OK, several posters have implied that the folks getting the bonuses are NOT the ones involved in the shenanigans.
I have to ask. How do you know this? Just how ‘in the know’ are you about it and if you are that knowlegable, perhaps you can tell us who was involved in the shenanigans?
Who is “we”? What is the process? Yes, I think I do mind.
http://www.connpost.com/ci_11927916 Financial products is who gets the bonuses.
Mmmmmm. A long time ago, I realized that the world wasn’t fair and that people didn’t always get what they deserved. A while after that I realized that I really wasn’t qualified to say what people deserved, nor was anybody else. It is simply not up to me, or you, or anybody else.
Historically, I think the attempts to limit to create an artificial balance have tended to go very badly and pushed things in the other direction.
But, I have some faith, and here’s why:
30-35 years ago, a car with airbags, crumple zones, power door locks, cruise control, traction control, fuel injection and what have you was a bit of an exotic animal. You could get a car with all that maybe in a very expensive Mercedes Benz available only to the very wealthy who had money to burn. Mercedes caters to those people. They want something new, better. Mercedes by selling such expensive cars can research it and pay for it by getting people to pay up.
Maybe those people deserve those cars, maybe they don’t. Probably they don’t. Probably the conspicuous consumption is offensive.
But now, even economy cars have all those features. People drive around in safer more reliable cars because some foolish rich people wanted something new and exclusive 30 years ago. Today, a working class family that buys a second hand Honda Oddyssey “deserves” to drive a safe car. And they do.
Did some 70 year old second generation trust fund man “deserve” to drive that Mercedes 30 years ago? Probably not. But he, and people like him created a demand that was fulfilled, and everybody benefitted.
Generally speaking, you can have wealth or you can display wealth. You can rarely do both. Most, choose to display wealth.
This same effect occurs whether we are talking about cars, DVD technology, computers, housing, or medicine. Generally speaking it takes an enormous investment to fund something new and bring it to market. That investment is impossible without people willing to pay for it.
So, the undeserving conspicuous rich serve a purpose.
The wealthy incent innovation.
You see rapid innovation as a direct consequence of capitalism. Innovation occurs primarily in capitalistic circumstances. It does not in socialistic circumstances, as a general rule. Countries that turn socialistic tend to fall behind.
I think the idea of creating a world that is perfectly fair and people’s fortunes and lives are directly in proportion to what they deserve is a really nice idea.
I also think it would be really nice if we could all flap our arms and fly, or be 18 years old and in love for the first time forever.
I think the latter two ideas are the more realistic ones. I’m concerned with what is, and what can be, not with what it should be and what I wish it was. I don’t waste my time with issues of deserve.
You left wing hippie types are always going on about the complexity of the planet, the fragility of ecosystems, and how ham-handed tampering with the environment is insanely dangerous and catastrophic.
And, I think you’re right. The problem is that the environment and the planet is reasonably strong and it can absorb a lot of punishment before it breaks down. It can take some abuse. Those that think you’re wrong point to such as evidence of it’s invulnerability. But, I think you are right to be sensitive to the fact that we are fucking with a complex chaotic system where the consequences aren’t immediately apparent.
Seeing as you guys are smart enough to understand that, I don’t see why some of you fail to understand that the economy itself is an ecosystem as well. When you fuck with it willy-nilly there are consequences.
This current crisis has its roots in such well-meaning interference. The Government deliberately created an innefficiency in the market with the creation of Fannie Mae and Freddie Mac to provide housing to people that the free market would deny it too.
I beleive that that was justifiable and a good thing. That inefficiency benefitted everybody in society. People had houses, commerce increased, industry increased, general wealth increased for thirty years. Free markets seek out innefficiencies and close them. This one was held open and fed. It was managed poorly and eventually it blew up. Overrall, I think we are in better shape for having done it than we would be had he not. But it could have been managed better had their been more respect for the forces at work. This disaster is not a failure of capitalism. It is a failure or regulated capitalism. The good thing about it is that we tend to learn from our mistakes and won’t repeat it.
I’ll give you another example, more to point:
There are a whole breed of traders that do something called “arbitrage.” Arbitrage literally means “riskless trading” but in fact it’s very risky.
An arbitrageur might simply watch one set of securities on a variety of different exchanges. If you watch long and hard enough you might find that prices don’t always move in sync. You can find an innefficiency. Let’s say XYZ (it can be a commodity, a stock, a bond, a currency or anything) is selling for $49 bid and $50 offer in New York. In London though it might suddenly be trading at $50.50 bid due to a spike in local demand. Seeing this an arbitrageur buys all he can in New York and sells all he can in London simultaneously. His buying drives the price up in New York. His selling drives the price down in London. The inneficiency eventually closes. He has to buy and sell enormous quantities to do so and make this work. He makes an enormous amount of money. However, if he screws up he might end up with $10 million dollars worth of XYZ that he paid $50 for and is now worth only $47. He can lose tens of millions of dollars, or be bankrupted. The only reason to take the risk is for the potential reward.
If somebody isn’t doing this than you end up with a farmer tons of tomatoes rotting away in Idaho because Idaho is swamped with tomatoes and they can’t be sold at any price, while in Atlanta the price of tomatoes has gone through the roof because there aren’t any to be had. Everybody suffers.
Traders route goods and securities to where there is demand for them.
I don’t think a trader is more deserving as a person than, say, a farmer. However, I do know that in the ecosystem of the economy you need to have a lot of tomato farmers compared to a few tomato traders. It has to be easier and safer to be a tomato farmer than to be a tomato trader. It has to be riskier but more rewarding to be a tomato trader than a tomato farmer.
It’s not about deserve. It’s the way it has to be.
Chiefs and Indians. Everybody would rather be a chief, but if everybody was a chief, nobody would be. It has to both very hard and very rewarding to be a chief.
Earlier somebody brought up Nancy Pelosi’s jet costs. Does Nancy Pelosi “deserve” to fly around on a great big jet at taxpayer expense?
The correct answer is that deserve has nothing to do with it. It’s simply the best solution.
The truth is that the financial sector took over the system. They owned the regulators, removed any oversight and determined their own compensation. They reaped huge rewards. Way over the top. But our system has warped into a perversion that allows the insider to roam free of laws and oversight. We have a political system that is fueled by private money. We know who ca afford to pay k street. They have lots of lobbyists infiltrating the house and senate. They are major political contributors. That gives you access and the power to get your de regulation passed. The bankruptcy bill was written by financial interests. It was a horrible bill that haunts us now. Paulson, Greenspan and others with a private ear to the president pushed hard to remove Glass/Siegal and deregulate. Give the bankers free reign and they will do the right thing for America. Sure thing. How did that work out?
I believe Pelosi is 3rd in line to the presidency. That is why she gets special treatment.
I don’t think you understood what I wrote. You’re agreeing with me. I think capitalism needs regulation and regulated capitalism is what failed. Letting them do whatever they want is not regulation.
Again, you misread me. I’m not sure how since I said Pelosi’s treatment was simply the best solution.
A charming humility, if somewhat uncharacteristic. But abdication of resonsibility is not negation, it remains, whether you shrug it off or no. The answer to Cain’s Question is yes, yes you are your brother’s keeper.
“Articifial”? Interesting word choice. Capitalism is “organic” and “natural”, then? Humans in the wild grow up and strike out on their own in rugged individualism, eschewing the artificial limitations of collectives like tribes? Since when?
Wasn’t the labor movement about just such an “artificial” restructuring of balance? The eight-hour day, old age pensions, child labor laws…would you offer these as examples of things that have gone “very badly and pushed things in the other direction”? Or is it your thesis that these things were handed down from the generous hearts of capital?
Yes, you do. You simply refuse to recognize it as “faith”, prefering to insist it is the inevitable conclusion of stern logic.
Rather a lengthy exposition for a pretty weak point…lets cut to the chase.
A *post hoc *argument. Even if it were so, and it is offered as a “just so” story, there is no reason to believe that it could not be otherwise. Even if we accept that the wealthy foster “innovation”, that isn’t proof that innovation depends upon them. Point of fact, the wealthy and comfortable have a tendency to be conservative, not innovative. Neccesity, not comfort, is the mother of invention. That, and Frank Zappa.
Again with the bald statements, supported only by your authority. Is Sweden “socialistic”? Are her citizens woefully unhealthy? Poorly fed, housed, and educated? Ah, the operative word is “tend”! So, when they do fall behind, it proves your point, when they don’t, it’s an exception which can be safely ignored?
Next time you pat me on the head, count your fingers when you draw back your hand. Got a lot of faults, its a long list, but “stupid” and “naive” ain’t on it. I would have thought you’d know that by now.
They do it every time, its like Godwin. Sooner or later, having run out of arguments, you fall back on the Eternal Verities. It Was Ever Thus, its human nature, can’t be changed, would be nice, but can’t be done.
Dogma. Sell it somewhere else.
I daresay. Do you waste your time with issues like “justice”?
OK with you if we stick to the subject?
Or, you might say that a well-intended and quite reasonable approach was perverted and misused by greed-freaks. ACORN invented the wildly over-leveraged credit default swap? First I’d heard of that.
Not the clearest of points. Do you mean to say that regulation of capitalism is at fault, or insufficient regulation?
Good! That last one really bit the bag.
Alas, no. You are lecturing on how trading works as a means for proving its necessary. I know how trading works, thanks. Most of us do, thanks.
Yes, yes, we know. The Eternal Verities. Was and Always Shall Be. Dogma, Scylla. You’re welcome to it, so long as you don’t try and offer it as proof.
“Chiefs”? “Indians”? Where do you get tribes in a species naturally made up of rugged individualists? Sounds pretty artificial to me!
By golly, you’ve finally said something pretty darn sensible! Its not about what she deserves, its about her place in our power structure. Even if she preferred to take a commercial jet, we shouldn’t let her. We are in perfect accord on that one! Always nice to end on a note of agreement.
Deciding what somebody “deserves” isn’t being their keeper, it’s being their judge. “Judgement is mine,” saith the Lord. Nice try trying to change the subject though.
That’s not capitalism.
Those are regulatory in nature. None of those is an “artificial restructuring of balance.”
If I just said I had “faith,” how can you say that I refuse to recognize it as faith? Are you high?
Of course their could be other systems. Feel free to propose one. I don’t think anybody is going to be interested in tearing down the old system until you have something better to replace it with.
“Someday somebody will come up with a better system, maybe.” is hardly an argument to tear down one that works.
“Sweden” What does that mean? You have some sort of cite that demonstrates how Sweden is doing so much better as a Socialist country than it would as a capitalism? Do you have some sort of capitalist Sweden hidden away that your comparing socialist Sweden to?
Than stopping acting like it. You’re just sitting there making wishes. “It should be better, the way it is sucks, we should do something else.” What?
No. You don’t.
I think his point re: Sweden is that it is doing better than the socialist systems that tend to get trotted out as bogeymen, and does not need to be a capitalist system to do so. So, rather than having a capitalist Sweden hidden away to compare socialist Sweden to, he compares socialist Sweden to other socialist systems.
The point (possibly) being that yes, perhaps a capitalist Sweden could do better than a socialist Sweden, but the built-in inequities (not to mention vulnerability to melt-down) leads him to question whether any improvement would be worth it.
Begs is likely a good word choice – albeit probably inadvertently; FactCheck has a special update addressing it (I’m quoting most of it):
Also, interesting – I was curious about the “Pelosi/Hastert flight comparison” linked from Judical Watch. So, they mean to tell me that Hastert did not fly at all in 2005? Perhaps that’s true – I don’t know how to even go about checking it. But it doesn’t really pass the smell test, now does it? Not even a single flight?
I await with bated breath the egregious examples of pork summing to billions (please do include your definition of what constitutes “pork”).
Now, just a second. You reduce my argument to a semantic distinction based entirely on your own terms, mine aren’t allowed, only yours are permitted. You then bring in a Biblical quote relevant to an entirely different matter as…what? Proof? And then chide because I’m changing the subject?
I know. That’s my point. The most “natural” form of human economics, at its most basic, is almost invariably tribal, hence, collective. Typing too fast again, am I?
They reflect changes in the balance of power, both economic and political, between labor and capital. “Regulatory”? Yeah, I suppose, so what? Again, another semantic distinction without a real difference.
Tsk, tsk. Losing, are you? Rather speak to my character flaws than my arguments? I can well understand, considering. Still progress is made, if you can recognize that your faith in capitalism has no more basis than a child’s faith in Santa Clause, we’re definitely getting somewhere. Still, don’t think you really mean that, think you’re just blowing more semantic smoke.
Am I revolutionary now, Scylla? A flaming Trotskyist throwing pipe bombs? Hell, man, are you high? Perhaps you will point out to me where I advocated blowing it all up and starting over?
Ably answered by Kayla’s Dad
I’ve spent hours answering that question, and you haven’t heard a word? No idea? For all that, you haven’t any idea what a progressive program looks like? None?
Or are you simply hoping to wear me out?
Do me a favor, Slick. Don’t tell me what I know, and don’t know. You ain’t qualified to take my inventory.
Yes, and I suppose that’s the perfect economical model for a small group of dirty hunter-gatherers trying to eek out a subsistence with sticks and stones.
I hardly find that an improvement from our current situation. YMMV.
I’ve heard you say, “Bushista” and"But soft" and a Bunch of “Natasha and Boris” stuff, but I think I’ve ever actually seen arguing for anything. Not a lot of meat on your sandwich.
Ohhhhhhh. I am. I really am. You see, if I were to walk up to an electrician, he would be well qualified to tell me that I don’t shit about wiring. It would be obvious.
There is no shame in that. We all have our professions, our areas of expertise.
There is shame though in pretending.
As a veteran wirehouse fixed income, trader I am highly qualified to tell you that you don’t know shit about securities trading.
Shall I quiz you?
Maybe the low brow, uninformed public should model the sophisticated, intelligent media commentators and the rational, skilled diplomats in Congress.
I am not referring to individual employees at AIG. The majority employed in the financial industry have no political power and nothing to do with the financial collapse. I am referring to a corporate culture, and more specifically, to the politically connected CEOs and board members who decided to risk other people’s money --retirement savings, college funds, and the nations bank deposits-- for economic self gain.
It’s hard to distinguish between the government, Wall Street, and media. The same people move easily between each sector. Even the bailout money went from Treasury to financial corporations and into the hands of politicians through donations and lobbying firms.
And yet you’ve spent hour after hour arguing with somebody who isn’t saying anything. Rather odd. You picked me at random, then? Lucky me.
Man, would you ever love that!
Its just that you present us with the rudiments of trading as though you were spreading truth to the ignorant, as if none of us had any clue about the arcane mysteries known only to the initiates. Which is OK, really, a lot of folks express appreciation.
But then you try to expand your particular area of expertise outside of its bounds, you claim authority. I also note that some of your sweeping statements have been challenged by others in closely associated fields, which implies to me that perhaps the Gospel of St. Scylla is not as authoritative as he makes it out to be.
Oddly, they tend to speak at unfortunate times, when you are far too busy to answer their criticisms. Pity.
I understand. Sweden being the one somewhat socialistic government that hasn’t collapsed or sent all of its people into gulags… yet.
With Sweden you basically have 50% private taxes and a socialist welfare and healthcare system. Their economy though is pure capitalism. After their almost total collapse in the mid-1990s they reformed themselves. They have free markets and their industry is almost entirely in private hands. The index of economic freedom ranks their economy as #27 out of 162 in these terms. You got Volvo, Erricson, Electrolux, SKF and many other publically traded entities.
IIRC, the corporate tax rate in Sweden is actually lower than the US(28 versus 35?) so hardly an example of anti-capitalistic social structure. Unemployment is probably much higher than they state as Sweden has this special welfare program that serves to mask true unemployment figures.
I am actually pretty worried about Sweden as an economy. There’s a handful of multinationals propping up this export economy, whose primary trading partners are us and Germany. Our demand drops… or those multinationals produce elsewhere and Sweden collapses. Sweden forstalls this with its free markets and low corporate tax rates.
Swedens markets are more free than ours for now.
I agree, that that’s strange of me.
Not really.
I must have missed this. I made a pretty big point of going back a page and answering China Guy to acknowledge an error I’d made long after the conversation had move on.
Where exactly have I been “challenged by others in closely associated fields” and “been to busy to answer?”
Cite, please?
Show them to me that I might correct my oversights.
Jesus Marimba, this thread is 13 pages long! Shit, I’d rather just take it back than to obsess over it. Withdrawn, your arguments stink, your character is flawless. Happy?
I double-checked, and it wasn’t Scylla. It was some asshole. Mea fuckup.
All bullshit aside, Thank You. I truly appreciate you acknowledging and correcting that.