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photo: Toban Black via Flickr
Now that financial reform has reached the front burner, it has become clear that there is no coherent progressive response. Many of us focus on the ideas put forward by a small group of well-known economists, including Jamie Galbraith, Dean Baker and Paul Krugman, and a few others we have discovered who got it right on the disastrous policies of the 30 year Republican deregulation movement, including Joseph Stiglitz, Simon Johnson and James Kwak. Their ideas may be wiser than the ideas put forward by mouthpieces for the wealthy elites, including their lobbyists and unreconstructed Chicago School economists; but there isn’t a set of progressive ideals that justifies listening to one group of economists over another.
In fact, as Yves Smith demonstrates in her book ECONned, How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism, one of the causes of the Great Crash is that the range of acceptable discourse on financial and economic matters was set by a relatively small group of neoclassical economists. Smith explains the nature and extent of the collapse of those theories, and at the end, leaves only the dried husks of their notions scattered across the intellectual floor.
Her criticism is based in part on the sterile mathematical models produced by neoclassical economists, and theories created from the use of those models. These theories were so far abstracted from the complexities of the real world that they *seem* useless. In retrospect, they see ludicrous. We see the results in practice, trillions lost, millions wiped out, more millions unemployed and becoming unemployable, the entire economic landscape scoured of small businesses and the jobs they create, leaving gargantuan businesses in their wake with no interest in this country unless they can use us to make more money.
The people who created this devastation, the Wall Street traders, the giant banks, the massive corporations, are still in place. So are their legions of enablers, ranging from what we used to call professionals, like lawyers and accountants, to academic economists and business school professors. They intend to use their failed theories to define regulation going forward.
As much as I appreciate the efforts of the few economists able to see the failure of their brethren, I don’t think we should just find own team of economists to lead us. Instead, I think we have to make sure we understand the political principles that should underlie a progressive approach to the economy. Then we can ask for input from economists as to plausible ways we might move towards those ends.
Like most liberals, my thinking on the issues of economics is heavily influenced by A Theory of Justice, by John Rawls. However, my work experience is equally important. I have seen the impact of the economic system on the rich and the poor and people in between, and I have seen the impact that the system has on people’s bodies and spirits, both in success and in failure. Rawls says that economic efficiency has to take second place to the principles of justice. Regardless of the merits of his principles of justice, that point seems obvious and right. With that, here are three progressive principles of economic regulation.
Principle1. Society creates the conditions for all business and personal activity, using law, regulation, policing, institutions, and other tools. This power should be used for the benefit of all citizens, not just a few.
Principle 2. The focus should be on good jobs, and the interests of capital should be subordinate to that focus. A progressive economics should find ways to encourage uses of capital that produce good jobs and to discourage uses of capital that don’t produce jobs.
Principle 3. There is every reason to use government to achieve these goals. Wealthy elites have demonstrated that they won’t do this on their own. The Great Crash is the direct result of policies that worked against these goals.
The proposals pending in the Senate and the bill passed by the House won’t change the system towards the principles I propose. The President’s common sense proposals entrench the financial elites, exactly as his health care reforms entrenched insurance companies. I see no evidence that the people dealing with this problem have any set of principles to guide them. As long as Congress and the President insist on protecting the finance companies, we are merely moneymeat for Wall Street’s dining pleasure.
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There is nothing arcane or abstruse about progressive goals and the economy: solid stable jobs, good healthcare and education, affordable housing, retirement and old age without fear. To arrive at these, you need a fairer economic system and distribution of wealth.
Currently, the top 1% have 13 1/2 times the wealth of the bottom 50% of the population. This is not only unsustainable and inherently destabilizing but obscene.
I have written extended lists of needed reforms both economic and political. http://seminal.firedoglake.com/diary/9198
The ideas and principles are there. It is just that our elites refuse to address them or bullshit them when they do.
Additional principles?”
How about some notion of benign sustainability? Building large coal-fired power plants or nukes creates “good jobs,” but the policy is not morally justifiable or environmentally sustainable.
We could have policies that in some sense treat all people fairly/equally, and still destroy the planet’s ability to sustain the human population; we could then tweak them to assure human survival by wiping out millions of other species.
We have economic principles that recognized the concept of externalities, but we haven’t found a workable political process to ensuring those externalities are properly considered in economic decision-making.
Government is failing on the most important issues essential to our survival. What do the financial economists have to say on this?
Very well put my friend. Concise and to the pt. Obama is no FDR he’s there to feather the nest of the wealthy and he is doing it all the while making noises like he’s a “man of the people.” In many respects he far worse a disaster for the left then any conservative could ever be. He’s taken our framing and ideas and he’s dressed his neo-liberal ideas in them. He’s a friggin Wolf in Sheeps’s clothing and we should all be working against him and his regime even more diligently then we did against BV$H.
Need a progressive ideal, a basic one-liner, that can encompass everything else?
Unrestrained capitalism is the single greatest threat to American national security.
Massive corporations whose size undermines national sovereignty, and whose imaginary existence spanning many borders puts them outside the jurisdiction of any Peoples. Systemic corruption of the republic, the very foundations of law and order, through the complete enmeshing of public and private service. Profit incentives for incarceration. Profit incentives for global & domestic instability; both politically and economically.
Progressive fiscal schemes and policies, historically, have done nothing but make that countries economy stagnant. Government control of a nation’s economy has never worked, and never will. I say we need to focus on correcting the negatives contained within the present capitalistic system, rather than change over into a European style socialistic system. After all, America was founded on the notion that the European way was NOT the AMERICAN WAY? And that the American Way has been a net benefit for the world at large?
For too long, certainly since the late 1700s, ‘capital’ has been viewed as the primary ingredient in creating wealth. At least, that’s the way that it has seemed to me.
Because of that, capital, which lends itself to the kinds of logical-mathematical tasks of calculating and computing, has been a topic of obsessive concern among most formal economists. And because that is something fairly easily taught in colleges and universities, that view has prevailed.
But IMVHO, that view of ‘capital’ as the source of wealth fails to ask a key question: “what does it mean to be human?” Generally, we leave this question to ministers, rabbis, novelists, and others who contemplate The Human Condition.
But having lived a few times, for periods up to several years, with people who have what most suburban (or urban) Americans would call “nothing”, I have long viewed this obsession over ‘capital’ as a quaint and spurious notion of the modern world.
If a man has nothing but his wits, then a knife will mean the difference between life and death if he can use it to kill and skin a snake or a rabbit or an iguana.
Similarly, I’ve met people who literally used the hides of animals to make small boats from which they fed they entire clans.
Both groups have what we might call ‘no capital’, or only primitive capital. However, what matters is ingenuity, cooperation, the capacity to develop skills.
Their ability to create and nourish has nothing to do with capital, but a great deal to do with their ability to learn, to watch, to observe, to be patient, to cooperate, to teach.
They have what Francis Fukuyama** SOCIAL capital. With that in mind, I’d offer revision suggestions along this line:
** forgive me, he did sign PNAC, but has since apparently recanted. A friend gave me his book called ‘Trust’, and it’s one of the best economic analyses that I have ever read. In ‘Trust’, he posits that the ability to create trust is a critical economic activity.
Notably, this concept of ‘SOCIAL capital’ has held zero heft in any biz school or economic program that I’m aware of, at least until perhaps quite recently. (I don’t keep track of biz school curricula as a general rule.)
But but but, unrestrained capitalism will trickle down & solve all the problems that progressives identify. /s
Could you please point to a progressive fiscal scheme or policy that has made the US stagnant? Perhaps you were referring to Medicare, Medicaid, Social Security, unemployment insurance, government support for research and development, contributions to schemes like the World Bank or the IMF? Or one of the other myriad progressive schemes and policies?
China has centralized control over its entire business sector, complete with central industrial policy. They have taken over huge swathes of the technologies of the future, including solar and wind technologies, and have captured most of the advanced computer manufacturing business. Please explain why their economy doesn’t stagnate.
“Government control of a nation’s economy has never worked”
Yes, much better to leave it in the hands of private enterprise. They will never drive the economy over a cliff. Oh, wait… Medicare works a lot better than private healthcare insurance and would work even better if corporatist politicos didn’t keep hamstringing it on some of the funding issues and Medicare Part D.
The artificial and irrelevant distinction between American and European is inane. If it works, it works. Privatized American healthcare doesn’t work; European healthcare does. Gosh, which would I choose?
Finally, the 1950 and 1960s saw very strong real economic growth and this was accomplished at a time of high taxes on both the rich and corporations and with a much higher degree of regulation. At that time, people had stable jobs and could reasonably expect to own a home and they could also expect that their kids would do even better than them. Thank God for 30 years of trickle down free market Reaganomics that ended all that.
That reads really well. Thanks.
Because none of the economists, that I have heard or read, propose doing away with capitalism “as we know it”. Financial “reform” and Healthcare “reform” both require getting rid of the big institutions, banks and insurance companies, that govern our lives. And until we can remove both those ingrained institutions piddling around the edges is not going to do us any bloody good whatsoever.
I listened To This American Life episode “Inside Job” yesterday. http://www.thisamericanlife.org/radio-archives/episode/405/inside-job.
What struck me was the way the professionals admired the cleverness of the Hedge fund Magatar who helped create the crisis.
If they didn’t technically break any law they were cool, and like Enron, the smartest men in the room. After all, theY made money and got away with it.
They reporter spent a lot of time explaining the hows and whys and Ira Glass pointed out they all said “nobody could have predicted this, when in fact lots of people did. Just not anyone who they listened to.”
Even the CDO banker they interviewed who got hustled by their game didn’t blame them. He blamed himself.
The underlying premise is that if you are savvy enough you are a winner. Destroying the lives of others isn’t really your fault. Especially if it was legal. Once again the people hurt weren’t profiled. The people who got millions via their cold smart math were just taking advantage of a loophole and the greed of others.
I saw in the press the same admiration for the evil “genius” of Karl Rove techniques as he turned a real war hero into some one else. And turned an AWOL drunk into a born again tough guy.
Visually the media have to see people in food riots or breadlines before they will see this as a crisis that impact the majority of people. Instead we have tea partiers in costumes saying stay away from business.
Nobody is proving those group visuals. They are talking to the ecominists who are abstract and admire the savvy of people who manipulate the market.
Envision the “bonus army” demanding jobs. Smeadly Butler would be dispatched to put them down. But the media would wonder “how did this happen? No laws were broken. Nobody is in jail. Are these people just lazy? Why don’t they retrain as financial manipulators? They are doing well.
The wealthy elite has made abundantly clear that it thinks it owns a monopoly on the use of government to further its own ends, primarily increasing its wealth and power at everyone else’s expense.
It attempts to make the use of government appear illegitimate – both individually and universally – for the same reason the wolf attempted to convince Little Red Riding Hood that its eyes, ears, arms and teeth were all designed the better to appreciate the darling little girl who thought she was getting in bed with her grandmother, until the wolf ate her up. (The addendum that the woodsman saved her from the wolf with his ax adds a false, Cinderella-like luster to a once practical tale.)
ROTL, re ‘biz schools an economic programs’:
““WILLIAM K. BLACK A criminogenic environment is a steal from pathology, a pathogenic environment, an environment that spreads disease. In this case, it’s an environment that spreads fraud.
criminogenic definition ;Origin of the Philosophy of Criminogenic ; Ironic as can be that the very University where the Philosophy of Criminogenic was invented is the same University where both of the authors of the book Black cites as the leading textbook in corporate law from law and economics perspective states “”A rule against fraud is neither necessary nor particularly important.” (paraphrased by Black).
And who is Frank Easterbrook? “Easterbrook was nominated to the court by Ronald Reagan in August 1984 to a new seat created by 98 Stat. 333, 346; the U.S. Senate did not act on his nomination that year, and he was re-nominated in Reagan’s second term on February 25, 1985. He was confirmed by the Senate on April 3, 1985, and received his commission the next day. The American Bar Association gave Easterbrook a low “qualified/not qualified” rating, presumably due to his youth and relative inexperience. In 2001, this rating was claimed by the George W. Bush administration as evidence of liberal bias in the ABA in its announcement that it would no longer confer with the ABA in selecting judicial nominees.”
And who is Daniel Fischel? “Daniel R. Fischel (born 1950) is the emeritus Lee and Brena Freeman Professor of Law and Business and former Dean of University of Chicago Law School, and a co-founder of Lexecon. He is a leading scholar of the regulation of financial markets and corporations, and a frequent expert witness on behalf of defendants in securities litigation.
So here we have a President also hailing from the University of Chicago setting up a commission to focus on entitlement spending with the commission getting PR advances from the Peterson coalition (President Clinton, OMB Dir. Peter Orszag, CAP CEO John Podesta, Sen. Judd Gregg, Rep. Paul Ryan, CBPP Dir. Robert Greenstein, fmr Treasury Sec.Robert Rubin, EPI President Lawrence Mishel, and fmr Federal Reserve Chairmen Paul Volcker and Alan Greenspan ) and Co-Chairs Bowles & Simpson of President Obama’s National Commission on Fiscal Responsibility and Reform are going to participate.
Add to the above “In the last three weeks, we have finally done a half-baked investigation, mind you. Not — nothing like we did in the Savings & Loan days — of Washington Mutual (WaMu), Citicorp, Lehman, and Goldman. And we have found strong evidence of fraud at all four places.
And we have looked previously at Fannie and Freddie and found the same thing. So the ONLY six places we’ve looked, at really elite institutions, we’ve found strong evidence of fraud. So where are the other investigations? Why are there no arrests? Why are there no convictions?
BILL MOYERS: Well, Bill, where are the other investigations? Why have there been no arrests? Why have there been no convictions?
WILLIAM K. BLACK Because we have still Bush’s wrecking crew in charge of the key regulatory agencies. Why are they still in place? They have abysmal records as major causes of this crisis. ”
So you can say with confidence that we have in place a Criminogenic culture with the President of the United States being fully co-operative in that environment (why else would he not be able to speak the word that describes what has occurred as being the fraud that it is/was?)
(cross commented here)
It’s good to have discussions of principles but ,IMHO, the real question is how do we change a criminogenic_society that has manifested itself into the base fabric of our political system?
This is one of the most asinine ignorant things I’ve ever seen written at FDL.
First of all, have you actually looked at GDP growth comparatively between the U.S., Germany, UK, Sweden, France, Switzerland, etc.? Any distinct indicators of stagnation? Christ, have you ever actually spent any time in those countries? Seem stagnant? Lacking dynamicism?
Second, the overwhelming configuration of new markets in the U.S. (nay, the world) have been built on the fruits of “government control.” The government, either directly (in agency) or indirectly (through the university system) conducts massive amounts of research in efforts to establish scientific and technological advancements. Those advancements are then handed off to private industry for the purposes of commercialization and economic activity. The development of new markets starts at scientific breakthrough, then turns from a scientific problem into an engineering problem, then becomes a sales and marketing one. Two out of the three of those stages are fundamentally rooted in the expense for public interest, the government.
Thirdly, exactly nobody is advocating for a total command-economy.
Lastly, the “American way” has been an unmitigated clusterfuck for the world at large. You might want to take a look at the Pan-Asian crises of the 1990′s and 2000′s, the Latin American crises of the decades prior, and lest us forget the global economic contagion that we’re living in right fucking now.
I hope to God that in your village [edited by mod], because if not; it speaks poorly of your friends and neighbors.
[MODNOTE - no personal attacks]
ubetchiam, it is hard to fit all these c’s together: criminogenic crony casino capitalism.
That is a powerful addition. Financial economists certainly have nothing to contribute to any of our actual economic problems.
Wasn’t cap and trade supposed to be an attempt to capture some of the costs inflicted on society as a whole by pollution? Even if it would work, it isn’t going to be enacted in any useful form. Your experience in California’s electricity models is a better indicator.
It seems to me extremely improbable that any significant regulatory reform will happen as long as those who fund elections do not want it.
The incentives for congress to act for the common good are just not there.
How to change those incentives is the salient question for me, all else is interesting but futile IMSHO
This is a framework for reform:
Take the C from criminogenic, the R from crony, the A from casino, and the P from capitalism and what’s that spell? CRAP, which is what the U.S. public is being fed, whether the discussion is healthcare,financial reform, climate change, defense, whatever.
Well, I did see Black and felt that what he was saying was really breathtaking — although also a relief: the system was created to enable and abet criminal conduct. I happen to agree, and although I am only in the preliminary section Yves Smith’s superb book EConned, what strikes me is how astutely and successfully this system was created and tweaked over 30 years. “Criminogenic” is a good term, and I think it’s extremely relevant for this thread.
Perhaps masaccio would be open to more brainstorming, and you might propose a 4th Principle on the whole notion of ensuring that systems are simple enough to use so that they can’t be manipulated — or when they are, it is easier to spot. The complexity in the current system, as I’ve tried to understand it, is quite clearly a ‘feature, not a bug’. I think it is a Ferenghian feature. (see Star Trek: Quark, for details…)
Finally, I hadn’t thought about it until your comment, but do you think that one way to start cleaning up the ‘criminogenic’ aspects of the current system would be to place far more emphasis on finance and economics as SOCIAL ACTIVITIES.
FWIW, George Soros has always struck me as a brilliant thinker in part because he seems to have the most clear sense of anyone that economics is a SOCIAL activity; a human endeavor. Indeed, many of his key insights rest on that fact. Yet, he appears to be an ethical actor, given the systems that he has to contend with — in other words, when they’re wretched, he doesn’t seem to flinch from that recognition.
(I also admire him because I sense that he recognized communism as a terrible economic model. Personally, I think it’s about the dumbest, most idiotic, incompetent system ever created by humans. It sure as hell missed the whole ‘entrepreneurial’ piece that in my view is absolutely critical to any human social group’s success.)
masaccio@10, thank you.
From your link:
“No bank should be too big to fail.” ; SEC. 203. SYSTEMIC RISK DETERMINATION (Large PDF)– “Such recommendation shall be made upon a vote of not fewer than 2⁄3 of the members of the Board of Governors then serving and 2⁄3 of the members of the board of directors of the Corporation then serving.” ; so 2/3 of the FED’s Board of Governors AND 2/3 of the Directors of the receivership corporation to be set up for liquidating an entity that is seen to be a ’systemic risk’ must vote in unison.”
“No financial company may lobby the Congress”; “If we do not reform campaign laws in a major way, we will once again repeat this experience after a generation or two has forgotten the lessons.” ; absolutely but just look how far Durbin has gotten with his Fair elections Act.
“The Federal Reserve regulatory function should be abolished. The Federal Reserve should concentrate on monetary policy and economic research.” ; the Fed gave up the idea of managing the economy via monetary policy awhile ago choosing to use interest rates since manipulating the money supply didn’t get them where they wanted to go in managing the economy(and they haven’t been very successful with the interest rate paradigm either).
“A bank should not be allowed to engage in broking or securities underwriting” ;absolutely but look what the Treasury has done.
“but do you think that one way to start cleaning up the ‘criminogenic’ aspects of the current system would be to place far more emphasis on finance and economics as SOCIAL ACTIVITIES.”; yes, that’s why I’ve written diaries about the ‘commons’.
Ah, thanks for the links.
One reason that I think the neocons, the neoclassical economists, and conventional economists are completely incapable of dealing with current realities is that they have a very weak sense of how key ‘the commons’ (air, water, social trust) is for economic productivity.
They might speak of it, but really in their minds it appears to be a ‘market failure’ waiting to be exploited.
I think they’d all be much better at their work if they took a year off to live with a tribe somewhere that requires them to be around people with high rates of illiteracy, who have to figure out how to feed themselves and watch what happens when someone violates norms, or endanger the group.
I’m a big fan of education in just about any form; what troubles me is the downright narrow thinking that so many of these prestige institutions and prestige degrees seem to produce. (Justices Alito and Roberts come instantly to my mind, but also Alan Greenspan and his enablers. )
Not hard at all. FDR’s programs kept our economy stagnant for years after the depression ended for the rest of the world. This is pointed out by the recent UCLA study on the matter.
Or if you want something more current, how about the “community re-investment act”. That really helped f**k up the economy, did it not?
I guess you are unaware of the unemployment rates for those countries. I suggest you do a study of the percentage of unemployed in those countries, compared to the USA, for say, the last twenty years. And Government control of a countries economy has always been an unmitigated failure, with the more control, the greater the failure. That is an historical fact. And as to your belief that the American way has been nothing but an “unmitigated clusterfuck”, I really am at a loss as to how you arrived at this conclusion. Hell, this country feeds a big portion of the world. We are the first country to come to the aid of other countries in need. We are the country that people in other countries would like to immigrate to most. We are not a perfect nation, but we are far from being an unmitigated clusterfuck as you seem to believe.
Why do need reform? If what these people did is fraud, then current laws should take care of the matter. The way I see it, the people who were tasked to prevent this from occurring didn’t do there jobs. If they had, this would not have happened to the extent it did. How would “reform” make those people do their jobs any better than they do now?
I have no idea what you are talking about with respect to ‘historical’ progressivism. FDR wasn’t strictly speaking a ‘progressive’. He was fundamentally a non-ideological man who held certain principles. For his time and the problems he confronted, he appears to have made his judgments based on what he thought would produce ‘the greatest good for the greatest number’.
He was superceded by people who sanctimonously used government to produce ‘the greatest good for the smallest number’.
This did not automatically translate into any kind of ‘government takeover’ of an economy under FDR or his policies. But he lived at a time when most people still assumed that acting in the public interest was a ‘given’: people didn’t expect to be told to help out. When they did that, they inadvertantly created ‘social capital’.
I have never, ever seen masaccio propose any kind of government takeover, and I’ve read his comments for several years now.
Arguably, under Bush, Reagan, and Bush II we did have government takeover, but it was ‘an inside job’: regulatory bodies were used to strangle laws that protected the public interest and the public good. For more, read Yves Smith, Simon Johnson, or others who document this very thoroughly.
The EU nations are smaller; their scale is far smaller than the US.
China is bigger; it also has a very different (and ancient) culture than the US.
Solutions in the EU need to work primarily for the EU, while also linking to larger systems. Ditto China.
For at least 30 years, but I’d argue back to the 40s (the origins of the National Security State and the increasing pace of global capitalism), the US has not had a cogent, clear, fundamental discussion of what economics ‘is’. Culturally, the US gives a lot of credence to academics and ‘professionals’, and that has upsides and downsides.
The upside is that expertise is invaluable.
The downside is their views can be too narrow, which makes them more likely to be ‘captured’ or co-opted.
Capitalism does not seem to be working as resources are no longer easily available. The neoclassical assumptions and arrangements created a ‘criminogenic’ environment, and they created social instability and concentrated wealth. As an economic model, that is narcissistic, and it is also the kind of economic activity that kills entrepreneurial activity.
Bashing masaccio is not going to move you, me, or any of us forward.
Unless you can produce some positive, grounded commentary on the 3 Principles that masaccio laid out for this discussion, I have nothing more to say about your efforts to poison the conversation.
should have been:
Lots of opinions, very few links. Hmm?
Yeah, it’s a wonder that a bill first passed in 1977 could be so powerful that it took until 2008 to screw everything all to hell.
“Hell, this country feeds a big portion of the world.” ;yeah, ol agribusiness has been real successful at having other countries forfeit their own agriculture leaving them dependent on others for feeding their nations.
“We are the first country to come to the aid of other countries in need.” ; incorrect; see Haiti for just one example.
“We are the country that people in other countries would like to immigrate to most.”; ok, but look at where they are coming from; don’t see a lot of Europeans clamoring to come here do you?
“We are not a perfect nation” and no nation is. Let me suggest some reading:
http://www.nytimes.com/2006/09/29/arts/29iht-idbriefs30A.2978125.html
http://en.wikipedia.org/wiki/Confessions_of_an_Economic_Hit_Man
http://www.amazon.com/Peoples-History-United-States-1492-Present/dp/0060528370
http://books.google.com/books?id=NrLv4surz7UC&dq=Noam+Chomsky&printsec=frontcover&source=an&hl=en&ei=fZzUS7DLCInQtAOk9syGCg&sa=X&oi=book_result&ct=result&resnum=6&ved=0CCIQ6AEwBQ#v=onepage&q&f=false
I read their “study” from ’01. It read to me like a couple of avowed “free market” types chose a conclusion and built a study (complete with computer model) that gave them a pre-determined outcome.
And of course, it’s possible that war in the rest of the world may also have had some bearing on how “the rest of the world” came out of the depression.
“How would “reform” make those people do their jobs any better than they do now?” ; you answered your first question with this one.
Take some time to read this transcript and you nay have a better understanding about ‘reform’.
This might be of some interest — although some of the key recommendations were made over a year ago to avert a meltdown, the nuts and bolts of reform remain true today.
http://www.peri.umass.edu/fileadmin/pdf/other_publication_types/PERI_SCEPA_statementJan27.pdf
Huh, what post are you referring to when you said I was bashing someone? Or is disagreeing with someone’s position now considered bashing? If it is, then someone forgot to send me the memo, in that regard. By the way, capitalism is working just fine, judging by the standard of living enjoyed by those from capitalist systems, compared to the standard of living for those living under other systems. We are on par or exceed every other country in the world, based on that standard, are we not?
Why link to things that are so readily available by goggling? That way, you can go to the many links that support my positions, not just the one I may choose to give you. I have notice over the years that when I post links, your sides response is to demonize the site, while ignoring the message.
Because the standard at FDL is if a commenter comes in and makes assertions on things, it is that commenter’s “duty” to provide the links.
Otherwise, the assumption is you are just blowing so much smoke and bull shit.
Well, things didn’t start to get “unhooked” until ol Barney got involved with freddie and fannie. He used the act to force banks into doing things that where against the banks best interest. Barney had help in doing this, but his hands are as dirty as anyone else’s.
What would you like a link to? Anything specific?
and just how did he do that since so much of the loosening was done when Newt Gingrich and Tom Delay were running the House from 1994 through 2006? It’s not as if they were known for accommodating anything proposed by any democrat for any reason.
But nice try in re-writing history.
As JClausen said above, you’ve made a number of factual assertions on this thread but provided no evidence to support your assertions.
So you can go back, check your assertions, provide links that support them and we can evaluate them for ourselves.
It really is a simple concept.
Your question and comment in your reply to me do not appear to me to be sincere, nor do your other comments. Fini
One: They have? Humm So, are feeding starving people all over the world has caused those countries to abandon the growing of their own food? Do tell.
Two: Huh, American aid groups have been in Haiti since way before the earthquake, and they did a lot to help those in need, before any other country could even get to that country. I know you CIP’s and BBL’s are big on revising history, but please, Haiti is way to recent for you to think you can get away with it, in this instance.
Three: I look at the totality of immigration. There are quite a few Europeans who have immigrated to our country, as well as from all other continents. That was true in the past, and still holds true today.
They have broader unemployment by design, they also have the social institutions to deal with it. Full-employment in a post-industrial society means something completely different, because as the society becomes sufficiently advanced, it doesn’t need huge swaths of people doing all kinds of pointless tasks for the facade of employment.
You specifically stated stagnation. Your word. There is literally zero evidence that European social-democracies are comparatively disadvantaged in terms of quality-of-life or economic-growth compared to the United States. In fact, there’s significant evidence that the condition is exactly the opposite of what you’re asserting once you extract the “growth” from financialization from the metrics.
As noted before, exactly nobody is advocating for a command-economy. So I have no idea where this asinine statement comes from, “And Government control of a countries economy has always been an unmitigated failure, with the more control, the greater the failure.”
Moreover, why don’t we take some stock for a moment of the things this “greater the failure” has produced which even allow you the capacity to broadcast this idiocy. Huge proportions of the fundamental science and engineering in electronics, materials, computation, networks, and the means to conglomerate them into functional usable tools that make up that magic widget you’re using right now, to both consume and produce media right here on this very website, are the direct result of that “government control.”
I arrived at the conclusion of the “American way” being an unmitigated clusterfuck because I happen to have readily available knowledge on the effects and prescriptions of the “American way” to all manners of foreign entities, and specifically how it has continually, and unfailingly, lead to the debasing of those societies self-determination, control over their own resources and markets, and the barriers we erect to ensure that we have to feed them, because we subsidize the ever loving shit out of our food crops, and sometimes outright disallow foreign imports of foods grown in those developing nations.
The IMF and the World Bank spent the better part of five solid decades failing miserably to advance modernization theory to the betterment of the rest of the world. U.S. foreign policy during that same period has done almost nothing except replace foreign leaders with brutal dictators who were friendly to the prescriptions of the aforementioned, and we weren’t shy about doing it through supporting violent military juntas, creating scarce resource shortages to create panic, etc.
Your “historical facts” are grade-school fairytales and American-exceptionlism mythology. Travel, read foreign media, read foreign history, and get a firm grip on economics in practice; then next time I won’t be such an asshole. When people assert stupid things, that are trivially falsifiable, it insults everyone who wasted the time reading it. You can never give me back that 30 seconds of my life, but I can make you pay for it by pointing out how utterly bereft of insight and validity the content that consumed that 30 seconds actually was.
Hummmm. So your response is that Barney is guilt free? I have never claimed the republicans are the good guys and the democrats are the bad guys. I say both parties are to blame, as they both have ceased doing the PEOPLE’S BUSINESS long ago, in my opinion.
I stated my opinions.
Dakine01 is, IMVHO and experience, very highly respected around these parts. You’d be wise to take his advice.
As for ‘bashing masaccio’, here was your response @5:
Masaccio’s post was an opportunity to think positively, about ideas that most of us have neither time, leisure, nor resources do consider during an average busy week. Your first sentence was negative, and also did not speak to the post topic.
As dakine01 points out, you provide no evidence, no links, and nothing to substantiate such a huge generalization. Arguably, Sparta of 500 BCE had government control of its economy and it’s probably no coincidence that it was in some respects an early surveillance state.
But where in masaccio’s post did he claim that a government should control an economy? Re-read the post.
Your comment makes it sound ‘as if’ masaccio is advocating government control of the economy. I have never seen him do any such thing.
Fine. The ‘market’ obviously has not policed itself. In the modern world, that leaves governments and NGOs to do the work. That does not equate to ‘government takeover’ by any stretch of the imagination.
I believe that masaccio’s effort to state principles is a sensible, fine thing to do on a Sunday morning; it gets people thinking creatively, and it is focused on problem solving from the bottom up.
His post does not advocate for takeover, European or otherwise.
IIRC, it was founded by people seeking to free themselves from the burden of theocracy: in Ye Olde Europe, church and state were One; two sides of the same coinage. This led to wars and deaths.
The first Europeans arrived in Greenland, the next in Jamestown, and the people we celebrate with pumpkin pie nearly froze their asses in Massachusetts. If you read some of the old Puritan sermons, their priority was their relationship with God, not with markets.
Again, plenty of room for dispute. But not the point of this thread topic.
I’ve taken time to respond because you clearly have passion and I hope that you’ll be able to channel it in a more thoughtful fashion so that you can think through some of the very important topics that masaccio raises on his Sunday threads.
How would we make things better?
What principles would guide us?
Can we simply leave that to economists? masaccio seems to think that we can’t leave it to economists and at this point I heartily agree with him.
I’m not close to perfect and I often go off topic, so I can sympathize with what appears to be a great deal of frustration on your part.
However, I would respectfully point out that masaccio has huge knowledge that he generously shares each week – it must take him hours to write many of the posts. To see his posts receive comments that are not on-topic, and not respectful, is going to provoke some pushback from those of us who have watched his writing over time and have enormous gratitude for his willingness to share what he knows and help us also try to think through large, systemic problems.
Likewise, dakine01 is an invaluable resource and knows a great deal about FDL and many other topics. you would be wise to take his advice.
I hope that you read this in the respectful, well-intentioned tone that I feel in writing it. It is meant to help you move forward, and not simply keep running circles in what appears to be a fairly frustrated eddy.
All Best, rOTL
Then don’t be upset if folks ignore your opinions
Yes, and it’s a key problem in the post-industrial society.
We pay huge, insane sums for ‘capital’ and ‘finance’.
Meanwhile, we have children shoved into day cares where people make crap pay. (And yes, some of the women that I know use nannies, and the next one that I hear whine about how much she has to pay her nanny is going to get verbally eviscerated by Yours Truly.)
We also have classes with 30+ children.
We don’t realize the value of work, even when that work might look like providing pedicures to the elderly, or a cooking class to a few preschoolers.
We have our priorities completely lopsided.
Our economics is built to serve finance, not people.
It is socially destructive, and people who would be engaged in useful, meaningful activities are feeling like yesterday’s garbage.
We treat ‘money’ better than we treat human beings.
That’s sheer lunacy.
You present it as if Barney is the primary culprit rather than acknowledging that he was in the congressional minority at a time when the majority was mostly ignoring the minority.
And when the majority was ignoring the rights of the minority, the minority did not have the power you are ascribing to Frank.
I don’t agree that a system that promotes sloth in a person is one that is best for us as a species. And I never said they where “disadvantaged”, I said there economies have little growth, especially compared to us. As to my comment about the failure, I would suggest you look at the economies of eastern europe, the ussr, cuba, etc. Most have been unmitigated failures, have they not? And it is private enterprise that has brought these innovations, not government, as you seem to believe. Hey, are you under the impression that Gates and Jobs where government workers? Or what about the the advancement in genetics? The private sector has out paced the government in mapping the genome, has it not?
And I really don’t know what books you have read about this country, but they fly in the face of the facts, which are, we are a flawed country, but on balance, we strive to do the right thing, and have been mostly successful in that goal. Especially if you want to compare the history of all other countries in existence. Or to para-phrase Churchell: This country is the worst country man has ever devised, with the exception of ALL other countries man has ever devised.
I see nothing “bashing” in my statement. As to my government control comment, huh, what link should I have provided? There really are thousands of them, showing the collapse of countries who’s model was that of centrally controlled economies that have failed. I am surprised that this appears to be news to you. Which failed country would you like me to link to? Or should I provide one link per country? And yes, we need our system to be policed. Just because those tasked with this function have failed us, is no reason to get rid of the system or even change it. I feel that we should hold those tasked with this police function, actually do their jobs, or be fired.
Are you sure this country was only founded by those who where seeking to unburden themselves from theocracy? Didn’t some want to unburden themselves from a monarchy as well?
All in all, to sum up, I am about personal responsibility. I do not trust the government to be my friend. I do not trust the government to do right by its citizens. I hold both parties at fault for the problems we face. And that is where I think we have a disagreement. Your side only wants to blame the other side, while the other side only wants to blame you. I believe both sides to be at fault, and hold each side accountable.
Barney had as much if not more to do with the housing collapse than did any other one individual, notwithstanding his status in congress.
And as has been asked before, your proof of this is…?
For if it is only your opinion, then it will be given appropriate consideration.
Then you better get to arguing against all productive modernization, because every plow, every welding robot, every CNC machine, every bandsaw, every locomotive, etc. etc. etc. etc. has pushed humanity further and further forward toward the irrelevancy of labor.
I look forward to coming to visit your thatched hut, and observe you walking everywhere, and accomplishing your daily tasks without the slightest semblance of even the simplest machines.
You mean excepting that this isn’t true? Not even remotely true. GDP per capita growth > annual % (most recent) by country
Like I said, trivially falsifiable. In fact you can also look at the comparative tax-rates over the last three decades, and note that there’s no statistical correlation between first-world tax-rates and per-capita change in GDP, so our comparatively low tax-rates have no discernible benefit to GDP, but have an obvious impact on our comparatively lower quality-of-life.
NOBODY IS ADVOCATING FOR A COMMAND ECONOMY
Government funded research is what made Steve Jobs and Bill Gates possible. Neither one of them (nor their companies) did the fundamental work on electricity, electrical distribution, the transistor, radio communication, theory of computation, magnetic storage, the materials science required to understand and utilize semi-conductors, etc. etc. etc. etc. The scientists and engineers, with heavy doses of government funding, do the heavy lifting, take on all the early risk in innovation where private enterprise won’t go, produces the advancements and innovations, and then private enterprise commercializes the innovations. That is the configuration of huge swaths of our economy.
Can you please be very specific about these “genetic advancements?” I’m really curious, because we’re way, way behind the curve as a nation on that front, and the overwhelming majority of the breaking research that has occurred in the U.S. seems to be heavily weighted toward research universities and labs that are working directly with, or are funded by, the government.
You’re giving me a completely butchered Churchill quote? Nice work.
Do you know anything at all about the Pan-Asian and Latin American economic and financial crises? How about the dictators that we placed throughout both regions? What about the ones we placed in the Middle East? Any knowledge at all on the programs and prescriptions of the IMF and World Bank, and what their results were? Do you know absolutely anything about American and world history that you didn’t pick up out of a 5th grade social studies book?
As a scientist and engineer I wish the entire historical community of my peers and colleagues could un-invent every last single advancement in science and technology specifically to spite people like you who have contributed absolutely nothing to that cause, fight actively against furthering it by wrongfully believing that the government engagement is antithetical to it, and yet still constantly ignorantly reap the benefits of it despite your replete and incurable ignorance.
I’d like a link to credible data backing up your assertion that CRA loans had anything to do with the subprime crisis. That idea has been so throughly debunked I’d be extremely surprised if anyone who ever made those claims is still doing so.
http://www.dallasfed.org/ca/bcp/2009/bcp0901.cfm
http://www.traigerlaw.com/publications/traiger_hinckley_llp_cra_foreclosure_study_1-7-08.pdf
http://www.redcounty.com/sarasota/2008/09/barney-franks-hypocricy-and-sl/
http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2008/09/28/franks_fingerprints_are_all_over_the_finan
http://blog.heritage.org/2009/06/26/9589barneyfrankfanniefreddie/
http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2008/09/28/franks_fingerprints_are_all_over_the_financial_fiasco/
http://www.cnsnews.com/public/content/article.aspx?RsrcID=50680
I just want to thank you for this profound statement.
Good job. The Globe op-ed link is busted. The Heritage foundation link is to an op-ed from June of 2009, months after the economy had tanked and is taking Frank to task for trying to use Freddie and Fannie to do something to restore the economy and the other op-ed takes him to task for chastising Republicans for not voting on something to help restore confidence.
I ask for facts and you bring me opinion pieces that aren’t even in the pertinent time frame.
Huh, false argument. Putting people on the public dole is what I am talking about, and was what you where talking about with your comment about planned unemployment. As to these dictators etc you refer to, we, as a nation, as does all nations, look out for our best interests. So, yes, we support some rulers that in hindsight we maybe should not have, but at the same time, what choice’s did we have? Was the alternative better for us, or worse? Like, for instance, when FDR got into bed with one of the worse mass murderers of the twentieth century. It was in America’s best interest to do so, at the time. I am not saying one can not find fault with aspects of America’s conduct, historically, what I am saying is that I believe our conduct has been more of a positive than a negative, especially when compared to the histories of most of the rest of the world.
How about this. Read what Edward J. Springer has to say about the subject. Or how about reading thomas sowell, or walt williams. They are who I go to regarding economic issue.
Common sense tells me that when you make bad loans, you will lose money. If you lose to much money, you go out of business. Or you should.
so you go to opinions rather than facts. If you want to convince me, you need to bring objective, verifiable facts, not just opinion pieces from right wing think tanks
Huh, then the only link anyone should ever supply is from the official record, such as the congressional one, is that what you are saying? All of the links I see from your side fall under the same category as you claim mine do, except mine often link directly to the source of the comments being made, such as when they quote Barney, they also link to the source of that quote, or did you fail to notice that?
And oh, by the way, I am not trying to convince you of anything. I am only exposing you to other beliefs on the subject. Group thought is not appealing to me, so I try and inject the other side of the debate, which your side seems to not be aware of. Your side seems to even be unaware that there is even an opposing viewpoint, so caught up in your group think bubble.
No. I’m saying that if you are claiming that a specific individual is to blame for things, then you need facts. Facts can be news articles from valid sources. They can be studies conducted (including delineation of underlying assumptions of the study). They can be the result of congressional inquiries. Valid sources abound.
Opinion pieces are not facts and are usually one person pulling something from where the sun don’t shine
You are then operating under the assumption that I don’t read things written by folks like Thomas Sowell. I do.
I just do not find him credible.
See, this isn’t about your opinions. It’s about my opinions, carefully thought out and buttressed with years of experience and study of the issues.
If you want to play, you answer my opinions with something that might change my mind. Since you didn’t read the post, here are the main ideas.
1. Professional economists and businesses dominate the discussion of regulation of economic and financial matters in the US.
2. Their work and opinions are based on models that are discredited in the cited book.
3. It would be a bad idea for progressives just to find some economists and adopt them. Economics is a tool. You have to know what to do with a tool before you use it.
4. John Rawls is a famous philosopher who tackled a problem of how societies should regulate themselves. I agree with Rawls on a number of important points.
5. Using those points, I generate some ideas that progressives should use as a test to figure out whether a particular idea should be put into practice.
Now if you were a regular here, you would know that I like Rawls’ ideas, because I have written about them. Many of the people who comment here are generally familiar with key Rawlsian ideas. I address those ideas directly here. Read that post and the comments, and you can see for yourself.
Perhaps you would like to explain why Rawls is wrong. You might start with his Original Position. You can at least get a start on understanding it by reading commenter Sluggo here.
LOL – we agree on some points but you need to be more fact based if you expect respect on FDL
Conservative opinion pieces that make assertions without analysis, presenting only partial truth “facts” is basic Fox News – and not a very useful link.
I especially liked your Jeff Jacoby http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2008/09/28/franks_fingerprints_are_all_over_the_financial_fiasco/ (your link is not correct) opinion piece –
Jeff is a Boston University School of Law grad who went to work for the conservative paper in Boston- the Herald – before moving to the Globe. He has no expertise in anything – including the law.
His plagiarism got him a suspension at the Globe, but “educated” conservatives apparently are in short supply so he was taken back after the suspension. In the link he does note the 70′s origination of the CRA loans – and says “5 years ago” (from 2008 – so 2003) for the date of the Franks comment. He of course forgets that SEC “deregulation to appease Greenspan and Bush by not enforcing current law and rules” is the point liar loans became “legal” and that Fanny and Freddie began to buy them as part of their support of the housing market.
Please get the chart of the growth of “sub prime” loans – see the jump when the SEC and other agencies under Bush stopped their regulatory enforcement – note the correlation with the housing bubble development.
Then also no that CRA loans NEVER went into the liar loan documentation mode.
Or just go BACK TO Beck and Fox and accept their lies and assertions because thinking on your own is hard.
For the record greed is needed for economic growth – that is why Marx was a socialist, not a communist, when he died. So TOTAL gov control is indeed bad. But then again capitalism without massive Gov regulation is a bigger problem.
No it isn’t a false argument. That you can’t see the correlation to the assertions you made is not a measure of the validity of it.
They have higher amounts of acceptable unemployment precisely because they have a more mature understanding of the realities of advanced economies as they pertain to their citizens.
If the entirety of the American labor force could be replaced by well-functioning robotics, what would be the point of them working at all? The “public dole” would just be the wealth generated and distributed by a sufficiently advanced society that no longer needed the direct employ of human-beings. Should private industry employ them to do nothing, instead of the government?
If an advanced economy doesn’t need people working in active production, what are they supposed to do? Die?
More importantly, none of this is at all germane to the statement that you made, which was that they were stagnant economies, and that their growth lags the U.S. because they have more “government control.” An assertion that is verifiably false when one takes even the briefest of looks at comparative per-capita change in GDP over the last several decades between the U.S. and it’s first-world counterparts in Europe, Asia, and South America.
It’s a 100% complete fiction that those nations have “stagnant” economies compared to the U.S.
Again:
Apparently the answer to all of them is, “No. No I don’t.”
Common sense tells you? You might sharpen your common sense a bit by at least taking a glance at the link I gave you to the Federal Reserve Bank of Dallas analysis of the CRA and it’s relationship to overall subprime lending.
So, you don’t think someone in congress, who has been a long time member of the banking committee, as well as it’s chairman, shouldn’t accept a lot of the responsibility for this mess? Please.
And don’t try to tell me that as Frank’s lover, the former head of freddie and fannie wasn’t influenced by Frank? Y
Not when he was in the minority at the time the worst abuses started taking place and the same party that was in charge of the House ruled the WH, with a President who made “the ownership society” a hallmark of his presidency, no I don’t think Frank’s being a member of the Banking committee at the time rises to the level of “it’s all his fault” (or “mostly his fault”) no.
Thank you.
Who makes them the ruling authority on the subject? And you seen to not realize that there are many reasons for the mess we are in. I am just pointing out some of those reasons that seem to have eluded some on this site.
Once again, do you have any proof of this statement?
And as far as it goes, how many people are on such good terms with their exes that one would do the bidding of the other in the way you are implying? It. Does. Not. Happen.
Edit: because if this is the standard, there are a few current “DC power couples” that have far more egregious conflicts that are rarely talked about.
I guess you feel that the role Franks played was of a minor nature?
Your takedown of Jeff Jacoby is well earned. He makes David Brooks seem weighty and Ross Douthat look prescient.
Proof of what? That barney and the ex head of freddie and fannie where once lovers or that because of that relationship, that barney obviously had some influence with what his ex did, at freddie and frannie? One is common knowledge, and the other is a very reasonable assumption, under the circumstance. After all, the finance and banking committee’s where very much involved in the doings of freddie and frannie, as that is one of that committees responsibilities, is it not?
In relation to the role played by Bush, Delay, the anti-regulation crowd in the Bush WH and admin in general, the role of Christopher Cox at the SEC and a lot of others, yes, Barney Frank played an extremely minor role in the problems.
Tell me, who holds the purse strings?
Either one.
You know, some of those objective verifiable facts we’ve talked about that you refuse to provide.
The Congress. Who controlled the Congress at the time all the problems started escalating in the early mid 2000s? It was NOT Barney Frank and the Dems.
None of those people pushed loans onto banks that could not be payed back. Franks committee did. They forced banks into making bad loans.
Who controlled congress when the ball was set in motion. Both parties are complicit. I don’t disagree with you there.
After all, it just escalated, your words, with the republicans. It started with the dems.
Yeah but it was not causing problems under the Dems since it had been functioning without the problems since 1977. But it took the Rs to take something that was functioning reasonably well and use it as a basis to destroy the economy.
And for the record, you can check the statistics, those folks with CRA loans have a far lower default rate than those who got fraudulent loans outside the auspices of the CRA.
Like I have said repeatedly, both sides, in my opinion, are to blame, but your side just wants to lay most, if not all of the blame on just one side. To me, that means we have only dealt with half of the problem, while to you, the problem is solved by just eliminating the other side.
Have I ever said the Dems didn’t deserve some blame? They do, if for no other reason than the incompetence some of them show in running for office and the framing of the problems.
But you came in here with the claim that it was mostly Barney Frank’s fault and that is specious BS.
http://www.zimbio.com/pictures/U391iUJfTQ_/House+Holds+Hearing+Collapse+Fannie+Mae+Freddie/Jo007Mp-SyM/Harold+Raines
http://www.marketwatch.com/story/fannie-freddie-to-be-used-to-prop-up-housing-more-2009-12-28
Yes – Franks role – if any – was small – even tiny.
The role that began this and was most at fault is Greenspan’s.
Next is the Bush folks following Greenspan and killing nearly all regulation (of course this is the Reagan model – see how Clarance Thomas – now a Justice – ran his EEOC function – or rather did not do anything about any enforcement).
Then we have Wall Street pushing liar loans because the demand for a higher fixed income investment made it an easy sale.
The there is the rating agencies that when I and others were telling them it was silly to rate a collection of BBB loans as AAA appeared to assume our math background was not as good as the assertions of Wall Street modelers that redefined the value and meaning of diversified, of independent, of “conservative”, and of “looking at the bad tail”.
Then there are Democrats (! – yes – Democrats !!!!) in 2004 that help forced out the top management (Freddie/Fannie type) over accounting lies – despite not being in the majority – but felt it necessary to defend Fannie/Freddie mortgage buying practices without actually looking into those practices. Here Franks can indeed be faulted, but only for not asking the GOP masters of the Congress at the time to investigate those mortgage buying practices.
No, it is you who paint my statements that way. And franks is the democrats point man in pushing the agenda in regards to freddie and frannie, so of course his name will come up. This, after all, was his job, as a long time member and head of the banking committee.
Yeah yeah yeah, blame bush and his cronies for all that is wrong with our fair country. You will never convince me that one side of the aisle has more culpability than the other. Both sides need fixing, or nothing will get better. That’s my informed opinion, and I’m am sticking to it.
I think that we merely need to return to Liberalism’s first principles and revolutionary, 18th-century roots.
We tend to forget that Adam Smith and David Ricardo, the founding theorists of political economy (capitalism), were men of the Enlightenment, Liberals and moral philosophers. They believed that economies were political constructs, not natural or divinely ordained forces, as conservatives believed. They held that organizing an economy for the greatest common good was both possible and desirable and that the driving force behind that improvement could only be free individuals, operating independently, as equals.
For Smith and Ricardo, as for Darwin, the natural world was phenomenal and, to all intents and purposes, governed by random processes. God was not selecting the best and most suitable people to be rulers and owners, as the conservatives claimed. Individuals who were no better or worse than anyone else accumulated wealth and power through luck, not right, divine or otherwise. No one is lucky all the time. So, for an economy to grow, all individuals must have an equal right to pursue their own economic interests and, thus, their own chance to get lucky. Some would succeed. Some would fail. But on average, wealth would increase as more people gained access to it. Wealth would redistribute itself through competition and trade. The luck would be chared and increased. (As a side note, Marx was, in my view, an essentially conservative thinker in this respect, because he rejected luck and felt the need to have a God–which he called History–to provide central control and inevitability in economics.)
Capitalism thus never opposed government, regulation, or even socialism in the way that is often claimed nowadays (socialism is just a more intellectually conservative descendent of political economy). Capitalism opposed bad government, unfair regulation, croneyism, favoritism. Smith and Ricardo conceived capitalism as an antidote to the plethora of government-guaranteed monopolies that, in the 18th century, concentrated wealth in the hands of a few government supporters, hereditary aristocrats, influential wealthy families, chartered companies, and cronies. These monopolies strangled innovation and limited supply and demand. They locked in a hereditary system of wealth and poverty that could not be readily improved or altered.
Smith and Ricardo did not oppose tariffs or taxes, as some claim now. They opposed specific, bad measures, notably the grain tariffs that kept food scarce in the British Isles, kept prices artificially high, and kept wages arbitrarilly low. These monopolies made the poor a permanent, disenfranchised underclass, always on the verge of starvation and incapable of bettering its situation. Smith and Ricardo opposed all laws that kept innovators from addressing problems–like food shortages–with improved practices or imports from more efficient foreign producers. Laws that made an already wealthy few ever richer and ever more politically powerful did nothing to benefit society or grow the wealth of nations.
Smith and Ricardo hoped that borrowing and lending of capital would lead to the necessary opening of the economy and redistribution of wealth. While lending at interest was overly restricted or illegal, Europe’s monarchies could be run as large-scale company towns, with wages, prices, trade, and production tightly regulated for the benefit of the established powers. The landed gentry, the licensed traders, and the chartered guilds could take their profits without making any investment. But the chance to get money for nothing–interest–undercut this status quo. The wealthy would not be able to resist sharing their wealth–for a fee. More individuals would become economic actors, earn their own wealth, and gradually break the aristocracy’s grip on power. The earning of interest was thus merely the means to general availability of venture capital, which was, in turn, only the means to increased and more equitably shared wealth, greater economic freedom, and, ultimately, political equality.
The “ism” in “capitalism” thus has to do with making productive and beneficial use of capital, not with rewarding the mere possession of it. Ricardo believed strongly that saving money, gambling, stock speculation, and other non-productive uses of wealth should always be less lucrative than the financing of work and production. He supported usury laws that held interest rates to a maximum of 4-6%. He thought that “profit”–the value added to capital by work–should be taxed as little as possible, but that “rent”–extra value amassed by merely having capital in the first place, when capital was in short supply–should be taxed heavily.
Preventing and dismantling monopolies, protecting the rights of workers and small businessmen, and setting trade regulations that benefit global society as whole–workers and consumers as well as producers and investors–are thus, logically, core functions of enlightened, Liberal government. The immediate intellectual descendent of Smith and Ricardo, John Stuart Mill, made this the core principle of the Utilitarian philosophy: do the greatest good for the greatest number.
We thus needn’t invent much to get Liberalism to where it needs to be. I avoid using the term “progressive”, in fact, for this reason. “Progressivism” implies that we need to move away from ideals that have been to something new, something emergent, something better suited to the times. As a virtue, novelty for its own sake always frightens me, because it can be made to justify anything. The Bush/Obama police state is new. It represents “progress” of a sort. But it does not represent the Liberal ideal upon which this country ws founded. We should be working to realise that old ideal, as yet never but imperfectly realized in our nation. We should be striving to finally achieve a truly capitalist economic order, a truly democratic government, and a truly egalitarian society. If I can see what half of what we were promised in 1776 and 1789 in my lifetime, I won’t want for anything.
My My – you are a special kind of poster today!
Frank had a relationship with Herb Moses, an executive for the now-government controlled Fannie Mae, that ENDED in 1998 (See the Washington Post articles on the topic http://www.washingtonpost.com/wp-srv/politics/special/clinton/stories/frank121898.htm). Moses “helped develop many of Fannie Mae’s affordable housing and home improvement lending programs.” Moses left his 7 year job at Fannie in 1998. The mortgage meltdown dates from 2003.
Now just what was the point of bring up who Barney has dated in the past?
The only error in your posts is that they are not informed.
Makes it hard to stick to one’s “informed opinion”.
Again you come with the links from AFTER the mortgage meltdown had already occurred as if they were things that happened prior to the meltdown. Do you not know when the meltdown actually happened?
Well said -
I always liked that Ricardo believed in a modified version of the taxation system in the Roman Empire – a percentage of wealth as the tax every year.
I would like to have an asset tax but that would “punish achievers and inheritors” and I guess really destroy our country! (sarcasm)
“Profit” in a world of corporations can not be low taxed as it is too easy to turn wages into corporate profit and all of our rich would do so the day after such a low tax on corporations was passed into law.
I guess you failed to actually read the parts about the causes of the meltdown?
http://iusbvision.wordpress.com/2008/10/07/snl-skit-exposes-democrats-role-on-mortgage-collapse-nbc-removes-the-video/
You appear to have no information – with or without links – on the causes of the meltdown that are other than assertions easily disproved – indeed disproved by the facts and links that you have been provided.
Indeed I am reminded about why I stopped teaching after one semester – the corporate world may not be the most rewarding – but there are fewer Vinnie Barbarinos and Horshacks.
You haven’t pointed out anything. The link I gave you didn’t offer unfounded opinions and wild speculation like you’re doing. It presented actual data, and reasoned analysis explaining the data. It’s simple enough that even I can understand it. Point out where they’re wrong or accept the fact that CRA wasn’t part of the problem.
I favor that tax myself. The amount of capital devoted to speculation is appalling.
Sad
“President Bush (played by Jason Sudeikis) interrupted: “Wait a minute. Wasn’t it my administration that warned about the problem six years ago? And it was Democrats who refused to listen?” When Pelosi protested, Barney Frank (played by Fred Armisen) corrected her, “Actually, this time, this time he’s sort of right.”
Wish you would check what they were talking about – Bush wanted to kill affordable housing – claimed Feddie and Fannie were “too big” in 2001. Nothing to do with liar loans because under Clinton we did not have liar loans. In 2004 Bush wanted a NEW housing agency that would replace – thus kill – Fannie and Freddie. Again it was size of Fannie and Freddie that was the problem (and a need to get jobs for GOP friends) – not the quality of mortgage that his administration was allowing to pollute the financial markets.
That is why is in the skit the Franks person says “sort of right” – and not that he was right.
Actually, what you’ve done, primarily, is cite and place your greatest reliance on a trio of right-wing talking points (CRA, Frank, Fannie/Freddie) that have been hysterically overemphasized by the right, and thoroughly debunked or de-fanged countless times by those who are willing to address the details and context of how the crisis unfolded. You focus on these points without any reference to the other and far more culpable players (private originators, bundlers and marketers, rating agencies), so that makes you seem suspect as to your sincerity about getting to the truth. Even when you focus on regulatory failures, where I, as a market player myself, agree 100%, you neglect to indicate that you even know those agencies were deliberately stacked with “govt is bad, regulation ain’t needed anyway, I used to lobby for the industry I’m supposed to be regulating” types by the Bush/Cheney administration, so that the lousy performance was anything but unpredictable, i.e.why not watch porn at the SEC if you think regulation offends your ideology?
So, you managed to dominate the comment section here to this post, but you feel more like a deliberate disrupter than a good-faith participant.
I abhor ad hominem, but in your case, to get a sense of who you really are and where you’re really coming from, I would ask whether you voted for Bush/Cheney, and what you thought about the job they did. I’ve never seen you here, and I’d like to welcome you as a respected participant here (and could, albeit with caution, even if you did vote for Bush lol), but so far it just doesn’t feel like that.
Excuse me, but I happen to be a proud black who has seem the devastation,caused by so called well intentioned government programs, and have had personal experience with the impact those same programs have had on my community. I am also conversant to the causes of these problems. They are not just some theoretical classroom problem to be analyzed by those relatively unaffected by these same programs and there actual effects, once implemented.
This has been the way of it all day.
Enter a thread wearing a shield of experience and vision, trash views with nothing more that Breitbartian talking points, wait for the thread to collapse into chaos.
Starve it of oxygen, it will shrivel and seek nourishment elsewhere.
Still waiting on that list of “advancements in genetics” that were wholly divorced from government funding.
Also waiting on some evidence that those horrible European social-democracies have stagnant economies compared to the U.S.
Here you go, sport:http://www.ask.com/wiki/Celera_Corporation?qsrc=3044
Wonderful.
Also, robespierre and Nathan A: breathtaking thinking.
Wow, I am heartened to think that I’m not the only one around here who thinks that economic beliefs matter.
BTW: I noted that trolls showed up at BaselineScenario the end of last week, around the time that the banksters were reportedly starting to get nervous — post Kaufman-Sherrod Brown proposed amendment. Trolls always used to show up at EW’s before the proverbial fecal matter began to make contact with the proverbial wind-generating device.
From your Ask.com wiki entry:
According to the same content, Celera evidently attempted to bar access to its own sequences despite the fact that the entirety of its work was predicated on prior work that it was able to freely pull from the public domain.
Hilariously, your “evidence” simply adds additional support to my original argument:
Building on the back of government work is being de facto government funded.
Additionally, how does Celera compare to other U.S. and foreign efforts in genetics research, both public and private? Where in the landscape of all research does Celera stand, and what are its unique insights and developments that are wholly divorced from government funded results?
Also, waiting on some evidence that those horrible European social-democracies have stagnant economies compared to the U.S.
You may not see this comment, but… if I lived with a tribe subsisting only on “social” capital, I would hope that most of my fellow tribesman had your level of compassion. Actually, this world would be a better place in general if people listened to your thoughts on this matter and took them to heart. Thanks.
Masaccio – thanks for opening up an interesting dialog.
…and an important one. If the topic is revisited I promise not to let my focus get hijacked.
Thank you; that was very kind.
Although I am increasingly convinced that if people felt more socially supported, the number of conflicts and risky endeavors would diminish over time.
I begin to see how people fled to monasteries post-Roman Empire.
It would not surprise me to see some kind of similar dynamic occur in the near future, although it would be a 21st century version. Mostly for the social support and stability; makes people more productive, IMVHO.