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agmlauncherFeb 6, 2012
Free market ideology is not the problem. Crony capitalism and socialism for millionaires is what is causing our economic and political woes.
Crony capitalism and socialism involves setting up regulations in such a way that it CREATES artificial barriers to entry, making competition more scarce. The only time the government needs to step in, is when an industry has a high barrier to entry and competition is naturally scarce as a result. For example the ISP industry requires billions of dollars of fiber investments. Nobody wants to invest that kind of capital into the system when more competition = lower market share and thus a harder recouping of those investments. As such, the government should step in and work out ways to reduce that high cost barrier so as to foster more competition.
Then consumers will sort out the problems from all of that competition. Prices will be lower, service will be better, etc. Industries that have competition work perfectly fine. Industries that don't have much competition, don't work perfectly fine.
bobcat7407Feb 6, 2012
Good post. On a side note, which AGM did/do you launch?
jphrFeb 6, 2012
Nice to illustrate that free market ideology actually is the problem. You are clearly assuming that "the market" will solve everything. Markets are not stable by nature but lead inevitably to oligopolies. Of course the problem gets exacerbated by crony capitalism.
Google for "DOJ HHI" and you will find that your Department of Justice is perfectly aware of the fact that market must be managed. Over the last few decades the political will was lacking, because a thoroughly corrupted political system allowed itself to be hijacked by corporate interest instead of fulfilling its fiduciary duty to the citizens by providing a safeguard against exploitation by the economic system.
Your ISP example refers to a so called natural monopoly. It simply is not worthwhile to develop a parallel infrastructure. This applies for instance to the last mile. Solution in Europe was to force the incumbent to split in a regulated tariff network operator and a service provider selling services to end users. However the network operator is also forced to sell these services at the same conditions to any other service provider. The resulting competition became fierce: the prices dropped and service increased spectacularly.
Lesson: The political system has to define the framework for the economic system in such manner that competitions remains guaranteed over time. Clearly one has to avoid establishing a private monopoly. So sometimes regulation is the only answer to safeguard the voter/consumer against exploitation.Comment is buried, click here to see the rest.
nmw6Feb 6, 2012
Well said.
planet87Feb 7, 2012
No, he didn't say the free market solves everything. Half of his post was explaining something where the government needs to step in.
Did you stop reading after the first sentence? Really?
nmw6Feb 6, 2012
But the government shouldn't step in when a financial crisis threatens the pensions of millions of Americans?
nerysFeb 6, 2012
take that bail out and "secure" the pensions. let the companies FAIL. and it would have cost us less too. a lot less.
eraptorFeb 6, 2012
Free market ideology isn't the only problem, but it is a major contributor to the economic problems we see today.
At it's core, free market theory fails because it's proponenets ALWAYS underestimate the power of greed in undermining it's effectiveness and overestimate it's capacity to self-regulate. "Crony capitalism" and "millionaire socialism" are merely symptoms produced by a fundamental human flaw (i.e., greed) held by MOST businessmen/politicians.
Free Market ideology is based upon free market THEORY. "Theory" refers to an UNPROVEN economic belief. It's time free market proponents stopped treating this economic THEORY as though it was a PROVEN FACT. It fails to work as advertised EVERY time it has been attempted. Dubya happened to be the LAST moron who relied TOO MUCH on it.Comment is buried, click here to see the rest.
nerysFeb 6, 2012
your using the wrong word. what we have is ANYTHING BUT a free market.
its damned near the opposite of a free market. we have a "bought and paid for" market. not a free market.
a free market fixed MOST problems. the exceptions are when the market "CAN NOT" be free (usually infrastructure such as electricity or water or internet for example)
Infrastructure must be government regulated to prevent abuse.
Case in point.
When we have GOVERNMENT regulated phone it was cheaper and I paid less taxes.
when they deregulated the price skyrocketed yet my taxes went up (later price dropped ONLY because wireless became viable as a competition for it)
WATER use to be cheap
they deregulated now its orders of magnitude more expensive AND my taxes go up.
Electricity is now deregulating.
Guess what? My rates are starting to SKYROCKET and so are my taxes.
So where is the savings in this? there is none. only anal raping.
we expect our electric bills to nearly DOUBLE next year and I have NO idea what I am going to do about it. WE CAN NOT PAY DOUBLE. We don't make enough money.
I have already made massive reductions in our electrical usage. more than 60% of my house is now LED lit.
I am not sure where else we can reduce. we sure as hell can't cut it by HALF to keep the same bill we have now.
We are already being taxed at over 50% of our total earnings. How much more can they bleed from us before we have no more to give?
eraptorFeb 6, 2012
You're recognizing the problems, but are misdiagnosing the causes. The excessive prices you recognize and are righteously indignant over are driven by the private sector, NOT the public sector.
That economic impact isn't limited to infrastructure as the private sector engages in the same price gouging and market manipulation in every sector of our economy where government regulations are absent, neglected or watered down. Take commodity speculation for instance. The private sector claims oil prices are driven by market forces/supply and demand, but close inspection of futures contracts indicates that the BANKING industry holds, by far, the LARGEST futures contacts making it a market MANIPULATOR since it's NOT an end user/producer.
While I wish free market theory worked as advertised. Tragically, the country's economy "hits a wall" every time it's put into practice.
By the way, free market practices are the REASON your wages haven't kept pace with the cost of living. I witnessed the causes for that economic/financial "disconnect" up close and personal for over 25+ years.Comment is buried, click here to see the rest.
nerysFeb 6, 2012
its never been put into practice. EVER. not once.
because you can not FUNNEL wealth to an elite few in a free market system so no one ABLE to try it is WILLING to try it.
that is my point When it GOES PRIVATE it GOES "screw the public"
The problem with INFRASTRUCTURE is I don't really have a choice in the matter.
I NEED electricity. there is no viable way for me to get by (and no LEGAL way) without it.
I NEED water I NEED SEWER again no viable way without and not LEGAL without. (at least where I live)
so when these services "go private" all that happens is we get RAPED.
a republic is supposed to be a little bit of everything.
You have a little bit of communism a little but if dictatorship a little bit of socialism and a little bit of capitalism and a LITTLE bit of democracy.
the mixture is the magic.
a free market can not exist in a vaccum. someone will ABUSE an advantage. THAT Is the moment where government should step in. NOT TO CONTROL the market but to simply "remove" the abuse and then "STEP BACK" and leave it alone again. Nothing more.
My wages are fine. The government simply takes too much of it in taxes and banks take too much of it with USURY.
REMOVE immoral taxation (NO taxes on non commercial property school or local) and NO TAXES on WAGES (which are not income)
and remove USURY from the banking system and 99% of our problems go POOF.Comment is buried, click here to see the rest.
eraptorFeb 7, 2012
If you're under the illusion free market theory has never been implemented, you don't understand it as well as you assume. Regulatory negligence and deregulation are BOTH as effective as if regulations NEVER existed at all (aka FREE MARKET). How is this lost on you?
Redistribution of wealth FROM the middle class TO the top 1% wasn't possible until AFTER MAJOR deregulation was pursued by Reagan and, later, by COngressional Republicans in the late-90's . That timing and the economic aftermath are NO coincidence.
I agree with your assessment of the government serving as a market referee (i.e., preventing market abuses), but every time it makes the effort Conservatives either cry foul or attempt to eject/muzzle it. It's effectiveness in this role is impossible unless it has the resources to full meet it's obligations. Conservatives attempt to choke off public sector financial resources PURELY to hamstring it's market oversight capabilities. Is this lost on you too?
Finally, if your wages were "fine", you wouldn't be complaining about your tax burden. It's not the tax burden which creates your problem, it's your lack of disposable income. As your wages rise, so does your disposable income.Comment is buried, click here to see the rest.
nerysFeb 7, 2012
I do not believe a free market means no regulation.
I believe a free market CAN NOT EXIST without regulation.
a free market is natural for markets but UN NATURAL FOR HUMAN BEINGS
We strive to "have it all" and will go to great lengths to do that which "breaks" the free market.
Regulation is mandatory to prevent interruptions to the free market but ONLY THAT FAR.
ie you recognize a break in the free market you act to stop it and then you BUTT OUT again.
that is the regulation that is needed.
OUR regulations are NOT about supporting a free market almost ALL of our regulations are PAID FOR to "BREAK" free markets.
My god just go READ some of them. go read medicare part d reform as a really god example of an extreme version of this problem.
My wages are fine. my tax burden is in excess of 50% of my earnings.
so YES the TAXES ARE IN FACT the problem. not the wages.
kwanijmlFeb 7, 2012
"Regulatory negligence and deregulation are BOTH as effective as if regulations NEVER existed at all (aka FREE MARKET). "
Incorrect on two fronts:
1. If a bout of deregulations were to have gotten rid of ALL regulation upon a certain thing, then you could say that there was a free market in that thing, but that has not happened and is not what is happening. You see, it's not that simple; the federal and state registers are full of literally tens of thousands of regulations, built upon thousands of acts/laws/legislation. And most importantly, they are layered on top of one another, such that you have primary, secondary, tertiary, etc. regulations.
One such recent event was the gramm-leach-bliley act which repealed parts of the glass-steagall act, which seperated investment and commercial banking. . . this event no doubt accelerated the boom of the mid-2000s, and the subsequent bust that we are in now. In short, deregulating was a bad thing. But Glass-steagall did not exist in a vacuum, where our wise overlords foresaw the greed of the banking industry and acted preemptively to save us from them. No, Glass-steagall was implemented because of or to mitigate the deleterious effects of prior interferences, namely the institution of the federal reserve in 1913. You have to actually look at these things case by case, and with historical perspective, to really see what regulations are about, and what the "deregulations" left behind. Not much deregulation has taken place, so it cannot by any stretch of the imagination be attributed to some resurgence of the free market.. . and what deregulation there was typically only affected the secondary or tertiary regulations, which were indeed protections to us from the effects of the prior interference.
2. even regulatory negligence still produces some of the effects of the regulation itself; the threat of a regulation being enforced is antithetical to freedom, in just the same way that a robber feigning a gun under his sweater pointed at me is affecting my decision to give him my money. If there is a regulation on the books which affects my business operations, but it is not being enforced, currently, or not enforced very well, I may continue to act in ways which flaunt that regulation, but I would not do so as brazenly, and I would take actions to comply or be prepared to comply with this regulation, just in case. . . hedging my bets essentially.
eraptorFeb 7, 2012
@kwanijml,
You're cherry-picking points to champion your narrative, but your theories are flat wrong for one very simple reason...the U.S. didn't experience an economic downfall of this magnitude until AFTER Republicans implemented their irresponsible financial services industry deregulation agenda.
I don't doubt there are some anti-competitive regulations fully deserving of repeal. The problem is that THOSE were NOT the regulations Republicans targeted. Unlike most Conservatives, I don't favor taking a brainless approach to regulation reform.
austrologiFeb 8, 2012
eraptor you are completely missing the point. Removing one regulation doesn't mean the rest of the monopoly creating risk-aversion diminishing regulations didn't exist. The banks use the fed as an unlimited credit line... bet fails? Borrow and bet bigger!
peppermintpigFeb 7, 2012
eraptor thinks regulation is magic and puts no thought into who is doing the regulating and what their financial incentive, or 'greed' as he would put it, actually is.
eraptorFeb 7, 2012
No, I don't piggy. As I've warned you before, your pathetic attempts at amateur psychology are tragically laughable. Stick to your day job...cleaning toilets.
I am FULLY aware of who writes most legislation and regulations. Are you? Congress gets most legislative and regulatory language from outside special interest groups. We were reminded of this ugly truth when a Conservative legal group was recently found writing most of the anti-union/voter ID legislation being championed in Conservative leaning legislatures across the country.
Piggy...meet hypocrisy, your old BFF.
planet87Feb 7, 2012
It doesn't matter what the mix is. If you have corrupt leaders, it will always fail. It all comes down to morality.
nerysFeb 7, 2012
No there is nothing you can really do about the morality of the individual EXCEPT what we originally intended. SPREAD government so thin for "day to day" operations that corruption would find it difficult to gain a foothold.
ALSO by spreading it thin you increases the capacity of a group of people to DO something about it. I can effect my local mayor much more directly than I can a congressman.
planet87Feb 7, 2012
Agreed. In addition to checks and balances.
eraptorFeb 7, 2012
If you're under the illusion free market theory has never been implemented, you don't understand it as well as you assume. Regulatory negligence and deregulation are BOTH as effective as if regulations NEVER existed at all (aka FREE MARKET). How is this lost on you?
Redistribution of wealth FROM the middle class TO the top 1% wasn't possible until AFTER MAJOR deregulation was pursued by Reagan and, later, by COngressional Republicans in the late-90's . That timing and the economic aftermath are NO coincidence.
I agree with your assessment of the government serving as a market referee (i.e., preventing market abuses), but every time it makes the effort Conservatives either cry foul or attempt to eject/muzzle it. It's effectiveness in this role is impossible unless it has the resources to full meet it's obligations. Conservatives attempt to choke off public sector financial resources PURELY to hamstring it's market oversight capabilities. Is this lost on you too?
Finally, if your wages were "fine", you wouldn't be complaining about your tax burden. It's not the tax burden which creates your problem, it's your lack of disposable income. As your wages rise, so does your disposable income.Comment is buried, click here to see the rest.
eraptorFeb 7, 2012
You're recognizing the problems, but are misdiagnosing the causes. The excessive prices you recognize and are righteously indignant over are driven by the private sector, NOT the public sector.
That economic impact isn't limited to infrastructure as the private sector engages in the same price gouging and market manipulation in every sector of our economy where government regulations are absent, neglected or watered down. Take commodity speculation for instance. The private sector claims oil prices are driven by market forces/supply and demand, but close inspection of futures contracts indicates that the BANKING industry holds, by far, the LARGEST futures contacts making it a market MANIPULATOR since it's NOT an end user/producer.
While I wish free market theory worked as advertised. Tragically, the country's economy "hits a wall" every time it's put into practice.
By the way, free market practices are the REASON your wages haven't kept pace with the cost of living. I witnessed the causes for that economic/financial "disconnect" up close and personal for over 25+ years.
bdbrFeb 6, 2012
There are things that the government should do to protect businesses and individual from things like predatory practices, but too often their intervention has been shaped by lobbyists.
Plus, the government has a powerful relationship with the central bank that plays a part in funneling money from the middle class to the wealthy. For several years, they have been keeping interest rates ridiculously low, purportedly to encourage investment. Most individuals don't get pensions so they need to save for retirement, but if they put money in savings accounts they make less than inflation - you LOSE money by saving money. So it forces individual savers to put their money into riskier assets - first overpriced houses (a big factor in the financial collapse), now volatile stocks. Institutional investors are better positioned to make money from these things (and if they don't, the government bails them our)...money that is often lost by the individual investors.
truthroxFeb 6, 2012
Recent U.S. economic history undermines your belief that free market theory didn't contribute to the nation's financial crisis.
nerysFeb 6, 2012
why do you keep saying its free markets fault when there is "NO" nationwide example of a free market in human history?
eraptorFeb 7, 2012
Don't be such a free market fundamentalist. We don't have to adopt 100% of the model to discover whether it works or not.
We've seen plenty of evidence that free market theory doesn't work. You simply refuse to acknowledge that irrefutable evidence.
nerysFeb 7, 2012
show me ONE example. just one that is NOT infrastructure based (which has built in features that prevent free markets from working ie television radio utilities etc..)
eraptorFeb 7, 2012
Just one?
Answer: Commodity speculation in commodities by the financial services industry over the past 20 years.
I DARE you to examine the FULL economic/financial impact of it on the world, nation/market and, yes, YOU. Fair warning, this research will turn your "world" and ideological beliefs on their head.
P.S. If you're under the illusion that infrastructure and our market can be separated, you're only kidding yourself. Here's some additional food for thought:
http://online.wsj.com/article/SB10001424052970204662204577198833989249406.html?mod=WSJ_hpp_RIGHTTopCarousel_2
You might have to Google the title or pick up a copy of the Feb. 3rd, Wall Street Journal, to read it in its entirety. Suffice it to say, you're engaged in the WRONG economic fight as this article illustrates. The U.S. economy would collapse entirely if we adopted your free market fantasy.Comment is buried, click here to see the rest.
nerysFeb 7, 2012
that is not a free market. NOT EVEN CLOSE. unless your "IN" the elite your not "participating" in such a setup.
Commodity speculation make the market EVEN LESS FREE.
its another example of "regulation" "creating" a problem. not solving one.
nerysFeb 7, 2012
I never said they were separate. I said infrastructure should be government run.
this assumes its run not for profit.
the moment you add "profit" its no longer government run its PRIVATE run under the color of government.Comment is buried, click here to see the rest.
peppermintpigFeb 7, 2012
Government controlling infrastructure is not about greed? From whose perspective?? How do you come to the conclusion that this form of monopoly is acceptable to you but others are not? What you are advocating is called fascism, eraptor.
nerysFeb 7, 2012
I never said it was not about greed. GREED is why it fails. this is why it needs to be not for profit.
if you add profit greed "WILL" take over.
the problem with infrastructure is IT WILL ALWAYS be a monopoly. the very nature of what infrastructure IS means its a monopoly much of the time of the natural sort.
there is only ONE electric wire going to your home. only ONE water line only ONE sewer line.
unless you plan to make multiple grids and multi lines of infrastructure the very nature of what "infrastructure is" is a monopoly.
if your going to have a monopoly the only "right" way to do it is government run NON PROFIT.
otherwise you get what we have today. everyone screwed.
eraptorFeb 7, 2012
Just one?
Answer: Commodity speculation by the financial services industry over the past 20 years.
I DARE you to examine the FULL economic/financial impact of it on the world, nation/market and, yes, YOU. Fair warning, this research will turn your "world" and ideological beliefs on their head.
If you're under the illusion that infrastructure and our market can be separated, you're only kidding yourself. Here's some additional food for thought:
http://online.wsj.com/article/SB10001424052970204662204577198833989249406.html?mod=WSJ_hpp_RIGHTTopCarousel_2
You might have to Google the title or pick up a copy of the Feb. 3rd, Wall Street Journal, to read it in its entirety. Suffice it to say, you're engaged in the WRONG economic fight as this article illustrates. The U.S. economy would collapse entirely if we adopted your free market fantasy. Conservatives/Libertarians are SO clueless it's tragic.
Since this response was so popular with the Digg Patriots, I thought I would bring it back for an encore presentation.
nerysFeb 7, 2012
Asked and Answered. Read the answer I already gave to that.
eraptorFeb 8, 2012
@nerys,
You challenged me to find one example where the free market fails and that is not considered infrastructure. I HAVE.
Commodity speculation has operated with as little regulation as humanly possible (hence...FREE MARKET). This wasn't the case until Republicans deregulated (aka REMOVED regulations) in the late 90's and the Bush Administration muzzled regulators for close to a decade beginning in 2000.
You are correct in concluding that commodity speculation has made our markets LESS free, but that is a DIRECT consequence of UNFETTERED PRIVATE SECTOR behavior (aka FREE MARKET)...NOT public sector interference.
Your ideology has you so twisted up in knots, you can't see the inherent flaws of your beliefs even when they're STARING you in the face. I JUST laid out THAT truth.
Now that I've shown you my evidence, where's YOUR proof that regulations force our commodity prices to unsustainable levels. I want to see the specific regulation(s) you blame for it.
If you need evidence of the deregulation efforts, research everything Phil Gramm (R-TX) and Congressional Republicans championed in the late 90's. There's REAMS of proof in the Congressional record.
P.S. Your notable silence on that article is NOT lost on me. What's wrong? SOE's (aka State Owned Enterprises) got your tongue.
nerysFeb 8, 2012
thats right but you did NOT find me a free market example. you provided me with an ANTI free market example.
you just don't see that reality.
truthroxFeb 8, 2012
@nerys,
eraptor highlighted the very free market behavior you are championing. Are you so blinded by your beliefs that you're incapable of seeing them manifested OR are you simply paid to champion the Koch Brother's self-absorbed agenda? It's not as if there's a shortage of Koch whores prowling social media these days.
Deregulation was pursued with the express intent of creating free market conditions for the financial services industry. Then, after the industry got what it sought (aka free market environment), it proceeded to self-destruct and take our economy with it.
eraptor's example (commodity speculation) nails the point home even if you're incapable of recognizing it.Comment is buried, click here to see the rest.
nerysFeb 8, 2012
truthrox. what he described was crony legislation.
only the "wealthy" can participate in that scam process. a free market is "everyone" what he described was an EXCLUSIVE market not a FREE MARKET.
an EXCLUSIVE market designed to fleece the general population.
that is the OPPOSITE of a free market. that is an ANTI FREE MARKET example.
truthroxFeb 8, 2012
@nerys,
Have you considered the possibility that deregulation unleashed destructive elements of capitalism and irresponsible private sector predators (like the Koch Brothers and others)?
If not, you should because that is what eraptor is criticizing. Remember, the federal government wasn't responsible for creating the financial instruments which collapsed our economy. We have unfettered private sector entities on Wall Street to thank for that. This was free market behavior at it's worst.Comment is buried, click here to see the rest.
nerysFeb 8, 2012
You can't "RIG" the system and then "deregulate" and blame it on deregulation.
regulation is NEEDED. the problem is they are making more "bad" regulation and getting rid of the few "good" regulations.
The purpose of government in a free market is to PRESERVE the free market condition.
a free market CAN NOT EXIST by itself. it has to be maintained.
a free market is naturally self balancing as long as no one gets "enough power" to alter the balance artificially.
this is where government and regulation comes in. not to REGULATE THE MARKET. but to regulate "ABUSES" to the market only.
our problem is the opposite we are getting RID of the checks and balances that prevent abuse of the market AND creating regulations to manifest artificial constructs to kill the free market.
njdoo7Feb 9, 2012
Collectively, people are not smart enough to sort out problems themselves, or we wouldn't be where we are today.
"The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. ...We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. ...In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons...who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind." - Edward Bernays, the father of public relations, 1928
http://en.wikipedia.org/wiki/Edward_Bernays#Philosophy_and_public_relations
However, you are right, free market ideology is not the problem. Our society has never followed free market ideology.
Do I feel free market ideology would solve these problems? No, for the reasons stated by Bernays. I do feel it would lead to a more equal and just society.
limitgovFeb 6, 2012
straying away from free markets is what got us into this mess in the first place.
jphrFeb 6, 2012
Ideology.
nerysFeb 7, 2012
actually we never really HAD free markets. we were STARTING TO which is why the United States accelerated ahead of the rest of the world so quickly. they slowly greed crept in and destroyed the progress we started to make TOWARD free markets (truly free markets)
the problems got "real" when corporations were granted personhood. thats when it started to go downhil and fast.
jqp123Feb 6, 2012
What got us into the current economic mess was the 1999 repeal of the Banking Act of 1933; otherwise known as the Glass-Steagall Act. The repeal was performed under full Republican stewardship, leadership and sponsorship.
This paved the way for the largest re-distribution of wealth ever in the history of the USA --- from middle class home owners and mortgage borrowers to wealthy Wall Street financiers, bankers and investors.
And as they say, the chicken who crows is the one who laid the egg. And the first one to crow about the latest economic downturn was none other than Phil Gramm, a promoter and sponsor of the bill that repealed Glass-Steagall.
http://www.nytimes.com/2008/07/11/us/politics/11campaign.html
http://en.wikipedia.org/wiki/Phil_Gramm
http://en.wikipedia.org/wiki/Glass-Steagall_Act
In other words, what got us into this mess was the removal of common sense regulations that had stood for over 6 decades. As a result of this, every US homeowner lost significant home market value. That money went into the pockets of Wall Street bankers playing mortgage derivative games.Comment is buried, click here to see the rest.
bobcat7407Feb 6, 2012
The repeal of Glass-Steagall was completely bi-partisan.
"Reported by the joint conference committee on Nov 2, 1999; agreed to by the Senate on Nov 4, 1999 (90-8) and by the House on Nov 4, 1999 (362-57)
Signed into law by President Bill Clinton on Nov 12, 1999"
http://en.wikipedia.org/wiki/Gramm%E2%80%93Leach%E2%80%93Bliley_Act
jqp123Feb 6, 2012
From your article:
"During debate in the House of Representatives, Rep. John Dingell (Democrat of Michigan) argued that the bill would result in banks becoming "too big to fail." Dingell further argued that this would necessarily result in a bailout by the Federal Government.[5]"
More prophetic words were never uttered.
Also from your article:
"... the Senate had already passed its version of the bill on May 6 by a much-narrower 54â44 vote along basically-partisan lines (53 Republicans and 1 Democrat in favor; 44 Democrats opposed)."
bobcat7407Feb 6, 2012
And that changes what? The votes on the final bill are all there. If the Democrats had believed in what Dingell said then why didn't they vote against it when it counted? Voting against something when you know it will pass along partisan lines is nothing more than politics when you turn around and vote FOR it.
Good call from Dingell though...
jqp123Feb 6, 2012
"And that changes what?"
Is certainly doesn't change the fact that Republicans were and remain the outspoken champions of deregulation --- despite the fact that it wrecked the economy just like it did in the 1930s. It's deja vu and selective amnesia all over again.
The unspoken downside --- a "free market" also means the freedom to make a bigger mess of things. The job of regulation is to try and avoid that.Comment is buried, click here to see the rest.
bobcat7407Feb 6, 2012
One select piece of deregulation in a massively manipulated/regulated market does not somehow show that deregulation "wrecked the economy".
The free market also makes people who make a big mess suffer the consequences, government intervention just socializes the consequences. Regulation certainly has its place, but it also increases cost and impedes business quite often.
And if you can get past the partisanship you'll see that Republicans are not the de-regulators that you claim. Not to mention that none of that changes the facts about the repeal of Glass-Steagall.
"Overall, the final outcome of this Republican regulation has been a significant increase in regulatory activity and cost since 2001. The number of pages added to the Federal Register, which lists all new regulations, reached an all-time high of 78,090 in 2007, up from 64,438 in 2001."
http://reason.com/archives/2008/12/10/bushs-regulatory-kiss-off
jqp123Feb 6, 2012
"The free market also makes people who make a big mess suffer the consequences, government intervention just socializes the consequences."
Sometimes the "free market" allows those who made the mess to retire fat, dumb and happy and others are left with the consequences.
In this particular case, *others* included anyone who owned a home. The government bailouts just compounded the injury to the average Joe.
And all this is precisely why regulations exist and why they are not necessarily bad and why Republican rhetoric is just that --- rhetoric with little basis in fact.Comment is buried, click here to see the rest.
bobcat7407Feb 6, 2012
"Sometimes the "free market" allows those who made the mess to retire fat, dumb and happy and others are left with the consequences."
Yup, but not as often as a heavily regulated market I would argue. Specifically the politicians that make the regulations.
"And all this is precisely why regulations exist and why they are not necessarily bad and why Republican rhetoric is just that --- rhetoric with little basis in fact."
Like I said, one piece of regulation does not make or break an argument in a highly regulated environment. There are too many working pieces. But Glass-Steagall is certainly not the only, or even most significant, explanation for the recession.
"The interaction of six government policies explains the timing, severity, and global impact of the financial crisis."
http://www.american.com/archive/2010/december/how-government-failure-caused-the-great-recession
http://www.slate.com/articles/news_and_politics/the_big_idea/2010/01/what_caused_the_economic_crisis.html
nerysFeb 6, 2012
DEREGULATION is what we need.
just not "THIS" deregulation :-) ie we are deregulated the WRONG THINGS.
when I SAY deregulate I mean to REMOVE the regulations that corporations paid to get put in place to CREATE their monopolies.
ncmusicFeb 6, 2012
You only quoted the vote after the two versions were merged, which is often more of a procedural vote that the two bills were reconciled. You left out:
"The House passed its version of the Financial Services Act of 1999 on July 1, 1999, by a bipartisan vote of 343-86 (Republicans 205â16; Democrats 138â69; Independent 0â1),[6][7][note 1] two months after the Senate had already passed its version of the bill on May 6 by a much-narrower 54â44 vote along basically-partisan lines (53 Republicans and 1 Democrat in favor; 44 Democrats opposed).[9][10][11][note 2]"
Clinton absolutely gets the blame for signing it.
bobcat7407Feb 6, 2012
A procedural vote? If they are against something, then stand by that and be against it. Voting against something when you know it will pass along partisan lines, then voting FOR it the next time around is pure politics.
ncmusicFeb 6, 2012
I agree that they need to have more of a spine and vote what thing think always, but that's not what happens when bills go through the processes of reconciling the senate and house versions. The reconciled version almost always has a higher majority of passing than the original bill.
bobcat7407Feb 6, 2012
Yeah, I know that's how it works. Like you said though, they need to have more of a spine. If they believe something is going to do damage to the country, then vote against it.
truthroxFeb 6, 2012
Democrat's didn't lead the charge to repeal Glass-Steagall or deregulate the financial services industry. Republicans get that credit after gaining the Congressional majority in 1994. So, regardless of that disgraceful vote tally, Republicans are fully to blame for the economic consequences they created.
bobcat7407Feb 6, 2012
So Democrats voted for it and signed it into law...but they get none of the blame? That's a pretty good deal. I hope someday you're rating me at my job, I'll just point at the other guy and you can blame him for any mistakes.
YachtRokrFeb 6, 2012
Suggesting Democrat's are equally culpable for Republican efforts is ridiculous.
Democrat's who supported that irresponsible piece of legislation share some of the blame, but the lion's share of blame goes to Republicans.Comment is buried, click here to see the rest.
bobcat7407Feb 6, 2012
Suggesting that anyone who voted for this/signed it is not equally culpable is ridiculous. I don't care what letter comes after their name.
eraptorFeb 6, 2012
So if we read you correctly, bobcat7407, Fire fighters and arsonists share the same blame since they're both at the scene of the fire.
bobcat7407Feb 6, 2012
Wow, you need to read it again. That's not even close.
eraptorFeb 7, 2012
@bobcat7407,
I'll tell you what, when Democrat's BEGIN to show the same zeal for irresponsible deregulation we saw from Republicans in the late-90's you'll have a point.
Until then, Conservatives (i.e., Republicans AND Conservative "Democrats") DESERVE the national disgrace they've EARNED by deregulating the financial services industry and ensuing economic collapse which resulted from it.
bobcat7407Feb 7, 2012
You can tell me whatever you'd like, it doesn't change the facts.
eraptorFeb 7, 2012
My point exactly! Take a good look at who (i.e., WHICH political party) INTRODUCED deregulation legislation and championed it through Congress.
bobcat7407Feb 8, 2012
Take a look at who VOTED FOR IT. The rest is all talk, what matters is the vote. If you want to simply buy into talk from either side, feel free. I'll stick with the hard facts and meaningful actions that are taken.Comment is buried, click here to see the rest.
linuxpersonFeb 6, 2012
"The repeal was performed under full Republican stewardship, leadership and sponsorship. "
Your comment stinks of partisan hackery.
jqp123Feb 6, 2012
"Your comment stinks of partisan hackery."
Because it happens to be true? Or because it is an unflattering statement on Republican leadership?
All the sponsors of the GrammâLeachâBliley Act were Republican. The bill was pushed through the Senate on a party line vote --- only 1 Democratic Senator voted for it. The bill was a shining example of the Republican philosophy --- the removal of unnecessary regulations.
Do you own a house? If so, how much value did you lose over the last decade? Did you write a "Thank You" note to the Republican Party for eliminating government regulations?
Your comment stinks of partisan idiocy.Comment is buried, click here to see the rest.
truthroxFeb 6, 2012
No, that comment rings true. The stench, you're smelling, comes from the partisan circles you frequent and the national disgrace you've earned.Comment is buried, click here to see the rest.
peppermintpigFeb 7, 2012
Using partisanship to label someone a partisan. Nice. It's too bad you think you're attacking a republican.
bdbrFeb 6, 2012
Funny how the Democrat president who signed that bill - the one person who could have individually stopped it - is always relinquished of responsibility in descriptions like these. Though the GOP pushed it through to his desk, he signed it.
bobcat7407Feb 6, 2012
That's true, but the GOP aren't the only ones who put it on his desk. It passed the Senate with the support of 84% of the Democrats and the House with 75% of the Democrats.
http://en.wikipedia.org/wiki/File:Gramm-Leach-Bliley_Vote_1999.png
truthroxFeb 6, 2012
I agree Clinton should have vetoed that bill but it would have never reached his desk if Republicans hadn't championed the issue from Day 1.
jqp123Feb 6, 2012
"the one person who could have individually stopped it - is always relinquished of responsibility in descriptions like these."
Funny, I don't remember relinquishing anyone of responsibility.
Bottom line --- the "free market" isn't always good, government regulation isn't always bad.
Those who try to argue otherwise got swindled along with everyone else when regulations were removed. The only difference --- they're too blinded by partisan ideology to even realize that their pocket was being picked.
bdbrFeb 6, 2012
"The repeal was performed under full Republican stewardship, leadership and sponsorship."
Your words, not mine. Was Clinton not the leader of the country? How is it that a President's signature isn't even worthy of mention? You talk about being blinded by partisan ideology, but I've have completely Dugg your comment without the partisan finger-pointing.
YachtRokrFeb 6, 2012
No one disputes the impact of Clinton's signature, but it's disingenuous to blame legislation on the executive branch when legislation originates from the legislative branch (aka Congress and the majority party who leads it).
That's not partisan, it's civics 101.
jqp123Feb 6, 2012
"How is it that a President's signature isn't even worthy of mention?"
I knew that someone would be along shortly to pick up any slack<g>.
Clinton did sign it --- but the fact remains, Republicans were and remain the outspoken champions of deregulation and the "free market" philosophy that the bill embodied.
The result speak for themselves, yet Republicans learned nothing. They continue to spew the same flawed rhetoric that lead us to the current mess.
bdbrFeb 7, 2012
YachtRokr, it's disingenuous to blame legislation *entirely* on the executive branch when legislation originates from the legislative branch. It's also disingenuous to place blame solely on the legislative branch for legislation signed by the executive branch. I hold everyone directly involved responsible.
eraptorFeb 7, 2012
@bdbr,
The legislative branch gets it's name from it's core responsibility, crafting legislation. As such, it makes COMPLETE sense to hold this branch of government accountable for the products they draft and pass onto the executive branch.
bdbrFeb 8, 2012
@eraptor: Perhaps I was unclear, because I completely agree with you. Congress is responsible for the legislation they pass onto to the President, and the President is responsible for legislation he signs. Just think how different the past decade might have been had he vetoed it.
kwanijmlFeb 6, 2012
Ah. . but look deeper grasshopper. Why did we need Glass-Steagall in the first place?
. . . secondary regulations on top of primary regulations (think Federal reserve, FDIC) which rendered the banking and financial system of this country, completely exempt from and exogenous to market forces.
So long as we have a central bank manipulating the interest rate and cartelizing banks, etc. . . then we do need a seperation of commercial and investment banking, among many other regulations (which will beget further interferences from government). A free market does not, and cannot create the booms and busts which the Federal Reserve has, which were excacerbated and set off by the gramm-leech-bliley act removing some of the glass-steagall protections.
nerysFeb 6, 2012
what got us INTO this mess was granting PERSONHOOD to corporations.
THAT is the "root cause" of most of our problems. ALMOST ALL current problems can be traced back to "THAT" single decision.
linuxpersonFeb 6, 2012
Since when do free market economies have governments that bailout entities that wouldn't exist in a free market (i.e. corporations)? Oh that's right, since the uneducated morons rebranded the term "free market" just like they rebranded the term, "liberal" to mean exactly the opposite of what it actually means.
pw378Feb 6, 2012
Exactly correct. The U.S. is very heavily regulated and manipulated by the Government - then they point to the failings resulting from this situation as evidence of why free markets don't work.
nmw6Feb 6, 2012
We'll we probably should have restructured/broken up all of the big banks when they were bailed-out so that there would never be the risk of "too big to fail" again. Now conservatives want to strip away the very regulations that could protect against future financial crises.
linuxpersonFeb 6, 2012
"Now conservatives want to strip away the very regulations that could protect against future financial crises."
Would those be the same conservatives that oversaw the largest Federal
regulatory expansion in modern history during Bush's two terms?
The big banks should have NEVER been bailed out to begin with. You f**k up, you should fail.
YachtRokrFeb 6, 2012
No, that would be a second batch of conservatives who were elected in 2010. Conservative efforts to stonewall financial reform grew significantly worse in the House and Senate after the 2010 election.
While I oppose the bailouts as much as you do, they wouldn't have been necessary absent financial services industry deregulation championed by Conservatives in the late-90's.
Aren't you one of the deregulation proponents? Meet Karma...
bluto36Feb 6, 2012
100% you cant make it? see you later, someone will take your place and they will be better, stronger and have more hunger...
plus they wont have the stable of politicians the big boys own
too big to fail
what what
nmw6Feb 7, 2012
I work hard and put money away in a pension. Then someone else is an IDIOT and GAMBLES my money away in bad investments. I am forced to eat CAT FOOD in retirement.
WHATS YOUR SOLUTION??
FYI: Bush oversaw the largest expansion of the federal gov't in recent history NOT the largest regulatory expansion. He was actually a champion of deregulation.Comment is buried, click here to see the rest.
linuxpersonFeb 7, 2012
Someone who you voluntarily allowed to gamble with your money. You should have diversified your retirement savings.
I shouldn't have to sacrifice my retirement savings to make up for your failed gambles.
nmw6Feb 7, 2012
Are you unaware how pension programs work? Are you unaware of the financial crisis of 2008? Are you unaware of the ethical and market failures that lead to the stock market crash? OR Did Fox news convince you that the financial crisis was the result of poor people not having "personal responsibility" or the Obama administration?
Acting like the financial crisis was the result of a lack of personal responsibility is plain stupid. Its the unemployed peoples fault right? The system should n't be changed in your opinion?
The conservative opinions you hold are responsible for the decline of the middle-class in America... Come back to reality please.Comment is buried, click here to see the rest.
linuxpersonFeb 7, 2012
If you planned on retiring with your pension fund, you're a useful idiot and nothing more. 401k plans and pensions funded are risky investments, despite what some white shoe boy told you.
My plan is to never retire because that's the reality of a centrally planned economy.
nmw6Feb 7, 2012
"401k plans and pensions funded are risky investments" Isn't that a problem? Especially when people are told how safe they are and therefore put their savings into them.
You see no problem with hardworking and decent people getting screwed over by rich liars?Comment is buried, click here to see the rest.
linuxpersonFeb 8, 2012
Nice straw man but I never said that. What I did say is that I shouldn't be forced to bail you, or your failed company, out.
eraptorFeb 6, 2012
"Since when do free market economies have governments that bailout entities that wouldn't exist in a free market (i.e. corporations)?"
Bailouts were an act of desperation by FORMER free market proponents after an over-reliance on free market theory COLLAPSED the U.S. economy. Did you SLEEP through Dubya's "lost decade"? I didn't.Comment is buried, click here to see the rest.
kwanijmlFeb 7, 2012
Great answer. . . keep at it with the list below and you might explain your way out of the twist in definitions for "free markets". . .
Since when do free market economies have:
-Central banks?
-Legal tender laws?
-Implicit and explicit bailout gaurantees?
-Undeclared wars of aggression?
-Standing armies?
-Suspension of habeus corpus?
-Illegal detainment and torture of u.s. and non-u.s. citizens?
-Military bases in nearly every country on earth?
-Literally untold amounts spent on endless federal alphabet soup of top-secret sector agencies.
-Wiretapping?
-Illegal checkpoints and fondling at airports and train stations?
-State grants of monopoly and licensure for nearly everything, but especially for private organizations like the A.M.A. to dictate the number of doctors who can be licensed and who can practice, and limit medical schools (limit the supply of medicine.. . and we wonder why it's so expensive here)?
-Laws preventing healthcare providers to sell accross state lines?
-distortion of healthcare market by government spending upwards of 40% of nations entire medical spending (medicare/medicaid). . . who becomes the real customer and master for the healthcare companies?
-compulsory government/public shools?
-Monopoly on certification and accreditation of schools and curriculums?
-Laws against homosexual relationships?
-Direct taxes?
-Indirect taxes?
-Inflation/debasement of currency?
-Tariffs?
-Trade agreements?
-Embargoes on doing business with other countries?
-Military and economic manipulation of the world economy and reserve currency status?
-Complexification of the criminal code to the point that it becomes a labrynth specifically designed to leave the state at all advantage, and no hope for the accused but to make a plea bargain.
-Absolute power in the supreme court judiciary (no higher power, or appeal court)
-legislation by reinterpretation of laws and use of court precedent
-patent, copyright, and other I.P. protections
-public funded utilities and infrastructure projects
-emminent domain
-destruction of forest lands by NFS
-innumerable e.p.a. regulations
-overall weakening of private property laws
-mandatory welfare programs and social security
-prohibitions, drug wars
Shall I get more specific and list out each of some-odd hundered-thousand acts and regulations that are on the federal books? And this is just the federal government! Our state and municipal governments weigh an almost equally heavy toll on us. . .in some ways more (property taxes alone in most places are enought to completely distort an economy).
Have you really deluded yourself to believe that our current economy and society are even within the same galaxy as a free market? Ask yourself what IS still free from government interference. . . you will be hard-pressed to find anything. . . and yet, in your mind you would equate what little is left which resembles capitalism or a free market and inflate that with the rhetoric of the right wing (who in action do nothing if not perpetuate the growth of the state and the destruction of freedoms).
On the flip side, take a look at the sectors of our economy which are the least regulated; tech companies. . . . and you will find the only industry in our economy that is still flourishing (for now).
Most people are fooled, for the time being, by the cries against "capitalism" from people like you. . . . but the masses are wising up. They are seeing that the emperor has no clothes on. Your statist system is crashing down around you and being replaced by the voluntary exchanges of peaceful people every day. . . you will be left behind, wondering what happened to the world.
bluto36Feb 7, 2012
but it is so so "progressive" and popular to state capitalism is the problem and then immediately expand on that by showing you have no idea what capitalism is or that the problems you see with capitalism are not capitalistic in nature but still blame capitalism.
it is like blaming nature for someone running over your dog with a train of space shuttles on the freeway
planet87Feb 7, 2012
That's a little extreme. It's like blaming mother nature for your dog getting run over by a herd of buffaloes being scared by the train of space shuttles on the freeway.
LOL
YachtRokrFeb 8, 2012
Capitalism is no more a homogeneous concept than immigration is. Just as we have responsible AND irresponsible forms of capitalism, we have responsible and irresponsible forms of immigration.
Until ideologues get this concept through their thick skulls, we will continue having "major" social problems from irresponsible forms of BOTH capitalism and immigration.
To the extent anyone is incapable of making the distinction, they aren't morally or ethically competent to render a credible opinion on the subject at hand.
ultimisFeb 7, 2012
While I support what you are saying on free markets, half your list has nothing to do with the economy (which is what a free market is talking about).
kwanijmlFeb 7, 2012
Non-sense. Money is not the only medium we use to exchange with each other in. Our actions are the economy and they affect the economy. Non-monetary transactions affect business of a monetary nature. Nearly everything we do in society is part of the market. . . is economics.
I'll quote from Peppermintpig below, who explains this well:
"Economics is a social science meant to explain value theory and market behaviors. Economics can never be a justification FOR something, or TO DO something. It either explains and informs or it does not. It cannot advocate.
This is true of natural sciences. We do not ascribe to nature the wants and needs of an individual in the act of describing the function of the universe, unless of course we hold greater regard for something other than empirical truth."
Take TSA screening at airports, for example; let's say that it didn't even cost us anything (in money/fees/taxes). . . we would still all change our behavior (I know I won't fly unless I absolutely have to for business), which affects the airline industry, and all other factors down the line.
This is the very reason why so many do not understand markets, and feel that they cannot be left to their own devices, but must have a wise government overlording them. . . they don't understand the other side of the equation with respect to incentives. . . because so many of the dis-incentives to act in a greedy or fraudulent way, come in the form of the more non-monetary type interactions which I listed above, especially regarding having a free market in laws and courts. A properly working free market does not presuppose that big business will "regulate itself", or that all will function beautifully, given the status quo. . .no, the status quo is the problem, it is a marketplace and legal environment which dis-incentivize good behavior, and necessitate the interventions of a government.
peppermintpigFeb 9, 2012
Yes, economy is about our individual time preferences, and not merely monetary gains. It makes no ethical sense to malign money which is a representation of the value you created by choice. Making choices over time sacrifices alternative choices, hence economists try to measure the value gained in hierarchies and orders of preference, and use this knowledge to solve economic problems (where having more money does not solve a given market problem).
I refuse to fly.
eraptorFeb 8, 2012
@kanijml,
If you don't want to live in a civilized society and enjoy the lifestyle it makes possible...DON'T. I'm not suggesting the U.S. is perfect, but adopting most of the "solutions" you prefer would cripple our society and destroy it completely.
Free Market THEORY has NEVER worked as advertised. That's why it's STILL nothing but a fantasy.
"On the flip side, take a look at the sectors of our economy which are the least regulated; tech companies. . . . and you will find the only industry in our economy that is still flourishing (for now)."
The "tech industry" is your shining example of the virtues of free market? With all due respect, I'm old enough to know where MOST of the seed money/research for that industry originated AND continues to...THE FEDERAL GOVERNMENT. Since I have no doubt you'll blindly dispute what I'm telling you...RESEARCH IT!!!! I was playing with computers before Steve Jobs and Woz EVER partnered up in that garage. How is that possible, you say? I had a cousin who was an electrical engineer/researcher for a major DEFENSE CONTRACTOR and toyed with some of that leading edge "work".
Whether you realize it or not, your anti-government approach to U.S. society is CRIPPLING the country's ability to compete on the global stage. Here's some sorely needed food for thought:
http://online.wsj.com/article/SB10001424052970204662204577198833989249406.html?mod=WSJ_hpp_RIGHTTopCarousel_2
If you can't access the full article with this link, either Google the title, "U.S. attacks China Inc." or pick up a copy of the Feb. 3rd Wall Street Journal (section B).
It's a REAL eye-opener to those who assume Libertarian/Conservative economic theory is a "solution" to the nation's economic problems.Comment is buried, click here to see the rest.
kwanijmlFeb 8, 2012
Alright. . . . go back and read my comment, and all the other comments to you as well on this article. . . . you're just not getting it. You are simply not comprehending at all what I'm saying, or you aren't even reading what I've written.
I cannot respond to this comment in any useful way, because it completely ignores the substance, letter, and spirit of what I've been saying to you.
You seem unable to cognitively cope with the actual assertions I'm making, so you are completely avoiding it altogether. You are simply skirting the issue:
LinuxPerson: the meaning of "free market" has been totally twisted so that it fits a certain narative that is popular today. We have nothing close to a free market. The recent bailout for example.
You: The bailout was an innevitable outcome to the free market policies of the right which failed.
Me: Okay, nothing republicans or democrates have done in the last 100+ years has anything to do with free market policies being employed or having failed, so bailouts can't possibly be attributed to free market policies (in fact the term: "free market policies" is really an oxymoron; which is the whole crux of the matter here) but let's run with that. . . . here's a ginormous, insurmountable list (which really only scratches the surface) of other ways the government interferes with markets; and thus, markets are not free in any way shape or form. I'm not even trying to make a case here, for or against the utility of free markets (when I make my case for free markets, you'll know it; I mentioned one small but poignant example in the tech industry). . . .I'm just simply trying to get you to understand that a free market has been nowhere to be found, therefore, whatever our economic woes are or have been, they cannot possibly be pinned on free markets or the repealing of regulations, when so many many other interventions still exist. Can you at least acknowledge that simple fact, or are you truly that brainwashed?
You: wharblewarble. . . price of civilized society. . . move to somalia. . . conservative/libertarian. . . .government created computers. . . strawman. .. . .wharblewarble. . . .you just don't know that free market is killing economy, because I say so makes it true, even though I'm completely ignoring the irrefutible evidence presented which shows that what I'm calling free markets has nothing to do with markets which are free from interference from government. . . .
I mean really. . . what more can I say to someone like you?
Stay on point, address the actual assertion being made, not your strawman, and I'll be happy to engage in a civilized and intellectually stimulating debate with you on the topic, and you'll find that I'm really pretty fair and not too proud to admit when I don't know something, or when I need to hone my thought processes to be able to explain coherently why I disagree.
norman619Feb 6, 2012
So a free-market economy is one in which government bails out failing companies? Where government meddles and tries to save losers and penalize winners? Damn! Then I I guess I'm against the new free-market system!
eraptorFeb 6, 2012
What would YOU have done if YOUR misguided economic theories threatened to bankrupt you too? If you were a Wall Street Banker with the ability to influence government...the SAME thing they did...force a bailout.
This was NOT a failure of Keynesian intervention. If anything, Keynesian economic theory PREVENTED a second Great Depression and this is acknowledged by EVERYONE, but blind ideologues.Comment is buried, click here to see the rest.
norman619Feb 6, 2012
Ummm let the companies that make crappy business decisions suffer the consequences of those decisions. Sure it would suck for all those connected to those businesses but in the end the market would be better off as would the nation. All we do now is tell businesses they can be as wreckless as they wish because if they mess up and fall Uncle Sam will be there to catch them. You NEVER want to reward bad behavior in business which is exactly what we are doing. The markets need SOME regulation to protect against fraud and such but that's about it.
eraptorFeb 6, 2012
As a capitalist, I normally share your sentiment that failure should bring consequences for those who dare to go there.
Unfortunatley, Conservative deregulation efforts in the late-90's made this a disastrous consequence for ALL of us, not just the numbskulls who rolled the dice. Had we turned our backs on the financial industry's collapse in 2008, we would be in a full-blown Great Depression around the globe. Most family fortunes would have been wiped out in the process.
This is PRECISELY the economic danger Glass-Steagall and other Depression-era financial services industry regulations were DESIGNED to prevent. Fraud isn't the only destructive business practice which endangers our market.
Take a good look at the economic impact of late-90's capital leveraging expansion (i.e., from 15x to 40x underlying asset values). This regulatory change, alone, turned Wall Street into another Vegas casino. It's NO accident that Lehman Brother's went under with a 33-1 debt/equity ratio or that MF Global sank holding a 40-1 debt/equity ratio. As for it's impact on the housing crisis, mortgage backed securities and credit default swaps (aka derivatives)s were vastly overleveraged thanks to that regulatory change. That's why their collapse brought so many Wall Street firms to their knees. Pick up a copy of Michael Lewis' book, "The Big Short", and read it for further insight.Comment is buried, click here to see the rest.
bdbrFeb 7, 2012
It's hard to know what verbal agreements were made in the revolving door between Wall Street and Washington. It was likely implied all along that they would be bailed out should these ridiculous risks go wrong. Bankers avoid moral hazard. No doubt they thought the occasional bailout would be small change in a hot economy.
YachtRokrFeb 8, 2012
If the bailouts were "implied", the Bush Administration would not have had to jump through so many hoops to make it happen.
Don't forget the main player, Hank Paulson, was a Goldman Sachs alum and former Chairman. Goldman Sachs was one of the firms on the verge of total collapse.
bdbrFeb 8, 2012
Raghuram Rajan describes Goldman as "a bank with alumni in every corner of the government." That's the revolving door I was speaking of.
truthroxFeb 8, 2012
I share the collective revulsion at that revolving door.
kwanijmlFeb 7, 2012
"What would YOU have done if YOUR misguided economic theories threatened to bankrupt you too?"
I don't know if the economic theories employed were Norman's but they certainly weren't "free market" policies.
"If anything, Keynesian economic theory PREVENTED a second Great Depression and this is acknowledged by EVERYONE, but blind ideologues."
Appeal to authority.
eraptorFeb 7, 2012
The economic theories which led to the financial services industry collapse were the same "free market theories" Norm is prone to supporting (hence, the opposition to bailouts).
"Free Market Theory" calls for virtually NO government intervention whatsoever, which is PRECISELY what Republican deregulation efforts were MEANT to achieve and DID. The Bush Administration NEGLECTED what few regulations they left behind by appointing ideologues to key administration posts and muzzling/firing industry regulators...a "free market" environment by default.Comment is buried, click here to see the rest.
kwanijmlFeb 7, 2012
Completely and utterly false.
Bush was responsible for a net increase in regulations and regulatory burden. Despite their rhetoric, republicans have not been for free markets, any more than democrats have been.
Can you cite for me the deregulations which occured under Bush, and/or which were neglected? I guarantee that for every 1 you can cite, I can cite 100 to 1000 which were still on the books, and still fully enforced (as much as any other time). By your own definition, a free market would only exist in the absence of such regulations, and not just with a minor decrease in the number of such.
Also see my other comments to you regarding the difference between real deregulation and getting rid of only top layers of regulation, but leaving behind the root intervention.
peppermintpigFeb 7, 2012
Central planning is not economics. It is merely an asinine form of financing which has no market based accountability. Monetarists, Chicago school and Keynesianism, are technocratic philosopher kings.
Economics is a social science meant to explain value theory and market behaviors. Economics can never be a justification FOR something, or TO DO something. It either explains and informs or it does not. It cannot advocate.
This is true of natural sciences. We do not ascribe to nature the wants and needs of an individual in the act of describing the function of the universe, unless of course we hold greater regard for something other than empirical truth.
norman619Feb 7, 2012
Only a fool buys into a 100% free market. To see the problem with that all one need do is look at the near collapse in the 90's. Greenspan didn't even want to regulate fraud for f's sake. That demonstrates a complete lack of understanding of human nature. In a wild west environment corruption takes hold pretty damn fast in any market. There needs to be a set of ground rules in place to punish fraud and to prevent monopolies from being born.Comment is buried, click here to see the rest.
peppermintpigFeb 7, 2012
The unchecked authority of a central governing scheme cannot be the steward by which any rules are enforced in a consistent and sensible manner. It is instead the means to an end of greater deviation from lawful and peaceable action.
All violent authoritarianism permeates monopoly, even if it crushes other monoplies to install the greater monopoly on legitimized force.
ennFeb 10, 2012
There was hardly a free market in the 90s. Just think about the role of Greenspan - Fed is not a free market creation.
eraptorFeb 8, 2012
@kwanijml, peppermintpig AND norman619,
I encourage ALL of you to read this article:
http://online.wsj.com/article/SB10001424052970204662204577198833989249406.html?mod=WSJ_hpp_RIGHTTopCarousel_2
If you can't access the full article with this link, either Google the title, "U.S. attacks China Inc." or pick up a copy of the Feb. 3rd Wall Street Journal (section B).
When you're done, take your central planning/seditious BS and throw it in the trash once and for all. This article GUTS your positions COMPLETELY.
The U.S. is getting it's ASS handed to it as a direct result of CENTRAL PLANNING and a STRONG role by trading "partner" GOVERNMENTS/SOE's. If the U.S. adopts your short-sighted ideological beliefs, it will NOT survive globalization. Since I don't favor that outcome, I will fight your positions "tooth and nail" to prevent it.Comment is buried, click here to see the rest.
truthroxFeb 8, 2012
Unbelievable! Talk about a game changer...
Pack your free market theories, boys. This trade revelation blows them all away.
If the U.S. adopts the free market approach some are advocating, U.S. companies would NEVER be able to compete effectively against SOE's since their government connections would always give them the competitive advantage. Eventually, the U.S. economy would collpase taking our economic opportunities and standard of living with it.
yurmutha412Feb 6, 2012
The problem has been an erosion of the division between free markets and government, most of it caused by liberals. Not all, I'll admit that, but the first step is to put that division back in place. Stop guaranteeing loans with government money. Stop subsidizing corporations. Stop the lottery. Completely eliminate Fannie Mae and Freddie Mac. The government is a referee to keep the playing field fair. Once it enters as a player, it's impossible to be fair.
bobcat7407Feb 6, 2012
I picture it like a stage. The government should be keeping the stage mostly clear, but instead they put up walls with one door to go through. Then people complain because companies went through the door, like they had a choice. That pretty much sums up the health care debate to me, or at least how we got to our current health care system.
barackalypseFeb 6, 2012
There is no workable alternative because any alternative ends up with a stronger Government and the American people don't have confidence in Government anymore after decades of high profile failures and abuses of civil liberties.
sbbitrcFeb 6, 2012
We haven't had a free market, capitalist system since the Constitution was ratified. People should quit pretending that there is one.
peppermintpigFeb 7, 2012
The alternative to freedom of choice is not freedom of choice.
Here is something for the 99 collectivism people to consider:
http://silverunderground.com/2012/02/is-megaupload-tycoon-kim-dotcom-part-of-the-1/
aplusplusplusFeb 7, 2012
Buried for communist propaganda.
bobcat7407Feb 6, 2012
FTA:
"a financial crisis that seemingly discredited the free-market deregulatory fervor"
I love how the article tries to tie our current economy to "free-market ideology", like the two have a bunch in common. Sorry, no matter how many times people try to blame the current economic issues on the "free-market" or capitalism, it doesn't magically become true.
austrologiFeb 6, 2012
amen, if anything it had to do with government intervention
16x9Feb 6, 2012
Are you guys delusional? Have you been paying attention to what happened?
This whole mess is built upon a foundation of unbridled greed that was (and remains) unchecked by intervention, government or otherwise.Comment is buried, click here to see the rest.
kwanijmlFeb 7, 2012
Please show me which part of the economy is not regulated, or otherwise interfered with by the government.
Greed goes unchecked, precisely because interferences into the market always have unintended consequences (which beget the need for more and more interference), and these interferences destroy or attenuate the market checks on greed.
i.e. if I am a greedy weapons manufacturer and want your money, in a free market I must earn your business (voluntarily), and provide you with what you paid me for, and compete against other providers for your money.
in our current "free market", we are all coerced into paying for the purchase of expensive weaponry, and no bid contracts, and a cartelized defense industry. There is no real market or real competition. . just a government contract; in essence one customer, and one provider. This intervention of government into the market of defense begets the 'need' for lobbying/campaign reform, etc. The need for the government to monopolize defense came from prior interventions.
This is an extremely blunt example of course. But it is to give you an idea of what is happening in our economy every day, in the macro, and in nearly every minute, micro, transaction (both monetary or otherwise) that is taking place billions of times every day.
Taxes, tariffs, prohibitions, regulations, and threats of such are ever present in every single sector of our economy, distorting the whole thing and creating the need for more intervention. . for government to "save" us from the greedy and unscrupulous.
austrologiFeb 7, 2012
whats always the solution? More government!
The only way these people see it is through a prism of a little more government or a lot more government to solve a problem.
nmw6Feb 6, 2012
Hmm, the asset bubble and flawed risk models were the gov'ts fault?
bobcat7407Feb 6, 2012
"The interaction of six government policies explains the timing, severity, and global impact of the financial crisis."
http://www.american.com/archive/2010/december/how-government-failure-caused-the-great-recession
bennygeoFeb 6, 2012
We are currently using an alternative to free market strategies called crony capitalism.
barackalypseFeb 6, 2012
"First, freedom for progressives means more than just being left alone"
Which is why you can't ever be progressive and free, because any "right" of yours that requires funding from me isn't a right at all since it places a burden on someone else. In a truly free society your rights only require me to respect them and not interfere with your free exercise of them. The moment I am required to fund them there isn't freedom anymore, there is compulsion under threat of violence.
blackwing602Feb 6, 2012
You have the right to an attorney.
peppermintpigFeb 7, 2012
There again goes the government in making rights out of things which are not rights. And informed individuals know that the constitution of the US is a set of prohibitions on government against the infringement of liberty, which is by its nature wholly infringing of liberty if at all in any part intentionally done without consent.
The judicial system is not voluntary, and it uses a system of licenses for lawyers, making everyone else a second class of person in the eyes of the state in the practice of that which they call 'the law'.
More problems would be solved if you lived in a voluntary society. But this contradicts the purpose of the existence of bureaucracy, and the nationalism and socialism which demand taxes of those who reside within the fictional recognized borders of these collective states, justified under the notion that the paltry sum of your money which they return to you, in a manner not of your choosing, propagandized as being for the general welfare which has erroneously brought about actual wealth redistributive 'welfare' for 'social good', is somehow making you better off than if you had the freedom to choose how to spend your own money on people who ask permission and compete to provide you an actual service.
blackwing602Feb 7, 2012
We can have any rights we want. You keep talking about natural rights and conveniently ignoring the fact that we also have legal rights.
peppermintpigFeb 8, 2012
Those 'rights' might be privileges of association, but not the same as liberty proper.
blackwing602Feb 8, 2012
Who cares? The problem with God-given rights is He can just as easily take them away. So they aren't really rights, are they?
ennFeb 10, 2012
re. your later comment bellow
Government cannot persuade God to change His laws. And God doesn't change His laws. Or have you heard of any change in 10 commandments lately?
blackwing602Feb 10, 2012
When Adam and Eve and Noah repopulated the Earth God gave them a pass on that whole incest thing.
arpadFeb 6, 2012
"a strong alternative to free-market ideology"? That would a strong, non-free-market ideology, right? Do the two words "Soviet Union" have any meaning for you?
If "no" then I invite you to acquaint yourself with George Santayana's observations about those who don't study history.
jphrFeb 6, 2012
You are confusing "free market ideology" and "capitalism". Nobody disputes that capitalism is the most successful system. Other systems like a plan economy (which you probably will identify with the misnomer socialism) have failed spectacularly. Socialism may have been implemented in small communities like the kibbutz in Israel but never at a state level.
Capitalism is efficient because it allows an organization of capital within corporations with a monomaniacal focus on profit disregarding all other considerations: as such the perfect sociopath. That is exactly why the voter/consumer has to be protected against exploitation by those sociopaths. It is the fiduciary duty of the political system to define the framework for the economic system accordingly. The failure of the political system in its fiduciary duty to the voters/consumers has reached epic proportions thanks to that misguided free market ideology.
CaptainobliviousFeb 6, 2012
that's what I meant, i just didn't know fiduciary was a word :)
eraptorFeb 6, 2012
Communism is NOT the only alternative to free market ideology. As jphr noted, capitalism and free market THEORY are NOT the same thing.
Free Market is an economic THEORY (aka UNPROVEN belief). Stop assuming it's anything other than a fantasy.Comment is buried, click here to see the rest.
peppermintpigFeb 7, 2012
It is an inherent flaw of any argument to ascribe the perspective or motivation of an individual, or the morality of one's actions to that of all individuals as a collective. What is worse is to confuse this with society.
The absence of a law does not determine an abundance of that which it prohibits. For a lack of any state decreed law governing a prohibition on murder, I would not therefore go and murder my neighbor.
Any two individuals who voluntarily agree to an exchange, in an ethical manner despite whatever conventions third parties attempt to promote, they do so in validation of the concept of a free market.
Free markets do not need to be validated at a national level. That is an irrational assumption prompted by your disrespect and mistrust of other human beings on faulty premises.
austrologiFeb 8, 2012
If you have regulations x, y, and z, you do not have a free market. Removing regulation Z and the market fails doesn't mean free markets have failed, its means markets under regulation x and y failed. The myth that free markets have failed is a gross lie or at least misunderstanding amoung leftist. If anything its an indictment against government interventionism in the Fed, regulations, and politically motivated financial incentives via the tax code.
adalseyFeb 6, 2012
Americans aren't really supposed to rely on the gov't. Why? Too many people to please some bound to get left behind. Can't please everyone. Poor will always complain but how come a person who came to this country without money, no education no sense of anything and still makes it and becomes somebody - not me but lots of them ever since migration to US started. We come here to create our own destiny. We are not followers.
CaptainobliviousFeb 6, 2012
I dont understand why we keep having this discussion. Capitlism is ultimatly flawed because it requires someone to have power inorder to regulate it. Power corrupts everyone from your local cop on the beat (literally) to the vatican. Its a universal problem. They ONLY remedy is to remove corporate money out of politcs. But that is never going to happen because the only people that can change it are the ones recieving the money.... and when the tea party or OWS bring it up they get picked apart because of their fringe members.... NOTHING is going to change, these big corporations are just pumping more and more money into the system and our voices are getting the volume turned down everyday.
You have the same people writing the regulations that benefit from a lack of regulations. Bouncing back and forth between the private and public sector. How can that ever work? How can you ever have honest regulation when there are hundreds if not trillions of dollars at stake? This country was sold a long time ago, the easiest way to find out is put a dem and conservative together in a room. The only thing they will ever agree is that the other side is full of liars trying to ruin this country for personal gain. Well guess what, Occam and both sides are right. So im just going to leave this here:
http://www.cic.gc.ca/english/citizenship/index.asp
See you on the other side.
eraptorFeb 6, 2012
While not fully crafted, it's a start in the right direction. The country can't afford to maintain the same trickle down/supply side/free market path Ronald Reagan set us on.
Free Market failure DESERVES to be shelved for the deeply flawed theory it has ALWAYS represented in this country.Comment is buried, click here to see the rest.
jqp123Feb 6, 2012
"Free market" also means the ability to scheme and swindle and run wild with financial games.
"Free market" means the freedom to make a much bigger mess that government will be forced to clean up.Comment is buried, click here to see the rest.
nerysFeb 7, 2012
NO because when you swindle you by definition are BREAKING the free market and government can and SHOULD step in to spank your ass.
eraptor and jqp123 I think what we have here is a failure to communicate.
Each of you please DEFINE for me what "free market economy" means to you.
captswuitsFeb 7, 2012
History repeats itself.