The curruption will (did) prevail - rant
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I would expect a Canadian to be more affected by what happens to Detroit than a Californian.
I, for one, am writing to my representatives. Just because no one's posting here, doesn't mean Americans are not trying to follow this and experiencing shock and awe.
It's not just a simple matter of rooting for a particular bill--but now this:
"Given the current weakened state of the US economy, we will consider other options, if necessary including use of the TARP program, to prevent a collapse of troubled automakers," White House spokeswoman Dana Perino said.
This may be to your liking, but it underlines that somehow Congress has handed over more than 700 B to a lame duck administration to hand out at will. (and very lame--eats me up that we have to have yet another month of their stupefied dys-management and graft.)
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As I said in my previous post:
@unknownuser said:
If the monetary system used is, at root, dishonest then it follows that everything else flowing from it is corrupted.
The former chairman of the Nasdaq stock market has been arrested and charged with securities fraud, in what may be one of the biggest fraud cases yet.
Bernard Madoff ran a hedge fund which ran up $50bn (£33.5bn) of fraudulent losses and which he called "one big lie".For more info (and don't believe for a minute that this is a one-off) visit: http://news.bbc.co.uk/1/hi/business/7779442.stm
The capitalist economic model is mostly conducted through the use of smoke and mirrors. We are all locked in to it, through no choice of our own, and because we have seen the collapse of various "socialist" economic systems we are all too scared to consider any alternatives.
We are in the horrible position of wanting to see the downfall of all these economic criminals but know that hundreds of millions of innocent victims (us!) could have our lives destroyed in the process.
Between a rock and a hard place comes to mind.
Regards
Mr S -
I would not go that far to blame Politicians for morgages given to people who do not have real means to repay. I am afraid all that is cooked by bankers. They have created model where they were betting on increase in productivity and prices steadily going up. It looked as easy win...but as capitalism is Sh**ty system which goes into boom and bust cycles then there is always one generation or two who do not remember last bust and they pay correction price...
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[quote="pbacot"]I would expect a Canadian to be more affected by what happens to Detroit than a Californian.
Why?
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Capitalism is not at fault here; those who abuse it are. Blaming the system is like blaming cars for auto accidents or blaming guns for gun deaths.
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Come on Ron, you wouldn't advocate no controlls on the distribution of drugs? Somewhere with every situation is a line that represents optimum balance. I personally favor free markets, but in hindsight not at the current pace deregulation was implemented.
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@honoluludesktop said:
Come on Ron, you wouldn't advocate no controlls on the distribution of drugs? Somewhere with every situation is a line that represents optimum balance. I personally favor free markets, but in hindsight not at the current pace deregulation was implemented.
I'm saying capitalism and free markets are inherently good. It's the practitioners who can mess it up. Certain governmental regulation is necessary, even desired. Finding the optimum balance, as you put it, is the goal.
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@double espresso said:
@pbacot said:
I would expect a Canadian to be more affected by what happens to Detroit than a Californian.
Why?
Just proximity? I gathered you were from the "midwest" of Canada. My impression is there are a lot of industry trade ties, including the car business with the US midwest and Canada. California has a different economy to some extent. Not trying to make a big point, just in answer to what you said earlier, which I forget now... You know, we'll all definitely feel it if one or more of these giants falls. We all have dealerships for example. I've worked on jobs for some of them. They pull back, there's no dealership plans to draw etc. etc.
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Hi Ron,
Cars and Guns like any other manufactured product are tangible goods that can be bought and sold. In a private enterprise situation, both seller and buyer arrive at a price that suits them. Or they don't and no transaction takes place.
The same applies to every product or natural resource that individuals or nations wish to trade.Due to barter being impractical for many transactions money was created as a means of exchange. Money itself has no intrinsic worth.
However, in the free enterprise system we have today money is manipulated by the likes of the stock exchange to create money out of other money. This distorts the value of real goods and services and hence we have boom and bust which causes the chaos we see today.
Private enterprise and Free enterprise are two totally different animals.
The first is a form of self-regulated capitalism that has proven to be more or less a fair and successful method of conducting transactions. It provides the best method for those who are prepared to work to receive a fair reward for their efforts.
The second is, in my opinion, a fraudulent and criminal system perpetrated by individuals who contribute nothing to the world. They are motivated by simple personal greed unimaginable to most of us.
I fear most Americans, when reading attacks on capitalism, wrongly interpret that to mean an attack on America itself. That is not the case. Americans should simply take note of what one of America’s greatest sons had to say:
@unknownuser said:
"If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered."
Thomas JeffersonRegards
Mr S -
Mr. S, I was talking about capitalism and free markets not private or free enterprise. My reference to the gun and auto industry was maybe an inaccurate analogy, but the point is that the system is good, some of the players are bad. When there are failures, we need to blame and punish the players, not the system. Bernie Madoff is a classic example. This guy needs to be in prison with a bunch of nasty guys who don't much care for his type.
The movie "Wall Street" really shows what you and others are talking about: people creating wealth without creating substance; greed run amok.
I do not take any offense whatsoever when capitalism is attacked. I don't see it as an attack on America at all.
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@bellwells said:
@honoluludesktop said:
Come on Ron, you wouldn't advocate no controlls on the distribution of drugs? Somewhere with every situation is a line that represents optimum balance. I personally favor free markets, but in hindsight not at the current pace deregulation was implemented.
I'm saying capitalism and free markets are inherently good. It's the practitioners who can mess it up. Certain governmental regulation is necessary, even desired. Finding the optimum balance, as you put it, is the goal.
How can Capitalism be divorced from the practice of Capitalism? Capitalism, unlike religions doesn't hold claims of truth therefore it is not an ideology but a praxis. There is a fundamental fallacy that people always fall for, they mix-up the Market-economy with Capitalism. Market economy can be idealised as having optimizing properties in certain respects like supply and demand. Capitalism is all about anti-competitive practices that actually detriment free-market principles. Just look at what corporations do. They realised early on by monopoly, dumping, with-holding stock, lobby groups, hotile take-overs of peer companies or those that supply or deal with related services and conditioning of consumers they can manipulate the market to their favour (i.e. multi-national Conglomerate's version of Capitalism). This is fine and dandy as such practices also occur in nature however, in nature there is no National or international Institutions that can institutionalise in Law and enforcement the advantages gained by this particular way of Capitalism. You see Capitalism in its current form is actually detrimental to the practice of free-market enterprise.
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@chango70 said:
How can Capitalism be divorced from the practice of Capitalism?....Capitalism is all about anti-competitive practices that actually detriment free-market principles....You see Capitalism in its current form is actually detrimental to the practice of free-market enterprise.
Read my post again. I'm distinguishing capitalism from those who practice it.
Capitalism is precisely the opposite of anti-competitive. It thrives on competition and innovation. The inverse is probably more true: competition and innovation need a capitalistic environment to thrive and flourish. Innovators and doers need to know their efforts can be rewarded within a capitalistic environment; one owned by the people. Corporations aren't the only entities who practice capitalism. You do, I do, the corner store owner does. You can't define system by looking only at large international corporations.
I'm baffled as to why you think "capitalism is detrimental to the practice of free-market enterprise". I think exactly the opposite. Please explain.
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"I fear most Americans, when reading attacks on capitalism, wrongly interpret that to mean an attack on America itself."
I am really wondering why. Capitalism is not an American invention. Americans maybe perfected it or not ...depends on point of view.
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@bellwells said:
@chango70 said:
How can Capitalism be divorced from the practice of Capitalism?....Capitalism is all about anti-competitive practices that actually detriment free-market principles....You see Capitalism in its current form is actually detrimental to the practice of free-market enterprise.
Read my post again. I'm distinguishing capitalism from those who practice it.
Capitalism is precisely the opposite of anti-competitive. It thrives on competition and innovation. The inverse is probably more true: competition and innovation need a capitalistic environment to thrive and flourish. Innovators and doers need to know their efforts can be rewarded within a capitalistic environment; one owned by the people. Corporations aren't the only entities who practice capitalism. You do, I do, the corner store owner does. You can't define system by looking only at large international corporations.
I'm baffled as to why you think "capitalism is detrimental to the practice of free-market enterprise". I think exactly the opposite. Please explain.
Simple, what you describe is free market dynamics of which the laws are probably immutable. Capitalism is a particular form of free market dynamic that exist as a certain historical formation. Capitalism isn't an ideology but a particular set of practices within the frame work of the Free market. In this day and age the dominant form of Capitalism is Corporate Capitalism which have the following anti-competitive tendencies and I quote myself "monopoly, dumping, with-holding stock, lobby groups, hotile take-overs of peer companies or those that supply or deal with related services and conditioning of consumers they can manipulate the market to their favour". These are all anti-market practices. For example when a manufacturer get sufficiently big it no long has to play to the market rules of supply and demand. It can do the following. Buy out its competitors as a form of horizonal monopoly (stifles competition and innovation). Alternatively it can take over services related to selling the product (Apple Stores) or take over the suppliers of Raw Material (vertical monopoly). It can withold stock to inflate value (de Beers dimonds anyone?) and it can dump cheap stocks of deflate market value. It can advertise and creat demand that isn't there. It may decide to move its capital elsewhere where labor is cheapor. Do any of those sound familier? You see we live in an age of Giant Mega corporate form of Capitalism which is a abhorant deviation of free market priciples brought about mainly through our own folly. When Adam Smith wrote the Wealth of Nations he didn't have Nike, or Microsoft in mind. Theorists such as Deleuze and Guattari in 'Capitalism and Schizophrenia' calls Capitalism 'Anti-Market'.
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Amen, brother!
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Mr S was on target. The quote from Jefferson was right on, and that is where the true problem lies.
Banks, not the Stock Market, are the ones who create money out of thin air - in the form of loans. When they lend, the full amount of the loan is not required to be held in reserve. In the US, it's at a ratio of around 9:1 loan:reserve.
That creates the possibility of 90 times the amount of real money available existing as loans that need to be repaid with interest. But since the amount of lent money already exceeds the real money available, that means someone has to default in order for someone else to pay off their loan with interest - unless the banks keep conjuring new money out of nowhere (but that just means even more debt).
Further, that imaginary money created by the bank as a loan is deposited in another bank, and becomes available for further lending. Customer deposits and central reserve deposits (from the bank's own money) are handled differently: a bank can lend 90% of customer deposits (9:1 loans:reserves).
Example:
Fred decides to open a bank, Bank1. After his startup costs, he has $1111.12. He puts this money into reserve at the central bank.
Since Bank1 has $1111.12 in reserve at the central bank (the bank's own money, not money from deposits), it can legally lend out at a 9:1 ratio, or $10,000 dollars.
Borrower1 takes out a $10k loan from Bank1 and buys a car.
The seller takes the $10k and deposits it at his bank, Bank2.
Bank2 can now lend $9k against that deposit, holding $1k in reserve.
Borrower2 takes out a $9k loan and buys materials for a home improvement project.
The home improvement store deposits the $9k in their bank, Bank3.
Bank3 can now lend $8100 against that deposit, holding $900 in reserve.
Borrower3 takes out a loan of $8100, makes a purchase, and the seller puts the money into his bank (Bank1, Bank2, Bank3, or any other bank), and the process keeps repeating.If the minimum loan amount is $1, then the total money created out of thin air by the banking system from that initial $1,111.12 is $99,990.59.
Now multiply by a few billion, and then mix in high-risk mortgage loans for overvalued properties that can't be resold...
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I'm not too sure things are going to change quite yet - at least not for the better. A tax evader was just approved as Treasury Secretary.
Worst case: lending dries up, which means no "new" money to grow the economy; jobs are lost on a massive scale; an American public that has grown accustomed to relying on government demands a solution; in the ensuing panic, the Constitution is eroded as new government programs are enacted and government power reduces our freedoms; and the ultimate nanny state is finally put in place in the U.S.
Best case: lending dries up, which means no "new" money to grow the economy; jobs are lost on a massive scale; an American public that has grown accustomed to relying on government to solve the problems the people should solve finally wakes up and realizes the government can't do much of anything correctly; people demand restoration of Constitutional government and the rule of law; the clowns are voted out and replaced with people who will support Congressional term limits and limited government; revision of the financial system to a more stable, equitable, and sustainable system results in a stronger economy.
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New BBC series on the Banking system and what went on that lead up to the current crisis. Enlightening.
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What a shame. Hope it will turn up on google video someday.
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Hi RickW,
@unknownuser said:
the people should solve finally wakes up and realizes the government can't do much of anything correctly; people demand restoration of Constitutional government and the rule of law; the clowns are voted out and replaced with people who will support Congressional term limits and limited government; revision of the financial system to a more stable, equitable, and sustainable system results in a stronger economy.
I have long given up on "the people waking up".
Without, I admit, any real empirical evidence, I would be surprised if more than one or two percent of the population gives a thought to these issues. That's a tiny minority that cannot exercise any political pressure whatsoever. The other 98% are interested only in TV, Sports and Sex etc. In so far as they do take an interest in politics, they like it presented to them in simple soap-opera style.
A simple telegenic appearance with meaningless catchphrases such as "Change" and a wife whose fashion choices can be discussed endlessly are on about the level required for most.My only hope is that nothing lasts forever.
But real change is always brought about my small dynamic minorities, never by the masses.Regards
Mr S
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