In Defense of Capitalism & Free Markets

That market was created by the liberal/left, when Bill Clinton appointed Franklin Raines head of Fanny Mae with marching orders to crank out billions of dollars in home loans to unqualified borrowers from his minority constituencies. He was taking his cue from leftwing groups like ACORN which had successfully threatened some banks into making such loans. Seeing the money FM was making (Raines walked away with $900 million) the banks joined in. Don't confuse the proximate "cause" with the REAL cause - leftwingers meddling in markets, the same way they created the Great Depression in the 1930s.





Boy, do you have THAT wrong! Large box stores aren't able to "extort" anything - they would be arrested for a felony. What happens is local governments, ever greedy for more tax money, sell out their constituents - there's no greed like government greed. They not only will dump the mom and pops, but use eminent domain to seize people's houses in their endless greedy quest for more money. In the USSC Kelo decision, who voted FOR such seizures? The whole lib/left wing of the USSC.

Your problem is with the leftwing ideologues, not "capitalism" - conservatives are used to people like you blaming capitalism for every dirty deed committed by the leftwing - used to be funny now it's just ironic.
Who is that mystery person who writes a mort. check to fanne amy or fredde mac? No, you write it to BofA, formerly Countrycide (misspelling intentional) or any of a dozen mort lenders who were not forced to sell anything, but instead found a way around financial obligation by selling off their toxic mort before they could blow up or converted them into securities and sold them, but they got too greedy and had too many on hand when the poop hit the fan. Show me any person who had a fannie may salesman sell them a mort. I didn't say what the box stores were doing are illegal, quite the opposite-thats my problem. Maybe you should google "walmart" and see the billion hits-pick out the one's concerning local taxation. Ignore the antiunion stuff as you guys don't believe in unions anyway. Then you can look up the "made in America" scam they pulled or the other "legal" BS they commonly get away with.
 
Werbung:
I have to ask, is this capitalism?
No, that's not Capitalism. Capitalism is a political system NOT an economic system. What you're complaining about is a function of the market. Notice I did not say "Free" market. While such things would happen in a free market, they also happen in a Mixed Market, such as we have here in the US. The only kind of market that does not allow such activity is a command and control market.

Where is the ability to compete?
You just gave an example of competition in the marketplace. The big box store was able to enter the market and compete for customers. The customers voted with their wallets in support of the big box store over the Mom & Pop stores. Most little stores remain in business after the arrival of a big box store by specializing in something not offered at the big box stores, as a result they remain in business by finding a way to compete.

You ask, what can we do to prevent corp from getting ino bed with politicians?
Why do corporations give politicians money?

If you answer that question rationally, the solution to preventing corporations from getting into bed with politicians is obvious. Corporate donations to a campaign fund is merely a symptom of the disease, we must eradicate the disease and all the symptoms will go away.
 
This is not capitalism, this is extortion.
You're correct, that's not Capitalism nor is it a Free Market. What you're complaining about is Corporatism functioning inside our Mixed Market economy. Where do you think those "unfair tax and utility" deals the big box stores get come from?

I'll give you a hint... Not the big box stores.

Just think about who has the power to write the tax code and who controls GOVERNMENT run utilities and the answer should stand out as if it's in all caps and bold print.

And please show me that ironic business that asks for regulation
Any business that wants an unfair advantage over their competition. When the politicians who write the regulations, and control the regulatory agencies in charge of enforcing the regulations, are in the back pocket of company A, you can bet that companies B and C are going to take it in the rear while company A comes out smelling like roses.
 
why can't we build a fully computer operated and controlled machine that produces socks
You mean like the Lonati L454j Sport Sock Knitting machine?

11067373_Lonati_Used_Circular_Knitting_Machines.jpg


We've had automated systems for sewing socks since Ford invented the assembly line in the early 1900's. That particular model is circa 1970's-80's. There are even more advanced sock knitters today being used by countries all over the globe.

We can't compete with the sweat shops of Asia. But we can take the manufacturing to a higher level.
Seriously, I like your attitude so I don't like being the bearer of bad news but the fact is, every industrialized country has this technology. No matter what, there will still need to be actual human workers and that's where our domestic workers simply earn to much to be competitive with the rest of the world. In the domestic market, US sock manufacturers can compete but globally, not so much.

But don't let that discourage you...

‘Made in the USA’ still means something
Despite downturn, the nation remains the world’s leading manufacturer
source-BloombergBusinessWeek3.gif

By Harold L. Sirkin
...
U.S. multinationals are generally among the most productive and innovative in the world. And, yes, U.S. companies have ceded production of men's dress shirts that retail for $12, microwave ovens that retail for $69, and boom boxes that retail for less than half that price to low-cost developing countries.

But the U.S. leads the world in many high-value fields, producing more than half of the $175 billion in health care technology products purchased worldwide each year, for example. The U.S. also ranks as the world's largest producer of chemicals, selling 11 percent of the global total. And, as the AP reported, we "sold more than $200 billion worth of aircraft, missiles, and space-related equipment in 2007."

In fact, even in the midst of a global recession, the U.S. exported an estimated $1.377 trillion worth of goods last year, according to the authoritative CIA World Factbook. Nearly half of the exports were capital goods: aircraft, computers, electric power machinery, office machines, telecommunications equipment, and the like. Industrial supplies, such as organic chemicals, accounted for another nearly 27 percent. And consumer goods, including pharmaceuticals, and agricultural products accounted for 15 percent and 9 percent, respectively.
That's actually a very good article and I was surprised to find it posted on MSNBC. One of the things suggested in the article to make the US even more competitive is to.... That's right... Reduce government bureaucracy. Slashing the red tape would help US manufacturers more than any government bailout or stimulus program and it wouldn't cost the taxpayers a dime.
 
That market was created by the liberal/left, when Bill Clinton appointed Franklin Raines head of Fanny Mae with marching orders to crank out billions of dollars in home loans to unqualified borrowers from his minority constituencies. He was taking his cue from leftwing groups like ACORN which had successfully threatened some banks into making such loans. Seeing the money FM was making (Raines walked away with $900 million) the banks joined in. Don't confuse the proximate "cause" with the REAL cause - leftwingers meddling in markets, the same way they created the Great Depression in the 1930s.
Please Rick, don't be angry but as an eye witness to the birth of the housing bubble, a couple corrections are necessary here...

The creation of the housing bubble was bipartisan. I remember watching C-Span in the late 90's while Clinton was still in office and there was a meeting with the comptrollers of Fannie and Freddie, Government Sponsored Entities (GSE's). The bipartisan panel asked the two firms about raising their holdings of sub-prime mortgages (SPM's).

Both comptrollers stated that according to well established standards for the industry, sub-prime mortgages should not account for more than 1% of the company's portfolio. They were simply too volatile.

The bipartisan panel stated their interest in having the GSE's raise their sub-prime holdings to 10% of their portfolio. The comptrollers adamantly requested that the panel reconsider such a move and stressed the financial dangers involved in such a decision.

The panel assured the comptrollers that, as GSE's, they would be well insured against financial disaster, claimed that fears over increasing the holdings of SPM's would be shown to be unfounded, and said that the increase was necessary to promote affordable housing.

Being GSE's, Fannie and Freddie had no choice, their SPM cap was soon raised to 10% of their portfolio.

A few years later, after Bush was elected, I again watched on C-Span as the panel dragged the GSE's comptrollers back to ask about SPM's. The comptrollers reported that things were going well but cautioned that the panel should consider allowing SPM's to return to 1%. The panel would have none of that.

Bush saw the "success" Clinton had in "affordable housing" and agreed with the panels suggestion to raise the cap again, this time to 25%. To say that the comptrollers freaked out would be to put it mildly but once again, they had no choice.

Now as Clark pointed out, Fannie and Freddie were not the ones out making loans, the privately owned banks did that. Fannie and Freddie were merely a dumping ground for these SPM's. They told the banks they needed to meet a quota of 10%, the banks issued loans and sold the SPM's to Fannie and Freddie. This happened each time the cap was raised and didn't stop till the house of cards collapsed.

Banks didn't want to hold onto SPM's because of their volatility, so they were glad to pawn them off on the GSE's. The GSE's didn't want them either and for the same reason, but they had a quota to meet and assurances from the government that they would be safe in the event of a collapse.

Now once the GSE's met their quota, they stopped buying the SPM's from the banks, leaving banks with volatile holdings. That's when some financial genius decided it would be a good idea to carve up individual loans and splice them back together, take a % of a high risk loan with a % of a medium risk loan and a % of a low risk loan, and the mortgage backed security was born.

The rest, as they say, is history.

Ok... Now as to Franklin Raines. He split the scene with 90 million, not 900 million.
 
:D
Who is that mystery person who writes a mort. check to fanne amy or fredde mac? No, you write it to BofA, formerly Countrycide (misspelling intentional) or any of a dozen mort lenders who were not forced to sell anything, but instead found a way around financial obligation by selling off their toxic mort before they could blow up or converted them into securities and sold them, but they got too greedy and had too many on hand when the poop hit the fan.

Wow! - run-on sentence or what? :D I come here to debate, but always end up tutoring instead. Fanny Mae acts as a secondary market for mortgages. Not a single one would ever have been given by the banks if fanny mae or freddy mac didn't agree to purchase them. Fanny Mae went bankrupt and was put under conservatorship as a consequence of the housing market collapse it caused. ONCE AGAIN (LISTENING THIS TIME????) the banks which sold the securitized loans did so >>>ONLY AFTER<<<< the market had been created by fanny mae, responding to Bill Clinton and the democrat congress's huge expansion of the leftwing Community Investment Act. Reread this paragraph eight times, or until in sinks in.

Maybe you should google "walmart" and see the billion hits-pick out the one's concerning local taxation. Ignore the antiunion stuff as you guys don't believe in unions anyway. Then you can look up the "made in America" scam they pulled or the other "legal" BS they commonly get away with.

Ah, you're going to ignore the points I made in my rebuttal. Don't blame you. :D
 
Please Rick, don't be angry but as an eye witness to the birth of the housing bubble, a couple corrections are necessary here...

The creation of the housing bubble was bipartisan. I remember watching C-Span in the late 90's while Clinton was still in office and there was a meeting with the comptrollers of Fannie and Freddie, Government Sponsored Entities (GSE's). The bipartisan panel asked the two firms about raising their holdings of sub-prime mortgages (SPM's).

Both comptrollers stated that according to well established standards for the industry, sub-prime mortgages should not account for more than 1% of the company's portfolio. They were simply too volatile.

The bipartisan panel stated their interest in having the GSE's raise their sub-prime holdings to 10% of their portfolio. The comptrollers adamantly requested that the panel reconsider such a move and stressed the financial dangers involved in such a decision.

The panel assured the comptrollers that, as GSE's, they would be well insured against financial disaster, claimed that fears over increasing the holdings of SPM's would be shown to be unfounded, and said that the increase was necessary to promote affordable housing.

Being GSE's, Fannie and Freddie had no choice, their SPM cap was soon raised to 10% of their portfolio.

A few years later, after Bush was elected, I again watched on C-Span as the panel dragged the GSE's comptrollers back to ask about SPM's. The comptrollers reported that things were going well but cautioned that the panel should consider allowing SPM's to return to 1%. The panel would have none of that.

Bush saw the "success" Clinton had in "affordable housing" and agreed with the panels suggestion to raise the cap again, this time to 25%. To say that the comptrollers freaked out would be to put it mildly but once again, they had no choice.

Now as Clark pointed out, Fannie and Freddie were not the ones out making loans, the privately owned banks did that. Fannie and Freddie were merely a dumping ground for these SPM's. They told the banks they needed to meet a quota of 10%, the banks issued loans and sold the SPM's to Fannie and Freddie. This happened each time the cap was raised and didn't stop till the house of cards collapsed.

Banks didn't want to hold onto SPM's because of their volatility, so they were glad to pawn them off on the GSE's. The GSE's didn't want them either and for the same reason, but they had a quota to meet and assurances from the government that they would be safe in the event of a collapse.

Now once the GSE's met their quota, they stopped buying the SPM's from the banks, leaving banks with volatile holdings. That's when some financial genius decided it would be a good idea to carve up individual loans and splice them back together, take a % of a high risk loan with a % of a medium risk loan and a % of a low risk loan, and the mortgage backed security was born.

The rest, as they say, is history.

Ok... Now as to Franklin Raines. He split the scene with 90 million, not 900 million.

$90 million? Is THAT all? :D Oh gollee, 8 figures instead of 9 figures.

Yaaaa yaaaaaaaa - I KNOW FM doesn't make loans directly - I thought it would be clear that I was speaking shorthand - in effect they DO make the loans because they agree to repurchase them - the banks are just intermediaries.

And you're wrong about the CRA. Originally passed by the democrat-controlled congress in the carter years, it was substantially ramped up in the 1992 changes passed by the democrat-controlled congress. In the late 1990s, Bill clinton demanded that FM ramp up the minority loans, and appointed franklin raines to do just that, and that he did. Some RINOs signed on? So what?
 
. And please show me that ironic business that asks for regulation, Rick, and I'll show you 100 that a putting millions lobbying the other way. You are right, we should end lobbying and political graft.

In which situation is the politican more to blame for what happens? When they accept a bribe from a corporation to change law in that corporations favor or when they choose from several corporations from whom they want to accept the bribe?

I suppose we could make a law forbidding corporations from donating to politicians. Nope, the politicians make the laws and they would never go for that (they would rather pretend to make such laws but really make laws that make it harder to track the money and manipulate from whom they will accept the money). Of course the pesky first amendment gets in the way.

What if we made a law forbidding politicians from accepting any money? There is no first amendment problem here. But then were would politicians get millions of dollars from? Nope, that's never gonna happen.

What if we said that corporations and any other U.S. citizen or corp could donate to politicians but the politicians could not pay them back with a favor? Well, we already have the equal protection clause. Why isn't anyone concerned about that? The people getting all the extra favors are not going to complain. And the politicians getting all the cash are not gonna complain. That leaves just you and I - we need to be on the same team cause right now the corporatists are winning.
 
One of the things suggested in the article to make the US even more competitive is to.... That's right... Reduce government bureaucracy. Slashing the red tape would help US manufacturers more than any government bailout or stimulus program and it wouldn't cost the taxpayers a dime.

I can believe that. I am retired now, but I had several small businesses in America, and even the smallest one (a model train store) required a bookkeeper to cut the checks for the employees with all the deductions (FICA, etc), keep track of 1099's we had to send out, remember to file the State sales tax, on and on. Oh, yea, and pay the benefits we gave to the employees, like medical insurance too.

The cost of just doing business and keeping the government off your back really racks up the overhead. Plus, if you make a mistake, the tax agency has no qualms about coming in an suddenly draining my personal bank account! That's because the business was a sole ownership so my personal assets were available against any claim on the company.

I can only imagine the paperwork that some of these big companies have got to fill out. Tough to make money when the labor costs are high and the overhead is high as well.
 
$90 million? Is THAT all? :D Oh gollee, 8 figures instead of 9 figures.

Yaaaa yaaaaaaaa - I KNOW FM doesn't make loans directly - I thought it would be clear that I was speaking shorthand - in effect they DO make the loans because they agree to repurchase them - the banks are just intermediaries.

And you're wrong about the CRA. Originally passed by the democrat-controlled congress in the carter years, it was substantially ramped up in the 1992 changes passed by the democrat-controlled congress. In the late 1990s, Bill clinton demanded that FM ramp up the minority loans, and appointed franklin raines to do just that, and that he did. Some RINOs signed on? So what?

The Republicans were the majority parties in the U.S. Senate and the U.S. House during the last six years of Clinton's adminstration, and during the first six years of the Bush administration. So it was a lot more than "some RINOS signing on".

Trying to justify the misdeeds and screwups of EITHER major political party, because of partisanship, shows a lack of intellectual honesty.

The Clinton-Bush-Obama triage of incompetence and stupidity is mind-boggling and endless.
 
$90 million? Is THAT all?
$90 million is accurate, $900 million is not. I like being accurate, don't you?

And you're wrong about the CRA.
I didn't mention the Community Reinvestment Act (not to be confused with the Crime Regulation Agency, also known as the CRA). Yes, the CRA was a creation of the Left but it survived Reagan and grew under both Bush administrations. Again, just me being accurate.

Some RINOs signed on? So what?
So... it would be dishonest to lay the blame solely at the feet of Democrats.
 
The Republicans were the majority parties in the U.S. Senate and the U.S. House during the last six years of Clinton's adminstration, and during the first six years of the Bush administration. So it was a lot more than "some RINOS signing on".

Trying to justify the misdeeds and screwups of EITHER major political party, because of partisanship, shows a lack of intellectual honesty.

The Clinton-Bush-Obama triage of incompetence and stupidity is mind-boggling and endless.

I have invested in real estate all my life and follow, as closely as possible, lending policies at banks and other agencies such as the FHA. It was still impossible to for most people to see all the little pieces that were falling into place that finally created the housing bust which began in 2006.

Systematic deregulation of the banking industry virtually eliminated the Glass–Steagall Act which regulated the banks and savings and loans was one element. The Community Reinvestment Act (CRA) of 1977 was a factor. The introduction of Hedge Funds provided as a way for common investors to buy and sell mortgages. Over-zealous banks made sub-prime loans and fudged the documentation. Over-zealous buyers who thought the price of housing would never fall was another cause.

All of these contributing factors plus more happened quietly and very few people could see the overall picture. In reality, it is the fault of a lot of people and legislators from both parties. The only place where anyone could really see a problem brewing was by looking at the graph of housing.

Graphs such as this one clearly show a bubble. Anybody could know that housing prices were going up quickly. But very few people know the answer to the question "Why?" The great imponderable question.
united_states.png


I was fortunate enough to have my second wife divorce me in 2004, which mean I had to sell all of "our" real estate investments - so I only got a 50% haircut thanks to the divorce laws, not the housing bubble! :o But the political blame game is not helpful when trying to learn from our historical mistakes. The trick now is to fix the problem. Sadly, a lot of the root causes still exist.
 
$90 million is accurate, $900 million is not. I like being accurate, don't you?

Yes, but that has nothing to do with the thrust of the point I made: $900 million, $90 million, or $17 million and 89 cents - a Clinton flunky made out like a bandit in crashing the world economic system.


I didn't mention the Community Reinvestment Act (not to be confused with the Crime Regulation Agency, also known as the CRA). Yes, the CRA was a creation of the Left but it survived Reagan and grew under both Bush administrations. Again, just me being accurate.

It survived Reagan because republican presidents have no power to overturn laws passed by a democrat congress and signed by democrat presidents. Also, the Carter era CRA was not a threat to the economic system - it was the 1990s amendments, plus the Clinton-era appointee, who did the damage. The continued leftwing claims that "capitalism" caused the crash remains a foolish and uninformed recitation of leftwing propaganda-for-morons.

So... it would be dishonest to lay the blame solely at the feet of Democrats.

Get a clue: The title "republican" means >>>NOTHING<<<. It covers an extremely wide range of individuals, and therefore is useless as a term of discrimination for those who are trying to descern who and what has nearly destroyed this country. RINOs are simply liberals who for some reason call themselves republicans. There are always RINOS who will support any leftwing policy - so a simpleminded, but DISTORTED way of looking at things is just to say that republicans and democrats have been involved in all the extremely bad policies. It's BETTER, more USEFUL, more ELUCIDATING, to grasp that it's LIBERAL/LEFT policies that have been so harmful.

Get it? Get it? :rolleyes:
 
Yes, but that has nothing to do with the thrust of the point I made: a Clinton flunky made out like a bandit in crashing the world economic system.

I was only correcting the number, that's it. I thought it was simply a typo on your part and certainly did not expect you to have this reaction. By pointing out that it was $90 million instead of $900 million, I was not trying to defend Raines for running his company into the ground, skating with a $90 million golden parachute, and leaving the taxpayers on the hook for the losses.

The continued leftwing claims that "capitalism" caused the crash remains a foolish and uninformed recitation of leftwing propaganda-for-morons.
Yes, the Democrats put the CRA on steroids but it's also true the Republicans did nothing to stop it and even helped out when they were in power. Progressives in both parties worked together to create the mess they both now blame on "unfettered" Capitalism.

Get a clue: The title "republican" means >>>NOTHING<<<.
Are you looking to have a conversation or simply spoiling for a fight?

so a simpleminded, but DISTORTED way of looking at things is just to say that republicans and democrats have been involved in all the extremely bad policies.
Many people believe that partisanship causes problems and claim that if only politicians would work together in the spirit of bipartisanship, then all the countries problems could be solved.

In pointing out that the CRA and subsequent mortgage crisis was the creation of bipartisanship, that it only happened thanks to politicians working together, I'm trying to point out how foolish it is for people to believe that bipartisanship is always good and partisanship always bad.

Any time the two parties actually agree on something, chances are the American people are getting, or will get, screwed. Case in point, CRA, TARP, Bailouts, etc. etc.

It's BETTER, more USEFUL, more ELUCIDATING, to grasp that it's LIBERAL/LEFT policies that have been so harmful.
What you consider "Liberal/Left" policies I consider, by definition, to be Progressive policies. The people you consider RINO's are Progressive Republicans. So no, I do not consider using the term "Liberal/Left" to be better, more useful, or more elucidating than Progressive.

Get it? Get it?
Oh I got it... We're on the same side of the issue but you're not going to tolerate anyone correcting your typo's or using different terminology.
 
Werbung:
I have invested in real estate all my life and follow, as closely as possible, lending policies at banks and other agencies such as the FHA. It was still impossible to for most people to see all the little pieces that were falling into place that finally created the housing bust which began in 2006.

Systematic deregulation of the banking industry virtually eliminated the Glass–Steagall Act which regulated the banks and savings and loans was one element. The Community Reinvestment Act (CRA) of 1977 was a factor. The introduction of Hedge Funds provided as a way for common investors to buy and sell mortgages. Over-zealous banks made sub-prime loans and fudged the documentation. Over-zealous buyers who thought the price of housing would never fall was another cause.

All of these contributing factors plus more happened quietly and very few people could see the overall picture. In reality, it is the fault of a lot of people and legislators from both parties. The only place where anyone could really see a problem brewing was by looking at the graph of housing.

Graphs such as this one clearly show a bubble. Anybody could know that housing prices were going up quickly. But very few people know the answer to the question "Why?" The great imponderable question.
united_states.png


I was fortunate enough to have my second wife divorce me in 2004, which mean I had to sell all of "our" real estate investments - so I only got a 50% haircut thanks to the divorce laws, not the housing bubble! :o But the political blame game is not helpful when trying to learn from our historical mistakes. The trick now is to fix the problem. Sadly, a lot of the root causes still exist.

I too have invested in RE for many years. Of course, I am in Michigan and our real estate prices never increased as dramatically as the rest of the nation, but they have fallen considerably. I still hold the properties in the hope of weathering the storm.

Many were responsible for the bubble. The government, Fed, politicians, lenders, originators, Wall Street, Fanny, Freddie, etc...but the group getting hurt are the middle class.

IMHO the perpetrators of the RE bubble did it all on purpose knowing full well it would harm millions of Americans. And, they have gotten away with it without any consequences, while getting rich.
 
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