What is the goal of capitalism?

[TruthNotBS]

Setting aside your incorrect assumptions and putting words in my mouth I didn't say or infer in any way. . .

Everything you say assumes that more government is the answer. But what government? Who gets to run it? The people running the government we have now damn sure don't have any answers and so far have not improved a single thing with their policies while making many things worse. And yet nobody on the left will admit that Donald Trump and his policies improved anything anywhere despite massive data that says differently. Barack Obama was loved by many and was disastrous for millions.

Who is wise enough or has the moral standing to dictate how the people must live, what they must believe, what they must think, what they must agree with in order to be acceptable? Who is wise enough to develop institutions that address the problems of 330+ million people? Who is wise enough to know all the components to get a can of tuna into a supermarket?

I will stand by my posts. What makes a great nation is small, efficient, effective government that serves the people and does ONLY that it must do in order for the various states to function as one cohesive nation and ensure it not do physical or economic violence to each other. And then it does ONLY what it is authorized to do by the Constitution and even then does only that which MUST be done and cannot be done as efficiently and effectively by the private sector.

And then it leaves the people alone to form themselves into whatever sorts of societies they wish to have. A free people left to work out their own problems generally need some trial and error, but they usually get it more right than wrong in the end.

Efficiency isn't the be-all and end-all. The private sector, left unchecked, is efficient at one thing – seeking profit. Often at the expense of workers, the environment, and even the economy as a whole. Remember the housing bubble? That was the efficient private sector in action. And where did that efficiency land us? In the worst financial crisis since the Great Depression.

Who gets to run the government? The people, through democratic processes. Yes, it's not perfect, but it’s a lot better than letting corporations run the show.

The private sector efficient? Tell that to the victims of predatory lending or workers getting paid peanuts while the executives get millions. The government, while not always efficient in a narrow economic sense, plays a role in safeguarding public interest, something the private sector often blatantly ignores.

And let's not even start with the "only what MUST be done" rhetoric. By whose standard? Public schools, highways, fire departments, the military – all government-run or funded. Oh, and let’s not forget the internet, which began as a government project.

Who has the moral standing? We’re not talking about sainthood here. But there are experts in fields, economists, scientists, educators - who have an understanding of the issues and are often more aligned with public interest than a CEO whose primary concern is the bottom line.

You speak of the Constitution as if it’s a holy scripture. It’s a living document, meant to be interpreted and adapted. The Founding Fathers were no fortune tellers; they couldn’t predict the complexities of the modern world.

So, before extolling the virtues of small government and the efficiency of the private sector, maybe take a look at the broader picture. Efficiency is not synonymous with what’s best for society. We need government as an active player in ensuring that the race for profit doesn’t trample over everything else.

 

[TruthNotBS]

That's true. Capitalist owners do exploit labor and everybody else that contributes to their business for their own self-serving advantage. That's how free market capitalism works. How it is supposed to work. Labor also exploits the capitalist owners by selling their labor to the highest bidder. Few do that out of any particular concern for their employers but they are looking to their own self interest.

And in the process of everybody looking to their own self interests, the benefits spread through the town, the state, the nation, the world.

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest."--Adam Smith​

See my Post: What is the goal of capitalism?

The romanticized notion that labor 'exploits' capitalist owners is akin to suggesting that a mouse and a lion in a tussle are on equal footing. The bargaining power between an average worker and a corporate behemoth is nowhere close to parity. This analogy ignores the glaring imbalance of power, information, and resources between the two.

The idea that the benefits of everyone looking out for their own self-interest will miraculously spread through society is an oversimplification. What about when companies use exploitative practices to maximize profit at the cost of human dignity and environmental sustainability? Where does this 'trickle-down' feature into the equation when wealth disparity is reaching record heights?

Moreover, the ‘invisible hand’ is not so invisible or benevolent when it’s lobbying for deregulation, tax breaks, and subsidies at the expense of the public good. If left uncontrolled, this kind of ‘self-interest’ morphs into an ogre that eats up everything, leaving social inequality and environmental wreckage in its wake.

Government involvement is not about stifling the market; it’s about ensuring that the market does not become a runaway train. It’s about ensuring that those who are working every day can afford healthcare, education, and a decent life without having to choose between rent and medicine.

In essence, it's about recognizing that economies are not just engines of wealth but are intrinsically tied to the well-being of citizens and that the ruthless pursuit of self-interest without checks is not a virtue but a pathway to societal decay.

 

[Cougarbear]

Sorry, I don’t speak conserabonics.

Obviously because of the lack of logic.

 

[Foxfyre]

Efficiency isn't the be-all and end-all. The private sector, left unchecked, is efficient at one thing – seeking profit. Often at the expense of workers, the environment, and even the economy as a whole. Remember the housing bubble? That was the efficient private sector in action. And where did that efficiency land us? In the worst financial crisis since the Great Depression.

Who gets to run the government? The people, through democratic processes. Yes, it's not perfect, but it’s a lot better than letting corporations run the show.

The private sector efficient? Tell that to the victims of predatory lending or workers getting paid peanuts while the executives get millions. The government, while not always efficient in a narrow economic sense, plays a role in safeguarding public interest, something the private sector often blatantly ignores.

And let's not even start with the "only what MUST be done" rhetoric. By whose standard? Public schools, highways, fire departments, the military – all government-run or funded. Oh, and let’s not forget the internet, which began as a government project.

Who has the moral standing? We’re not talking about sainthood here. But there are experts in fields, economists, scientists, educators - who have an understanding of the issues and are often more aligned with public interest than a CEO whose primary concern is the bottom line.

You speak of the Constitution as if it’s a holy scripture. It’s a living document, meant to be interpreted and adapted. The Founding Fathers were no fortune tellers; they couldn’t predict the complexities of the modern world.

So, before extolling the virtues of small government and the efficiency of the private sector, maybe take a look at the broader picture. Efficiency is not synonymous with what’s best for society. We need government as an active player in ensuring that the race for profit doesn’t trample over everything else.

The people elected Ron DeSantis and Donald Trump. You were happy about that? Accepted their policies as a good thing and praised their accomplishments? No leftists that I know were happy about that or accepted those policies as a good thing and they are still condemning and misstating those accomplishments.

A program with a noble sounding title or self-serving propaganda is rarely what it seems, most especially when it contains a gazillion things that the public aren't told that is in it or what the government is really doing. A government big enough to do everything we want, provide everything we want is a government that can control everything we do, dictate everything we are allowed to have, and do anything to us it wants to do. Liberty with a lot of problems is a far better choice.

I think efficiency and good short and long range results (effectiveness) are not something to be sneered at. I certainly prefer them to inefficiency, damaging policy, waste, short and long range negative consequences.

 

[Toddsterpatriot]

"Not even a little bit."

Oh, but yes, quite a bit. When the barriers eroded, commercial banks had easier access to capital markets through their investment wings, and this fueled the mass production of subprime mortgages. They got the taste of those high returns and wanted more.

"Glass-Steagall didn't stop these sales."

But it made it logistically and financially less appealing for commercial banks to dive headlong into the risky end of mortgage lending.

"Banks could sell to Goldman under Glass-Steagall; banks could sell to Goldman after Glass-Steagall."

True, but the repeal of Glass-Steagall allowed for an intensification and change in the scale of these transactions. Before, when commercial and investment banks were separate, there was less incentive and capability for commercial banks to issue mortgages they knew they could offload through securitization. Post-repeal, the lines blurred, and the integration allowed commercial banks to tap into the capital and mechanisms of investment banks more efficiently. This altered the risk dynamics and contributed to a surge in the issuance and securitization of subprime mortgages. Essentially, the speed and scale of the transactions changed dramatically, setting the stage for the reckless lending practices that were at the heart of the crisis.

"They could work just as directly under Glass-Steagall."

There's a difference between working with someone and being in the same trench with them. When the walls came down, synergies and the scale changed dramatically, making it more lucrative and tempting for commercial banks to generate mortgages without as much regard for quality.

"Are you telling me a bank got in trouble because of crappy mortgages? Tell me more. LOL!"

Citigroup, one of the largest financial conglomerates, faced significant turmoil due to its exposure to mortgage-backed securities. When the housing bubble burst, the value of these securities plummeted. The depth of Citigroup's engagement in these high-risk instruments was partly due to the erosion of the barrier between commercial and investment banking, which allowed it to aggressively engage in underwriting and trading mortgage-backed securities. The losses were so severe that Citigroup required a bailout to avoid collapse, which had wider implications for the global financial system.

"Two investment banks that weren't taking deposits got in trouble because of crappy mortgages? Tell me more. LOL!"

Certainly, Lehman Brothers and Bear Stearns were investment banks that played a critical role in the financial crisis due to their heavy involvement in mortgage-backed securities. They did not have the traditional deposits base but financed themselves through the repo market which proved to be highly unstable in times of stress. Glass-Steagall would have curtailed the scale of their involvement in the mortgage market. Had Glass-Steagall or similar regulations been in place to limit their high leverage and risk-taking in mortgage markets, the implosion of Lehman Brothers and Bear Stearns could have been averted or at least mitigated, saving the economy from the severe shock it faced in 2008.

Oh, but yes, quite a bit.

Not one line in GS stopped retail banks from writing crappy mortgages and selling them.

Not one line in GS stopped investment banks from buying crappy mortgages or securitizing them.

Not even a little bit.

But it made it logistically and financially less appealing for commercial banks to dive headlong into the risky end of mortgage lending.

"Here's a pile of mortgages". "Here's the wire for the mortgages".

Nope. No difference in difficulty. No difference in appeal.

True, but the repeal of Glass-Steagall allowed for an intensification and change in the scale of these transactions.

Which line in GS controlled the intensity or scale?

Post-repeal, the lines blurred, and the integration allowed commercial banks to tap into the capital and mechanisms of investment banks more efficiently.

Commercial banks were borrowing from investment banks to write mortgages? Link?
They couldn't do that under GS? Link?

Essentially, the speed and scale of the transactions changed dramatically, setting the stage for the reckless lending practices that were at the heart of the crisis.

Technology made it quicker and easier, not the repeal of GS.

There's a difference between working with someone and being in the same trench with them.

They weren't in the same trench, before or after.

Citigroup, one of the largest financial conglomerates, faced significant turmoil due to its exposure to mortgage-backed securities. When the housing bubble burst, the value of these securities plummeted.

Yes, their commercial banking division held too many crappy mortgages. Nothing to do with GS.

Certainly, Lehman Brothers and Bear Stearns were investment banks that played a critical role in the financial crisis due to their heavy involvement in mortgage-backed securities.

I know! They held too many crappy mortgages (and crappy bonds).

Glass-Steagall would have curtailed the scale of their involvement in the mortgage market.

How?

Had Glass-Steagall or similar regulations been in place to limit their high leverage and risk-taking in mortgage markets,

Where did it limit mortgages or risk?

 

[Toddsterpatriot]

Remember the housing bubble? That was the efficient private sector in action.

What part of the private sector mandated that Fannie and Freddie buy 50% of
their mortgages in the subprime market?

 

[Toddsterpatriot]

The private sector efficient? Tell that to the victims of predatory lending or workers getting paid peanuts while the executives get millions.

How did the private sector force you to sign the loan document or work for peanuts?

 

[Mexicano]

The reason we have problems with housing and healthcare is irresponsible in harmful meddling by the U.S. government. Until enough Americans have enough history, economic, and sociopolitical understanding to realize how harmful unnecessary and unreasonable government meddling is to quality of life, opportunity, choice, options, liberties, we won't remedy the problem.

The answer is not in changing our form of government. It is changing those in government--elected and appointed leaders, bureaucrats, rank and file employees, contractors etc. who created this mess and installing those who do have practical history economic and sociopolitical understanding of the principles this country was founded on and restoring the government to its original intent.

First rule of good management:
--you cannot fix a bad system by changing the people.
--you cannot fix bad people by changing the system.

Second rule of good management:
--If the new thing isn't working, scrap it and go back to the one that worked plus
if it ain't broke, don't fix it.

Forxfyre,
I will mostly ask questions about your conclusions. I find it useful to poke at ideas you will either uncover new evidence or data that changes your perspective on problems.

How did you reach the conclusion "The reason we have problems with housing and healthcare is irresponsible in harmful meddling by the U.S." ?
Did you analyze the data from other countries with varying degrees of intervention? Are there any countries with a healthcare system similar to the US? Are prices stable and affordable?Healthcare is a complex topic, much depends on life habits and population's age but I find it difficult to establish a causal relationship between government intervention and prices. Alas there is a great variation between the insurance prices among states from $350 to 712? If the main cause is government intervention what explains the difference between states?

I find the case of housing particularly suspicious. What measures did the government take that broke the housing market?

The rest of the rant talks about the form of government. I am not really talking about changing the form of government, so I consider that part of the discussion irrelevant. That's why I made the distinction in the previous post. I am talking about changing the form of production. In the case of healthcare single-payer healthcare seems the easiest fix. Turning all private hospitals into public institutions ( as is the case in Europe) seems a daunting task full of risks and points of failure.

 

[TruthNotBS]

Oh, but yes, quite a bit.

Not one line in GS stopped retail banks from writing crappy mortgages and selling them.

Not one line in GS stopped investment banks from buying crappy mortgages or securitizing them.

Not even a little bit.

But it made it logistically and financially less appealing for commercial banks to dive headlong into the risky end of mortgage lending.

"Here's a pile of mortgages". "Here's the wire for the mortgages".

Nope. No difference in difficulty. No difference in appeal.

True, but the repeal of Glass-Steagall allowed for an intensification and change in the scale of these transactions.

Which line in GS controlled the intensity or scale?

Post-repeal, the lines blurred, and the integration allowed commercial banks to tap into the capital and mechanisms of investment banks more efficiently.

Commercial banks were borrowing from investment banks to write mortgages? Link?
They couldn't do that under GS? Link?

Essentially, the speed and scale of the transactions changed dramatically, setting the stage for the reckless lending practices that were at the heart of the crisis.

Technology made it quicker and easier, not the repeal of GS.

There's a difference between working with someone and being in the same trench with them.

They weren't in the same trench, before or after.

Citigroup, one of the largest financial conglomerates, faced significant turmoil due to its exposure to mortgage-backed securities. When the housing bubble burst, the value of these securities plummeted.

Yes, their commercial banking division held too many crappy mortgages. Nothing to do with GS.

Certainly, Lehman Brothers and Bear Stearns were investment banks that played a critical role in the financial crisis due to their heavy involvement in mortgage-backed securities.

I know! They held too many crappy mortgages (and crappy bonds).

Glass-Steagall would have curtailed the scale of their involvement in the mortgage market.

How?

Had Glass-Steagall or similar regulations been in place to limit their high leverage and risk-taking in mortgage markets,

Where did it limit mortgages or risk?

Glass-Steagall made it logistically and financially less appealing for commercial banks to get involved in risky securities trading by establishing a clear separation between commercial banking and investment banking. This is corroborated by scholars like Arthur E. Wilmarth Jr., a professor of law at George Washington University Law School, who argues in his paper “The Dark Side of Universal Banking: Financial Conglomerates and the Origins of the Subprime Financial Crisis” that the Glass-Steagall Act had previously limited the securities activities of commercial banks, thus preventing them from becoming too heavily involved in the mortgage-backed securities market.

The separation was designed to prevent conflicts of interest and limit the risks that banks could take with depositors' money. Once this separation was eroded, banks had more incentive to engage in risky lending and investment practices.

Post-repeal, the lines blurred and banks started to engage in riskier behavior, as they now could use depositors' money for high-risk investments. The scale and intensity of transactions changed. According to a 2009 report by the Independent Evaluation Office (IEO) of the IMF, the repeal of the Glass-Steagall contributed to the global financial crisis by enabling financial institutions to expand their operations and undertake risky practices that were detrimental to financial stability.

The speed and scale of transactions did change with technology, but it was the integration of commercial and investment banking that made the impact of these transactions more severe.

Citigroup's exposure to mortgage-backed securities was a result of its involvement in both commercial banking and investment banking. Had the Glass-Steagall Act been in place, Citigroup would not have been able to become so heavily involved in the mortgage-backed securities market.

Similarly, investment banks like Lehman Brothers and Bear Stearns would have been more restricted in their involvement in mortgage markets under Glass-Steagall. The Act could have curtailed the scale of their involvement by preventing them from accessing deposits for speculative trading, as noted by a report by Public Citizen.

It's essential to consider the crisis from a systemic viewpoint rather than isolating individual practices. Glass-Steagall was part of a broader regulatory framework that kept different financial activities separate, thereby reducing systemic risk.

Now, it seems that we're at an impasse. You have your opinion, I have mine, and the latter is well supported by experts in the field.

1. 
   Arthur E. Wilmarth Jr., in his paper "The Dark Side of Universal Banking: Financial Conglomerates and the Origins of the Subprime Financial Crisis", discusses how the Glass-Steagall Act limited the securities activities of commercial banks and how its repeal contributed to the financial crisis.
2. The Independent Evaluation Office (IEO) of the IMF released a report in 2009 titled "IMF Performance in the Run-Up to the Financial and Economic Crisis: IMF Surveillance in 2004-07", which talks about how the repeal of the Glass-Steagall contributed to the global financial crisis by enabling financial institutions to undertake risky practices.
3. Public Citizen, a consumer advocacy organization, released a report in 2009 titled "Sold Out: How Wall Street and Washington Betrayed America", which discusses the role of deregulation, including the repeal of the Glass-Steagall Act, in the financial crisis.

In summary, these references emphasize that Glass-Steagall was an integral part of a regulatory system that aimed to separate the banking and investment functions of financial institutions. The repeal of this act is considered by experts and analysts as a contributing factor to the financial crisis, mainly by allowing financial institutions to engage in riskier behaviors with depositors' money.

 

[TruthNotBS]

How did the private sector force you to sign the loan document or work for peanuts?

It's important to recognize that for many individuals, the choices in employment and financial services are not made on an even playing field.

Work is not a choice for most; it’s a necessity for survival. It’s essential to consider the socioeconomic conditions that limit the choices available to individuals. Judging someone's decision without acknowledging the constraints they face lacks empathy and understanding of the systemic issues at play. Executives often have a wide array of choices due to their position and wealth, whereas a worker reliant on a paycheck to feed their family does not have the luxury of choice to the same extent.

 

[Toddsterpatriot]

Glass-Steagall made it logistically and financially less appealing for commercial banks to get involved in risky securities trading by establishing a clear separation between commercial banking and investment banking. This is corroborated by scholars like Arthur E. Wilmarth Jr., a professor of law at George Washington University Law School, who argues in his paper “The Dark Side of Universal Banking: Financial Conglomerates and the Origins of the Subprime Financial Crisis” that the Glass-Steagall Act had previously limited the securities activities of commercial banks, thus preventing them from becoming too heavily involved in the mortgage-backed securities market.

The separation was designed to prevent conflicts of interest and limit the risks that banks could take with depositors' money. Once this separation was eroded, banks had more incentive to engage in risky lending and investment practices.

Post-repeal, the lines blurred and banks started to engage in riskier behavior, as they now could use depositors' money for high-risk investments. The scale and intensity of transactions changed. According to a 2009 report by the Independent Evaluation Office (IEO) of the IMF, the repeal of the Glass-Steagall contributed to the global financial crisis by enabling financial institutions to expand their operations and undertake risky practices that were detrimental to financial stability.

The speed and scale of transactions did change with technology, but it was the integration of commercial and investment banking that made the impact of these transactions more severe.

Citigroup's exposure to mortgage-backed securities was a result of its involvement in both commercial banking and investment banking. Had the Glass-Steagall Act been in place, Citigroup would not have been able to become so heavily involved in the mortgage-backed securities market.

Similarly, investment banks like Lehman Brothers and Bear Stearns would have been more restricted in their involvement in mortgage markets under Glass-Steagall. The Act could have curtailed the scale of their involvement by preventing them from accessing deposits for speculative trading, as noted by a report by Public Citizen.

It's essential to consider the crisis from a systemic viewpoint rather than isolating individual practices. Glass-Steagall was part of a broader regulatory framework that kept different financial activities separate, thereby reducing systemic risk.

Now, it seems that we're at an impasse. You have your opinion, I have mine, and the latter is well supported by experts in the field.

1. 
   Arthur E. Wilmarth Jr., in his paper "The Dark Side of Universal Banking: Financial Conglomerates and the Origins of the Subprime Financial Crisis", discusses how the Glass-Steagall Act limited the securities activities of commercial banks and how its repeal contributed to the financial crisis.
2. The Independent Evaluation Office (IEO) of the IMF released a report in 2009 titled "IMF Performance in the Run-Up to the Financial and Economic Crisis: IMF Surveillance in 2004-07", which talks about how the repeal of the Glass-Steagall contributed to the global financial crisis by enabling financial institutions to undertake risky practices.
3. Public Citizen, a consumer advocacy organization, released a report in 2009 titled "Sold Out: How Wall Street and Washington Betrayed America", which discusses the role of deregulation, including the repeal of the Glass-Steagall Act, in the financial crisis.

In summary, these references emphasize that Glass-Steagall was an integral part of a regulatory system that aimed to separate the banking and investment functions of financial institutions. The repeal of this act is considered by experts and analysts as a contributing factor to the financial crisis, mainly by allowing financial institutions to engage in riskier behaviors with depositors' money.

Glass-Steagall made it logistically and financially less appealing for commercial banks to get involved in risky securities trading by establishing a clear separation between commercial banking and investment banking.

The crisis didn't happen because commercial banks got involved in risky securities trading, it happened because they wrote and bought too many crappy mortgages.

The separation was designed to prevent conflicts of interest and limit the risks that banks could take with depositors' money.

The separation didn't prevent them from writing crappy mortgages.

Post-repeal, the lines blurred and banks started to engage in riskier behavior, as they now could use depositors' money for high-risk investments.

I know.....mortgages!

Citigroup would not have been able to become so heavily involved in the mortgage-backed securities market.

Citibank wrote plenty of mortgages under GS.

Similarly, investment banks like Lehman Brothers and Bear Stearns would have been more restricted in their involvement in mortgage markets under Glass-Steagall.

What part of GS limited their mortgage involvement?

The Act could have curtailed the scale of their involvement by preventing them from accessing deposits for speculative trading,

Bear and Lehman had no deposits under GS and no deposits after.

Now, it seems that we're at an impasse. You have your opinion, I have mine

Your opinion is a mishmash of errors. I posted facts.

 

[Toddsterpatriot]

It's important to recognize that for many individuals, the choices in employment and financial services are not made on an even playing field.

Work is not a choice for most; it’s a necessity for survival. It’s essential to consider the socioeconomic conditions that limit the choices available to individuals. Judging someone's decision without acknowledging the constraints they face lacks empathy and understanding of the systemic issues at play. Executives often have a wide array of choices due to their position and wealth, whereas a worker reliant on a paycheck to feed their family does not have the luxury of choice to the same extent.

It's important to recognize that for many individuals, the choices in employment and financial services are not made on an even playing field.

Who said it's an even playing field? So, they didn't force you?

Work is not a choice for most; it’s a necessity for survival.

Not a choice to work, but many, many choices of employers.

Executives often have a wide array of choices due to their position and wealth, whereas a worker reliant on a paycheck to feed their family does not have the luxury of choice to the same extent.

Same extent? No. Still no force.

 

[Foxfyre]

The romanticized notion that labor 'exploits' capitalist owners is akin to suggesting that a mouse and a lion in a tussle are on equal footing. The bargaining power between an average worker and a corporate behemoth is nowhere close to parity. This analogy ignores the glaring imbalance of power, information, and resources between the two.

The idea that the benefits of everyone looking out for their own self-interest will miraculously spread through society is an oversimplification. What about when companies use exploitative practices to maximize profit at the cost of human dignity and environmental sustainability? Where does this 'trickle-down' feature into the equation when wealth disparity is reaching record heights?

Moreover, the ‘invisible hand’ is not so invisible or benevolent when it’s lobbying for deregulation, tax breaks, and subsidies at the expense of the public good. If left uncontrolled, this kind of ‘self-interest’ morphs into an ogre that eats up everything, leaving social inequality and environmental wreckage in its wake.

Government involvement is not about stifling the market; it’s about ensuring that the market does not become a runaway train. It’s about ensuring that those who are working every day can afford healthcare, education, and a decent life without having to choose between rent and medicine.

In essence, it's about recognizing that economies are not just engines of wealth but are intrinsically tied to the well-being of citizens and that the ruthless pursuit of self-interest without checks is not a virtue but a pathway to societal decay.

No poor man ever offered me a job or paid me to do one.
Because I have been working since I was 12 and my husband was transferred a lot in much of our marriage, I have had many jobs and those included a lot of different fields. Sometimes it would take me two or three or more jobs in any given town before I landed one I actually enjoyed and gave me opportunity to be paid what I was worth. For decades I sold my labor to the highest bidder until I became sufficiently prosperous to start my own business and hired other people to work for me. I paid what I had to pay to get the talent and experience I needed.

We are not financially wealthy by a long shot but my husband and I pride ourselves on paying our own way in life and being able to continue to do that in retirement. We simply weren't willing to do what it takes to become a millionaire but a full 3/4ths of the millionaires in this country built their fortunes from scratch either via an unusual talent or ability or via innovation, taking risks, investing, coming up with products and/or services that people were willing to buy.

Nobody should sneer at them for their wealth or assume they didn't deserve it or it is unfair that they have it. Without them there wouldn't be a market for a lot of the products and services those of lesser means are producing for sale.

A man bought a new car.
His self-righteous neighbor opined that he could have fed a lot of people with the money he spent for that car.
The man nodded in agreement but replied:
--the owners of the dealership and the salesperson who sold him the car and the guy who did all the paperwork all have more money for food because he bought that car.
--the transport driver who delivered the car and all the thousands (millions?) of people involved in building the truck and multi-vehicle trailer have more money for food because people are buying those cars.
--all the millions of people involved in the design, mining, processing, refining, producing the parts/components, and assembly of the car itself have more money for food because people are buying those cars.
And for years mechanics, parts sales people, fuel providers, car wash operations, tire sales and repair people, and various other vendors will have more money for food providing products and services for that car.

That's how capitalism works.

 

[sparky]

Who gets to run the government? The people, through democratic processes. Yes, it's not perfect, but it’s a lot better than letting corporations run the show.

somewhere in a perfect world.......~S~

 

[TruthNotBS]

It's important to recognize that for many individuals, the choices in employment and financial services are not made on an even playing field.

Who said it's an even playing field? So, they didn't force you?

Work is not a choice for most; it’s a necessity for survival.

Not a choice to work, but many, many choices of employers.

Executives often have a wide array of choices due to their position and wealth, whereas a worker reliant on a paycheck to feed their family does not have the luxury of choice to the same extent.

Same extent? No. Still no force.

However, this argument is myopic and fails to recognize the socioeconomic pressures and systemic inequalities that limit the choices available to many individuals.

When talking about "force," it is essential to understand the broader context. Many people are essentially "forced" by circumstances. If someone is in a financially precarious position, they might have to accept whatever job is available, even if it pays low wages, just to make ends meet. The alternative is not being able to provide for themselves or their families. In such cases, the force is the economic necessity.

Similarly, in the case of predatory lending, many people who took on subprime loans were not necessarily well-versed in the intricacies of finance. They were often misled or coerced into agreements that were not in their best interest. The need for shelter, coupled with aggressive marketing and sometimes deceptive practices, can be seen as a form of force.

When one juxtaposes this with the many options available to executives and the wealthy, it becomes clear that there is a significant disparity in the power dynamics. This disparity affects the quality of choices available to different economic classes and can lead to people making decisions under duress, which is a form of force in a socioeconomic context.

Therefore, it is critical to look beyond a narrow interpretation and consider the real-world conditions and constraints that people face, which significantly impact their range of choices.

 

[TruthNotBS]

Glass-Steagall made it logistically and financially less appealing for commercial banks to get involved in risky securities trading by establishing a clear separation between commercial banking and investment banking.

The crisis didn't happen because commercial banks got involved in risky securities trading, it happened because they wrote and bought too many crappy mortgages.

The separation was designed to prevent conflicts of interest and limit the risks that banks could take with depositors' money.

The separation didn't prevent them from writing crappy mortgages.

Post-repeal, the lines blurred and banks started to engage in riskier behavior, as they now could use depositors' money for high-risk investments.

I know.....mortgages!

Citigroup would not have been able to become so heavily involved in the mortgage-backed securities market.

Citibank wrote plenty of mortgages under GS.

Similarly, investment banks like Lehman Brothers and Bear Stearns would have been more restricted in their involvement in mortgage markets under Glass-Steagall.

What part of GS limited their mortgage involvement?

The Act could have curtailed the scale of their involvement by preventing them from accessing deposits for speculative trading,

Bear and Lehman had no deposits under GS and no deposits after.

Now, it seems that we're at an impasse. You have your opinion, I have mine

Your opinion is a mishmash of errors. I posted facts.

Let's clarify certain aspects:

1. Glass-Steagall Act (GSA) indeed mainly aimed at separating commercial and investment banking to avoid conflicts of interest and risky use of depositors' funds. The primary intent was to protect the consumer from speculative risks taken by investment banks.
2. While you rightly mention that commercial banks could engage in mortgage lending under Glass-Steagall, what changed post-repeal was the extent to which these institutions could also securitize those mortgages and engage in speculative trading. The repeal allowed commercial banks not only to issue mortgages but also to securitize them and trade the securities, which led to the loosening of lending standards.
3. Regarding Citigroup, while it did write mortgages under GSA, it is the securitization and trading of these mortgages where the issue lies. The ability to securitize these mortgages and offload them to investors led to a decrease in lending standards, contributing to the financial crisis.
4. For investment banks like Lehman Brothers and Bear Stearns, the issue was not access to deposits but rather their level of leverage and involvement in the mortgage-backed securities market. While GSA would not have impacted their access to deposits, regulatory oversight on investment banks regarding leverage ratios and risk-taking could have mitigated the scale of their involvement in risky mortgage-backed securities.
5. Now addressing the final point where you mention your posts are based on facts, it's crucial to understand that the financial crisis was a complex event with numerous contributing factors. The repeal of Glass-Steagall was not the sole cause, but many experts and analysts believe that it played a role in the build-up to the crisis.

In conclusion, it is the amalgamation of reduced regulation, securitization, excessive risk-taking, and various other factors that contributed to the financial crisis. Glass-Steagall’s repeal is viewed by many as a contributing factor because it is a part of the larger deregulation trend that enabled excessive risk-taking in the financial sector. It is important to approach this with a nuanced understanding of the various elements at play, rather than boiling it down to a single factor.

 

[sparky]

In conclusion, it is the amalgamation of reduced regulation, securitization, excessive risk-taking, and various other factors that contributed to the financial crisis. Glass-Steagall’s repeal is viewed by many as a contributing factor because it is a part of the larger deregulation trend that enabled excessive risk-taking in the financial sector. It is important to approach this with a nuanced understanding of the various elements at play, rather than boiling it down to a single factor.

an interesting take CM......~S~

 

[TruthNotBS]

The assertion that government bailouts are the result of too much regulation is fundamentally flawed and displays a lack of understanding of the dynamics that led to the necessity for bailouts, particularly during the financial crisis of 2007-2008.

1. Deregulation as a Catalyst: The financial crisis was, in significant part, precipitated by a lack of regulation and oversight. A prime example is the Gramm-Leach-Bliley Act of 1999, which effectively repealed the Glass-Steagall Act, leading to a blurring of the lines between investment banks and commercial banks. This deregulation allowed for riskier investments using depositors’ money. A study by the Journal of Economic Issues asserts that deregulation played a significant role in the crisis. (Source: Journal of Economic Issues, "Did Deregulation Cause the Financial Crisis?" 2011)
2. Insufficient Oversight of Mortgage Lending: The crisis was fueled by poorly underwritten mortgage loans. The absence of proper oversight allowed for predatory lending practices and the granting of loans to individuals who could not afford them, known as subprime lending. When housing prices collapsed, this led to a domino effect where those loans defaulted en masse.
3. Over-reliance on Rating Agencies: There was a systemic failure in relying on credit rating agencies, whose assessment of securities turned out to be overly optimistic or outright flawed. The agencies had conflicts of interest, as they were paid by the very issuers of the securities they rated. Regulation to ensure transparency and independence was lacking.
4. Derivatives and Securitization: Financial innovation outpaced regulation with the growth of complex financial products like derivatives. Banks and financial institutions built investment products based on these shaky mortgages and sold them worldwide. This market was largely unregulated, which contributed to the uncertainty and the severity of the crisis.
5. Leverage: Many financial institutions were highly leveraged, meaning they had a high proportion of debt relative to their equity. They could borrow excessively with little capital of their own, and this was permitted because of the lack of regulation surrounding leverage ratios.
6. The Cost of No Bailout: When the crisis hit, the government had to step in to prevent a total collapse of the financial system. Not bailing out would have had even more catastrophic consequences for both the national and global economy. The bailouts can be seen as a response to the failure caused by lack of regulation.

To argue that the bailouts were the result of too much government intervention is to ignore the substantial body of evidence to the contrary. It is crucial to recognize that it was the lack of effective regulation and oversight that allowed systemic risks to build up in the financial system, which ultimately led to the crisis and subsequent bailouts. The bailouts were not the disease; they were a bitter medicine applied to a patient already infected by the virus of deregulation and uncontrolled financial recklessness.

 

[Toddsterpatriot]

However, this argument is myopic and fails to recognize the socioeconomic pressures and systemic inequalities that limit the choices available to many individuals.

When talking about "force," it is essential to understand the broader context. Many people are essentially "forced" by circumstances. If someone is in a financially precarious position, they might have to accept whatever job is available, even if it pays low wages, just to make ends meet. The alternative is not being able to provide for themselves or their families. In such cases, the force is the economic necessity.

Similarly, in the case of predatory lending, many people who took on subprime loans were not necessarily well-versed in the intricacies of finance. They were often misled or coerced into agreements that were not in their best interest. The need for shelter, coupled with aggressive marketing and sometimes deceptive practices, can be seen as a form of force.

When one juxtaposes this with the many options available to executives and the wealthy, it becomes clear that there is a significant disparity in the power dynamics. This disparity affects the quality of choices available to different economic classes and can lead to people making decisions under duress, which is a form of force in a socioeconomic context.

Therefore, it is critical to look beyond a narrow interpretation and consider the real-world conditions and constraints that people face, which significantly impact their range of choices.

When talking about "force," it is essential to understand the broader context. Many people are essentially "forced" by circumstances.

Not by their employer.

Similarly, in the case of predatory lending, many people who took on subprime loans were not necessarily well-versed in the intricacies of finance.

Have you seen the dozens of pages you're handed during the loan process?
Still, stupidity or ignorance isn't force.

it becomes clear that there is a significant disparity in the power dynamics.

Lots of disparity, still no force.

 

[otto105]

The Glass-Steagall’s separation of investment and commercial banking would have put the brakes on the wild mortgage party.

It wouldn't have stopped a single bank from writing or buying a single crappy mortgage.

They were more incentivized to issue mortgages, even crappy ones, because they could just bundle them, sell them off as securities, and wash their hands clean.

Mortgages were sold and securitized under Glass-Steagall.

Additionally, investment banks, freed from the constraints, were snapping up these mortgages like hotcakes.

Investment banks bought and securitized mortgages under Glass-Steagall.

If Glass-Steagall were still standing guard, investment banks would have been less able to create this insatiable market for mortgage-backed securities

Post the section of Glass-Steagall that you feel could have stopped it.

In a way, Glass-Steagall would have kept everyone in check and would have made sure the banks didn’t treat mortgages like chips in a casino.

You're lying. Or ignorant.

So, how come the meltdown didn’t happen before the G-S Act was diluted by a republic Congress.