[quote]Ryan P. McCarter wrote:
And of course, interpretation of the political class could hardly be counted against socialism, since capitalism also required interpretation of theory by the political class. Unless you’re still clinging to your fantastical interpretation of history.
[/quote]
If communism requires interpretation by the political class then it can never be established as it is theorized.
On the other hand what I propose requires no interpretation but rather only specific moral behavior – mind your own business and keep your mitts to yourself…and if people do that on a very large scale then, voila! we have Anarchism.[/quote]
But, history has clearly shown that populations in general do not like a society regulated by the free market, which is why the state is required to maintain the free market. On the contrary, your system requires constant state supervision, a contention which is corroborated by history.[/quote]
History corroborates more vividly that people utterly hate communism. If you don’t like the way the U.S. works you can leave. Not so for Cuba, North Korea and to a lesser degree China. Why do you think people risked life and limb to get the fuck out of communist countries? Because they sucked that’s why. The people are miserable and they have to kept in like caged animals, because if they were free to leave, nobody would stay.
If you lived in a communist country this is where you’d live…They all pretty much look like this, at least all the ones I have ever seen and I have seen plenty…
Ah yes, in the end it is vindicated. Nevermind that no one uses the free-market anymore. Never mind that capitalism is in crisis all across the globe. Your faith is unshaken.
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Capitalism isn’t in retreat - the economic crises threatening to sink Europe (and, sooner, blow up the Euro) is the result of the ravages of the unsustainable bloated socialist state (pace Greece). And, our European brethren are beginning to sober up from the socialist stupor they have been in and are adjusting their economic policies to something sustainable.
Further, the most recent crisis in the US, as has explained to you repeatedly, resulted not from the market doing what the market does but rather the market doing what government-subsidized risk-taking makes it do. Without the government’s socialization of the risk of lending in housing (and other) markets, we would never have had the unsustainable boom and resultant bust.
No more of this “but I got a note from my daddy that says I don’t have to listen to you!” - facts are facts, sparky. If and when you ever get a job and actually engage in economic transactions, you will be dosed with some unavoidable sense and you will learn your Utopia is a fraud.
Have Ryan explain to you how he believes that socialism is going to “defang and render powerless the baser aspects of human nature!” - and all because the means of production will be collectively owned!! LMAO - it’s been hours and I am still LMAO!!
[quote]thunderbolt23 wrote:Of course I don’t remember claiming that the CRA caused the housing bubble - that’s in large part because I never claimed it. Good try, junior.
As for CFC, the so-called “uptick” was also influenced by other factors (because not everyone could avail themselves of CFC), which was my point - which you knew, and again, are wasting time whining about.[/quote]
Recalling previous instances of your idiocy is not whining. I find it hilarious that you think there’s anything you could say that would upset me.
Retcon all you want, your temper tantrum does nothing to conceal your irritation at being refuted by a young communist.
[quote]But whining is part of your charm - and so is hypocritically cashing your benefactor’s checks while adding nothing to the collective wealth. Yay, communism for me but not for thee!
[/quote]
Who’s whining? You’re the one who follows me around, butt-hurt at being at being exposed as the charlatan you are. Keep the insults coming–they only underscore the barrenness of your ideas. If it weren’t for your bon mots, you’d have nothing whatsoever to say.
Who said “retreat,” moron? I said it was in crisis, which it visibly is. That’s the best part about you capitalists–crisis appears and you double down on failed policies.
Ah, the “socialist state.” We beat communism twenty years ago but all of a sudden here it is again! Pray tell, which states are socialist? Which states feature collective ownership of the means of production? Which states feature a planned economy? Or have we simply hit upon another area that you know nothing about?
I find it comical that you use the example of Greece, which only introduced austerity measures after the Socialists were elected. Once again, it is socialism that saves capitalism.
A rosy assumption (you need many to hold your contradictory theories together), but unfortunately for you, it is not one for which we can find a single shred of evidence. The government certainly didn’t subsidize risk-taking prior to the 1929 stock market crash. There was no structure in place to rescue troubled institutions, but did that make one bit of difference in people’s willingness to take risks? No, it did not. In fact, the extensive history of manias and crashes provides so much evidence that directly contradicts your claims that it nearly beggars belief that you would be stupid enough to make the claims you do.
Furthermore, you simply gloss over the issue of market irrationality and insufficient information. In many cases, investors didn’t think they were taking significant risks. Most people simply misread the riskiness of the assets. That’s what the whole thing about CDOs was, remember?
Recalling previous instances of your idiocy is not whining. I find it hilarious that you think there’s anything you could say that would upset me.
Retcon all you want, your temper tantrum does nothing to conceal your irritation at being refuted by a young communist.
Who’s whining? You’re the one who follows me around, butt-hurt at being at being exposed as the charlatan you are. Keep the insults coming–they only underscore the barrenness of your ideas. If it weren’t for your bon mots, you’d have nothing whatsoever to say.[/quote]
Exactly my point. You keep bleating about “exposing me as a charlatan” (that makes no sense) and “refuting” me (hasn’t happened) - whole grain evidence that, nope, it hasn’t happened. Your desperation to trumpet your “successes” gives the game away. To the next post, “young communist”.
Who said “retreat,” moron? I said it was in crisis, which it visibly is. That’s the best part about you capitalists–crisis appears and you double down on failed policies.[/quote]
I do love the semantics of a “young communist”. No, capitalism isn’t “in crisis” either - and there is no “doubling down” of policies, largely because if you had any sense at all, you’d know that countries are reversing the policies that added to the problem (excepting the US). Certain EU countries aren’t “doubling down” - they couldn’t be, because their austerity measures are the exact opposite of the socialist policies that got them into hot water in the first place.
Moreover, the US is “doubling down”, just not on capitalist policies - the stimulus speaks for itself and the new financial regulation bill does little to discourage the systemic risk taking by huge institutions underwritten by ever more socialization of risk. Plus, there has been no move to reform Fannie Mae. This is doubling down, all right - but not on “capitalist” policies that caused the crisis.
Facts, junior.
A cute attempt, predictable for socialist idiots - because a country isn’t full-blown state ownership of production, per the theory, no one can accuse socialist policies of causing the problems.
European (and US) states engage in wholesale government policies aimed at large scale wealth redistribution, cradle-to-grave benefits, etc. and when these policies are working well (and time hasn’t run out on them), young communists like yourself can’t wait to extoll the wonders of these socialistic elements of the state and ask “why not more of this wonderful stuff to help people? If anything, these states aren’t socialist enough with their policies!”
But then, when these selfsame socialist-themed policies threaten to bankrupt the state and generally cause chaois, it can’t possibly be because of the “socialist policies!” because these states don’t “feature collection ownership of the means of production!” and “they aren’t planned economies!”…must be something else, says the young communist.
Stupidity. Everyone with a functioning brain stem recognizes that these states aren’t pure socialist states in the abstrac (thank God) but instead incorporate as much socialism as they could get away with given human beings ultimate repulsion to the idea. And these policies are the ones causing the crisis.
Your convenient cop-out is just that.
Austerity measures aren’t “socialist”, which is why you see the local communists threatening to burn the place down. Who cares what party does it? The substance of the policy is what counts, and austerity measures are not examples of “socialism saving capitalism”.
Pathetic. I just gave you the evidence you need and you wimp out with some throwaway line about some “rosy assumption” (and never say what it is). Fact is, we wimply would not have had the credit bubble had the government not subsidized the making of bad loans to high-risk borrowers and, frankly, the making of loans generally. That is a fact, it isn’t an assumption. The federal government’s polciy of socialization of risk/privatization of profits was the driving factor of the crisis.
So, with nothing intelligent to say on the current crisis, the young communist…
…changes the subject!
The main problem with your (lack of logic) is that you treat independent events as the same event. The events leading up to the Crash of 1929 are, in fact, different from those that led to the current crisis.
In 1929, people were prone to taking risks - that is nothing new, as long as there are humans, there will be speculation. But risks and risk-taking - with adequate information, market transparency, and reasonable safeguards - are fine as long as we recognize that the risk still remains.
Fast forward to the current crisis - people were encouraged to speculate by federal policy. Whatever “normal” amount of speculation that is built into the economy had its restraints ripped off by government policy. It’s a fact, and the crash of 1929 has nothing to do with this unique set of problems caused by deliberate “socialization fo risks”.
No, I didn’t, and you wouldn’t even know if I had or hadn’t in any event.
In many cases, investors weren’t taking significant risks, because they transferred that risk to someone else, genius. As for the rest of them, those investors that thought real estate assets would grow forever at exponential rates should have known better, but given the artificially low interest rates, there was no reason - in the short term - to worry about it.
We all get it, Ryan. You know exactly dick about real economics, but you are desperate to defend your precious ideology from the onslaught of common sense. So you present smug, empty answers that simply demonstrate a lack of education and a willful idiocy.
I don’t care - be a communist, an anarchist, a monarchist, a neo-libertarian socialist - I couldn’t care less. But stop wasting my time pretending you have substantive arguments when you clearly don’t.
Every time, but be careful - I have seen how allergic you are with facts. Handle with extreme care and caution.
So, with official unemployment hovering around 10% and the threat of massive sovereign default is not crisis? What are all these people talking about on the news when they speak of “the greatest economic crisis since WWII?” Call it whatever pleases you, but the waters are rough.
On the contrary, countries across the globe are reaffirming their support for the capitalist system, which caused the problem to begin with.
It IS capitalist. Simply because you don’t like it doesn’t mean it is not capitalist. Are the means of production privately owned? Is there a market? If so, it’s capitalism. You do not get to paint with such a broad brush when it comes to the alleged “socialism” (HA!) of certain European countries, while being so exacting and discriminating with regards to the US. Stop making excuses.
Yes, these are the easy ones, requiring nothing more than a dictionary to verify. Let’s see how you do on the more complicated ones.
Of course not, and if you wish to disguise your hypocrisy at all, it is an objection which you must respect. Socialism has a long history, and it has always been about worker control, not state control, as you erroneously suppose here. If the workers and society at large do not have direct control of industry, it is not socialist. Facts, please.
Furthermore, you maintain this fantasy while simultaneously insinuating that the US is not really capitalist. If you care to rub a couple of brain cells together, it is evident that the US is much, much closer to capitalism than the capitalist states of Europe are to socialism. You don’t get to have your cake and eat it too.
On the contrary, socialists are and always have been against welfare. Apparently, you don’t understand the phrase “abolish capitalism,” and you think we are liberals. Let me make it simple for you: socialismis not compatible with private ownership of the means of production. The welfare programs you whine about are thoroughly capitalist in nature, enacted by capitalists, and are essential to diffusing tensions within a capitalist society.
Of course it must be something else. Socialism IS collective ownership of the means of production. This has always been the case, and your expansion of the definition of socialism and the contraction of the definition of capitalism only serves as a lazy and ineffectual way to excuse capitalism’s growing failures.
Funny that that you should accuse me a “copping out” when I object to you calling a state socialist when they have a big fat 0 of the characteristic of socialism, but you are somehow not copping out when you call an obviously capitalist state, with all of the chracteristic of capitalist, socialist.
You’re a joke. Drive on.
Because, the capitalists wouldn’t do it! It’s quite a hole in your argument that you need to account for. If the solutions really are so easy, then why does it take the party nominally opposed to such solutions to implement them?
Basic logic, please. There is no way to know exactly what would have happened if things had been different. This is EXACTLY an assumption, one, as I previously mentioned, with no evidence to support it. Bubbles have occurred frequently enough throughout history to make them entirely plausible without government action. Al you are doing is attempting to sidestep criticism.
Prove it. Facts please, remember? Not assumptions rendered asinine by history.
Pardon? I thought socialization of risk was the driving factor? Now you say that speculation will always occur? Thnen I have to point out that there is nothing in your posts that proves, or even suggests, that even without implicit government guaranatees, there will not still be speculative activity to create an unsustainable bubble. Again, you assume the problem away.
They were indeed encouraged, but again, you leave out very important parts of the equation.
1.) Profit-making is a powerful force. Everyone knows this. So when you say that the government encouraged speculation, all they were doing was pushing on an open door. You still provide no evidence whatsoever that this government encouragement was necessary to start the bubble. However, on the other side we find some bits of information which cast doubt on your reconstruction of events. For instance, the recent reform bill makes it mandatory for a lender to check the income of a borrower before making the loan. That this was a problem before renders your thesis suspicious. Why would an implicit promise by the government cause so many lenders to lose all common sense in doing business? The real explanation is, of course, that capitalists frequently fall victim to their own propaganda–they really believed that the market could do no wrong.
2.) My point with the comparison to 1929 is that, at that time, there was no well-established precedent of the government swooping in to keep everyone solvent. There was not the socialization of risk you attempt to blame for all your woes (as illustrated by the thousand of subsequent bank failures), but there was a great bubble that formed, directly contradicting your assertion that it was only the government promise that allowed the speculation to get out of hand.
The CDOs did not spread risk to the degree that many imagined. The mere fact that the government had to come along and bail the banks out is plenty of evidence as to the risk they were taking.
[quote]We all get it, Ryan. You know exactly dick about real economics, but you are desperate to defend your precious ideology from the onslaught of common sense. So you present smug, empty answers that simply demonstrate a lack of education and a willful idiocy.
I don’t care - be a communist, an anarchist, a monarchist, a neo-libertarian socialist - I couldn’t care less. But stop wasting my time pretending you have substantive arguments when you clearly don’t.[/quote]
If you want to delude yourself, that’s fine with me. But don’t pretend you have a case. You respond to valid points with idiotic assumptions, and then act like there’s something wrong with me for not sharing your religion. Your inability to have a rational discussion without flinging shit everywhere is all the evidence anyone needs to see to understand that you don’t have a clue what you’re talking about. Hell, even IrishSteel can go several posts without insults.
Here:
Assumptions are not the same as facts. Get it straight and you’ll be much more convincing.
So, with official unemployment hovering around 10% and the threat of massive sovereign default is not crisis? What are all these people talking about on the news when they speak of “the greatest economic crisis since WWII?” Call it whatever pleases you, but the waters are rough.[/quote]
You are confused yet again. I never said there was no crisis. But you said it was “capitalism in crisis”, and it’s not. Stop invetsing straw men when you find yourself floundering.
Wrong again - the problems were not caused by “the capitalist system” - the problems were caused, as stated before, by unsustainable government policies promising Heaven on earth through cradle to grave benefits, preposterous benefit programs for public service workers and general redistribution of wealth. Take a deep breath - those aren’t “capitalist” programs.
No, it isn’t. You are as bone-headed as your ideological twin Lifticus - when pressed on your idiotic theories, you just invent new definitions to get yourself out of the pickle. It ain’t working. Europeans countries have long enjoyed socialist-themed public programs enacted by, you guessed, Socialist parties.
By your reckoning, these self-identified “Socialists” have the wrong definition and are really capitalists. Hilarious.
But socialists of all stripes recognize that the ownership must first start at the state level because private ownership concentrated outside the workers’ hands won’t be relinquished by the Big Meanie Capitalists. The means of production must be wrested from the capitalists, either by revolution/force (original Socialists) or through democratic action (Social Democrats) - capitalists will not simply give away the means to workers.
So, your convenient rejiggering of the definition of “socialism!” ignores basic socialist thought that real change in favor of the workers has to first come through the state, and that action, sure enough, is socialism in action. That that inconvenient fact hurts your argument now doesn’t mean it isn’t true - and so, yes, we have socialism in practice in European countries, and these practices sure enough caused the newest crisis.
Straw man - I believe the US is pretty darn capitalist and closer to capitalism than fellow European states. Problem is, the US is trending towards more of the socialistic policies that have nearly ruined the EU while the EU countries are (somewhat) trending away after their experience.
I’ve never said otherwise - what I did say is that no country is “doubling down” on “capitalist policies” that caused the problems. The EU countries are moving in the opposite direction and the US is doubling down on the problems that have made it worse, but they aren’t “capitalist” policies.
See above, and it is fairly said that I have to correct a self-described “communist” on how socalist theory works. Socialists of all flavors are trying to wrest power from capitalism first through the state. You’re just making shit up because you are on the defensive.
See infra. Just because socialists can’t snap their fingers and convert all property into the hands of the workers is not proof that steps in the government policy to more “fairly” redistribute wealth - socialism’s endgame - aren’t somehow “socialism”.
Your thesis amounts to “hey, socialism means when the workers have 100% of the means of production…everything else is capitalism!!!” - it’s ridiculous. No one buys it, lease of all actual socialists.
Sure thing - wealth redistribution policies in the name of “fairness” and “social justice”, bloated pensions for government workers, massive welfarism and cradle to grave benefits are all blood-drinking capitalist policies, not socialist ones - good Lord, who are you kidding, Ryan?
Angela Merkel is a socialist? Do tell.
Good Lord, here we go with Ryan’s freshman seminar of philosophy 101. Awesome. So we can’t know what would have happened had things been different? You don’t say?
And yes, there is evidence. I gave it to you. It isn’t a novel theory and I don’t claim to be inventing it - lots of economists agree as to the cause. Government policy - including Greenspan’s artificially low interest rates in response to the tech wreck recession, federal housing and asset securitizatoin policies, and the Community Reinvestment Act, among other things - created a moral hazard in the credit markets. That moral hazard - in a culture of rampant “if it feels good, do it” consumerism and Wall Street’s excessive risk-taking and drunken belief that markets can evolve past human nature in the medium term - was pouring gasoline on a flame for over a decade.
What to do about it in light of other problems (recession, need for credit, etc.) is a separate issue. What caused it isn’t.
You mean you want me to show you the increased volume of (1) loans made post tech wreck recession, (2) loans securitized, and (3) rising tide of loans guaranteed by Fannie Mae (and other GSEs) that grew exponentially over time? If I gave the numbers to you, you wouldn’t know what to do with them. But these are indisputable facts.
Instead of squealing about my “assumptions”, why not produce an alternative theory as to what caused the housing bubble-credit crisis and the sovereign debt crisis in Europe? I’m all ears, as is the rest of us. Show us you got the economics all figured out. Chop chop.
Uh, it was - in the current crisis. I never said socialization of risk caused the 1929 crash. Just wow - you suck at this.
Uh no, and it is quite clear you have no idea what you are talking about.
Outside of general analysis (which covers and has covered the point just fine, if you avail yourself of it), I can provide anecdotal evidence - in the 1990s, I did some work in the financial services arena. I can tell you that the government guarantees on securitized mortgages influenced all kinds of economic behavior, including, but not limited to, firms borrowing against the value of securitized mortgage CDOS/CMOs/ABSs. The Fed allowed leveraging rates of up to 90% against these securities because…wait for it…they had implicit government guarantees.
Further, major institutional investors counted on CDOs with government guarantees as “safe” investments, so they went wild(er) with other investments.
I saw it firsthand, junior - big banks and institutional investors would engage in a number of transactions (reverse swaps, structured finance, etc.), all with a mind that “hey, if the underlying assets go belly up, the feds won’t let Fannie Mae default”. It’s a fact - and if you haven’t the ambition to just go read about it yourself, take the advice of someone who saw it occur during the punchbowl days of the late 1990s/early 2000s.
Unless you think that someone like me is suddenly going to assume my firsthand experience was, er, untrue because some undergraduate whose knowledge of finance is confined to memorizing his dad’s pin number on the ATM card but who “has it all figured out” because he is a “socialist!”, then avail yourself of the evidence and stop pretending that no one has shown you anything.
[quote]They were indeed encouraged, but again, you leave out very important parts of the equation.
1.) Profit-making is a powerful force. Everyone knows this. So when you say that the government encouraged speculation, all they were doing was pushing on an open door. You still provide no evidence whatsoever that this government encouragement was necessary to start the bubble. However, on the other side we find some bits of information which cast doubt on your reconstruction of events. For instance, the recent reform bill makes it mandatory for a lender to check the income of a borrower before making the loan. That this was a problem before renders your thesis suspicious. Why would an implicit promise by the government cause so many lenders to lose all common sense in doing business? The real explanation is, of course, that capitalists frequently fall victim to their own propaganda–they really believed that the market could do no wrong.[/quote]
I see the problem, and to be frank, I don’t have time to educate you on how artificially low interest rates can encourage people to overinvest.
But to the dumbest thing you said: Why would an implicit promise by the government cause so many lenders to lose all common sense in doing business?. Let me type slowly for you: because lenders didn’t keep the bad loans on their books. That was entirely the point of Fannie Mae: lenders make the loans, then sell the loans to the government entity. It is a near risk-free transaction.
Ordinarily, lenders don’t loan to risky borrowers because if the borrower doesn’t pay, the lender is the one who loses and eats it. Because of government policy, however, lenders didn’t have to worry about this ordinary “common sense” of lending to people who might not otherwise be able to pay because they wouldn’t own the loan long enough to suffer the default. In the alternative, Fannie Mae “guaranteed” loans that stayed on the banks’ books - if someone didn’t pay, the government would make the bank whole (like with student loans). This was the whole point of the system - Fannie Mae underwrote the bad loans, making banks engage in largely risk-free transactions that they would otherwise not engage in based on “ordinary business sense.”
And now, we see the problem - you don’t have a damn clue what happened or how any of this stuff works. What a waste of time you have become. Your dumbass question gave the game away.
Straw man - I never said socialization of risk was the blame for the woes of 1929. I even noted that your problem was that you insist on treating unlike things alike. You keep getting this wrong. It’s preposterous.
It wasn’t clear, because banks trusted that the government would back the bad loans. Once the tidal wave of defaults hit, the government was strapped to make good on its promise. And the banks’ balance sheets suffered.
Let’s cut the crap - you don’t have any idea what you are talking about. Any fool asking why a bank would offer loans to risky borrowers in the age of Fannie Mae doesn’t get the economics or the history to even have an informed opinion on the matter (regardless of conclusion), so you have nothing substantive to add. Just be on your way and go humiliate yourself on some other topic.
Ah, I misunderstood you. I didn’t think you’d be stupid enough to make the claim you actually did.
Well then where do they come from? Is it a conspiracy? Is someone sabotaging the economic system?
You do realize that to be correct, you either have to suggest a massive, 100+ year, worldwide conspiracy, or your have to suggest that all the governments of the world are mindblowingly stupid?
No, on the contrary–you are wrong again. These policies are an unavoidable byproduct of capitalism, without which crisis would have appeared sooner.
I’m sorry you have blundered again, but no amount on bluster from you changes the definition of socialism that has been used since its inception. Find me the countries with collectively-owned industry and a planned economy. Until then, you have no socialism.
The fact that are pulling a President Clinton here, and you are obviously wrong, it’s useful to note that your new definition of socialism lumps the US and Europe in with Cuba and North Korea. Thus, in your attempt to save your ideology, you must make definitions useless.
Not really, when you consider that you must contend the same thing with regard to the capitalist parties that institute “socialism.”
My ass. Socialists have long understood the true nature of the state, which liberals and libertarians constantly misunderstand. Socialists have battled and been thwarted by the state far too many times to hold the naive conviction that all we have to do is transfer power to the government. On the contrary, there would be no difference. The problem is control of the means of production by a small group which is not representative of the public as a whole. All one has to do is notice that businessmen and government officials are frequently the same people at various times. The pro-capital nature of the state is far too clear. Indeed, Friederich Engels wrote a book in which he traced the formation of the state and how it serves to protect private property, not antagonize it.
“What government in these days has been able to stand against the power of associated wealth? It is the real dynasty of modern states, let the forms of their government be what they may.”
Of course, which is why it must be accomplished by the working classes themselves, not representatives on their behalf.
Wrong again. I am not the one “rejiggering” the definition of socialism. It’s been the same for 100 years. Man up and admit it. Of course, that would mean you’d have to rethink your blind devotion to capitalism.
You don’t “trend toward socialism.” It’s either socialism or it’s not, as socialism and capitalism involve mutually exclusive economic arrangements. Welfare programs to stabilize capitalism are in no way incompatible with it, and the prevalence of these programs shows us that they are nearly indispensable for a smoothly running economy.
Again, you blatantly ignore the fact that all of this is happening with private control of the means of production and a market economy. Hence, there’s nothing socialist about these policies. Attempting to correct some of the inherent flaws of capitalism is not socialist–it’s just smart.
But you are not “correcting” anything, merely twisting 100-year-old established concepts so that you don’t have to rethink your ideology.
How does the overthrow of the state count as “using” the state to seize power? It is true that there are some brands of socialism that seek to gain power through the ballot box, but for the most part, these are properly known as social democratic parties, and most of them are not actually socialist parties–they simply support capitalism with wealth redistribution.
Redistribution of wealth itself is not a tenet of socialism. Sorry, the right wing pundit definitions of socialism are not very accurate, you’ve been deceived. I say again, socialism’s endgame has always been about worker control of the means of production.
“Let us finally imagine, for a change, an association of free men, working with the means of production held in common[…]”
Of course they don’t buy it–if they do, their strawman disappears, and they no longer get to blame capitalism’s problems on socialism.
Who are you kidding? In your ideological “purity” you forget that not all supporters of capitalism believe the batshit insane theories you hold so dear. Democrats are not socialists. They truly believe in capitalism, they’re simply not so narrow and dogmatic. Even by the wrong definition of “state ownership of industry” the European states are not socialist. They are at most mixed economies. The real problem is, you’re so desperate to retain your whipping boy that you deny a century of socialist thought and broad consensus, to tell the socialists what they actually believe.
We were talking about Greece, which you comically asserted to falling victim to “socialist” policies, after the Socialist party came in and introduced austerity measures.
[quote]Good Lord, here we go with Ryan’s freshman seminar of philosophy 101. Awesome. So we can’t know what would have happened had things been different? You don’t say?
And yes, there is evidence. I gave it to you. It isn’t a novel theory and I don’t claim to be inventing it - lots of economists agree as to the cause.[/quote]
Please re-post and highlight your evidence. I read your post again, and saw none. All you say is “without the government’s socialization of the risk of lending in housing (and other) markets, we would never have had the unsustainable boom and resultant bust.” That’s an assertion, not evidence.
And yes, lots of economists do agree to the cause–this is another example of the boom-and-bust cycle that has been with us since the dawm of capitalism nearly 200 years ago. You don’t need any hare-brained theories about the Evil Government mucking things up, this has happened so many times before that toe deny that the market had anything to do with it verges on insanity. It certainly is not rational thinking.
Now, I’m not going to say that the Federal Reserve was without any responsibility whatsoever for the housing bubble, but to be sure, it was one of the smaller ones. The Fed is another bogeyman for the Right, but no reasoned argument can support the allegation that they were a prime cause of the bubble. For one, most mortgage rates have virtually no correlation with the federal funds rate.
Second, there were other factors leading to low interest rates, such as the large influx of savings from thrifty foreign nations. Furthermore, the blame-the-Fed line does not explain why housing prices were high in other countries.
And, it’s already been covered in some detail how the institutions which made the most subprime loans were not subject to CRA regulations, the ones that were rarely audited, and that subprime mortgages were a small part of the bubble regardless.
Wall Street traders and executives are not stupid people. Much of the moral hazard is built right into the financial system, without the government having to do anything.
Nice try, but what I’m asking is for you to prove that this would not have happened anyway despite government actions. You have provided no evidence that the government played a crucial role in causing the crisis. You simply assume it.
Eager to change the subject, eh? I would be, too.
Stop dodging the issue. What’s the difference? You simply assume that government caused this crisis, but you have not managed to point out any way in which it is essentially different. If speculative bubbles could happen back then, why do you need a new explanation now? Other than keeping your ideology intact, that is?
Oh, so you showed how inbuilt specualtion was the culprit then, but not now? Forgive me, I must have missed.
Quit dancing around the question.
But you keep missing the point. They DIDN’T always have the guarantee, but it happened anyway. What’s to keep it from happening again?
[quote]I saw it firsthand, junior - big banks and institutional investors would engage in a number of transactions (reverse swaps, structured finance, etc.), all with a mind that “hey, if the underlying assets go belly up, the feds won’t let Fannie Mae default”. It’s a fact - and if you haven’t the ambition to just go read about it yourself, take the advice of someone who saw it occur during the punchbowl days of the late 1990s/early 2000s.
Unless you think that someone like me is suddenly going to assume my firsthand experience was, er, untrue because some undergraduate whose knowledge of finance is confined to memorizing his dad’s pin number on the ATM card but who “has it all figured out” because he is a “socialist!”, then avail yourself of the evidence and stop pretending that no one has shown you anything.[/quote]
I’m sure that it influence behavior–I said that before, and no one is arguing the fact. But, speculative manias have occurred for well over a hundred years, way before our modern financial-governmental hybrid. You have yet to explain the discrepancy. Historicall, the market has had these problems all by itself. Yet you introduce a new theory that says now, it cannot happen without a government promise, despite the fact that it has happened numerous times before. Explain this contradiction.
You need not “educate” me, only to explain how the low interest rates had anything to do with government action.
Nice story, but it didn’t happen. At least not the way you present it.
“Start with the most basic fact of all: virtually none of the $1.5 trillion of cratering subprime mortgages were backed by Fannie or Freddie. Thatâ??s right â?? most subprime mortgages did not meet Fannie or Freddieâ??s strict lending standards. All those no money down, no interest for a year, low teaser rate loans? All the loans made without checking a borrowerâ??s income or employment history? All made in the private sector, without any support from Fannie and Freddie.”
“He pointed out that, for all their failings, Fannie and Freddie didn’t originate any of the bad loans – that disastrous piece of work was done by purely private, largely unregulated companies, which did it for the usual bubble-logic reason: to make a quick buck.”
"Federal Reserve Board data show that:
* More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
* Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
* Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics."
“But, to my mind, that view is only half-right. Yes, people got loans who had no hope of paying them back, and that was insane. But Fannie and Freddieâ??s affordable housing goals â?? which the G.S.E.â??s easily gamed â?? were not the main reason. Rather, it was the rise of the subprime lenders â?? and their ability to get even their worst loans securitized by Wall Street â??that was the main culprit. Fannie and Freddie lowered their standards mostly because they were losing market share to the subprime originators.”
See above.
No, the problem is you keep dodging the question. Explain how you know that government actions were responsible for the bubble when it has been demonstrated that they are quite possible without it.
Or, they were misled by the ratings agencies who slapped AAA ratings on everything that came across their desks.
Your criticism would be relevant if the bubble happened the way you say it did. But it didn’t, and so it’s not. Congratulations, you’ve lost this argument for the second time. Drive on.
Well then where do they come from? Is it a conspiracy? Is someone sabotaging the economic system?
You do realize that to be correct, you either have to suggest a massive, 100+ year, worldwide conspiracy, or your have to suggest that all the governments of the world are mindblowingly stupid?
No, on the contrary–you are wrong again. These policies are an unavoidable byproduct of capitalism, without which crisis would have appeared sooner.[/quote]
No, they are policies from well-meaning ignoramuses that haven’t quite figured the constraints of the real world - socialists, for example. It’s basic politics - making promises you can’t keep.
And yet - you:
Are a socialist
And consistently affirm your desire to have the state interfere with the market economy in order to blacken the eye of Evil Capitalism and make life better for the victims of Evil Capitalism
So, what “ism” is that then, exactly? You don’t hate the state - you routinely support the government stepping in with, in your mind, ameliorative policies for the ills of the dreaded capitalism. And, as such, you support actions by and through “the state” to effect some remedy to capitalism.
So, again, what “ism” does that represent exactly? By your previously stated definition, you are a “capitalist trying for a little socialism”? Awesome, welcome, capitalist.
Sure thing, junior. You have the right definition, and these millions of other socialists attempting to get “social justice” via the means of government policy are closet capitalists. I passed your “definition” of socialism off to a European friend of mine, a socialist. He laughed.
This is just incurable, juvenile idiocy.
Your pedantics are becoming boring. The entire reason to put the means of production in teh hands of the worker (and not the capitalist) is to remedy the income/property maldistribution that occurs when the capitalist gets to exploit the worker. That is the endgame - wealth redistribution. You are becoming a clown.
Incorrect, my understanding of socialism amounts to talking with and associating with socialists who have told me what they believe their “ism” - I’m not just making this up as I go. Of course, their version is very different from yours and is consistent - not the weird, shifting version you have.
I haven’t told socialists what they believe - quite the opposite, they have told me exactly what they believe, and it doesn’t stack up with your lazy and cheap version that assaults common sense.
Merkel, too, is introducing austerity measures, as are many members of G8. Greece, for its part, got into this mess precisely because of socialistic policies - and just because it hurts your feelings doesn’t mean it isn’t true.
[quote]Please re-post and highlight your evidence. I read your post again, and saw none. All you say is “without the government’s socialization of the risk of lending in housing (and other) markets, we would never have had the unsustainable boom and resultant bust.” That’s an assertion, not evidence.
And yes, lots of economists do agree to the cause–this is another example of the boom-and-bust cycle that has been with us since the dawm of capitalism nearly 200 years ago. You don’t need any hare-brained theories about the Evil Government mucking things up, this has happened so many times before that toe deny that the market had anything to do with it verges on insanity. It certainly is not rational thinking.[/quote]
This has become ludicrous. Federal policies attempt to influence and incentivize consumer, producer and investor protection on large scales through monetary, fiscal and regulatory policy - out policymakes are obsessed with it. And yet, here we have a credit crisis - and federal policy drives the amount of credit in the system - and your position is that federal policy couldn’t have had anything to do with it? It was purely a private phenomonon, just another speculation-driven bubble that government policy neither added nor subtracted to?
Now you see why no one takes you seriously? “Speculation” is part of human nature and is inherent in a free system that doesn’t outlaw it (even assumuing you could). In the current instance, the spirits of “speculation” were encouraged by government policy, namely, at the outset, artificially low interest rates.
That is a fact - even Greenspan now concedes that he left interest rates too low too long.
For someone who is no friend of “the state”, you are blindly devoted to defense of any actions taken at the state level w/r/t actions “against” capitalism without an ounce of criticism.
Finally conceding that the Fed could have just possibly, just maybe, screwed something up? And no, it wasn’t one of the smaller ones, from the mouth of the man who presided over the mistake.
Second, you don’t have a point about the fed funds rate’s correlation - the fed funds rate isn’t the same as the mortgage rate (it is a market rate that has, like most market interest rates, a baseline of the fed funds rate because the banks are the ones doing the lending on mortgages), but that has nothing to do with the fact that when borrowing costs between banks are low, banks loan funds out cheaper and more often. That is why our mortgage rates remained at historically low rates for years. Had the Fed moved interest rates up, the market would catch up with the amount of loanable funds for mortgages as well. But the Fed didn’t want to do that, because the Fed wanted to drive more economic growth after the tech wreck.
This is economics 101. The fed funds rate drives the other market rates. The Fed can’t change the mortgage rate - it can only change the underlying rate banks operate from to lend from.
And your statement that “no reasoned argument can support the allegation that they were a prime cause of the bubble” is absolutely laughable - the former chairman of the Fed himself has said otherwise. You are a cartoon.
[quote]Second, there were other factors leading to low interest rates, such as the large influx of savings from thrifty foreign nations. Furthermore, the blame-the-Fed line does not explain why housing prices were high in other countries.
I never said other factors didn’t influence low interests rates - given that borrowing can so easily occur acrodd national borders, other countries’ monetary policy certainly affect our rates. And other central banks engaged in a number of very loose policies that contributed to the crisis - and the Fed was one of them.
Oh, by the way, you should actually read the articles you provide as “proof” of your points. From your article:
But to the extent that the federal government is to blame, the main fed culprits are the beefed up Community Reinvestment Act and the run-amok Fannie Mae and Freddie Mac. All played a key role in loosening lending standards.
Hilarious. Well done, junior. You can’t get a coherent theme of an argument going to save your life.
Not at all true, because ordinary risk is not the same as “moral hazard”, genius. Wall Streeters (and everyone else) are inclined to accept ordinary risk commesurate with return - moral hazard occurs when a patry gets insulated from the ordinary risk that they would otherwise and they therefore act differently in response to that insulation from risk.
My God, man - you really have no idea what you are talking about, do you? The market has “moral hazard” built right into it? This has become comical - you don’t even have th ebasic concepts down to have an informed opinion.
Come on, be serious. You have been shown exactly what you are looking for. Why would banks or morgage companies issues these extremely risky mortgages to risky borrowers if they have to keep the loans on their books? Why would they? They wouldn’t. I can tell you, I’ve worked with banks and I understand how they manage their balance sheets. These loans would not have been made if they didn’t have the incentive to immediately turn them over to Fannie Mae, et al.
It’s an economic fact. It is called a “credit bubble” for a reason - government policy drove (along with other factors to be sure) the bubble.
Nope, it’s just that I have given you chapter and verse on what happened and how the economics explains it. You haven’t done anything except demonstrate that you are blindingly ignorant as to the most basic aspects of economics and finance.
You think you have all the answers. I invite you to explain, that’s all. Shouldn’t be hard, if we all have it wrong. But so far, you have only embarrassed yourself on what you don’t know (but are desperate to posture that you do). And you know it.
The difference is the problem of moral hazard, genius. In 1929, speculators mismanaged the risk drastcailly. In the 2000s, investors were encouraged to take risks because the government told them it would underwrite the risk. Enormous difference in the events. One involves moral hazard, the other does not. If you can’t see the difference, why is that my problem?
No dancing. Read above. I feel like I should send you a bill for tuition.
Who said it would never happen again? Our economy will always be subject to the animial spirits. But why should we encourage improper risk-taking and thus encourage it happening again and again and worse?
I’ve explained it over and over. We can’t solve speculation; we can solve encouraging speculation based on moral hazard.
And yet another yawning straw man - I never said that “it could never happen without a government promise” - why do you consistently invent positions I don’t have? I have argued that government intervention (not all, a certain kind) exacerbates the inherent problem of boom and bust in an economy, i.e., it encourages it and makes it worse.
Thus, there is no contradiction to explain - it is simply a matter of bettering your reading comprehension. Pathetic.
Clearly I do have to educate you, and if you can’t figure out how low interest rates set by the Fed caused a bubble, then, again, not my problem to fix.
Bullshit. I’ll address the gaps in your cited articles next, but as a threshold matter, that is exactly what drove banks to do what they did.
[quote]“Start with the most basic fact of all: virtually none of the $1.5 trillion of cratering subprime mortgages were backed by Fannie or Freddie. Thatâ??s right â?? most subprime mortgages did not meet Fannie or Freddieâ??s strict lending standards. All those no money down, no interest for a year, low teaser rate loans? All the loans made without checking a borrowerâ??s income or employment history? All made in the private sector, without any support from Fannie and Freddie.”
Good try, by 2008, Fannie Mae owned $5.1 trillion on housing mortgage loans. And, they bought loans they couldn’t originate themselves. Thus, the took them off the books of banks and other lenders and underwrote the risk. Then, of course, when borrowers started having problems paying back loans (subprime and otherwise), Fannie Mae was on the hook to back loan packages it securitized, even if it had not made the loans themselves. That, genius, is why Fannie Mae, et al. had to go into consrevatorship - they couldn’t back the promises they made when they underwrote the risk.
Let’s also not forget that in the early 2000s, Fannie Mae began buying Alt-A mortgages under pressure from HUD - risky mortgages to risky buyers (created by a loosening of policies) that Fannie Mae previously refused to own in the 1990s. Fannie Mae began to make the market for risky loans and explosed the demand for them. Thus, banks and mortage lenders rushed in with a supply and made easy money.
[quote]“He pointed out that, for all their failings, Fannie and Freddie didn’t originate any of the bad loans – that disastrous piece of work was done by purely private, largely unregulated companies, which did it for the usual bubble-logic reason: to make a quick buck.”
So what? Fannie Mae made the market and bought the loans it couldn’t originate itself, thus underwriting and encouraging ever more riskier and crappier loans.
But, most importantly, none of your links do anything to refute the basic premise which you were totally clueless about - that banks were not exercising “common sense” making risky loans because of help from the government. You can’t unring that bell - you’ve been trying to convince me of your alternative explanation of the housing crisis and you didn’t even know why banks were lending the way the were.
What a joke.
Asked and answered.
I have lost patience with you. I’ve given you the tale and I lay the blame at the feet of several institutions, public and private.
Like a child, you ignore all of it, plug your ears with your fingers and whine “you haven’t told me anything! You haven’t told me anything!”.
You are precious, precious defender of your ideology and the fact that government policy could have significantly screwed things up (in addition to private behavior) has made you like look an idiot.
And no, I haven’t lost the argument - but you knew that. You love to announce victory (over and over!) in hopes that no one will actually read what you write and realize you are a complete fraud trying to tread water on a topic you simply don’t know much about. It’s sad to behold - I was actually looking for a good argument from your side. But, truth is, I have had to spend so much time explaining basic ideas to you and it is clear you have no foundation for an informed opinion on this issue. That’s clear enough, and I realize it has been a waste.
I am off on holiday, and I am done in this thread. One day, maybe we will have a socialist who can provide a decent and coherent argument - that would be a lot of fun. Today is not that day.
Oxford English Dictionary: “1. A theory or policy of social organization which aims at or advocates the ownership and control of the means of production, capital, land, property, etc., by the community as a whole, and their administration or distribution in the interests of all. 2. A state of society in which things are held or used in common.”
Compact Oxford English Dictionary: “a political and economic theory of social organization which advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.”
Social policy :
Social policy primarily refers to guidelines and interventions for the changing, maintenance or creation of living conditions that are conducive to human welfare.
"I don’t know what you mean by ‘socialism,’ " Thunderbolt23 said.
Ryan P McCarter smiled contemptuously. "Of course you don’t - till I tell you. I meant ‘there’s a nice knock-down argument for you!’ "
"But ‘socialism’ doesn’t mean ‘a nice knock-down argument,’ " Thunderbolt23 objected.
“When I use a word,” Ryan P McCarter said, in rather a scornful tone, “it means just what I choose it to mean - neither more nor less.”
"The question is, " said Thunderbolt23, “whether you can make words mean so many different things.”
“The question is,” said Ryan P McCarter. “which is to be master - that’s all.”
Ryan,
I am sure you will take this as an attack. It is not meant to be.
You have always been an enigma to me. I do not doubt your intellectual capacity. I only marvel at what I see as the misapplication of it.
Reading this exchange between yourself and TB23, a few things have become painfully clear. You are obviously well read on the various flavors of communism and socialism, or at least the theoretical aspects of said ism’s. Equally obvious is your lack of knowledge and understanding of economics and finance.
You fought a valiant fight. You used what you have to the best of your ability. However, in the end thunderbot23 thoroughly dismantled your arguments. This is not simply my opinion. It just became obvious that you do not have the foundation and understanding to defend against or overcome TB23’s knowledge, experience and application.
You are young, intelligent and passionate, yet you lack enough experiential hooks on which to hang your conceptual knowledge.
I am not suggesting you abandon your cause. I am suggesting that you challenge it often and from all angles with all the data you can. In the end, regardless of your conclusions, you will end up a better man.
[quote]JEATON wrote:
Ryan,
I am sure you will take this as an attack. It is not meant to be.
You have always been an enigma to me. I do not doubt your intellectual capacity. I only marvel at what I see as the misapplication of it.
Reading this exchange between yourself and TB23, a few things have become painfully clear. You are obviously well read on the various flavors of communism and socialism, or at least the theoretical aspects of said ism’s. Equally obvious is your lack of knowledge and understanding of economics and finance.
You fought a valiant fight. You used what you have to the best of your ability. However, in the end thunderbot23 thoroughly dismantled your arguments. This is not simply my opinion. It just became obvious that you do not have the foundation and understanding to defend against or overcome TB23’s knowledge, experience and application.
You are young, intelligent and passionate, yet you lack enough experiential hooks on which to hang your conceptual knowledge.
I am not suggesting you abandon your cause. I am suggesting that you challenge it often and from all angles with all the data you can. In the end, regardless of your conclusions, you will end up a better man.
[/quote]
I dont want to fight ryans battles for him because I dont think he want me to.
but I have a question Jeaton.
1: how is it painfully clear that ryan lacks knowledge about economics, but at the same time is able to read and understand marx who wrote “das kapital”. I would guess that it takes some understanding of basic economics to fully understand “das kapital”. the reason I ask is because people to often in here, just make a statement about somebody being wrong or similar, without explaining why they are wrong. ( I know I have said this before, but it obviusly needs repeating ).
So if you could be so nice and explain why ryan dont understand economics?
