Worse! He found something ideologically incorrect, comrade!
Now we’re on the same page. Excellent.
But Goldman Sachs does not have the power of prosecution, taxation, use of legal force, or the management of the currency. The government does. Goldman Sachs can only get what they want by using the government as their agent.
Of course there will be lobbyists who will seek to get whatever they can for their money. I can’t believe that is a surprise to anyone. Goldman Sachs. Archer Daniels Midland. Halliburton. Moveon.org. Acorn.
But if the government does not have the ability to do anything with that lobbying money, it will be wasted. There will be no reason to lobby, because there will be nothing to gain.
That was what I was getting at above. Using words like ‘asshole’ to describe a bank CEO is fun and cute, and describing the revolving door between Goldman Sachs and government is interesting. Not really surprising. But interesting. I would expect there to be a revolving door between the government and somewhere, given the way things are structured.
Once you’ve decided to throw billions or trillions of dollars of other people’s money at something, you’ve created the problem. Because that’s the honey that will attract the flies. That’s the root cause. Not whether John Thain is an asshole. And not because Goldman Sachs is ‘governing us’.
If it’s not Goldman Sachs, it will be somebody else. Hell, T. Boone Pickens has already made it obvious that he’s circling the Treasury for wind farm dollars. ADM has already made out like bandits on ethanol subsidies. Lots of other folks lined up at the trough for stimulus dollars.
That’s the point I’m trying to make. That’s the real problem. I can tell by the quotes above that the author of the article has already missed the point.
The bits of this article I read on the RS site were typical Taibbi – entertaining if a little grassy-knoll. I find him a fascinating guy, and thoroughly engaging when he’s been on Bill Maher’s show several times, and I enjoyed his book, “The Great Derangement”.
For this last example I kept thinking that if we’re going to indict everyone we can think of because of where they used to work, and that place just happens to be an elite organization, you’re going to start believing the military is really the ultimate source of our problems. Which maybe it could be, although that’s a different topic altogether, but it’s certainly not a conspiracy.
To wit – Taibbi is always fun, but I’d go to him more for entertainment than education. I do reco that book, however. It’s got some painfully funny scenes of his (rather pathetic, in his own admission) adventures among a camp for born-again proselytizers-to-be, among other things.
Because of where they work? Wow. They were not secretaries or phone guys. They were involved in management and planning for a company that is part of a theft ring of gargantuan proportions. They were huge shakers. They were creators of financial instruments that shook the economies of the entire world.
You sure about that?
Barney Frank had a huge handin the housing mess. Now he is trying to repeatthe mistakes of the past.
Of course, it seems, that ol Barney can be forgiven as his actions, as destructive as they were, were for the *poor *people. He was trying to *help *and therefore is as pure as driven snow. It is only those evil companies who exist to make money who are to blame.
That article is full of crap. This, in particular, is just wrong:
*It sounds obvious now, but what the average investor didn’t know at the time was that the banks had changed the rules of the game, making the deals look better than they actually were. They did this by setting up what was, in reality, a two-tiered investment system — one for the insiders who knew the real numbers, and another for the lay investor who was invited to chase soaring prices the banks themselves knew were irrational. *
I knew a bunch of ‘average’ investors who knew that the market was going to have a huge problem*. Heck, I knew at least a year a head of time that the housing market was in for a big problem. I didn’t realize quite how big, but I knew that there was a problem 'cause I can do math. I was house hunting during the peak. Looking at the house prices and knowing the average income in my area I figured out that no one could afford a house**.
Of course this guy forgets to mention that a lot of the lenders were pressured by (guess who?) Barney Frank to make loans to low income people. This pressure led to relaxed lending standards since the reason the low income people didn’t get the loans was because they didn’t meet the guidelines. Of course, when people pointed out to Frank that Fannie and Freddie had a problem, he didn’t quite buyit.
There were multiple causes for the present market issues (including anaylists who didn’t value CDO’s correcly***). Trying to place the blame on Goldman Sachs is shortsided and misses a huge chunk of the problem.
Slee
- Knowing there is a problem is different than knowing when it will burst. Had I been able to guess the timing I could have gone short and been absolutely loaded right now.
** When I first started looking the average house price was something like 9 to 10 times the average yearly wage in my area. Even with two incomes the houses would be ~5 times the average yearly wage. A person can usually handle 2.5 to 3 times their yearly income before taxes. I knew that a whole lot of people couldn’t afford their houses long before the bubble burst.
*** There is a great article in Wired, from January I believe, about one of the math guys who wrote an equation for valuing CDOs.
So, I take it your thesis is that dat ol’ debbil Barney Frank and his evil minions forced bankers to make bad loans? Gosh, you’d think they’d object, wouldn’t you? It’s a pity that our financial institutions have so little representation in the halls of Congress, they might have been able to do something about it!
So, tell us, how long has Barney Frank been bullying what was a Republican majority to do his bidding?
It’s so nice that he somehow picked out a select few people who happen to be richer than most people on this board, so that we can vent our collective spleen at them.
If they are making loans with someone’s money that not yours, and not mine, it doesn’t matter. They will be making bad loans with their depositors money and with their shareholders money.
So if the loans go bad, those people lose out and the bank goes bankrupt. Not you. Unless of course you decided to become a customer or shareholder of that bank, in which case you have to accept the consequences of your decision.
But of course, that’s not how it works. Barney Frank, the GSEs and most of the banks are making bad loans with YOUR money…because you’ve backstopped them with your tax dollars. They also have tied your fortunes to theirs via forced use of a fiat currency to store value, the control of which is also not yours.
THAT is the problem, my friend.
That’s a great description.
I’ll be back to this thread when I’m more coherent. Because I generally think Gonzo is off his rocker unless it concerns the American economy, and I generally think Idahomaulman is pretty reasonable on the same subject but for a few exceptions.
Thanks for the post.
I’m dying to hear what those exceptions are, and to check the correlation between those posts of mine, and my consumption of late night Scotch-and-sodas. That will be good feedback for me.
Well, the tool Frank wielded was passed under Carter though Frank started pushing it under Clinton. The Community Reinvestment Act.
Next, who brought up Republican vs. Democrat? Sure wasn’t me. The fact that Frank is a Democrat is is trivial. The fact that he is stupid is not. Both sides made big mistakes, though on the housing front the 'pubs tried to reign in Frannie and Freddie a while ago . At this point it appears that Frank is trying to keep making the same dumb mistakes.
Thisis an interesting link to two Frank clips.
Short summary of the clips:
Clip one (the most recent clip): The Republicans irresponsibly pushed home ownership. Poor peopple should rent (!?!)
Clip two (from 2005): I sponsered a bill to get lower income people into home ownership. Bubble, there ain’t no bubble.
On a side note, it’d be nice if you brought an actual arguement with some facts instead of snark.
Slee
Your shining example is a beacon to us all.
I have read before about how the Community Reinvestment Act was the very source of all our ills, how Barney Frank and the Clintonistas ruthlessly exploited their weakness and lack of power to make the financial industry the cringing slaves of their socialist agenda. A pity there were never any Republicans in a position of power to help them, I’ve noticed in the past that Republicans are warmly sympathetic to their needs.
So, right through the whole Bush administration, Barney held the banking industry in his ruthless grip? Was he wearing leather, were they crying out “Hurt me, beat me, make me write bad checks!”
Please. This is the kind of story you tell baby Republicans in their Ronnie Reagan pajamas. You want me to lay off the snark, stop telling me fairy tales.
WOW. Idahomaulman is twisted. He dances on a head of a pin trying to find a way to blame the dems for all the repubs did. Back to Drudge and Fox with you MOIDALIZE.
Are dems to blame . Sure. We have a political system fueled by money.In order to be elected ,you need to get money from the rich and powerful. They are not just giving it away. But politicians will not change that. They are on the inside and it makes them able to get elected again and again.It is a system, broken by money and greed.
When Paulson demanded we give him a couple trillion to fix the economy, I was one of the few who said get him as far away from the recovery as possible. Why the hell you people thought the guys who perpetrated the scheme should have the steering wheel, I will never understand. They are in it for themselves. As Tiabbi pointed out, that is what happened. I want those thieves vilified in public and in jail. But so many are convinced they care about the people. What a farce.
I agree, this is not a Dem/Repub issue - they both have equally dirty hands as subjects of influence peddling by Goldman Sachs, along with others but GS is king of the heap.
Solutions? Short term - I’m clueless. The foxes are running the hen house
Long Term? Term Limits & requiring our elected officials to utilize modern video conferencing and work from their home town instead of moving to DC. For the most part, our illustrious politicians fought to get elected to benefit themselves and only give a rat’s ass about the general public when the camera to pointed at them (at least that’s my opinion)
Short term solution: Stop the expansion of government, and its ability to borrow and spend yours and my money. That is what keeps building the henhouse bigger and bigger, which keeps attracting more foxes.
Long term solution: Roll back the size of the government, to shrink the size of the henhouse, and eventually knock it down. Then you don’t need to worry about the foxes. They will have to find their food on their own.
Is that really that hard to understand?
So let’s get started.
I’m going to already assume you opposed the stimulus package, the bank bailouts, the current proposals for cap-and-trade, and the re-jiggering of shareholders rights for the Chrysler and GM bailouts. Good. No need to revisit those again.
Going forward, I am also going to assume you oppose any efforts to expand the governments reach into healthcare. I am also going to assume you support the gradual dismantling of Social Security and Medicare, since those are $55 trillion liabilities just waiting to attract more foxes into the henhouse.
Longer term, I am going to assume you support a much reduced role for the Federal Reserve, and a plan to return to a commodity-based currency standard.
Removal of trade barriers and general overall reduction of regulation are a given, of course. Those two really ring the dinner bell for the foxes (industry lobbyists) to craft and distort legislation to their advantage.
I like the term limits thing you propose.
I think they want to do the right thing. I believe the system we have does not permit that. Our political system has been taken over incrementally until it has become a twisted relic. It no longer serves the people. Every politician will decry the time they spend on fund raising. It is their job now. Those who fund the big chunks of the money that are required, are doing their jobs for them. The lobbyists write the bills .
If we do not have complete public funding ,we will never fix the mess. Term limits is a bad idea in a system that rewards seniority with powerful committee seats.
Maybe the need to spend millions of $$ on getting elected/re-elected won’t be there if term limits are in place. As for the seniority and powerful committee seats - that’s more of an problem than an asset.
Just this once…
P1. How you got me blaming Democrats, or Republicans, or turning anything into a little political diatribe is beyond me.
P2. Yes, yes, yes yes. Yes to everything you said.
But WHY is the political system fueled by money? WHY are the stakes so high? Why are there so many greedy people trying to get on the inside of the political system?
Is this really so hard to understand? Am I speaking Greek? Is this microphone on <tap tap>?
The reasons those foxes are after the henhouse, is because the henhouse is where YOUR money is. And mine. And trillions of dollars of other taxpayer’s money. The government extracts it by force, and then of course lobbyists and greedy people and shysters and God-knows-who-else will line up, trying to get their piece of it.
You solve the problem by giving that money back to you. And me. And the other taxpayers. By reducing the size of government.
Then there is no reason to have any political system, or lobbying system, fueled by money. There is no reason for Hank Paulson to get his hands on our money…because it won’t be there. Term limits might become less necessary, because politicians won’t be incented to get elected to get their hands on that pot of money…because there will be no pot.
All of your other ideas are just Band-Aids covering up symptoms. You’re not going after the root cause.
The root cause is that the government is willing to take your money and spend it on…well…whatever someone with influence can convince a Congressman to spend it on. Take the money away from the Congressman, and all those shysters will go away.
Right? Yes? Kapish? Is that coming through in English on everyone’s browser? Good.
P3. Yes, yes, yes. A thousand times yes. But you are confusing Hank Paulson’s power with government power in general. As if it’s OK for the government to wield that awesome power…but only if the right people in the roles.
Again, a Band-Aid. You’re suggesting that it’s OK to elect a benevolent dictator and grant him/her awesome powers, as long as they are nice and care about us.
If it wasn’t Hank Paulson there at that time and place, it would have been someone else. If it wasn’t Barney Frank screwing up the GSEs with your money, it probably would have been a Republican (if they were chairing the committee). Barney Frank is especially obnoxious, conceited and stupid though, so he is a bit of an easier target than most.
Barney Frank has chaired the committee since 2007. Fast work.
Ring ,ring can you hear that. that is an alarm clock trying to wake you up. You have essentially come out against the American system. Do you really think we should not have taxes? You are a starve the beast anti government neanderthal conservative. You live in a world of sophistry. Do you think the most powerful nation in the world would not have the most powerful leader in the world.? Should we be run by a committee?
My reaction to Paulson is that he got extremely rich off the anti regulation system of economics that he and his financial pros pushed into existence. as Tiabbi says, Paulson ,Bernanke and all the others in charge are part of the creation and looting of the wealth of the people. They should not be allowed near it. They should be running rapidly from people with torches and tar and feathers.