America: What's wrong with "socialism", anyway?

[MikeMangum]

I doubt it. Seems to me that the big investors were doing rather corrupt things. Didn't some company just get caught selling funds that were designed to fail?

Haven't heard of it, but that surely does not support your point. Was this previously illegal and is now legal? That's called deregulation.

 

[thaiboxerken]

Funny, I thought I said deregulation AND corrupt practices. If not, that's what I meant.

So you don't think Wall Street practices had anything to do with the recession?

 

[Dancing David]

Government-instigated and government-mandated financial interference designed to skew the market to allow low-income families to get mortgages on homes they couldn't afford.

Nice bullflop, the high risk mortages were not instigated by the gubermmint, nor were they bundled by the government, nor were they part of the CRA, nor were credit default swaps started by AIG.

But please continue.

 

[Dancing David]

That's a problem with corruption. It could be easily fixed by paying executives a nominal salary and then bonuses in the form of stock options (or something similar) that mature after 5 years. That way they're financially interested in the long-term success of the company.

Much of the recent problems in the financial sector would have been prevented if CEO's were paying more attention to the long-term rather than their quarterly bonuses.

I understand that (and I agree), however the 'free market fixes all ills' is a common argument, I am pointing out that all systems are capable of fault and therefore the 'free markets' self correct is a fallacy.

There is currently this meme running around started by Friedman but it has wide acceptance, it seems to say that 'capitalism is all good', which is untrue, I also have stated that socialism is not all good.

 

[Dancing David]

Then you thought wrong.

Questionable securities that were over rated ,high risk mortgages, sovereign wealth flowing into them, credit default swaps, they were all that chart, cool!

 

[jimbob]

I doubt it. Seems to me that the big investors were doing rather corrupt things. Didn't some company just get caught selling funds that were designed to fail?

Haven't heard of it, but that surely does not support your point. Was this previously illegal and is now legal? That's called deregulation.

Bloomberg's link to this story (so not some left-wing source)

In a March 7, 2007, e-mail Tourre describes the U.S. subprime mortgage market as “not too brilliant” and says that “according to Sparks,” an apparent reference to Daniel Sparks who ran Goldman Sachs’s mortgage business at the time, “that business is totally dead, and the poor little subprime borrowers will not last too long!!!”

The timing of the e-mails overlaps with his work on the Abacus 2007-AC1 bond that is at the center of the SEC’s lawsuit. The Abacus deal was sold to IKB Deutsche Industriebank AG and ACA Management LLC between January and April 2007.

A few months later, a June 13, 2007, e-mail shows Tourre claiming, “I’ve managed to sell a few Abacus bonds to widows and orphans that I ran into at the airport, apparently these Belgians adore synthetic ABS CDO2,” using short-hand for asset- backed collateralized debt obligations squared, or CDOs made up of tranches of CDOs containing asset-backed securities.

Sold as low-risk investments.

I would consider this as immoral, regardless of the legality.

 

[theprestige]

Isn't the point of capitalism to make the most money? Who ever has the most money wins, right?

No. Wrong. That point is so stupid that even capitalists don't believe in it.

 

[AvalonXQ]

Nice bullflop, the high risk mortages were not instigated by the gubermmint,

Yes, they were. So much so, that banks were bullied by groups like ACORN into making them.

 

[thaiboxerken]

Yes, they were. So much so, that banks were bullied by groups like ACORN into making them.

Wrong.
Also, this doesn't even make any sense. The government bullied banks so much taht ACORN made them make risky investments and mortgages? Huh?!

 

[AvalonXQ]

Wrong.
Also, this doesn't even make any sense.

ACORN lobbied the government for years to get legislation favorable to subprimes. Then they used the CRA as a club to force banks to make these loans.
At the same time, others capitalized on the government's implied safeguard for these investments; when the government decided that encouraging low-income home ownership was extremely important, they pushed to make it more likely.
The economic disaster hinged on government interference in the housing market.

 

[thaiboxerken]

Do you have any evidence to support your assertions, or is this something you hear from Rush?

 

[AvalonXQ]

Rush Limbaugh is a first-class entertainer; he's not much of a news source.

This is equally true of CNN, by the way.

 

[Dancing David]

Yes, they were. So much so, that banks were bullied by groups like ACORN into making them.

Data ,evidence?


The eternal cry of the JREF.

 

[Dancing David]

ACORN lobbied the government for years to get legislation favorable to subprimes. Then they used the CRA as a club to force banks to make these loans.
At the same time, others capitalized on the government's implied safeguard for these investments; when the government decided that encouraging low-income home ownership was extremely important, they pushed to make it more likely.
The economic disaster hinged on government interference in the housing market.

Data, evidence?

BTW: Most sub-prime loans were originated by insititutions not covered by the CRA, so what percentage are you talking about?

 

[Cobalt]

I swear I read this thread like, what, eight months ago?

 

[Rolfe]

It's kind of fun, though, trying to make sense of what those wacky Americans think....



Rolfe.

 

[Undesired Walrus]

College professors have a great opportunity to show how Socialism could work in their classroom. Run the semester under Socialism.

The Students are the workers. The products, or the production side, is homework, papers, exams, etc. The rewards or results of the production are the grades.

Put a ceiling on individual wealth.
Put a floor on individual poverty.

Set up a progressive tax.

All “A” students (the rich) will be taxed 2 grades.
All “B” students (the upper middle class) will be taxed 1 grade.
All “C” students (the working class) will not be taxed.
All “D” students (the lower class) will be subsidized 1 grade.
All “E” students (the poor) will be subsidized 2 grades.

Everyone gets a “C”.
No one has to little and no one has to much.
Everyone passes the class.

Utopia achieved!

DDW(one "w" taxed away)

Should a E student get an A grade because their parents were A students?

 

[Mark6]

Well, that's my "silly" point. If it benefits the whole society, that could be a good goal to some social persons as well - without any personal benefits. And yes, some ideas need to be sponsored to be realized. But that isn't a matter of socialism or capitalism since communist and socialist countries do sponsor research/science etc. as well. So?

Problem is that communist and socialist countries tend do sponsor research/science in big and exciting things like hydroelectric dams and manned spaceflight. Someone has to decide what will "benefit the whole society" and what will not -- and they overlook research into small things that actually improve individuals' lives. In Soviet Union, tampons did not exist. (Unless brought from the West and sold on black market.) For that alone, state-planned research deserves to be "guilty until proven innocent" -- be limited to whatever private enterprise demonstrably will not do.

 

[ExTechOp]

My personal experience (having visited the Soviet Union, while it still was there) is that the socialist system seemed to erode people's motivation and somehow made the society more susceptible to slip into totalitarianism merely posing as socialism/communism.

This of course does not mean that all socialist ideas are bad, just as it does not automatically mean robber baron capitalism (eg. China and Russia right now) is automatically good. I tend to think there are places for both approaches.

Specially I believe that in this era, it is morally reprehensible to leave humans without health care just because it costs money, just like destroying the environment for temporary capital gains is incredibly short-sighted.

(climbing off soapbox)

 

[DDWW]

Should a E student get an A grade because their parents were A students?

No. But an E student should get at least a C if he can throw a football accurately 80 yards.

DDWW