Becoming disillusioned with Capitalism?
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I have found something that illustrates the topic well.
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Good find Tomaz. That cartoon is funny BUT so sadly true. That is the case, Governments are bailing out the banks and letting the economy hang out to dry in the hope that it will recover quickly, fat chance!
Of course we need banks to keep 'a' show on the road BUT they do not keep 'the' show on the road. That is done by hard working productive people. Its these people that create a Countries wealth and provide livelihoods for the population.
I've watched the second episode of 'Love of Money' (a BBC 'Money Production') this evening and from what I can understand much of the blame for this Depression was due to Bush's stupid Housing Policy and the freedom allocated to the greedy sub prime scum bankers that jumped on the gravy train. The worst of them is dead and no loss as far as I'm concerned. However the billions he made in the process should be taking back and handed over to charities.
Banks and lending institutions will have to be regulated again as they simply cannot be trusted to do an honest day's work for EVEN x10 or more honest days pay! They will have to be controlled / regulated and NEVER again trusted to act reasonably. These idiots cannot even act in their OWN long term self interests because of their GREED FOR MONEY.
Making money by sole use money will have to be taxed very heavily to discourage intelligent people entering this 'profession' in the future. Where as 'light' taxes must be levied on REAL wealth and knowledge creators.
Mike
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“due to Bush's stupid Housing Policy”
Excuse me Mike, but the housing policy you mention was started during Carter’s presidency. Bush tried numerous times to get congress to set some limits on Freddie Mac and Fannie May, however, congress, especially congressman Barney Franks was no going to allow that to happen.
A very simple and not a detailed view of what was happening the last couple of decades. To get a better reading, just do a Google search.
Ken
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Yes, and additions and damages to that housing policy can be handed to Reagan, Bush Sr., and Clinton as well. I've researched that policy initiated by Carter, and certain factions like to make believe that the policy "forced" banks into making bad loans while completely ignoring that the policy had been operating effectively since Carter's presidency, and that all banks that had been engaged in making loans to the areas that the policy sought to prevent discrimination against were quite profitable.
I am more inclined to believe that the crisis was a combination of factors: The de-coupling of the requirement for the "-macs" to have enough money to cover the loans they make, the repeal of the Glass-Steagall act, two wars, the incredibly foolish idea that spending billions and billions of dollars while simultaneously slashing taxes was a good idea (anybody with a credit card knows that you can't spend without making payments) and the coup de grace, greed greed greed. Even Greenspan himself said he underestimated the greed factor. Another part that I personally like to add is the "too big to fail" brigade that despise regulation and government involvement in their business, but are the first to cry for, and get, government help when there's a problem. Socialism for the rich, while the rest of us get a hefty dose of capitalism.
No corporation should ever, ever, be allowed to be "too big to fail". All the so-called savings we get from such a large corporate entity are wiped out when it gets in trouble, from our retirement funds to our jobs and homes.
Oh, and regarding communism - if true communism worked, there would be a lot more governments and people using it right now. Communism today winds up being a dictatorship and falls short of true communism. What seems to work is a balanced form of widespread social policy and democracy.
(Eh, tried to keep politics out of it and make it mostly economic. If it's too political, my apologies.)
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@unknownuser said:
“due to Bush's stupid Housing Policy”
A very simple and not a detailed view of what was happening the last couple of decades. To get a better reading, just do a Google search.
Ken
My assessment of the situation may be simple and not detailed but never the less I do believe its reasonably accurate. Someone has to be responsible for the mess. Some facts,
http://en.wikipedia.org/wiki/Subprime_mortgage_crisis
**'Main article: Government policies and the subprime mortgage crisis
U.S. Subprime lending expanded dramatically 2004-2006
Both government failed regulation and deregulation contributed to the crisis. In testimony before Congress both the Securities and Exchange Commission (SEC) and Alan Greenspan conceded failure in allowing the self-regulation of investment banks.'**
The USA Housing Policy started to go haywire during Bush's term of office (see above dates). I am not aware of his efforts to 'cool it down' but believe what you say. However Greenspan could have been sacked by Bush from what I understand and a more capable Chairman of the Federal Reserve be put in place that would have had the common sense to pour some cold water on the fire. Again please correct me if I am wrong.
We have had the very same situation here (Ireland) over the past decade with what appears to have been an idiot Financial Controller (now retired on a fat pension) and a very second rate Prime Minister that kept his 'savings' in a shoe box under his bed. My only fear is that the then Minister for Finance during the 'boom years' is now our Prime Minister! On the upside I think we now have a very honorable and capable Minister for Finance that is trying to sort out the mess and I believe succeeding, all be it with much pain to the Country. From what I can see, I think its the same situation in the US and UK. My opinion of Blair is much the same as Bush, another idiot War Monger!
The only thing I hope to happen, is that the people that were trusted to do the job will not be allowed to walk away and shrug their shoulders while at the same time enjoy fat pensions. If I screwed up a company's financial situation I would not expect to walk away free!
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Mike
A personal observation. Since 1982 I have bought three homes. The first, I had to show income statements, prove that I was employed and not have any of the down payment from borrowed monies. Generally, prove that; one, that I could afford the home; two, had the means to continue paying for the home and; three, that my job seemed to be secure, that I was a reliable employee.
In 1992 it was almost the same, but what I did notice, not at the time, but later looking back was how the real-estate salesperson keep leading us to homes that were above what I considered our limits. She insisted that I could get a loan; “no problem” was her term. She was pushing loans larger than I was comfortable with taking on. I didn’t really notice this behavior until after the crises, and the wife and I were talking and looking back how she tried to push us into a bigger and more expensive home.
In 2003, the wife and I bought a house in a retirement community. I like to call it a “kid free zone”. Now, I am 65 years old, the chances of me continuing working for another 10 to 30 years is remote. However, I didn’t have to prove employment, or any means of continuing to pay for this home. Now, being a frugal person, I have the means, so I am not personally worried, but I don’t know how the finance company can rests with the almost non existence info I had to turn in.
From my prospective, the country made a bad turn when it was decided that everyone should be capable of owning a home. So real-estate sales people pushed for bigger homes and higher commissions, finance companies didn’t care because the loans were to be sold and out of their business, and Fannie May and Freddie Mac were rating the loans at a higher quality than the loans should have been rated and then reselling to make a dishonest buck.
All in all it was greed. Politician’s greed to satisfy their electorates at any costs, the real-estate for pushing for higher commissions, and the financial group for thinking, hell for not thinking, just taking the money.
Good morning Mike
Ken
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Ken,
The only thing I can say to you is that WE (at our age, me hitting 60 this year) have seen it all before. I remember getting my first small loan to renovate a small apartment. Much of the renovation work was to be carried out by myself and my wife's brother, a carpenter and it was. Both my wife and I were working in reasonably jobs and the bank manager agreed a small loan. At the end of the conversation he handed me a Guarantor Agreement that needed to be signed by our parents (property holders) as he was taking no chances even though we were cutting our cloth closely.
While I was resentful or this stipulation at the time due to pride, I did see the logic behind his request and learned a good lesson that has stood to me over the years. His requirement made us sit down and double check the figures and consider the 'worst case scenario'. I have been doing this over the past 35 years of property deals that I have been involved in and am still and fortunately can say that I am in healthy positive equity even after the drastic property value slump.
I know many young couples that have over the past 5 years purchased houses which have even included a new car in the deal with the knowledge of the lenders. This was a crazy situation and one that was bound to end in tears and now it has.
It looks to me that we will be seeing the introduction of 2nd and possibly 3rd generation mortgages coming into play in order to keep people in their homes. It has not started here yet BUT I believe its only a matter of time otherwise the banks will have a load of empty houses on their hands with high upkeep.
When one thinks about this it is not so bad as most houses are more than capable of lasting for over 60 years plus. All that is needed is some common sense Government policies that disallows lending institutions and banks to wildly profiteer on the three basics, food, shelter and clothing, at least in their basic forms.
Mmmmm ..... I think I'm starting to sound like Comrade Mike!
But maybe not a bad thing to see raw Capitalism diluted with a little more with Socialism / regulation as cocktails are often more palatable than raw spirits.
Mike
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Short version of politics -
Extreme left: my friends and I should be in charge, and rich.
Extreme right: my friends and I are rich, and should be in charge.
End results are often startlingly similar. -
I don't think there is anything wrong with 'capitalism' as a whole, it's just our current capitalist model which is all wrong ("cowardly capitalism"?!).
I get by, reading Spiked online, which is great for old Marxists like myself. My wife has recently read "Das Capital" by Karl Marx. She said, although very complex, it was a brilliant read. When I've got some time (!), I too will have to pick this book up and read it.
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@tfdesign said:
My wife has recently read "Das Capital" by Karl Marx. She said, although very complex, it was a brilliant read. When I've got some time (!), I too will have to pick this book up and read it.
I haven't read Marx directly, but I understand that he makes the false assumption that history makes some kind of sense
I agree that something new has to be invented. The current form of "venture" capitalism seems to me to be just some kind of giant pyramid scheme. "Owner valus" seems to lead to a "grab the cash and run" mentality instead of a strategy based on long-term viability.
As for society, I cannot help that I always feel that what is good for the weakest and poorest should be the guiding principle. In the later times this seems to have been lost, and the western Antisocialism has been replaced with global AsocialismAnssi
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