What is the goal of capitalism?

[TruthNotBS]

Which bailouts should we have stopped? Be specific.

Let capitalism collapse on its own, as it always does. Socialism saves capitalism every few years with public funds. The government should stop subsidizing capitalists. Let them rot.

 

[Toddsterpatriot]

Alright, let's cut to the chase. The Glass-Steagall Act was the bouncer at the party, making sure the rowdy crowd didn't crash in and wreck the place. When Glass-Steagall was repealed by the Gramm-Leach-Bliley Act in 1999, it was like the doors were thrown open and everyone, including the Wall Street jocks, were allowed to rush in with their beer funnels.

First, it's clear as day that Glass-Steagall kept the lunatics in the asylum. Commercial banks, you know, the guys you trust with your life savings, were not allowed to gamble it away in the Wall Street casino. Without Glass-Steagall, they jumped into bed with the high-risk-taking crowd. Paul Volcker, former Federal Reserve Chairman, was one of the big guns who supported bringing back Glass-Steagall. He knew the financial world like the back of his hand, and he argued that separating commercial and investment banking was essential for financial stability.

Non-Bank Financial Institutions? Sure, Lehman Brothers wasn't a traditional bank, but guess what? Without Glass-Steagall, everyone was playing in the same muddy puddle. If Glass-Steagall had been in place, Lehman's crash wouldn't have splashed as much dirt on the traditional banks. Less intermingling, less cross-contamination.

Globalization and Innovation? That's like blaming the car for the accident and not the drunk driver. The fact that the financial world got more complex is all the more reason we needed a chaperone like Glass-Steagall. Nobel Prize-winning economist Joseph Stiglitz was on the money when he said repealing Glass-Steagall contributed to the global contagion of the meltdown.

Shadow Banking? That's the black market of banking. But if Glass-Steagall had been around, the shadow banking system wouldn't have had the traditional banks to lean on.

So, the bottom line is that Glass-Steagall had our backs. It kept the financial system from turning into a free-for-all and could have stopped 2008 from taking the economy on Mr. Toad's Wild Ride.

Without Glass-Steagall, they jumped into bed with the high-risk-taking crowd. Paul Volcker, former Federal Reserve Chairman, was one of the big guns who supported bringing back Glass-Steagall. He knew the financial world like the back of his hand, and he argued that separating commercial and investment banking was essential for financial stability.

That's awesome.

But what would Glass Steagall have done to prevent the 2008 recession? Be specific

 

[TruthNotBS]

Foxfyre,
I agree with your first paragraph, but I need to make some clarifications for the sake of future discussions. There are two separate matters that people tend to clump into a single concept:
1) The production system or economic system : socialist, capitalist, mixed economy.
2) The form of government: democracy, bi-party democracy, single-party democracy, dictatorship, monarchy.
Some examples:
- France :
Economic system: mixed economy ( mostly capitalist)
Form of government: democracy
- Saudi Arabia
Economic system: mixed economy (mostly capitalist)
Form of government: monarchy
- China
Economic system: mixed economy ( half state-owned enterprises: mostly socialist)
Form of government: single-party democracy... it is not an actual dictatorship people do vote for candidates, but they are all sanctioned by a single party... how different is that when there are only 2 parties and no direct vote?
Liberty has many aspects, but we can diferentiate at least 2:
economic liberty - a product of having wealth and working it the option you consider the best option.
political liberty - having the right to express your ideas and choose the direction of the government.
They are not the same , but they have effect on each other.

A mixed economy is the way to go until technology necessitates adopting a non-profit system of production.

 

[TruthNotBS]

Without Glass-Steagall, they jumped into bed with the high-risk-taking crowd. Paul Volcker, former Federal Reserve Chairman, was one of the big guns who supported bringing back Glass-Steagall. He knew the financial world like the back of his hand, and he argued that separating commercial and investment banking was essential for financial stability.

That's awesome.

But what would Glass Steagall have done to prevent the 2008 recession? Be specific

Let me help you again:

• 
  Reducing Risk-Taking and Excessive Leverage: By keeping commercial and investment banking separate, the Glass-Steagall Act would have ensured that banks could not use deposits (which are federally insured) for speculative trading. This separation would have inherently reduced the amount of leverage in the system. Senator Elizabeth Warren, a proponent of a modern version of Glass-Steagall, argued that the repeal of the Act led to the banks making riskier investments, which contributed to the 2008 financial crisis.
• Preventing Contagion: The Glass-Steagall Act would have made the financial sector more modular. The failure of investment banks would not have had the domino effect on commercial banks, and the crisis could have been contained. Nobel laureate economist Joseph Stiglitz has argued that the repeal of Glass-Steagall contributed to the contagion that spread the crisis from Wall Street to Main Street.
• Mitigating Conflicts of Interest: The Act would have prevented banks from owning, investing, or trading risky assets, which would reduce conflicts of interest and make sure that banks focused on lending to households and businesses.

 

[Toddsterpatriot]

Let capitalism collapse on its own, as it always does. Socialism saves capitalism every few years with public funds. The government should stop subsidizing capitalists. Let them rot.

No specifics?

 

[Foxfyre]

Foxfyre,
I agree with your first paragraph, but I need to make some clarifications for the sake of future discussions. There are two separate matters that people tend to clump into a single concept:
1) The production system or economic system : socialist, capitalist, mixed economy.
2) The form of government: democracy, bi-party democracy, single-party democracy, dictatorship, monarchy.
Some examples:
- France :
Economic system: mixed economy ( mostly capitalist)
Form of government: democracy
- Saudi Arabia
Economic system: mixed economy (mostly capitalist)
Form of government: monarchy
- China
Economic system: mixed economy ( half state-owned enterprises: mostly socialist)
Form of government: single-party democracy... it is not an actual dictatorship people do vote for candidates, but they are all sanctioned by a single party... how different is that when there are only 2 parties and no direct vote?
Liberty has many aspects, but we can diferentiate at least 2:
economic liberty - a product of having wealth and working it the option you consider the best option.
political liberty - having the right to express your ideas and choose the direction of the government.
They are not the same , but they have effect on each other.

And there is no such thing as any perfect system as all are designed and implemented by imperfect people. And we have no other options than that.

But I still maintain that a free market capitalist system that is regulated in that it cannot legally do physical or economic violence to benefit itself is the best system to produce individual liberty, choices, options, opportunities, quality of life and prosperity that has ever been devised.

One of the best analogies to explain that I've ever seen written was by Walter E. Williams, PhD in his essay "Economic Miracle":

Excerpt:
". . .The average well-stocked supermarket carries over 60,000 different items. Because those items are so routinely available to us, the fact that it is a near miracle goes unnoticed and unappreciated. Take just one of those items — canned tuna. Pretend that Congress appoints you tuna czar; that’s not totally out of the picture in light of the fact that Congress has recently proposed a car czar for our auto industry. My question to you as tuna czar is: Can you identify and tell us how to organize all of the inputs necessary to get tuna out of the sea and into a supermarket? The most obvious inputs are fishermen, ships, nets, canning factories and trucks. But how do you organize the inputs necessary to build a ship, to provide the fuel, and what about the compass? The trucks need tires, seats and windshields.

It is not a stretch of the imagination to suggest that millions of inputs and people cooperate with one another to get canned tuna to your supermarket.

But what is the driving force that explains how millions of people manage to cooperate to get 60,000 different items to your supermarket? Most of them don’t give a hoot about you and me, some of them might hate Americans, but they serve us well and they do so voluntarily. The bottom line motivation for the cooperation is people are in it for themselves; they want more profits, wages, interest and rent, or to use today’s silly talk — people are greedy.

Adam Smith, the father of economics, captured the essence of this wonderful human cooperation when he said, “He (the businessman) generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. … He intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain.” Adam Smith continues, “He is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. … By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.” And later he adds, “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest.” . . ."

Economic Miracle

The idea that even the brightest person or group of bright people, much less the U.S. Congress, can wisely manage an economy has to be the height of arrogance and conceit. Why? It is impossible for anyone to possess the knowledge that would be necessary for such an undertaking. At the risk of...

walterewilliams.com

 

[Toddsterpatriot]

Let me help you again:

• 
  Reducing Risk-Taking and Excessive Leverage: By keeping commercial and investment banking separate, the Glass-Steagall Act would have ensured that banks could not use deposits (which are federally insured) for speculative trading. This separation would have inherently reduced the amount of leverage in the system. Senator Elizabeth Warren, a proponent of a modern version of Glass-Steagall, argued that the repeal of the Act led to the banks making riskier investments, which contributed to the 2008 financial crisis.
• Preventing Contagion: The Glass-Steagall Act would have made the financial sector more modular. The failure of investment banks would not have had the domino effect on commercial banks, and the crisis could have been contained. Nobel laureate economist Joseph Stiglitz has argued that the repeal of Glass-Steagall contributed to the contagion that spread the crisis from Wall Street to Main Street.
• Mitigating Conflicts of Interest: The Act would have prevented banks from owning, investing, or trading risky assets, which would reduce conflicts of interest and make sure that banks focused on lending to households and businesses.

Help me by explaining what part of Glass-Steagall would have prevented banks from writing or buying crappy mortgages?

 

[Toddsterpatriot]

A mixed economy is the way to go until technology necessitates adopting a non-profit system of production.

Like Cuba's. Do you still have to bring your own bedding and aspirin in Cuba?

 

[TruthNotBS]

Help me by explaining what part of Glass-Steagall would have prevented banks from writing or buying crappy mortgages?

The Glass-Steagall’s separation of investment and commercial banking would have put the brakes on the wild mortgage party. Commercial banks started acting like reckless teenagers, getting into bed with risky mortgage-backed securities. They were more incentivized to issue mortgages, even crappy ones, because they could just bundle them, sell them off as securities, and wash their hands clean.

But here's the deal: if Glass-Steagall was in place, commercial banks wouldn't have had as much skin in the mortgage-backed securities game. They would have been more cautious about who they lent to because they couldn’t just offload those mortgages to the investment banking side.

Additionally, investment banks, freed from the constraints, were snapping up these mortgages like hotcakes. They were fueling the fire, making it profitable for commercial banks to keep churning out these risky loans.

If Glass-Steagall were still standing guard, investment banks would have been less able to create this insatiable market for mortgage-backed securities, and commercial banks would have been more judicious in their lending.

In a way, Glass-Steagall would have kept everyone in check and would have made sure the banks didn’t treat mortgages like chips in a casino. The house of cards that was built on these crappy mortgages would not have been piled so high, and the fallout wouldn’t have been as severe.

 

[TruthNotBS]

Like Cuba's. Do you still have to bring your own bedding and aspirin in Cuba?

Cuba isn't a mixed economy, it's a sanctioned economy in the shadow of a very powerful adversary. A better example of a mixed economy would be Western European countries. A mix of capitalism and socialism. Countries with markets and a robust social safety net for the working class.

 

[otto105]

Over the head of a liberal, I know.

Sorry, I don’t speak conserabonics.

 

[otto105]

Without Glass-Steagall, they jumped into bed with the high-risk-taking crowd. Paul Volcker, former Federal Reserve Chairman, was one of the big guns who supported bringing back Glass-Steagall. He knew the financial world like the back of his hand, and he argued that separating commercial and investment banking was essential for financial stability.

That's awesome.

But what would Glass Steagall have done to prevent the 2008 recession? Be specific

He already was.

 

[TruthNotBS]

He already was.

He's a pedantic, disingenuous twerp.

 

[Toddsterpatriot]

The Glass-Steagall’s separation of investment and commercial banking would have put the brakes on the wild mortgage party. Commercial banks started acting like reckless teenagers, getting into bed with risky mortgage-backed securities. They were more incentivized to issue mortgages, even crappy ones, because they could just bundle them, sell them off as securities, and wash their hands clean.

But here's the deal: if Glass-Steagall was in place, commercial banks wouldn't have had as much skin in the mortgage-backed securities game. They would have been more cautious about who they lent to because they couldn’t just offload those mortgages to the investment banking side.

Additionally, investment banks, freed from the constraints, were snapping up these mortgages like hotcakes. They were fueling the fire, making it profitable for commercial banks to keep churning out these risky loans.

If Glass-Steagall were still standing guard, investment banks would have been less able to create this insatiable market for mortgage-backed securities, and commercial banks would have been more judicious in their lending.

In a way, Glass-Steagall would have kept everyone in check and would have made sure the banks didn’t treat mortgages like chips in a casino. The house of cards that was built on these crappy mortgages would not have been piled so high, and the fallout wouldn’t have been as severe.

The Glass-Steagall’s separation of investment and commercial banking would have put the brakes on the wild mortgage party.

It wouldn't have stopped a single bank from writing or buying a single crappy mortgage.

They were more incentivized to issue mortgages, even crappy ones, because they could just bundle them, sell them off as securities, and wash their hands clean.

Mortgages were sold and securitized under Glass-Steagall.

Additionally, investment banks, freed from the constraints, were snapping up these mortgages like hotcakes.

Investment banks bought and securitized mortgages under Glass-Steagall.

If Glass-Steagall were still standing guard, investment banks would have been less able to create this insatiable market for mortgage-backed securities

Post the section of Glass-Steagall that you feel could have stopped it.

In a way, Glass-Steagall would have kept everyone in check and would have made sure the banks didn’t treat mortgages like chips in a casino.

You're lying. Or ignorant.

 

[Toddsterpatriot]

Cuba isn't a mixed economy, it's a sanctioned economy in the shadow of a very powerful adversary. A better example of a mixed economy would be Western European countries. A mix of capitalism and socialism. Countries with markets and a robust social safety net for the working class.

A mixed economy is the way to go until technology necessitates adopting a non-profit system of production.

Like Cuba's non-profit system?

 

[Toddsterpatriot]

He already was.

Not even a little bit.

 

[otto105]

The Glass-Steagall’s separation of investment and commercial banking would have put the brakes on the wild mortgage party.

It wouldn't have stopped a single bank from writing or buying a single crappy mortgage.

They were more incentivized to issue mortgages, even crappy ones, because they could just bundle them, sell them off as securities, and wash their hands clean.

Mortgages were sold and securitized under Glass-Steagall.

Additionally, investment banks, freed from the constraints, were snapping up these mortgages like hotcakes.

Investment banks bought and securitized mortgages under Glass-Steagall.

If Glass-Steagall were still standing guard, investment banks would have been less able to create this insatiable market for mortgage-backed securities

Post the section of Glass-Steagall that you feel could have stopped it.

In a way, Glass-Steagall would have kept everyone in check and would have made sure the banks didn’t treat mortgages like chips in a casino.

You're lying. Or ignorant.

You’re the one lying and/or ignorant.

 

[Toddsterpatriot]

He's a pedantic, disingenuous twerp.

Who is kicking your commie ass........

 

[Toddsterpatriot]

You’re the one lying and/or ignorant.

Help old Karl out, if you can.
I'm not hopeful.........

 

[TruthNotBS]

The Glass-Steagall’s separation of investment and commercial banking would have put the brakes on the wild mortgage party.

It wouldn't have stopped a single bank from writing or buying a single crappy mortgage.

They were more incentivized to issue mortgages, even crappy ones, because they could just bundle them, sell them off as securities, and wash their hands clean.

Mortgages were sold and securitized under Glass-Steagall.

Additionally, investment banks, freed from the constraints, were snapping up these mortgages like hotcakes.

Investment banks bought and securitized mortgages under Glass-Steagall.

If Glass-Steagall were still standing guard, investment banks would have been less able to create this insatiable market for mortgage-backed securities

Post the section of Glass-Steagall that you feel could have stopped it.

In a way, Glass-Steagall would have kept everyone in check and would have made sure the banks didn’t treat mortgages like chips in a casino.

You're lying. Or ignorant.

1. "It wouldn't have stopped a single bank from writing or buying a single crappy mortgage." Response: Banks could have still written crappy mortgages, but Glass-Steagall would have kept commercial banks from getting high on the investment banking supply. That means fewer incentives to create risky mortgages. It’s about keeping the appetite in check, my dear Watson. Sometimes less is more.
2. "Mortgages were sold and securitized under Glass-Steagall." Response: Indeed, but here's the thing: size matters. Before the repeal, we’re talking about a lemonade stand; after the repeal, it’s a multinational soda corporation. The scale and sheer audacity of the mortgages being sold and securitized went supernova. Glass-Steagall, had a lid on that Tupperware.
3. "Investment banks bought and securitized mortgages under Glass-Steagall." Response: Ah, yes, they did. But, investment banks were more like lone wolves howling at the moon. When Glass-Steagall got thrown out, it was like a pack of wolves with a megaphone. The synergy between commercial and investment banks amplified the buying and securitization of these mortgages, turning a campfire into a bonfire. Glass-Steagall kept the fire extinguisher handy.
4. "Post the section of Glass-Steagall that you feel could have stopped it." Response: The Act's Section 16 had this little gem, stating that commercial banks could only be "engaged principally" in securities if they were “characteristically a banking one.” And Section 21 asserted that investment banks couldn’t galavant around taking deposits. These two were like the dynamic duo keeping everyone on their side of the playground.
5. "You're lying. Or ignorant." Response: Ah, the sweet sound of discourse!