MORE pressure is the answer to the resulting crash.

It was a 2 way street. Banks wanted to become giant unregulated monopolies & the government wanted sub-prime lending. They made a deal to lend more sub-prime loans & spread the risk (code for make it systemic) if they could merge. They were allowed to repackage & sell these loans as AAA. That meant that Pension Funds, city treasurers & many other financial institutions who could only invest in AAA investments could buy this junk. It was EXTREMELY profitable to these huge new monopolies & their backers in congress. They went absolutely crazy lending & drank their own Kool-Aid when housing prices keep going up.

It caused us inflation & eventually lead to huge government debt. Government backs enterprises GSE's so it does not show up as government debt & the elected officials look good until the next guy steps in when it explodes. We now have huge systemic risk Wallstreet monopoly banks. We are at their mercy. Government bailed them out, they got huge bonuses for boning US. Ain't life grand.

The same happens to government pensions. They use the money for other projects to make themselves look good. The can gets kicked down the road until the pension fund is empty when the next guy comes into office.

Mitt Romney's dad did this same thing to us in 1972. That is how Mitt Romney knew how to cash in on the crash buying derivatives bets against the sub-prime bubble. They keep doing this to us over & over. Wallstreet colludes with DC to screw the responsible workers / taxpayers.

Alan Greenspan was flabbergasted that Wallstreet could not regulate itself.

Don't kid yourself, both parties wanted this bad. Democrats for obvious reasons. I was involved with Republicans who recruited me to use these loans to leverage homeowners to the max so they could buy their insurance products wrapped up in Charitable Remainder Trust (CRT). This would allow them to fund private schools in the "Thousand Points of Light" Bush Senior started. My insurance license bound me to only act in a fiduciary responsible manor. They pressured me to leverage people with mortgages which I could legally do, but again I said it would not be in their best interest. They said we know but so what, if you don't do it we will find someone that will. They were all showing me their big fancy boats, cars, houses & diamond rings they made selling this shit.

If we forced all financial institutions & employees to act in a fiduciary role, this shit would not happen. Because they would all be in jail now.

 

[Oldstyle]

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 **** 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.

Wait a second...the root cause of the housing bubble and crash was government pressuring lending institutions to give mortgages to people who would never have qualified before in the name of "fairness". How can you then turn around and blame a lack of government regulation for the subsequent cratering of the real estate market? Canada didn't experience the same bubble and crash in THEIR real estate market simply because their lending institutions typically asked for 20% down on a mortgage. Let's be honest with ourselves here...if you put governmental pressure on banks to make loans that they shouldn't, it shouldn't shock you when those loans are defaulted on. When you pressure banks legislatively to pursue unwise banking practices or face the wrath of the Federal Government it's ludicrous to then turn around and say that MORE pressure is the answer to the resulting crash.

It was a 2 way street. Banks wanted to become giant unregulated monopolies & the government wanted sub-prime lending. They made a deal to lend more sub-prime loans & spread the risk (code for make it systemic) if they could merge. They were allowed to repackage & sell these loans as AAA. That meant that Pension Funds, city treasurers & many other financial institutions who could only invest in AAA investments could buy this junk. It was EXTREMELY profitable to these huge new monopolies & their backers in congress. They went absolutely crazy lending & drank their own Kool-Aid when housing prices keep going up.

It caused us inflation & eventually lead to huge government debt. Government backs enterprises GSE's so it does not show up as government debt & the elected officials look good until the next guy steps in when it explodes. We now have huge systemic risk Wallstreet monopoly banks. We are at their mercy. Government bailed them out, they got huge bonuses for boning US. Ain't life grand.

The same happens to government pensions. They use the money for other projects to make themselves look good. The can gets kicked down the road until the pension fund is empty when the next guy comes into office.

Mitt Romney's dad did this same thing to us in 1972. That is how Mitt Romney knew how to cash in on the crash buying derivatives bets against the sub-prime bubble. They keep doing this to us over & over. Wallstreet colludes with DC to screw the responsible workers / taxpayers.

Alan Greenspan was flabbergasted that Wallstreet could not regulate itself.

Don't kid yourself, both parties wanted this bad. Democrats for obvious reasons. I was involved with Republicans who recruited me to use these loans to leverage homeowners to the max so they could buy their insurance products wrapped up in Charitable Remainder Trust (CRT). This would allow them to fund private schools in the "Thousand Points of Light" Bush Senior started. My insurance license bound me to only act in a fiduciary responsible manor. They pressured me to leverage people with mortgages which I could legally do, but again I said it would not be in their best interest. They said we know but so what, if you don't do it we will find someone that will. They were all showing me their big fancy boats, cars, houses & diamond rings they made selling this shit.

If we forced all financial institutions & employees to act in a fiduciary role, this shit would not happen. Because they would all be in jail now.

With all due respect, Kiss...banks that wished to merge were extorted to make loans that anyone with even a modicum of common sense knew shouldn't be made. The banks went along with it because they didn't have a choice. Then you turn around and point the finger at the banking industry and demand MORE regulations? Where are the calls to clean up the mess that Fannie Mae and Freddie Mac have become?

 

[Oldguy]

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.

According to Adam Smith, it is the free market economy which creates the government it needs, not the other way around. For western history up until this point, that meant democracy. However, we are now in a global economy which, if Smith is right, MUST lead to the creation of a world government in order to sustain the economy. There is no guarantee that government will be democratic, or even has to be.

Smoke on THAT for awhile.

 

[nodoginnafight]

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.

Superb point here.
Anyone who thinks completely unregulated capatlism is the way to go must have slept through their history classes.

 

[KissMy]

Wait a second...the root cause of the housing bubble and crash was government pressuring lending institutions to give mortgages to people who would never have qualified before in the name of "fairness". How can you then turn around and blame a lack of government regulation for the subsequent cratering of the real estate market? Canada didn't experience the same bubble and crash in THEIR real estate market simply because their lending institutions typically asked for 20% down on a mortgage. Let's be honest with ourselves here...if you put governmental pressure on banks to make loans that they shouldn't, it shouldn't shock you when those loans are defaulted on. When you pressure banks legislatively to pursue unwise banking practices or face the wrath of the Federal Government it's ludicrous to then turn around and say that MORE pressure is the answer to the resulting crash.

It was a 2 way street. Banks wanted to become giant unregulated monopolies & the government wanted sub-prime lending. They made a deal to lend more sub-prime loans & spread the risk (code for make it systemic) if they could merge. They were allowed to repackage & sell these loans as AAA. That meant that Pension Funds, city treasurers & many other financial institutions who could only invest in AAA investments could buy this junk. It was EXTREMELY profitable to these huge new monopolies & their backers in congress. They went absolutely crazy lending & drank their own Kool-Aid when housing prices keep going up.

It caused us inflation & eventually lead to huge government debt. Government backs enterprises GSE's so it does not show up as government debt & the elected officials look good until the next guy steps in when it explodes. We now have huge systemic risk Wallstreet monopoly banks. We are at their mercy. Government bailed them out, they got huge bonuses for boning US. Ain't life grand.

The same happens to government pensions. They use the money for other projects to make themselves look good. The can gets kicked down the road until the pension fund is empty when the next guy comes into office.

Mitt Romney's dad did this same thing to us in 1972. That is how Mitt Romney knew how to cash in on the crash buying derivatives bets against the sub-prime bubble. They keep doing this to us over & over. Wallstreet colludes with DC to screw the responsible workers / taxpayers.

Alan Greenspan was flabbergasted that Wallstreet could not regulate itself.

Don't kid yourself, both parties wanted this bad. Democrats for obvious reasons. I was involved with Republicans who recruited me to use these loans to leverage homeowners to the max so they could buy their insurance products wrapped up in Charitable Remainder Trust (CRT). This would allow them to fund private schools in the "Thousand Points of Light" Bush Senior started. My insurance license bound me to only act in a fiduciary responsible manor. They pressured me to leverage people with mortgages which I could legally do, but again I said it would not be in their best interest. They said we know but so what, if you don't do it we will find someone that will. They were all showing me their big fancy boats, cars, houses & diamond rings they made selling this shit.

If we forced all financial institutions & employees to act in a fiduciary role, this shit would not happen. Because they would all be in jail now.

With all due respect, Kiss...banks that wished to merge were extorted to make loans that anyone with even a modicum of common sense knew shouldn't be made. The banks went along with it because they didn't have a choice. Then you turn around and point the finger at the banking industry and demand MORE regulations? Where are the calls to clean up the mess that Fannie Mae and Freddie Mac have become?

If you think I have not raised hell about the GSE's & CRA then you are dumber than Forest Gump. I have threads dedicated to it. There was way more going though than just those.

Once they opened the door for this crap, Wallstreet drove a train through it.

 

[Oldstyle]

It was a 2 way street. Banks wanted to become giant unregulated monopolies & the government wanted sub-prime lending. They made a deal to lend more sub-prime loans & spread the risk (code for make it systemic) if they could merge. They were allowed to repackage & sell these loans as AAA. That meant that Pension Funds, city treasurers & many other financial institutions who could only invest in AAA investments could buy this junk. It was EXTREMELY profitable to these huge new monopolies & their backers in congress. They went absolutely crazy lending & drank their own Kool-Aid when housing prices keep going up.

It caused us inflation & eventually lead to huge government debt. Government backs enterprises GSE's so it does not show up as government debt & the elected officials look good until the next guy steps in when it explodes. We now have huge systemic risk Wallstreet monopoly banks. We are at their mercy. Government bailed them out, they got huge bonuses for boning US. Ain't life grand.

The same happens to government pensions. They use the money for other projects to make themselves look good. The can gets kicked down the road until the pension fund is empty when the next guy comes into office.

Mitt Romney's dad did this same thing to us in 1972. That is how Mitt Romney knew how to cash in on the crash buying derivatives bets against the sub-prime bubble. They keep doing this to us over & over. Wallstreet colludes with DC to screw the responsible workers / taxpayers.

Alan Greenspan was flabbergasted that Wallstreet could not regulate itself.

Don't kid yourself, both parties wanted this bad. Democrats for obvious reasons. I was involved with Republicans who recruited me to use these loans to leverage homeowners to the max so they could buy their insurance products wrapped up in Charitable Remainder Trust (CRT). This would allow them to fund private schools in the "Thousand Points of Light" Bush Senior started. My insurance license bound me to only act in a fiduciary responsible manor. They pressured me to leverage people with mortgages which I could legally do, but again I said it would not be in their best interest. They said we know but so what, if you don't do it we will find someone that will. They were all showing me their big fancy boats, cars, houses & diamond rings they made selling this shit.

If we forced all financial institutions & employees to act in a fiduciary role, this shit would not happen. Because they would all be in jail now.

With all due respect, Kiss...banks that wished to merge were extorted to make loans that anyone with even a modicum of common sense knew shouldn't be made. The banks went along with it because they didn't have a choice. Then you turn around and point the finger at the banking industry and demand MORE regulations? Where are the calls to clean up the mess that Fannie Mae and Freddie Mac have become?

If you think I have not raised hell about the GSE's & CRA then you are dumber than Forest Gump. I have threads dedicated to it. There was way more going though than just those.

Once they opened the door for this crap, Wallstreet drove a train through it.

So your solution is more "crap"?

Can we agree that when government attempts to legislatively engineer "fairness" they inevitably shoot themselves in the foot while doing so? The concept that everyone should be able to buy a house despite how much money they make or their credit history is one more example of ideology trumping common sense and when that occurs, bad things happen...like housing market collapses that lead to economic Armageddons.

 

[KissMy]

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.

Unregulated Capitalism is Extremist Political Ideology. It does not work in reality. Alan Greenspan & Hank Paulson were floored when they realized what happened. I believe they were physically ill. The Ayn Rand disciples are mislead in the worst way.

Once the rules are gone, you can't remain neutral as I tried to do. If I do not screw my fellow man, then someone else will. Then if I tried to help my friend or family who just got screwed, they would just screw them again, thus screwing myself. You lose customers, business, friends, family etc. You must go after your fellow man before someone goes after them & you. It is the furtherest thing from civilized society. Trust & investment vanish. Everyones efforts go into defending themselves & none into producing goods, services, & wealth. Therefore all wealth vanishes.

If you are not a insider financial wizard, but instead worked in another field dedicated & focused on your work, you will not know the rules were secretly changed. Then your investments, savings, business & job got destroyed before you were even told what happened or had a chance to defend yourself.

 

[pinkwaxfish]

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.

Unregulated Capitalism is Extremist Political Ideology. It does not work in reality. Alan Greenspan & Hank Paulson were floored when they realized what happened. I believe they were physically ill. The Ayn Rand disciples are mislead in the worst way.

Once the rules are gone, you can't remain neutral as I tried to do. If I do not screw my fellow man, then someone else will. Then if I tried to help my friend or family who just got screwed, they would just screw them again, thus screwing myself. You lose customers, business, friends, family etc. You must go after your fellow man before someone goes after them & you. It is the furtherest thing from civilized society. Trust & investment vanish. Everyones efforts go into defending themselves & none into producing goods, services, & wealth. Therefore all wealth vanishes.

If you are not a insider financial wizard, but instead worked in another field dedicated & focused on your work, you will not know the rules were secretly changed. Then your investments, savings, business & job got destroyed before you were even told what happened or had a chance to defend yourself.

You've had some interesting and informative points in this thread, but you've got to quit pretending that Hank Paulson, Alan Greenspan, and the banking crisis are anything other than BIG GOVERNMENT.

Doesn't matter that Greenspan once was a big fan of Ayn Rand and hard currency--by the mid-80s, he was the epitome of government interference in the market.

You believe that people will ceaselessly screw one another when left to their own devices, but that they somehow will become virtuous and believe in the common good of all once they get into the halls of government. But the political market has many more incentives for people to screw one another than the free market. The ballot box is a place where we can all try to steal from one another without any consequences. That's the problem.

 

[Toro]

http://www.usmessageboard.com/economy/70006-cra-not-to-blame-for-housing-debacle.html

 

[Toro]

As to the OP, I generally agree that capitalism is the driver of wealth creation, not democracy. I've never heard anyone argue that democracy causes wealth creation. Capitalism creates the most wealth for the most people, most of the time.

As for social "justice," that's more debatable. However, society tends to move forward when the economy is growing strongly.

 

[KissMy]

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.

Unregulated Capitalism is Extremist Political Ideology. It does not work in reality. Alan Greenspan & Hank Paulson were floored when they realized what happened. I believe they were physically ill. The Ayn Rand disciples are mislead in the worst way.

Once the rules are gone, you can't remain neutral as I tried to do. If I do not screw my fellow man, then someone else will. Then if I tried to help my friend or family who just got screwed, they would just screw them again, thus screwing myself. You lose customers, business, friends, family etc. You must go after your fellow man before someone goes after them & you. It is the furtherest thing from civilized society. Trust & investment vanish. Everyones efforts go into defending themselves & none into producing goods, services, & wealth. Therefore all wealth vanishes.

If you are not a insider financial wizard, but instead worked in another field dedicated & focused on your work, you will not know the rules were secretly changed. Then your investments, savings, business & job got destroyed before you were even told what happened or had a chance to defend yourself.

You've had some interesting and informative points in this thread, but you've got to quit pretending that Hank Paulson, Alan Greenspan, and the banking crisis are anything other than BIG GOVERNMENT.

Doesn't matter that Greenspan once was a big fan of Ayn Rand and hard currency--by the mid-80s, he was the epitome of government interference in the market.

You believe that people will ceaselessly screw one another when left to their own devices, but that they somehow will become virtuous and believe in the common good of all once they get into the halls of government. But the political market has many more incentives for people to screw one another than the free market. The ballot box is a place where we can all try to steal from one another without any consequences. That's the problem.

I witnessed lenders, brokers, dealers screwing people. They said they were & if I did not someone else will. I & most others refused to screw our customers. But that did not stop the few from taking advantage of the many as fast as possible including my customers. I was not aware at the time how many people were actually falling for this & got fleeced by these con-men claiming to have their best interest at heart. I also did not know how many con-men were out there around the country doing the same thing. Now I know it was enough to be systemic. Many of my customers went under because someone else fleeced them. So I may as well have done it myself & benefited from their misery instead of simply losing their business as they went under.

Yes this crap really happened. Most people are not financial wizards & actually trusted their financial advisor's. Most people have jobs like construction workers, nurses, diesel mechanics etc. What do they know about Wallstreet? That is why they go to financial experts to advise them. Even the experts can be tricked by complex shady dirivatives. When experts are not required to act as fiduciaries they get screwed & called Muppet's behind their backs. Now most do not trust financial advisor's who do have their best interest at heart. This kills investing, the economy & jobs. The few screwed the many & got away with the cash.

Laws, checks & balances keep vulture people in line. Then if someone breaks them they are removed from the system & jailed. Otherwise they take all they can because hey it' legal, so why not? Who cares government will take care of them when they lose their home & their retirement.

 

[Oldstyle]

Unregulated Capitalism is Extremist Political Ideology. It does not work in reality. Alan Greenspan & Hank Paulson were floored when they realized what happened. I believe they were physically ill. The Ayn Rand disciples are mislead in the worst way.

Once the rules are gone, you can't remain neutral as I tried to do. If I do not screw my fellow man, then someone else will. Then if I tried to help my friend or family who just got screwed, they would just screw them again, thus screwing myself. You lose customers, business, friends, family etc. You must go after your fellow man before someone goes after them & you. It is the furtherest thing from civilized society. Trust & investment vanish. Everyones efforts go into defending themselves & none into producing goods, services, & wealth. Therefore all wealth vanishes.

If you are not a insider financial wizard, but instead worked in another field dedicated & focused on your work, you will not know the rules were secretly changed. Then your investments, savings, business & job got destroyed before you were even told what happened or had a chance to defend yourself.

You've had some interesting and informative points in this thread, but you've got to quit pretending that Hank Paulson, Alan Greenspan, and the banking crisis are anything other than BIG GOVERNMENT.

Doesn't matter that Greenspan once was a big fan of Ayn Rand and hard currency--by the mid-80s, he was the epitome of government interference in the market.

You believe that people will ceaselessly screw one another when left to their own devices, but that they somehow will become virtuous and believe in the common good of all once they get into the halls of government. But the political market has many more incentives for people to screw one another than the free market. The ballot box is a place where we can all try to steal from one another without any consequences. That's the problem.

I witnessed lenders, brokers, dealers screwing people. They said they were & if I did not someone else will. I & most others refused to screw our customers. But that did not stop the few from taking advantage of the many as fast as possible including my customers. I was not aware at the time how many people were actually falling for this & got fleeced by these con-men claiming to have their best interest at heart. I also did not know how many con-men were out there around the country doing the same thing. Now I know it was enough to be systemic. Many of my customers went under because someone else fleeced them. So I may as well have done it myself & benefited from their misery instead of simply losing their business as they went under.

Yes this crap really happened. Most people are not financial wizards & actually trusted their financial advisor's. Most people have jobs like construction workers, nurses, diesel mechanics etc. What do they know about Wallstreet? That is why they go to financial experts to advise them. Even the experts can be tricked by complex shady dirivatives. When experts are not required to act as fiduciaries they get screwed & called Muppet's behind their backs. Now most do not trust financial advisor's who do have their best interest at heart. This kills investing, the economy & jobs. The few screwed the many & got away with the cash.

Laws, checks & balances keep vulture people in line. Then if someone breaks them they are removed from the system & jailed. Otherwise they take all they can because hey it' legal, so why not? Who cares government will take care of them when they lose their home & their retirement.

I'm sorry but the concept that people were "tricked" by their financial experts into buying houses that they couldn't afford is laughable. When you sit across the desk from someone who's telling you "In order to qualify for this loan you need to make $80,000 a year...how much do you make?" and you only make $40,000 but lie and tell them that you DO make $80,000 then you are fully cooperating in your own "trickery".

We got into this mess because lending institutions were not using due diligence when they were writing loans. They wrote "liar loans", relying on people's word instead of verifying income. That's bad banking...something we as a nation encouraged with the notion that EVERYONE should be able to buy a house. Bankers wrote bad loans because they no longer apt to hold those loans but instead bundled and sold them to third parties. If you're not going to hold a long term note then obviously you're not going to be all that concerned about it's stability. THAT'S bad banking as well.

Then our legislators dropped the ball by allowing those bundled loans to be classified as something other than a loan so that the financial institutions holding them didn't have to keep as large a cash balance in reserve to pay them off in case of a default. THAT is bad legislating.

So if you want to start putting people in jail for financial stupidity...which is what this was...then you better start building lots of new prisons because the people that lied on their loans are at fault...the bankers who didn't follow good banking procedures are at fault...and the legislators who decided that everyone should be able to buy a house are at fault.

 

[Freemason9]

As to the OP, I generally agree that capitalism is the driver of wealth creation, not democracy. I've never heard anyone argue that democracy causes wealth creation. Capitalism creates the most wealth for the most people, most of the time.

As for social "justice," that's more debatable. However, society tends to move forward when the economy is growing strongly.

And at one time, FEUDALISM was once the "driver of wealth creation." As was brutal invasion (Genghis Khan), slavery (Egypt and the U.S. South), fascism (Nazi Germany), totalitarianism (the Soviet Union), and communism (China).

Sometimes it just ain't that simple.

 

[KissMy]

You've had some interesting and informative points in this thread, but you've got to quit pretending that Hank Paulson, Alan Greenspan, and the banking crisis are anything other than BIG GOVERNMENT.

Doesn't matter that Greenspan once was a big fan of Ayn Rand and hard currency--by the mid-80s, he was the epitome of government interference in the market.

You believe that people will ceaselessly screw one another when left to their own devices, but that they somehow will become virtuous and believe in the common good of all once they get into the halls of government. But the political market has many more incentives for people to screw one another than the free market. The ballot box is a place where we can all try to steal from one another without any consequences. That's the problem.

I witnessed lenders, brokers, dealers screwing people. They said they were & if I did not someone else will. I & most others refused to screw our customers. But that did not stop the few from taking advantage of the many as fast as possible including my customers. I was not aware at the time how many people were actually falling for this & got fleeced by these con-men claiming to have their best interest at heart. I also did not know how many con-men were out there around the country doing the same thing. Now I know it was enough to be systemic. Many of my customers went under because someone else fleeced them. So I may as well have done it myself & benefited from their misery instead of simply losing their business as they went under.

Yes this crap really happened. Most people are not financial wizards & actually trusted their financial advisor's. Most people have jobs like construction workers, nurses, diesel mechanics etc. What do they know about Wallstreet? That is why they go to financial experts to advise them. Even the experts can be tricked by complex shady dirivatives. When experts are not required to act as fiduciaries they get screwed & called Muppet's behind their backs. Now most do not trust financial advisor's who do have their best interest at heart. This kills investing, the economy & jobs. The few screwed the many & got away with the cash.

Laws, checks & balances keep vulture people in line. Then if someone breaks them they are removed from the system & jailed. Otherwise they take all they can because hey it' legal, so why not? Who cares government will take care of them when they lose their home & their retirement.

I'm sorry but the concept that people were "tricked" by their financial experts into buying houses that they couldn't afford is laughable. When you sit across the desk from someone who's telling you "In order to qualify for this loan you need to make $80,000 a year...how much do you make?" and you only make $40,000 but lie and tell them that you DO make $80,000 then you are fully cooperating in your own "trickery".

We got into this mess because lending institutions were not using due diligence when they were writing loans. They wrote "liar loans", relying on people's word instead of verifying income. That's bad banking...something we as a nation encouraged with the notion that EVERYONE should be able to buy a house. Bankers wrote bad loans because they no longer apt to hold those loans but instead bundled and sold them to third parties. If you're not going to hold a long term note then obviously you're not going to be all that concerned about it's stability. THAT'S bad banking as well.

Then our legislators dropped the ball by allowing those bundled loans to be classified as something other than a loan so that the financial institutions holding them didn't have to keep as large a cash balance in reserve to pay them off in case of a default. THAT is bad legislating.

So if you want to start putting people in jail for financial stupidity...which is what this was...then you better start building lots of new prisons because the people that lied on their loans are at fault...the bankers who didn't follow good banking procedures are at fault...and the legislators who decided that everyone should be able to buy a house are at fault.

Some did straight out lie. The ones I am talking about were talked into lying or the lender actually changed the numbers or they did not lie at all. I am talking about people who had equity, low debt to income ratio, good credit & made their payments. They give them a presentation of how stupid it was to have good credit & not leverage it & have their equity trapped into just their home. They could max out their home equity credit & invest into the tax free insurance & investment product that returned more money. It would set up a tax free "charitable remainder trust" they could use to fund their childs education, protect them from lawsuits, get them a larger mortgage interest tax deduction plus their home would still go up in value for them covering the 'Negatively Amortizing Loans' they were sold.

People were also told to sign a Accredited Investors form waiving their SEC protections.

 

[Toro]

As to the OP, I generally agree that capitalism is the driver of wealth creation, not democracy. I've never heard anyone argue that democracy causes wealth creation. Capitalism creates the most wealth for the most people, most of the time.

As for social "justice," that's more debatable. However, society tends to move forward when the economy is growing strongly.

And at one time, FEUDALISM was once the "driver of wealth creation." As was brutal invasion (Genghis Khan), slavery (Egypt and the U.S. South), fascism (Nazi Germany), totalitarianism (the Soviet Union), and communism (China).

Sometimes it just ain't that simple.

Those are not drivers of wealth creation. They are, for the most part, methods of wealth redistribution.

 

[PratchettFan]

As to the OP, I generally agree that capitalism is the driver of wealth creation, not democracy. I've never heard anyone argue that democracy causes wealth creation. Capitalism creates the most wealth for the most people, most of the time.

As for social "justice," that's more debatable. However, society tends to move forward when the economy is growing strongly.

And at one time, FEUDALISM was once the "driver of wealth creation." As was brutal invasion (Genghis Khan), slavery (Egypt and the U.S. South), fascism (Nazi Germany), totalitarianism (the Soviet Union), and communism (China).

Sometimes it just ain't that simple.

Those are not drivers of wealth creation. They are, for the most part, methods of wealth redistribution.

Well, at the end there is only one driver of wealth creation. Society. Wealth is a meaningless concept absent society. Production does not create wealth without anyone to purchase what is produced, demand creates no wealth unless there is something to purchase. In a complex society, wealth is defined by money and other pieces of paper, which have no intrinsic value of themselves. Their value derives only from the agreement of the society to recognize them as value.

So anything which engenders a healthy society creates wealth.

 

[Freemason9]

As to the OP, I generally agree that capitalism is the driver of wealth creation, not democracy. I've never heard anyone argue that democracy causes wealth creation. Capitalism creates the most wealth for the most people, most of the time.

As for social "justice," that's more debatable. However, society tends to move forward when the economy is growing strongly.

And at one time, FEUDALISM was once the "driver of wealth creation." As was brutal invasion (Genghis Khan), slavery (Egypt and the U.S. South), fascism (Nazi Germany), totalitarianism (the Soviet Union), and communism (China).

Sometimes it just ain't that simple.

Those are not drivers of wealth creation. They are, for the most part, methods of wealth redistribution.

Your reply is meaningless and incorrect. All methods can be "credited" with creating wealth. HOW it is distributed seems to be your concern.

 

[Toro]

And at one time, FEUDALISM was once the "driver of wealth creation." As was brutal invasion (Genghis Khan), slavery (Egypt and the U.S. South), fascism (Nazi Germany), totalitarianism (the Soviet Union), and communism (China).

Sometimes it just ain't that simple.

Those are not drivers of wealth creation. They are, for the most part, methods of wealth redistribution.

Your reply is meaningless and incorrect. All methods can be "credited" with creating wealth. HOW it is distributed seems to be your concern.

All wealth is driven by productivity. All of it. Productivity allows us to create more with less. It allows us to create more food, more medicine, and more goods and services that make our lives easier in exchange for less resources. And all productivity comes from innovation. Economies can grow either through innovation or importing technologies that arise from innovation.

Most - but not all - innovation has arisen from the past two hundred years in the Western societies which practiced capitalism. Relatively little - but not zero - innovation has come from outside systems that practiced Western capitalism. This is why the richest countries are generally capitalist. Poor countries that have become wealthier have done through capitalism and/or importing western innovation or are beneficiaries of western innovation.