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BiggerBoat 
"Pass me the harpoon"
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 Posted - 09/25/2008 : 21:54:14
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Hey there american buddies.
Just wondering what the current feeling is on the economic crisis? I see that Bush has announced rescue package to prevent a meltdown - thing is, it's a meltdown already and by using the taxpayer's money to bail out the banks (who have been creating a house of cards since the Regan era) the poor joes in the country are going to suffer regardless. It seems to me that not only when the rich get rich that the poor get poorer, but when the rich get poorer, the poor get poorer still. How is that fair?
What surprises me most is that there isn't more of a public outcry, as if this was an unfortunate sequence of events that led to this, rather than the result of a market that is run on greed and greed alone. They say that it's the worst financial situation since the 1920s, which set off the great depression and yet I've seen no criticism of Bush or the republicans for allowing these unregulated markets bring the national economy to its knees.
How are you all feeling over there? What do you think is going to happen? And, seeing as the Iraq war has already cost $557,116,259,905 and you're only still there because [insert semi-plausible reason here], do you think it's time to pull out?
BB
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Sean 
"Necrosphenisciform anthropophagist."
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Posted - 09/26/2008 : 02:18:31
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quote:
Originally posted by BiggerBoat
It seems to me that not only when the rich get rich that the poor get poorer, but when the rich get poorer, the poor get poorer still. How is that fair?
Capitalists like to privatise profits and socialise losses.  I don't think capitalism is generally thought of as "fair". However, some claim that the fact someone has been able to take (oops, I mean "make") a lot of money is the proof that they deserve it.quote:
What surprises me most is that there isn't more of a public outcry, as if this was an unfortunate sequence of events that led to this, rather than the result of a market that is run on greed and greed alone.
It's being marketed to the public as "a thing that happened" that is nobody's fault. (See Bush's address from yesterday.) Lack of public outcry is what I'd expect given that half the population don't care enough about the larger issues to even bother voting at elections.quote:
They say that it's the worst financial situation since the 1920s, which set off the great depression and yet I've seen no criticism of Bush or the republicans for allowing these unregulated markets bring the national economy to its knees.
You can't blame Bush for this. The Western World has been run on the "markets know best" philosophy for decades.
The financial sector has self-destructed because it created financial instruments that were beyond it's own capacity to understand, and it lacked the capacity to value these instruments and quantify risk. I think Paulson/Bush et al are in denial of the causes of this scenario for ideological reasons. When faced with clear proof that markets do not always know best, and proof that markets are capable of self-destructing, they want to throw $700B at the markets with no strings attached as a symptomatic treatment of an immediate problem, with no suggestion yet as to how to treat the cause of the problem. Without a paradigm shift in the way governments manage their financial markets (currently by NOT managing their markets) I can see no reason why this scenario isn't going to occur again, perhaps only a few years into the future. |
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BiggerBoat
"Pass me the harpoon"
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Posted - 09/26/2008 : 02:44:08
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quote:
Originally posted by Se�n
Capitalists like to privatise profits and socialise losses.
 Yeah, good call Se�n, I think that sums it up. Karl Marx did prophesise that capitalism would produce internal tensions that would lead to its destruction. Maybe it's coming to pass?
Just read an interesting article that slams the republican ideology - worth a read, especially if you're a pinko, commie liberal. |
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MisterBadIdea 
"PLZ GET MILK, KTHXBYE"
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Posted - 09/26/2008 : 03:07:51
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"They say that it's the worst financial situation since the 1920s, which set off the great depression and yet I've seen no criticism of Bush or the republicans for allowing these unregulated markets bring the national economy to its knees."
I've seen nothing but that, BB. Where exactly are you looking? |
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turrell
"Ohhhh Ohhhh Ohhhh Ohhhh "
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Posted - 09/26/2008 : 03:37:12
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Well 9 years ago (before most people even knew President Bush had a junior) the New York Times published an article warning about the dangers of the Clinton Administration pressuring Fannie Mae to lower its credit standards to promote low income and minority homeownership. It also lambasts Fannie for trying to ramp up profits. The article is so prescient you would almost guess it was describing the crisis instead of portending it.
http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&sec=&spon=&pagewanted=all
quote:
Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
New York Times
Published: September 30, 1999
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
quote:
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.
''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''
So there is plenty of blame to go around including the people who risked almost nothing (very low or no downpayments) to buy homes they could not afford.
Since the Dow went up 600 points when the deal was first proposed, I'd say it is a painful but probably pretty necessary step to take. |
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BiggerBoat
"Pass me the harpoon"
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Posted - 09/26/2008 : 03:48:33
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quote:
Originally posted by MisterBadIdea
I've seen nothing but that, BB. Where exactly are you looking?
Well, to be fair, we only get Fox and CNN news over here, which is hardly fair and balanced reporting, but I've dropped into a few news websites too and whilst there is criticism about the bail-out, there doesn't seem to be too many campaigning for Bush's head on a stick. Our own prime minister is under huge pressure and may be forced out due to to the economic crisis.
Obviously I don't get to see your full media output but I just feel like there should be more of an outcry, maybe a few protests and a couple of full-scale riots. Perhaps even a civil war. Then I want to see Henry Paulson in a new version of Escape from New York, where he's got his $500 million in a briefcase and he's got to get to the Bahamas before the disgruntled public tear him apart. |
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Sean
"Necrosphenisciform anthropophagist."
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Posted - 09/26/2008 : 04:34:06
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quote:
Originally posted by turrell
So there is plenty of blame to go around including the people who risked almost nothing (very low or no downpayments) to buy homes they could not afford.
That's true that they deserve some blame. But I wouldn't like to see the health of the economy resting on the good judgment of the poorest, most poorly educated, most financially illiterate individuals. If someone lends out $3000 and the borrower can't pay it back then it's the borrower's problem. But if someone lends out $300,000 and the borrower can't pay it back then it's the lender's problem.
BTW, nicely spotted on the Fannie Mae article. 
I went hunting and recall reading this article in 2003, Buffet's thoughts were widely reported at the time. Here are a few excerpts:-
Buffett warns on investment 'time bomb'
The rapidly growing trade in derivatives poses a "mega-catastrophic risk" for the economy Warren Buffett has warned.
Mr Buffett argues that such highly complex financial instruments are time bombs and "financial weapons of mass destruction" that could harm not only their buyers and sellers, but the whole economic system. Some derivatives contracts, Mr Buffett says, appear to have been devised by "madmen".
He warns that derivatives can push companies onto a "spiral that can lead to a corporate meltdown", like the demise of the notorious hedge fund Long-Term Capital Management in 1998.
In his letter Mr Buffett compares the derivatives business to "hell... easy to enter and almost impossible to exit", and predicts that it will take years to unwind the complex deals struck by its subsidiary General Re Securities.
Unfortunately the Sage of Omaha appears to have been ignored entirely. 
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Edited by - Sean on 09/26/2008 04:44:26 |
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Sean
"Necrosphenisciform anthropophagist."
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duh 
"catpurrs"
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Posted - 09/26/2008 : 05:05:11
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quote:
Originally posted by BiggerBoat
How are you all feeling over there?
My parents (Mom is nearly 80 and Dad is in his late 80's) have told me lots of horror stories about their childhood years of the Great Depression.
Mom's family was so poor that they all frequently went to bed hungry. Mom said she and her sisters were so hungry that one time they even ate some banana skins they found. They had no shoes. Each of them had a single pair of underwear that they washed each night.
When things get that bad, then I'll feel sorry for myself. How about that?
My husband has traveled to some under-developed countries. He says that our poorest people are better off than the "well-off" people of some of the places he's been. Tales told by other travelers to India and so on reflect my husband's observations.
Again, I don't think we have any good reason to be sitting on the pity pot. Not yet. |
Edited by - duh on 09/26/2008 05:05:41 |
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thefoxboy 
"Four your eyes only."
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Posted - 09/26/2008 : 06:22:55
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quote:
Originally posted by duh Improper Username
My husband has traveled to some under-developed countries. He says that our poorest people are better off than the "well-off" people of some of the places he's been. Tales told by other travelers to India and so on reflect my husband's observations.
The happiest children that I have ever seen were in the Nepalese mountians. They had nothing to cry about, they only had just dirt and sticks to play with. |
Edited by - thefoxboy on 09/26/2008 06:23:50 |
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MisterBadIdea
"PLZ GET MILK, KTHXBYE"
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Posted - 09/27/2008 : 17:56:13
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quote:
Originally posted by BiggerBoat
Obviously I don't get to see your full media output but I just feel like there should be more of an outcry, maybe a few protests and a couple of full-scale riots.
Reasons why this is not happening:
1) But I majored in marketing... -- The average American doesn't have a fucking idea what caused this or who's to blame. Unless they took a class in it in college, and they probably didn't, they have no understanding on what exactly causes a stock market to drop. They might be trying to figure it out now, but it will have to take a while.
2) Lame Dead duck. What exactly are they supposed to do to Dubya? He's got what, four months before he leaves office? Why be impatient? This long national nightmare -- or at least this part of it -- is already about to come to an end.
3) Not my problem. You know how this stock market crash affected me personally? Judging by how much my life has changed , it hasn't at all. The Hoovervilles aren't going up yet and most people's 401Ks are still intact for the moment. When people start being unable to find employment, then you'll see riots, but the layoffs haven't happened yet.
4) Who cares if Hitler beats his dog? In case you hadn't noticed, we've spent the last five years in the midst of a costly, casualty-heavy, unnecessary, massively unpopular war. We have what the Onion called "outrage fatigue" -- we've been protesting for five years and what have we gotten for it? Nothing.
5) As Sean rightly pointed out, most of us don't give a shit about anything. It's the American Way. |
Edited by - MisterBadIdea on 09/27/2008 17:57:12 |
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MguyXXVI 
"X marks the spot"
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Posted - 09/27/2008 : 22:26:58
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| Here is a very astute, informative, clear and entertaining explanation of who's at fault and how it happened. The Giant Pool of Money. |
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Sean
"Necrosphenisciform anthropophagist."
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Posted - 09/28/2008 : 11:55:05
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quote:
Originally posted by MisterBadIdea
3) Not my problem. You know how this stock market crash affected me personally?
I think the principal question here doesn't have much to do with the recent stock market decline (which is moving within 'normal' limits; the 2000-2002 decline was much bigger). The question was (paraphrasing):-
What do American taxpayers think about forking out $700 billion to bail out the financial sector after they self-destructed, and why do few seem to have a problem with it?
But I think you've answered this anyway. |
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w22dheartlivie
"Kitty Lover"
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Posted - 09/28/2008 : 12:19:10
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What I found rather bizarre was John McCain grousing about Barack Obama's $900 million spending proposal in light of supporting a $700 billion bailout. I'm not supportive of this "bailout". I'm hardly in a position to lose anything, but that is beside the point. It may be naive of me, but basically, my opinion is to let them sink. I watched a now-failed mortgage company allow fraudulent activities sink it. The fraud was by various mortgage brokers, working on behalf of the mortgage company, who worked in collusion with real estate appraisers to allow borrowers, who had too little equity or legitimate income to afford their payments, to finance and re-finance and re-finance again until the houses were effectively mortgaged beyond their market value, all in order to "help" the borrower obtain lower payments. But the mortgage company wasn't much concerned. They'd sit in California, refer a potential sale by a buyer in Texas to a local appraiser, and tell the appraiser what assessment was needed to make the deal happen. Everyone made money on it with the exception of the buyer in Texas, who later defaulted on the loan, filed bankruptcy and walked away. I can't do that. I can't even let my checking account get below $0 without a $35 penalty. What's wrong with this picture? Why should banks and investment companies like that deserve a branch from shore as they drown? There's been no government branch offering the everyday guy a branch, even as they are drowning. Do I sound bitter? Good. Enough is enough.
Is that better?
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ChocolateLady
"500 Chocolate Delights"
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Posted - 09/28/2008 : 12:43:41
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quote:
Originally posted by Se�n
What do American taxpayers think about forking out $700 billion to bail out the financial sector after they self-destructed, and why do few seem to have a problem with it?
If it was only the Americans who were being effected by this, that would be their problem. But it isn't. Look at the Euro - it's also stumbling, and who knows how this will effect the rest of the world. Having the Republicans suggest that the US government bail out private banks seems pretty ironic in light of their "get the government out of private businesses" ideology. And then, if the US goes bust over this, what happens to all those countries around the world that depend so heavily on US aid? Who will have the money to help them, and under what conditions will they agree to do so?
(If I were a Stephen King or John LeCarre right now, I'd be having a field day with speculation on the answser to that question.)
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BaftaBaby
"Always entranced by cinema."
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Posted - 09/28/2008 : 13:04:45
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To get back to BB's question - I am convinced that a large barrier to public outcry is the almost unbreakable association between a political and an economic concept.
Which is to say: many people think the opposite of democracy is communism. They cannot conceive of a communist democracy, or a capitalist dictatorship. This is despite the fact that they couldn't actually define communism and - if they're American - probably only think of it in terms of the Soviet system. That was never communism, but state capitalism. And that is what is driving the current debate, in whatever country. It is clear if you look for it, that state capitalism already drives most western countries, but the multi-nationals that benefit from it don't call it that.
The bottom line is that trickle-down has never worked, and it is certainly one of the more amoral methods to exploit the powerless.
There's a wonderful and quite funny novel about the way capitalism guarantees profits for the controlling elite at the expense of those whose labor produces their wealth. It is The Ragged Trousered Philanthropist by Robert Trestle. It kind of explains why the vast majority buys the bullshit instead of finding a way to counter it.
Yeah, yeah - life ain't fair. Oh, but it might be. It might be.
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Why aren't all Americans storming Wall Street?
