Political discussion moved from the Starcke thread

[swatcher]

Blacknight,

Thank you for your reply.

It looks to me you're buying the corporate PR-spin hook, line and sinker.

Your take on GS is flawed. Of course Goldman Sachs has repaid the government loan with interest, AFTER they were propped up & allowed to become the fifth biggest US bank and make a killing. It's pennies on the dollar for them. If you don't understand this I don't know what else will open your eyes ... No, big corporations don't play fair, because they don't have to!

 

[Miah]

Walter Starcke: What am I missing?

I'm pretty much right there with you, cotton. Anyone who's ever listened to Angry Human knows how I feel about Obama - while I detested Bush, and didn't think much about McCain and The Bimbo, I've not been much of a fan of Obama, and his policies, words and actions have played out largely how I feared they would. Folks need to understand that democracy is the last thing that's currently playing out in the U.S. I tend to refer to it as corporate feudalism. Thanks for that post.

dB

I have never heard of 'Angry Human' personally. And from what I have heard you say on political subjects in the Paracast, I can't say I understand your view on these subjects. So how are things with Obama playing out how you feared they would, please explain? I consider you a very intelligent person, and would love to know your views.

Me personally, I wish we would stop electing politicians to run our government, and start putting scientists and geniuses in power instead. I hate that we elect based on a majority of people voting for who they like the best, and who speaks better at a debate, or who promises the most people the most freebies. All of which caused Obama to get elected, but also which allowed McCain to be the other choice for that matter. I wish that you had to answer a simple policy questionnaire for your vote to count. Or as another friend suggested, you didn't get to see the names on the ballot, just the policies you were voting for.

Blacknight, I like a lot of what you've said in this forum, please stick around.

 

[Blacknight]

Walter Starcke: What am I missing?

Blacknight,
Of course Goldman Sachs has repaid the government loan with interest, AFTER they were propped up & allowed to become the fifth biggest US bank and make a killing.

Actually, Goldman paid dividends and repurchased their warrants at very handsome rates. In another era the feds would have been guilty of usurious conduct. I would support any federal funds under these conditions....repaid in months at a 23% annualized return. More of that and less of the phony stimulus packages and we'll have a real recovery.

The collapse which precipitated Goldman's near-demise was caused by two simple events, coming together like a devil's bargain...the avarice of the "new breed" investment bankers who saw derivatives as a means of cashing in on the burgeoning credit markets and the irresponsibility of far-too-many consumers driven to live beyond their means. And what enabled that? OUR POLITICAL SYSTEM! Dems and Repubs alike saying we would essentially guarantee any "residential" loan--even those clearly beyond rational and traditional acceptable borrowing standards. Add to that the lackadaisical nature of our "watchdogs", including Congress, and we had a perfect storm.

This whole "corporations are the root of all evil" notion is factually insupportable. There will always be bad players in any field of endeavor. There will be greedy individuals who collapse an entire company (Enron) and business leaders who use their corporate clout to enhance their personal cache (Immelt). But the vast majority of corporations and its people comply with the laws. And those laws permit limited participation through direct monetary contribution to political campaigns...just as the law permits it for unions and other interest groups. Most of the issues with campaign contributions come from individual aggregators not corporations who must report all contributions and make them only after approved by their Board, as representative of shareholders. And what it all has in common is that the pot into which it all flows belongs to the politicians who are ruining this country.

 

[DVS]

Walter Starcke: What am I missing?

That is the problem with politics. Its all about image and public perception, but in reality, its all smoke and mirrors. I see Obama being just as dangerous and negligent as Bush just with different ideologies.

Black night, I agree with you but it's these greedy individuals that give the easy scapegoat for "evil corporations." David is right, America is experiencing corporate feudalism. The Founding Fathers created this government in order to avoid this, but our country is becoming less democratic (I know, I know its a Democratic Republic) by having corporations influence political decisions. The answer isn't govt take over of the corporations or bigger government. We need a Constitutional amendment for the separation of corporations and the government, ban all lobbyists and any politicians with conflict of interest.

 

[Miah]

I'm not sure if it's what you were getting at, but I don't believe in taking from those who work hard and take risks, to give to those who don't.

I do believe in taxing the rich to do things like help those who are disabled or truly sick.

I believe in schooling getting way more funding than it does now, to try to promote the underclass to rise above what they were born with. If you are going to give something away, let it be for the betterment of all mankind, make collage free to all those who can't afford it.

I also believe in free birth control for the poor. But I also believe if you have one kid without a father on welfare, you should be fixed until the situation is fixed, or no help at all. I know, I am extreme fringe now.

 

[swatcher]

Walter Starcke: What am I missing?

Blacknight,

We're going in circles here.

You don't seem to be able to understand my point of view and that's fine with me. It just bugs me that you deliberately chose not to address my main issue that GS repaid pennies on the dollar. You honestly believe that we, the people, got our fair share with the GS transaction. Wow, all your business classes were for naught! It's people like you who were/are sitting in boardrooms and don't even understand that you are part of the "game". You pretend to be in it, but not of it ...

FYI: the whole mortgage mess is a direct result of Mr. Greenspan's policies, and his cavalier attitude towards the safety measures that were in place. He is not a politician. Guess who whispers in the ear of the Fed?

All the best, I'm moving on.

 

[swatcher]

Walter Starcke: What am I missing?

dB,

May I ask you a question?

Why do you and most Americans always sound apologetic when socialism is mentioned? I don't get it? Is there really something evil about it that I'm overlooking? I wasn't brought up in the US, so I'm really curious. May I bore you with a wiki quote:

"Socialists mainly share the belief that capitalism unfairly concentrates power and wealth among a small segment of society that controls capital through exploitation, creates an unequal society, does not provide equal opportunities for everyone to maximize their potentialities and does not utilize technology and resources to their maximum potential nor in the interests of the public. Therefore socialists advocate the creation of a society that allows for the widespread application of modern technology to rationalize the economy by eliminating the anarchy in production of capitalism[4], allowing for wealth and power to be distributed more evenly based on the amount of work expended in production ..."

I think the socialists had a time machine and were describing the current state of the US. Right now socialism sounds pretty appealing to me.

 

[Blacknight]

Walter Starcke: What am I missing?

Blacknight,
You don't seem to be able to understand my point of view and that's fine with me. It just bugs me that you deliberately chose not to address my main issue that GS repaid pennies on the dollar. You honestly believe that we, the people, got our fair share with the GS transaction.

FYI: the whole mortgage mess is a direct result of Mr. Greenspan's policies, and his cavalier attitude towards the safety measures that were in place. He is not a politician. Guess who whispers in the ear of the Fed?

All the best, I'm moving on.

First, I fully understand your point of view. It's your facts that are a mystery. Your statement that Goldman repaid "pennies on the dollar", for example. It fully repaid every dime of the TARP funds plus 23% in the form of dividends and repurchased warrants. (Coincidentally I heard Geithner speaking on a Digg Dialogue yesterday and even he is applauding the returns taxpayers are getting from TARP--averaging, he said, 16%, and again acknowledging Goldman's 23%. When you borrow $10B and repay $11.1B within 6 months that's what happens!) By what standard is THAT not good for taxpayers?

Second, the notion that the credit crisis is a consequence of Fed policy is grossly inadequate. Our Fed actually saw the crisis coming and began tightening. The central banks of other countries, unfortunately, maintained a low interest policy well after we tightened, and that low cost money pushed long-term interest rates in the U.S. down even further. Then there was the pressure from our POLITICIANS to lend money even to clearly unqualified borrowers, which triggered the derivatives debacle, and the whole house of cards collapsed when the housing bubble burst.

Sorry about the tangent--again--but I'm struggling to understand "the other side" on this issue. I get that there's this undercurrent of conspiratorial evil--"whispers in the ears of the Fed"-- but surely there's more than just that! At this point, Swatcher, I'd be happy just to understand how Goldman's 123% annualized repayment can fairly be characterized as "pennies on the dollar".

I anxiously await responses to your question about socialism.

 

[swatcher]

Walter Starcke: What am I missing?

OP, I know I'm totally off topic here, but this will be my last post about Goldman Sachs.

Blacknight,

First I want to apologize for sounding a bit harsh. I had a bad night yesterday and it reflected in the post. I applaud you for not responding in the same manner! I also get very emotional about the financial crisis because I have neighbors that may not have a house for much longer.

Just to get "your facts" straight:

"And although Goldman was among ten large financial institutions that the Treasury allowed to pay back their TARP emergency capital infusions, the firm still has benefits from $28 billion in subsidization from the government in form of cheap debt backed by the Federal Deposit Insurance Corporation.

In July 2009, New York Attorney General Andrew Cuomo revealed, as reported by the Wall Street Journal, that after having received its TARP bailout in late 2008, Goldman Sachs paid hundreds of millions of dollars in bonuses to 1556 of its employees. This included 212 employees each receiving $3 million in bonuses, 391 receiving $2 million bonuses, and 953 receiving $1 million in bonuses."

Sounds like you were not aware of this fact. Do you still feel that "we the people" got a fair deal LOL - Don't buy into the corporate spin.

And this is what I mean by "pennies on the $": I'm not just talking about the TARP loan, I'm looking at a bigger picture here. GS was a major contributor to the financial crisis, but then they turn around, ask for our tax money, and manage to make a huge profit off the crisis that they caused. Their current position as the 5th biggest bank in the US would have been unthinkable before the crisis. You honestly think that move was only worth 12B? I'm not even going to write about their actions re Cali bonds, but you can google it.

Also, please don't spin facts as "undercurrent of conspiratorial evil":

"Former Treasury Secretary Hank Paulson was a former CEO of Goldman Sachs. The current chief economic adviser to President Obama, Lawrence Summers, was noted for receiving $5.2 million from hedge fund D.E. Shaw in 2008 and speaking fees (ranging from $45 thousand to $135 thousand per event) from banks including Goldman Sachs, JPMorgan Chase, Citigroup, Lehman Brothers and Merrill Lynch[51] at a time when he was expected to become the most influential financial official in the U.S. Government. Former bank regulator William K. Black, appearing on Bill Moyers Journal on April 3, 2009, accused the financial industry of massive fraud, citing the role Tim Geithner played before being promoted to Treasury Secretary as well as the successful efforts of Alan Greenspan, former Goldman CEO Robert Rubin (Geithner's mentor) and Larry Summers in the late 1990s to block regulation of the financial derivatives market. According to Brooksley Born, former head of the Commodity Futures Trading Commission, Summers, Rubin and Greenspan blocked her efforts to regulate the derivatives market, on the grounds that the financial industry were objecting."

All I'm saying is that big money controls the government. There is no conspiracy, no voodoo magic. It's a cold blooded fact. Some are able to see it, some won't.

Peace out.

 

[DVS]

Walter Starcke: What am I missing?

Blacknight, you are completely correct about the mortgage crisis. It's Fannie Mae and Freddie Mac that enabled the "sub-prime" mortgages to be given to everyone and anyone without proper financial qualifications. It was a free for all. A friend of mine is a mortgage broker and he was getting people that made basically no money, mortgages for $800,000 homes, with no resistance from any banks. Why? Because the law required the banks to approve mortgages for low income people. This guy made a killing, but now all that is done and he is doing Robert Wagner reverse mortgages for people over 65, which is protected by the govt (no other mortgages are). It's not some overpaid rich guy that made this happen, although they did harm tothe system in other ways. It all relates and everyone is responsible, from the borrowers who went over the head, the brokers who made the deals, to the govt who forced it on the banks and the politicians who ignored the warning signs.

Uh-oh, it's going to be capitalism vs. socialism for the 487,000th time. The US will never change to socialism overnight or at all for that matter. I think the process alone would be more destructive than people believe our current system is. Let's say the govt actually takes over health care and puts the health care insurance industry out of business. Well, millions of people who actually work in the health care industry will be jobless. I think the best people could expect is more government socialist programs like medicare becoming more robust.

I might despise the greedy rich people as much as anyone, but taxing the rich more isn't the answer. It's not like have-nots will get some extra cash in their pockets. I think this whole redistribution of wealth idea is a bit overrated. Some wealthy people do give more to charity to help the poor than many socialist countries.

Another point to look at, China had to adapt to a free market economic system and are now one of the fastest growing economies. The U.S. is indebted to China and both countries, while still rivals, are economically interdependent on each other.

Let's face it, there are always pros and cons when it comes to these economic philosophies.

All I'm saying is that big money controls the government.

I totally agree that this is the problem with the U.S. and it must change. They should have nothing to do with each other aside from the normal rules and regulations the corporations must abide by. Ahh, but it's all a big clusterfuck. The next thing will be 'green' policies that will put some industries out of business, make the unemployment rate go higher. Put more more citizens on unemployment and feeding off the govt. Maybe that is the goal of the current admin after all.

 

[swatcher]

Please post your replies here.

Thank you,

swatcher

 

[swatcher]

DVS wrote: "Let's face it, there are always pros and cons when it comes to these economic philosophies."

Yes, I agree. There is no perfect system, because we human beings are flawed. But there are systems that encourage and facilitate greed and there are other socio-economic concepts that are centered around equality. The x-factor is always human greed and power. That brings me to ...

IMHO it all boils down to education and how your parents instilled their values in you. If we all had a truly humanistic education, we wouldn't need all that material junk. I know people who make 1 million dollars profit a day ( I know hard to believe, but true!) and live very modestly. I know some athletes who make a fraction of that, but live in castles. How come? Well, the answer is education and self-worth that is tied to the material world.

 

[Blacknight]

Blacknight,

First I want to apologize for sounding a bit harsh...
Just to get "your facts" straight:

All I'm saying is that big money controls the government. There is no conspiracy, no voodoo magic. It's a cold blooded fact. Some are able to see it, some won't.

Peace out.

No apologies necessary.

First, Goldman's FDIC borrowing was pursuant to a government program designed to stimulate lending. In fact it appears to be working, even if it is government inspired. But Goldman has done absolutely nothing wrong or unethical in participating in the program precisely as the government intended. They did not borrow from the FDIC. The FDIC is merely backing their debt...it is NOT Goldman's debt to the government. There is nothing to repay. If that is your premise for contending that Goldman repaid "pennies on the dollar" of its TARP debt you are woefully mistaken. You are comparing apples and oranges.

As to your repeating the same tired old saw about Goldman's government connections, that is so unfair and inappropriate. Goldman is known for hiring the best and the brightest. The men and women in Goldman's upper echelons are absolutely brilliant financial minds. (By the way, contrary to popular myth, Geithner NEVER worked, directly or indirectly, for Goldman.) They are sought out resources precisely because they are brilliant. Now, having posted an unattributed quote that implies some nefarious scheme, I challenge you to show me one scintilla of a hint of a whiff from a truly responsible person that ANY of the people mentioned is anything but impeccably ethical. Black's contention is exactly the same that I've made--that our financial crisis resulted from creating financial markets from bad loans. The fraud he addresses is the consumers' fraud, what he has called "liars' loans". And he claims regulators were negligent in their obligations. I do not always--or even often--agree with the politics or practices of the people referenced but I have never seen nor heard any reputable person impugn their characters or integrity. To even imply that Summers would sell his soul for a few thousand dollars is preposterous. ( I don't care for him but I would never even consider his speaking fees as anything other than money well spent to access a brilliant mind.) To contend that Goldman's executives and alum are somehow involved in an effort to control our government is grossly unfair and completely unsupportable. God forbid that we start tapping into the ill-informed and the unsuccessful and the mundane thinkers to direct and support our financial markets.

I suspect that your position on this is somehow connected with your apparent embrace of socialism. Am I correct?

 

[Angel of Ioren]

I like living in Canada. We have our own set of problems to be sure, but I'm glad I don't live in the U.S. right now. There's an economic slowdown here as well, but nothing like there is in the US.

 

[DVS]

DVS wrote: "Let's face it, there are always pros and cons when it comes to these economic philosophies."

Yes, I agree. There is no perfect system, because we human beings are flawed. But there are systems that encourage and facilitate greed and there are other socio-economic concepts that are centered around equality. The x-factor is always human greed and power. That brings me to ...

True, and we also have to take into account the application of these concepts in the real world. Instead, a capitalist minded person, would say capitalism facilitates economic freedom and human behavior is not predictable or controlled. So that system might be flawed based on the human aspect.

While the other system touts economic equality, but might actually be economic slavery. Who is to say someone who is capable of making tons of money off of his art can't because the other guy down the street can't write his own name? The wealth should be distributed, the incentive to excel could be reduced in the individual. So in that case the system is flawed, not the human aspect.

IMHO it all boils down to education and how your parents instilled their values in you. If we all had a truly humanistic education, we wouldn't need all that material junk. I know people who make 1 million dollars profit a day ( I know hard to believe, but true!) and live very modestly. I know some athletes who make a fraction of that, but live in castles. How come? Well, the answer is education and self-worth that is tied to the material world.

Definitely, look at Eli Manning. He is the highest paid player in NFL history, but he still drives a Toyota and lives in a modest apartment. Look at philanthropists, they have all the material wealth but still donate so much to charity.

 

[swatcher]

DVS, thanks for your interesting reply.

I don't believe that socialism really equals economic slavery or hinders people at excelling AND being rewarded for outstanding achievement.

Look at Sweden, which is de-facto a socialist welfare state, not a state with collective ownership. It's one of the most prosperous countries in Europe. ABBA (LOL), Ikea, H&M and Ericcson hail from there.