What is the goal of capitalism?

[TruthNotBS]

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

A pedantic, disingenuous, and delusional twerp.

 

[Toddsterpatriot]

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!

Response: Banks could have still written crappy mortgages, but Glass-Steagall would have kept commercial banks from getting high on the investment banking supply.

Commercial banks didn't need investment banks for crappy mortgages.

That means fewer incentives to create risky mortgages.

No reduction in incentives to sell mortgages under Glass-Steagall.
And they still had Fannie and Freddie to feed.

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.

Glass-Steagall didn't stop a single investment bank from buying a single mortgage from a single commercial bank. Glass-Steagall didn't stop a single investment bank from securitizing a single one of those mortgages.

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.”

Which commercial banks failed or even got in trouble from "engaging principally" in securities?

And Section 21 asserted that investment banks couldn’t galavant around taking deposits.

Which investment banks failed or even got in trouble from "galavanting around taking deposits"?

Ah, the sweet sound of discourse!

Ah, the truth hurts.

 

[Toddsterpatriot]

A pedantic, disingenuous, and delusional twerp.

With his foot all the way up your commie ass.

 

[TruthNotBS]

With his foot all the way up your commie ass.

Only in your sick mind.

 

[Toddsterpatriot]

Only in your sick mind.

My boot tickling your tiny brain?

 

[Mexicano]

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

I agree regulated capitalism is probably the best option we have right now.
Chinese steady and fast growth baffles me. So I have my qualms on that topic. I don't know how a single-party system can be so effective at reaching its goals.

The US has two weakness : housing , it has been going through a housing bubble for 2 decades.
The healthcare system : it is not nearly universal and its the most expensive in the world.

Regarding planning... yes supply and demand were the best options to allocate and create product variations. But then came MRP (first use in 1964, mass use in 1980) which is actually used by most firms. And now we have AI's that are good at cracking multidimensional problems with billions of data points. So markets are probably not the only possible solution.

 

[Toddsterpatriot]

I agree regulated capitalism is probably the best option we have right now.
Chinese steady and fast growth baffles me. So I have my qualms on that topic. I don't know how a single-party system can be so effective at reaching its goals.

The US has two weakness : housing , it has been going through a housing bubble for 2 decades.
The healthcare system : it is not nearly universal and its the most expensive in the world.

Regarding planning... yes supply and demand were the best options to allocate and create product variations. But then came MRP (first use in 1964, mass use in 1980) which is actually used by most firms. And now we have AI's that are good at cracking multidimensional problems with billions of data points. So markets are probably not the only possible solution.

Chinese steady and fast growth baffles me.

Commies lie.

 

[TruthNotBS]

Response: Banks could have still written crappy mortgages, but Glass-Steagall would have kept commercial banks from getting high on the investment banking supply.

Commercial banks didn't need investment banks for crappy mortgages.

That means fewer incentives to create risky mortgages.

No reduction in incentives to sell mortgages under Glass-Steagall.
And they still had Fannie and Freddie to feed.

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.

Glass-Steagall didn't stop a single investment bank from buying a single mortgage from a single commercial bank. Glass-Steagall didn't stop a single investment bank from securitizing a single one of those mortgages.

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.”

Which commercial banks failed or even got in trouble from "engaging principally" in securities?

And Section 21 asserted that investment banks couldn’t galavant around taking deposits.

Which investment banks failed or even got in trouble from "galavanting around taking deposits"?

Ah, the sweet sound of discourse!

Ah, the truth hurts.

"Commercial banks didn't need investment banks for crappy mortgages."

The ability to securitize and offload those mortgages was enhanced by the eroding barriers between commercial and investment banking. When commercial banks knew they could easily sell these mortgages to investment banks, it contributed to a lowering of lending standards.

"No reduction in incentives to sell mortgages under Glass-Steagall. And they still had Fannie and Freddie to feed."

Fannie and Freddie did play a role, but the sheer scale of securitization was greatly increased by the more intimate relationship between commercial and investment banks post-Glass-Steagall. The Financial Crisis Inquiry Commission’s report points to the deregulation caused by the repeal of Glass-Steagall as a contributing factor to the crisis (Source).

https://fcic-static.law.stanford.edu/cdn_media/fcic-reports/fcic_final_report_full.pdf

"Glass-Steagall didn't stop a single investment bank from buying a single mortgage from a single commercial bank. Glass-Steagall didn't stop a single investment bank from securitizing a single one of those mortgages."

While this is correct, Glass-Steagall created a separation that made it less rampant. The volume and scale went through the roof post-repeal. The investment banks, once separated, could now work directly with commercial banks, making it easier to engage in large-scale securitization. The consequences of this were highlighted by several economists, including Joseph Stiglitz, a Nobel Prize-winning economist:

Joseph Stiglitz - The FRONTLINE Interview

www.pbs.org

"Which commercial banks failed or even got in trouble from 'engaging principally' in securities?"

Citigroup had to be bailed out due to its exposure to mortgage-backed securities after engaging heavily in securities. Washington Mutual is another example; it became the largest bank failure in U.S. history, mainly due to its heavy involvement in the subprime mortgage market. The Financial Crisis Inquiry Commission noted that heavy engagement in securities trading was a contributing factor.

"Which investment banks failed or even got in trouble from 'galavanting around taking deposits'?"

Lehman Brothers and Bear Stearns were not taking deposits in the traditional sense but were significantly involved in the mortgage market, and this overexposure led to their downfall. Former Chairman of the Federal Reserve Paul Volcker pointed to the mixing of commercial and investment banking contributing to the risky behavior of these institutions (Source).

A Rise in Pessimism in the Corner Office (Published 2009)

Corporate bosses across the globe fear that this downturn may be fundamental, not just cyclical.

www.nytimes.com

"Ah, the truth hurts."

The truth is that Glass-Steagall provided an essential buffer. While its absence wasn't the only cause of the crisis, it was a critical piece of the puzzle. The scaling up of risk and lack of sufficient buffers led to a domino effect.

 

[TruthNotBS]

My boot tickling your tiny brain?

You have your boot up your own ass.

 

[Foxfyre]

I agree regulated capitalism is probably the best option we have right now.
Chinese steady and fast growth baffles me. So I have my qualms on that topic. I don't know how a single-party system can be so effective at reaching its goals.

The US has two weakness : housing , it has been going through a housing bubble for 2 decades.
The healthcare system : it is not nearly universal and its the most expensive in the world.

Regarding planning... yes supply and demand were the best options to allocate and create product variations. But then came MRP (first use in 1964, mass use in 1980) which is actually used by most firms. And now we have AI's that are good at cracking multidimensional problems with billions of data points. So markets are probably not the only possible solution.

The reason we have problems with housing and healthcare is irresponsible in harmful meddling by the U.S. government. Until enough Americans have enough history, economic, and sociopolitical understanding to realize how harmful unnecessary and unreasonable government meddling is to quality of life, opportunity, choice, options, liberties, we won't remedy the problem.

The answer is not in changing our form of government. It is changing those in government--elected and appointed leaders, bureaucrats, rank and file employees, contractors etc. who created this mess and installing those who do have practical history economic and sociopolitical understanding of the principles this country was founded on and restoring the government to its original intent.

First rule of good management:
--you cannot fix a bad system by changing the people.
--you cannot fix bad people by changing the system.

Second rule of good management:
--If the new thing isn't working, scrap it and go back to the one that worked plus
if it ain't broke, don't fix it.

 

[TruthNotBS]

The reason we have problems with housing and healthcare is irresponsible in harmful meddling by the U.S. government. Until enough Americans have enough history, economic, and sociopolitical understanding to realize how harmful unnecessary and unreasonable government meddling is to quality of life, opportunity, choice, options, liberties, we won't remedy the problem.

The answer is not in changing our form of government. It is changing those in government--elected and appointed leaders, bureaucrats, rank and file employees, contractors etc. who created this mess and installing those who do have practical history economic and sociopolitical understanding of the principles this country was founded on and restoring the government to its original intent.

First rule of good management:
--you cannot fix a bad system by changing the people.
--you cannot fix bad people by changing the system.

Second rule of good management:
--If the new thing isn't working, scrap it and go back to the one that worked plus
if it ain't broke, don't fix it.

“The reason we have problems with housing and healthcare is irresponsible in harmful meddling by the U.S. government.”

It’s too simplistic to pin all the problems of housing and healthcare solely on government meddling. In reality, these sectors are influenced by a myriad of factors including market dynamics, private sector practices, and yes, government policies. But let's not forget the vital role government has played in housing through programs like the GI Bill, which helped millions of veterans afford homes. Similarly, in healthcare, Medicare and Medicaid have been lifelines for the elderly and the underprivileged.

“Until enough Americans have enough history, economic, and sociopolitical understanding to realize how harmful unnecessary and unreasonable government meddling is to quality of life, opportunity, choice, options, liberties, we won't remedy the problem.”

It’s imperative to recognize that government intervention has often been essential in addressing market failures and ensuring social welfare. The Clean Air Act, for example, is a government intervention that drastically improved air quality and public health. Social Security is another example where government intervention has provided essential support to retirees.

“The answer is not in changing our form of government. It is changing those in government--elected and appointed leaders, bureaucrats, rank and file employees, contractors etc. who created this mess and installing those who do have practical history economic and sociopolitical understanding of the principles this country was founded on and restoring the government to its original intent.”

Change is not just about the people; it’s also about adapting institutions and policies to meet the changing needs of society. Our Founding Fathers were insightful, but they couldn't foresee all the complexities of the 21st century. Adapting and modernizing government is not a betrayal of original principles; it's a necessary evolution.

“First rule of good management: --you cannot fix a bad system by changing the people. --you cannot fix bad people by changing the system.”

This oversimplifies the issue. In reality, systemic change and personnel change often go hand-in-hand. Systems and people influence each other. For example, implementing a new healthcare policy requires both systemic change and ensuring the right people are in place to execute it effectively.

“Second rule of good management: --If the new thing isn't working, scrap it and go back to the one that worked plus if it ain't broke, don't fix it.”

This argument assumes that there’s always an old way that worked better, which is not necessarily true. Also, the world is ever-evolving, and what worked in the past might not be applicable today. There’s a reason we don’t use typewriters anymore. Progress is about analyzing, adapting, and sometimes, inventing anew. It’s not about blind adherence to the past or unfettered embrace of the new; it’s about thoughtful evolution in response to an ever-changing world.

 

[iamwhatiseem]

The best description of all - "There has simply been no other system which has ended the kind of grinding poverty that existed in every society prior to it, than capitalism."

 

[Mac-7]

There is no such thing as a "free capitalist" society. When was last time you participated in an election in the workplace?

First I agree with your assessment that 1950-1980 were the golden years for American workers

In those days we made practically everything we needed in this country and American workers were the highest paid in the world

Thats not true now and we can discuss that later

But as for workers voting on how a business is to be run thats silly

The owners of the business are the final authority on that

And should be

 

[Toddsterpatriot]

"Commercial banks didn't need investment banks for crappy mortgages."

The ability to securitize and offload those mortgages was enhanced by the eroding barriers between commercial and investment banking. When commercial banks knew they could easily sell these mortgages to investment banks, it contributed to a lowering of lending standards.

"No reduction in incentives to sell mortgages under Glass-Steagall. And they still had Fannie and Freddie to feed."

Fannie and Freddie did play a role, but the sheer scale of securitization was greatly increased by the more intimate relationship between commercial and investment banks post-Glass-Steagall. The Financial Crisis Inquiry Commission’s report points to the deregulation caused by the repeal of Glass-Steagall as a contributing factor to the crisis (Source).

https://fcic-static.law.stanford.edu/cdn_media/fcic-reports/fcic_final_report_full.pdf

"Glass-Steagall didn't stop a single investment bank from buying a single mortgage from a single commercial bank. Glass-Steagall didn't stop a single investment bank from securitizing a single one of those mortgages."

While this is correct, Glass-Steagall created a separation that made it less rampant. The volume and scale went through the roof post-repeal. The investment banks, once separated, could now work directly with commercial banks, making it easier to engage in large-scale securitization. The consequences of this were highlighted by several economists, including Joseph Stiglitz, a Nobel Prize-winning economist:

Joseph Stiglitz - The FRONTLINE Interview

www.pbs.org

"Which commercial banks failed or even got in trouble from 'engaging principally' in securities?"

Citigroup had to be bailed out due to its exposure to mortgage-backed securities after engaging heavily in securities. Washington Mutual is another example; it became the largest bank failure in U.S. history, mainly due to its heavy involvement in the subprime mortgage market. The Financial Crisis Inquiry Commission noted that heavy engagement in securities trading was a contributing factor.

"Which investment banks failed or even got in trouble from 'galavanting around taking deposits'?"

Lehman Brothers and Bear Stearns were not taking deposits in the traditional sense but were significantly involved in the mortgage market, and this overexposure led to their downfall. Former Chairman of the Federal Reserve Paul Volcker pointed to the mixing of commercial and investment banking contributing to the risky behavior of these institutions (Source).

A Rise in Pessimism in the Corner Office (Published 2009)

Corporate bosses across the globe fear that this downturn may be fundamental, not just cyclical.

www.nytimes.com

"Ah, the truth hurts."

The truth is that Glass-Steagall provided an essential buffer. While its absence wasn't the only cause of the crisis, it was a critical piece of the puzzle. The scaling up of risk and lack of sufficient buffers led to a domino effect.

The ability to securitize and offload those mortgages was enhanced by the eroding barriers between commercial and investment banking.

Not even a little bit.

When commercial banks knew they could easily sell these mortgages to investment banks, it contributed to a lowering of lending standards.

Glass-Steagall didn't stop these sales.

Glass-Steagall created a separation that made it less rampant.

Banks could sell to Goldman under Glass-Steagall; banks could sell to Goldman after Glass-Steagall.

The investment banks, once separated, could now work directly with commercial banks, making it easier to engage in large-scale securitization.

They could work just as directly under Glass-Steagall.

Citigroup had to be bailed out due to its exposure to mortgage-backed securities

Are you telling me a bank got in trouble because of crappy mortgages?
Tell me more. LOL!

Lehman Brothers and Bear Stearns were not taking deposits in the traditional sense but were significantly involved in the mortgage market, and this overexposure led to their downfall.

Two investment banks that weren't taking deposits got in trouble because of crappy mortgages? Tell me more. LOL!

 

[TruthNotBS]

The best description of all - "There has simply been no other system which has ended the kind of grinding poverty that existed in every society prior to it, than capitalism."

Firstly, it is essential to recognize that capitalism has not acted alone. Mixed economies, where there is a combination of free markets and significant government intervention, have been the norm in most developed nations. This has been critical in creating safety nets, public goods, and ensuring stability, as pure capitalism can lead to inequality and market failures.

Additionally, the historical context cannot be ignored. The rise of capitalism in Europe and the United States was intrinsically tied to colonialism and the exploitation of resources and labor from colonized nations. As Immanuel Wallerstein, the renowned sociologist and economic historian noted in his World-Systems Theory, the wealth accumulation in capitalist countries was often a result of unequal exchanges with the periphery or colonized nations. This economic gain for the colonizers often came at the expense of the economic development and wellbeing of the colonized.

Moreover, it's crucial to note that capitalism is often supported and bolstered by government policies. For example, in the early United States, Alexander Hamilton's "American System" was pivotal in protecting budding American industries through tariffs and fostering industrialization through government investments. This refutes the idea that capitalism thrives only in the absence of government intervention; rather, strategic government policies have often been essential for capitalism's success.

Furthermore, the statement seems to imply an end state, but history shows that economic systems evolve. Feudalism was once regarded as the most effective system, and it was eventually replaced by capitalism. As society progresses, it's possible that new economic systems might emerge that are more attuned to the needs and values of future societies.

 

[TruthNotBS]

First I agree with your assessment that 1950-1980 were the golden years for American workers

In those days we made practically everything we needed in this country and American workers were the highest paid in the world

Thats not true now and we can discuss that later

But as for workers voting on how a business is to be run thats silly

The owners of the business are the final authority on that

And should be

The people who work in the productive enterprise should own it and decide how it's run. There should be democracy in politics and in the workplace, where people spend most of their waking hours. Mass production is a social endeavor, not a private one. Capitalists live by exploiting and relying on other people's labor.

 

[Foxfyre]

“The reason we have problems with housing and healthcare is irresponsible in harmful meddling by the U.S. government.”

It’s too simplistic to pin all the problems of housing and healthcare solely on government meddling. In reality, these sectors are influenced by a myriad of factors including market dynamics, private sector practices, and yes, government policies. But let's not forget the vital role government has played in housing through programs like the GI Bill, which helped millions of veterans afford homes. Similarly, in healthcare, Medicare and Medicaid have been lifelines for the elderly and the underprivileged.

“Until enough Americans have enough history, economic, and sociopolitical understanding to realize how harmful unnecessary and unreasonable government meddling is to quality of life, opportunity, choice, options, liberties, we won't remedy the problem.”

It’s imperative to recognize that government intervention has often been essential in addressing market failures and ensuring social welfare. The Clean Air Act, for example, is a government intervention that drastically improved air quality and public health. Social Security is another example where government intervention has provided essential support to retirees.

“The answer is not in changing our form of government. It is changing those in government--elected and appointed leaders, bureaucrats, rank and file employees, contractors etc. who created this mess and installing those who do have practical history economic and sociopolitical understanding of the principles this country was founded on and restoring the government to its original intent.”

Change is not just about the people; it’s also about adapting institutions and policies to meet the changing needs of society. Our Founding Fathers were insightful, but they couldn't foresee all the complexities of the 21st century. Adapting and modernizing government is not a betrayal of original principles; it's a necessary evolution.

“First rule of good management: --you cannot fix a bad system by changing the people. --you cannot fix bad people by changing the system.”

This oversimplifies the issue. In reality, systemic change and personnel change often go hand-in-hand. Systems and people influence each other. For example, implementing a new healthcare policy requires both systemic change and ensuring the right people are in place to execute it effectively.

“Second rule of good management: --If the new thing isn't working, scrap it and go back to the one that worked plus if it ain't broke, don't fix it.”

This argument assumes that there’s always an old way that worked better, which is not necessarily true. Also, the world is ever-evolving, and what worked in the past might not be applicable today. There’s a reason we don’t use typewriters anymore. Progress is about analyzing, adapting, and sometimes, inventing anew. It’s not about blind adherence to the past or unfettered embrace of the new; it’s about thoughtful evolution in response to an ever-changing world.

Setting aside your incorrect assumptions and putting words in my mouth I didn't say or infer in any way. . .

Everything you say assumes that more government is the answer. But what government? Who gets to run it? The people running the government we have now damn sure don't have any answers and so far have not improved a single thing with their policies while making many things worse. And yet nobody on the left will admit that Donald Trump and his policies improved anything anywhere despite massive data that says differently. Barack Obama was loved by many and was disastrous for millions.

Who is wise enough or has the moral standing to dictate how the people must live, what they must believe, what they must think, what they must agree with in order to be acceptable? Who is wise enough to develop institutions that address the problems of 330+ million people? Who is wise enough to know all the components to get a can of tuna into a supermarket?

I will stand by my posts. What makes a great nation is small, efficient, effective government that serves the people and does ONLY that it must do in order for the various states to function as one cohesive nation and ensure it not do physical or economic violence to each other. And then it does ONLY what it is authorized to do by the Constitution and even then does only that which MUST be done and cannot be done as efficiently and effectively by the private sector.

And then it leaves the people alone to form themselves into whatever sorts of societies they wish to have. A free people left to work out their own problems generally need some trial and error, but they usually get it more right than wrong in the end.

 

[Foxfyre]

The people who work in the productive enterprise should own it and decide how it's run. There should be democracy in politics and in the workplace, where people spend most of their waking hours. Mass production is a social endeavor, not a private one. Capitalists live by exploiting and relying on other people's labor.

That's true. Capitalist owners do exploit labor and everybody else that contributes to their business for their own self-serving advantage. That's how free market capitalism works. How it is supposed to work. Labor also exploits the capitalist owners by selling their labor to the highest bidder. Few do that out of any particular concern for their employers but they are looking to their own self interest.

And in the process of everybody looking to their own self interests, the benefits spread through the town, the state, the nation, the world.

“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 self-interest."--Adam Smith​

See my Post: What is the goal of capitalism?

 

[TruthNotBS]

"Not even a little bit."

Oh, but yes, quite a bit. When the barriers eroded, commercial banks had easier access to capital markets through their investment wings, and this fueled the mass production of subprime mortgages. They got the taste of those high returns and wanted more.

"Glass-Steagall didn't stop these sales."

But it made it logistically and financially less appealing for commercial banks to dive headlong into the risky end of mortgage lending.

"Banks could sell to Goldman under Glass-Steagall; banks could sell to Goldman after Glass-Steagall."

True, but the repeal of Glass-Steagall allowed for an intensification and change in the scale of these transactions. Before, when commercial and investment banks were separate, there was less incentive and capability for commercial banks to issue mortgages they knew they could offload through securitization. Post-repeal, the lines blurred, and the integration allowed commercial banks to tap into the capital and mechanisms of investment banks more efficiently. This altered the risk dynamics and contributed to a surge in the issuance and securitization of subprime mortgages. Essentially, the speed and scale of the transactions changed dramatically, setting the stage for the reckless lending practices that were at the heart of the crisis.

"They could work just as directly under Glass-Steagall."

There's a difference between working with someone and being in the same trench with them. When the walls came down, synergies and the scale changed dramatically, making it more lucrative and tempting for commercial banks to generate mortgages without as much regard for quality.

"Are you telling me a bank got in trouble because of crappy mortgages? Tell me more. LOL!"

Citigroup, one of the largest financial conglomerates, faced significant turmoil due to its exposure to mortgage-backed securities. When the housing bubble burst, the value of these securities plummeted. The depth of Citigroup's engagement in these high-risk instruments was partly due to the erosion of the barrier between commercial and investment banking, which allowed it to aggressively engage in underwriting and trading mortgage-backed securities. The losses were so severe that Citigroup required a bailout to avoid collapse, which had wider implications for the global financial system.

"Two investment banks that weren't taking deposits got in trouble because of crappy mortgages? Tell me more. LOL!"

Certainly, Lehman Brothers and Bear Stearns were investment banks that played a critical role in the financial crisis due to their heavy involvement in mortgage-backed securities. They did not have the traditional deposits base but financed themselves through the repo market which proved to be highly unstable in times of stress. Glass-Steagall would have curtailed the scale of their involvement in the mortgage market. Had Glass-Steagall or similar regulations been in place to limit their high leverage and risk-taking in mortgage markets, the implosion of Lehman Brothers and Bear Stearns could have been averted or at least mitigated, saving the economy from the severe shock it faced in 2008.

 

[fncceo]

This is just a philosophical question. Is there a goal for capitalism at all?

That is like what is the goal of nature.

Capitalism, a purely economic philosophy, is what occurs naturally when people do commerce.

Capitalism never has to be imposed, markets exist without any form of state imposition.

Even in the most regulated Socialist economies, Capitalism will flourish as a Black Market because it is the only way to ensure the movement of goods and services to consumers.