And not a John Galt anywhere in sight.

Bailouts came AFTER the economy tanked. One of the main reasons the economy tanked is because banks got greedy with the mortgages, so this situation is nothing like Atlas Shrugged. If anything, it's the opposite, as we got here due to a lack of regulation and oversight, and not increased government intervention, which is what the article implies.

Spare me the "intellectual creativity" of Bernie Madoff and his ilk.
The "intellectual, entrepreneurial creativity," predictably, turned to fraud and theft. Rand's simplistic thinking was simplistic.

mikemoto: And not a John Galt anywhere in sight.

Then there's these guy...John Galt indicted for grand larceny

We're living the reality of a society tainted by this Randian dogma, and the verdict is in: Unfettered selfishness does not necessarily lead to the best of all possible worlds, just look at your own personal balance sheet. The best possible situation is surely something other than the laissez faire free for all that impoverishes all but the wealthiest .5% of the country, nevermind the Randroid's entertaining fantasies.

NOM NOM NOM these waffles are so much better tasting since I am eating them in rational self interest

Rand's heroes CREATED and BUILT things. Madoff and his ilk did not create a damn thing. He was little more than a common thief. NOT a Randian hero.

Government flacks and politicians create nothing. They just take.

I know it's cool and hip to hate successful people, but by and large they are the ones who hire and pay people to actually do something.

Poor and ignorant people like socialism because they think they will get something for nothing.

Rich and educated people like it because they think that they will be put into positions of power that they couldn't achieve honestly.

*reads comments*

/You people are all sick. On both sides.
//That is all.

Elvis_Bogart: NOT a Randian hero.

That's because "Randian heroes" are fiction, with no relation to reality.

I read most of Atlas Shrugged, but some editor should have taken a hatchet to that radio address.

/starts reading it
//thumbs forward a couple of pages
///thumbs foward a few dozen more
////Dear god I would have smashed my radio before he was done

Read Stanislaw Lem instead. Memoirs Found in a Bathtub explains everything better in fewer pages.

MorrisBird:

That's because "Randian heroes" are fiction, with no relation to reality.

sigh...ok

NOT a Randian ARCHETYPE.

Happy now, Mr. Anal retentive?

I thought we were going to live Blade Runner.

Elvis_Bogart: Happy now, Mr. Anal retentive?

Miserable, actually. The economy's in the shiatter and the best the vaunted WSJ can come up with is Ayn freaking Rand? I don't know how we fix this mess, but I've been really hoping somebody does.

FredaDeStilleto: I thought we were going to live Blade Runner.

That comes next. Just wait a year or two.

It's a badly written novel that expounds a dubious ideology. If it wasn't so simplistic that it gives people too blinkered to comprehend that the social contract, as it operates in western democracies, doesn't imply communism/bourgeois socialism something to anchor their beliefs to nobody would have read it since the '60s.

Persepolis: Bailouts came AFTER the economy tanked. One of the main reasons the economy tanked is because banks got greedy with the mortgages, so this situation is nothing like Atlas Shrugged. If anything, it's the opposite, as we got here due to a lack of regulation and oversight, and not increased government intervention, which is what the article implies.

This, but you'll never get a Rand fan to admit that their hero's ideology has feet of clay.

EvilEgg, big THIS.

I couldn't agree more.

MorrisBird: Spare me the "intellectual creativity" of Bernie Madoff and his ilk.
The "intellectual, entrepreneurial creativity," predictably, turned to fraud and theft. Rand's simplistic thinking was simplistic.

if you take the law out of the equation, the easiest ways to make a buck are fraud and theft. it comes as no surprise that business starts turning to those sources of revenue if you let it.

Best part about this article is that he's right, and most people won't realize it until it's far too late.

Biggest problem in this country is that the vast majority of us have been drinking the kool-aid and don't even know what the problem is anymore. Know the problem before you start fixing it.

burndtdan: the easiest ways to make a buck are fraud and theft.

I dont' think anyone here is advocating anarchy, because that doesn't work. However, the government doing everything in it's power to 'level the playing field' has got to stop.

Also, we need to bring back shame into the business world. Madoff should be shamed publically everyday for the rest of his life. He's scum and should be treated as such.

And fear, let's not forget fear. If the big banks and insurers and mortgage brokers feared getting screwed by all these sub-prime loans, then maybe they wouldn't have been so head-over-heals to sell them.

That book is a pile of fail. Nothing but self-aggrandizing crap that "smart" people read to make themselves feel better about being total a-holes to everyone else.

The people criticizing Rand for being simplistic and naive never had to live in the Stalinist Soviet Union and put up with the shiat she did. This is the same bunch that would completely agree with her strident atheism, then blame her for being Jewish.

Persepolis: Bailouts came AFTER the economy tanked. One of the main reasons the economy tanked is because banks got greedy with the mortgages, so this situation is nothing like Atlas Shrugged. If anything, it's the opposite, as we got here due to a lack of regulation and oversight, and not increased government intervention, which is what the article implies.

Laissez-faire? In the banking industry? The lack of regulations caused our current situation?

How long did it take you to smoke that planet-sized rock of crack?

big_pth: That book is a pile of fail. Nothing but self-aggrandizing crap that "smart" people read to make themselves feel better about being total a-holes to everyone else.

Maybe, but this moreso. (new window)

Persepolis: Bailouts came AFTER the economy tanked. One of the main reasons the economy tanked is because banks got greedy with the mortgages, so this situation is nothing like Atlas Shrugged. If anything, it's the opposite, as we got here due to a lack of regulation and oversight, and not increased government intervention, which is what the article implies.

I love that you're on Fark, because you decrease the amount I have to type on a daily basis. Thank ye again for stealing my thoughts.

Capitalist1: Laissez-faire? In the banking industry? The lack of regulations caused our current situation?

How long did it take you to smoke that planet-sized rock of crack?

There may be tons of regulations on the books, but they are barely enforced so there might as well be very little.

benlonghair: Maybe, but this moreso.

Nobody ever actually made it through that one. This I believe.

Capitalist1: The lack of regulations caused our current situation?

To turn it on you, then: which regulations, precisely, were the ones that made banks give out irresponsible loans and poor people take loans they couldn't afford?

hillbillypharmacist: To turn it on you, then: which regulations, precisely, were the ones that made banks give out irresponsible loans and poor people take loans they couldn't afford?

Wait a minute. Is that you?

MorrisBird: Nobody ever actually made it through that one. This I believe.

I'm proud to have made it through the first ten pages. I didn't understand a word of what I'd read, but it must have been good to have been voted best novel of the 20th century, right?

hillbillypharmacist: To turn it on you, then: which regulations, precisely, were the ones that made banks give out irresponsible loans and poor people take loans they couldn't afford?

[Canned response about having no choice but to give them to poor, ignorant, irresponsible, do-nothing minorities to avoid complaints of racial discrimination]

sepuku2: Wait a minute. Is that you?

Uh, I guess it's me. Who am I?

hillbillypharmacist: To turn it on you, then: which regulations, precisely, were the ones that made banks give out irresponsible loans and poor people take loans they couldn't afford?

No law to force it, but they did make laws that took away the risk of making those loans. There was (potentially) money to be made there, and since there's no risk, why wouldn't a bank make those loans?

We need to put risk back into the equation. That requires repealing the laws that back loans with (basically unlimited) government funds.

Greed + fear = safe loan practices
Greed - fear = economic disaster

Capitalist1: Laissez-faire? In the banking industry? The lack of regulations caused our current situation?

Post Madoff, the notion that the regulations, while numerous, were in any way adequately enforced is indefensible.

hillbillypharmacist: sepuku2: Wait a minute. Is that you?

Uh, I guess it's me. Who am I?

In response to your question:


By sepuku2 at 2008-10-01

The fat guy is the one I'm referring to.

A man chooses, a slave obeys.

sepuku2: The fat guy is the one I'm referring to.

Oh, I've got way bigger jowls than that.

hillbillypharmacist: sepuku2: The fat guy is the one I'm referring to.

Oh, I've got way bigger jowls than that.

Heh.

Capitalist1: The lack of regulations caused our current situation?

Yes, the fact that there was a time that anyone with a pulse and a pen could qualify for a mortgage. (Adjustable rate? Why, that's mere dollars a day for the first few months, and I'm going to flip this house before the rates go up like they do on the TeeVee! Weee!)

This is one of the main reasons we're in the position we're in. There needed to better regulate Freddy and Fannie a few years back, and they didn't, now we're in the position we're in.

/crack is whack.

FTA: "These, in turn, generate more havoc and poverty, which inspires the politicians to create more programs . . . and the downward spiral repeats itself until the productive sectors of the economy collapse under the collective weight of taxes and other burdens imposed in the name of fairness, equality and do-goodism."

Increased taxes? How so? Income taxes have been decreasing steadily since 1952. Back in '52, the top tax bracket was 92%. Now the top tax bracket is 35%. The Randians should be extremely pleased with the reduced taxes that we've been having to pay and all of the wondrous things that these reduced taxes have done for our economy.

Lando Lincoln: Increased taxes? How so?

I'm beginning to entertain the notion that Rand's sense of liberalism was just a strawman.

hillbillypharmacist: Capitalist1: The lack of regulations caused our current situation?

To turn it on you, then: which regulations, precisely, were the ones that made banks give out irresponsible loans and poor people take loans they couldn't afford?


The subprime collapse itself would have been bad, but it was merely a minor blip compared to the credit derivatives market that it brought down with it. We are talking here about $1.2 trillion in debt that was leveraged into $140 trillion in traded derivatives. It was the Wild West situation in derivatives markets that were the real problem. They were operating without proper regulatory oversight and reporting. You can thank Phil Gramm's Commodity Future's Modernization Act (which Clinton signed into law) for that. After the Enron collapse (caused in no small part by derivatives trading), some of the brightest observers of the financial sector called for making the derivatives market more uniform with policing by regulators who could establish price limits, listing requirements and other trading parameters. But apparently Enron hadn't been enough of a lesson for the overseers of the SEC.

Obligatory:

(link goes to embiggened version

benlonghair:
No law to force it, but they did make laws that took away the risk of making those loans. There was (potentially) money to be made there, and since there's no risk, why wouldn't a bank make those loans?

We need to put risk back into the equation. That requires repealing the laws that back loans with (basically unlimited) government funds.

Fannie and Freddie did not cause the housing bubble. IN fact, they were too swept up in their own problems to be much of a buyer in 2006 and beyond. Most of the loans were private.

The real problem with the financial crisis was that CDOs, CDSs, in-rate auction securities, and other financial derivatives were designed to provide long-term investment rates with the benefit of demand deposits. However, in a time of great fear, like we have now, we are experiencing a massive bank run.

On top of that lack of long term investment regulation, we also eliminated leverage ratios for the major investment banks, and transferred many SEC regulations to computer software that banks themselves monitored. My Money, Bank, and Finance TA in college had been a computer programmer who wrote and designed such software. Interesting guy.

Lastly, coupled with the non-regulation of many financial derivatives, our media has failed us. Despite many, many warnings, cable news and many other sources claimed for months that nothing was ever wrong; that capitalism never fails. And worse, the financial editorials- Moodys, Barrons, etc...- failed even worse by rating derivatives as AAA despite warnings otherwise.

Quite frankly, we let the financial industry get too inbred. There was profit to be made in every transaction, even if added up it was a negative for society.

Elvis_Bogart: Rand's heroes CREATED and BUILT things. Madoff and his ilk did not create a damn thing. He was little more than a common thief. NOT a Randian hero.

He created plenty of stuff for himself.

sloppy shoes: Quite frankly, we let the financial industry get too inbred. There was profit to be made in every transaction, even if added up it was a negative for society.

We let most businesses get too big. If a corporation is so large that it will destroy the economy if it fails, then it needs broken up, not bailed out. Capitalism cannot work if businesses are not allowed to fail.

"A profitably speculation is presented as a public good because growth will stimulate demand and everywhere diffuse comfort and improvement. No patriot or man of feeling could therefore oppose it. But the nature of this growth, in opposition, for example, to older ideas such as cultivation, is that it is at once undirected and infinitely self-generating in the endless demand for all the useless things in the world." - Adam Smith

sloppy shoes: Fannie and Freddie did not cause the housing bubble. IN fact, they were too swept up in their own problems to be much of a buyer in 2006 and beyond. Most of the loans were private.

I was under the impression that they set the national standards as far as mortgages were concerned, so while the mortgages that we troubled were in the hands of private institution, it was all going on with a nod from Freddie and Fannie.

Persepolis: Yes, the fact that there was a time that anyone with a pulse and a pen could qualify for a mortgage. (Adjustable rate? Why, that's mere dollars a day for the first few months, and I'm going to flip this house before the rates go up like they do on the TeeVee! Weee!)

This is one of the main reasons we're in the position we're in. There needed to better regulate Freddy and Fannie a few years back, and they didn't, now we're in the position we're in..

Fannie and Freddie are a scapegoat. They were a small part of the housing bubble.

The reality is that investment banks, regular banks (google Wells Fargo), and other "financial services" companies realized about 15 years ago that you could make a quick buck off of poor people and never take a loss.

They designed their financial instruments so that everyone else would get hurt in the investment but them. However, if everyone is hedging their bets that way, and everybody purchases those poor investments, then all of society takes a loss.

It's not that we can't give poor people loans, or that all sub-prime loans are bad, or that government promoting housing programs is bad- greed above all else is bad. That's where Rand is wrong. You cannot think only for yourself because you live in an interconnected society, and if everyone is always trying to screw everyone else- well everyone gets screwed.

Republicans keep coming up with strawmen because it was their God- Reagan- whose broken ideology was the foundation for all of this. And the Democrats don't correct them because they went along with it. You want a good financial system- put the fervor we instill in the DEA into financial regulation.

They could have caught Bernie Madoff. They could have figured out the fraud of CDSs. The problem is that we treat businesses like they are queens that need to be pampered.

sloppy shoes: Fannie and Freddie are a scapegoat. They were a small part of the housing bubble

Heh, I beat you to the comment. Regardless, do you agree that situation was caused by a lack of solid regulation?

The Icelander: We let most businesses get too big. If a corporation is so large that it will destroy the economy if it fails, then it needs broken up, not bailed out. Capitalism cannot work if businesses are not allowed to fail.

Adam Smith quote aside- yes this is true of many industries. However, it is not true of all of them. Any supply chain expert, knowledged economist, etc... will quickly tell you that the Auto industry almost requires this because of the economies of scale gained.

Persepolis: I was under the impression that they set the national standards as far as mortgages were concerned, so while the mortgages that we troubled were in the hands of private institution, it was all going on with a nod from Freddie and Fannie.

No. Fannie and Freddie invest in AAA rated CDOs in order give more capacity for banks to lend. However, due to accounting scandals in 2004-6, they made up a paltry sum of the housing boom. Fannie and Freddie may give certain signals to the markets, and have influence, but they are not the a communistic authority in a capitalistic society.

The reality is that- as I said in another post- banks and other financial services companies figured out that they could make a cheap buck by lending money and selling it elsewhere. This is why the rest of the world is feeling the hurt- they all bought our CDOs, not just Fannie/Freddie. (In fact, I believe most of the bad loans- or at least subprime- were done by financial services companies like GMAC, and not banks).

Any time you let banks/financial companies transfer paper without regulation, you are going to let them transfer significant moral hazard with significant risk. NPR had an interview with the former head of WaMu who said that at one point the issue was brought up in a board meeting, and everyone just agreed that profits were up, so don't worry about it.

Persepolis: Heh, I beat you to the comment. Regardless, do you agree that situation was caused by a lack of solid regulation?

Yes. But we will never establish a set of rules and be done. As I stated in a previous post- the fervor that drug regulators have needs to be transferred to financial regulators. This may sound bad, because drug regulators appear to not be very successful, but in fact they are- given the limitations.

We often forget that financial companies don't really have the rights that people have. Financial regulators, the IRS, etc... all have lots of powers to investigate companies- but the prevailing government attitude that they shouldn't is what hampers them.

When Republicans say that government regulation is useless and that regulators are bad, they knowingly lie. They turn around and do it in another field. The difference is that they care.