Forum Post: Ill-Informed Occupiers
Posted 11 years ago on Sept. 20, 2011, 10:58 a.m. EST by PragmaticEconomist
from New York, NY
This content is user submitted and not an official statement
Firstly, I’d like to state that I think it’s both admirable and commendable that young people are getting involved and trying to change the world for the better. I have some firsthand experience of this from a different place during a different time. Certainly, there are many things that can improve within our current global network of economic systems. And, like all industries, the banking industry, which is in many ways at the core of the economic system, is not immune to negligence or corruption.
Having said all of that, protesting aimlessly and haphazardly does not often yield results. I think this movement is overwhelmingly undereducated about the nuts and bolts of the banking system, its role in the broader economy, its regulatory oversight and fundamental economic principles in general.
There is certainly a discussion to be had about how we can make banking and the general economy better for all. I’m just not sure that camping across the street from the symbol of world finance while holding a sign that spouts rudimentary propaganda against banking and corporations is the way to do it. It certainly seems ironic when that same person utilized many of the same corporations for their products in their everyday life (Adidas, iPhone, iMac, FB, Twitter, Google, etc.). Coincidentally, all of these corporations were able to make their products available to the general public only after the so-called Banksters reallocated surplus capital to these companies in the form of investments. I wonder if the cost of the enlarged police force to keep everyone safe is worth the price of admission – especially should resources be stretched while there are real emergencies in the city.
Oh, for God's sake. Has the OP heard the term "Concern troll"? The OP needs a reality check. He complains that a demonstration demonstrating general discontent (to put it mildly) with an obviously corrupt and unaccountable establishment is somehow missing the point because it ought to be doing what's really effective, and that's arguing minutiae of banking policy with -- well, that's not immediately clear, and blah blah blah.
This is concern-trolling. And it should be ignored.
Thank you for so quickly characterizing me in one of your little buckets. I'm a little disappointed that such a self proclaimed movement of peace, led by representatives from the 99% of the population, would be so quick to stereotype. But I guess in your mind, if I don't agree with you, I must be ignored. I can recall many past dictators that had similar sentiment.
If you care, please tell me what establishment you are actually referring to and what in particular was so obviously corrupt and unaccountable? Do you really even understand what you're talking about, what financial firms such as investment banks do? Broad-based accusations, which imply you're looking for a scapegoat for your own shortfalls, will get you nowhere.
Otherwise, you're just wasting your own time while giving the rest of us a decent laugh.
You mad, bro.
You know what, I should take my own advice.
Thanks for the intelligent discussion.
Hello PragmaticEconomist, greetings from Spain. Just wanted to remind you that this revolution is already a global claim to change things. I am a PhD in Life Sciences, not time in my life to acquire enough knowledge about finances. Nevertheless, the demands of the occupiers in Wall Street are aligned with the demands of the Economic Comission of the #SpanishRevolution, some members of this C are University Professors in finance. Moreover, this development programme that is being created at Liberty Plaza is also aligned with the principles and values of TRIODOS BANK. Therefore, with my little knowledge as a Scientist (coauthor of a patent of invention), as a Social Innovator Certified by the World Bank Institute (yes, I am aware that university and the WB are instruments of capitalism) and HSEQ Manager and a human being I back up US occupiers and their economic, social and legal demands.
The ultimate rebuttal to all this garbage about occupiers being "ill-informed":
"One thing many of the protesters do know is their facts and figures. For every hippy talking about world peace or traveller wanting to heal the world, another will mention the exact tax rates that rich Americans pay, or that 20% of the US population now control 84% of the wealth. Or that the richest 400 families have the same net worth as the bottom 50% of the entire nation."
The only "broad-based accusations" I see here are the ones from people like PragmaticEconomist.
Did you ask yourself why that is? Or what the ramifications are. I'm originally from a country where wealth was completely equally distributed between all the people (with the exception of political party leaders, of course). We had free education, housing and healthcare. And it was unbearable. People were demotivated and demoralized. The economy stagnated, black markets popped up to avoid government regulation, bread lines and eventually everything collapsed.
Perhaps you're confusing correlation with causation.
Not to mention, did you consider how those statistics are calculated? One shouldn't assume that numbers are accurate just because they seem to coincide with your point, or way of thinking.
A concern troll is someone who is eager to criticize, but never has any constructive suggestion. It's someone who argues people into inaction. It's unpleasant
You could head to the occupation and interview the people there. Then you would realize how well informed they are indeed. Or you could setup a teach-in and educating them further. Or you could post informative links on this forums.
Matt Taibbi is an award-winning investigative journalist who writes for Rolling Stones magazine. He wrote some of the best summaries of unprosecuted criminal behavior in Wall Street.
Why Isn't Wall Street in Jail? Financial crooks brought down the world's economy — but the feds are doing more to protect them than to prosecute them
Is the SEC Covering Up Wall Street Crimes? A whistle blower says the agency has illegally destroyed thousands of documents, letting financial crooks off the hook.
Wall Street's War Congress looked serious about finance reform – until America's biggest banks unleashed an army of 2,000 paid lobbyists
Another good read, with a more systemic view, is the article by IMF's Simon Johnson in The Atlantic:
If by trying to help shape your discussion and educate you guys on how things work in Financial Services and economics in general, then yes, I guess I am a concern troll. As I said in my original post, there are certainly things that can and should be improved. But a lot of people in your movement seem to have contradictory agendas. For example, it seems as though people want jobs - and better jobs at that - to make a decent living for themselves. In order for this to happen, the economy must obviously get better. At the same time, many members of your group are striving for higher corporate taxes, which by the way, the US has the highest corporate tax rate in the developed world. How do you think corporations, big like Walmart and small like your neighborhood coffee shop will pay for these?
Sometimes it's smarter to get educated and get to the root of the problem rather than throwing around accusations.
With regards to your posted articles, I'm happy to see you have an interest on reading up on finance. But perhaps Rolling Stone magazine isn't the best tool to gain a fundamental understanding of my industry. To put it bluntly, regarding why Wall Street's not in jail, because it's not illegal to make mistakes. Just as it's not illegal for one to max out their credit cards and not pay the principal back, or for one's small mom and pop business to make bad decisions and end up bankrupt, it's not illegal for bankers to make mistakes. Were there any illegal activities going on on WS? Sure. There are people doing illegal and unethical things everywhere and in every profession. But that is not the aim of banking. As in any business, you try to provide value to your customers because if you don't, you will not survive.
Finance can be complicated. The author doesn't even strive to explain how CDO's and swaps work, or how they benefited the general populace. But he's quick to place blame when things go wrong. Yes, WS didn't recognize many of the risks of what they were doing. But everyone that flipped houses, took out a second mortgage, borrowed to buy that motorcycle or even financed a house they couldn't afford is to share the blame.
With regards to financial reform, please note that Finance is already the most regulated industry in the US. Dodd Frank and all of the other regulations being applied are already strangling the bank's ability to function. And, unfortunately, when banks struggle to survive, they make less loans to people and businesses, which has long term ramifications to everyone.
Just to be fair, here's some articles to match yours:
Right, that's good. If you can focus on providing information and supporting your argument with reliable sources of information, it will be an appreciated contribution.
I would invite you to be patient and compassionate for people who disagree with you. You have jumped to many conclusions about the people here without taking time to become acquainted with their position. It's unpleasant.
Remember that your position is as strange and foreign to people here as ours is to you.
Sorry HPolloi opened with the 'concerned troll' accusation. That wasn't very nice, and not very useful.
It's quite hard to communication across the ideological lines in this country. It commendable that you are trying to reach out and have a dialogue.
I don't think that's true at all. Can you provide a citation, otherwise it's a bit unconvincing.
Around here 'highest corporate tax rate' comes across as a popular GOP talking point, one which is not true and it is transparently self-serving.
I will cite Congress of the united states congressional budget office
You will have to argue for you position if you want to be convincing, rather than automatically dismissing a source that disagree with you, simply because you disagree with them. In particular...
Matt Taibbi has done a lot of excellent reporting to inform people on the nature of cdo and swaps.. So this accusation of yours appears a bit uninformed, which is unfortunate, since that was your original charge against this group. If you stay close to your domain of expertise, you will be more convincing.
That's not the argument made in Taibbi's article. Please go a read it so we can have a discussion.
Again, that wasn't the argument made on Johnson's article. Please read it, in particular the section where he argues against the ills of 3 decades of financial deregulation. Then come back here and I'll be happy to have a conversation.
The accusation is that criminal behavior on Wall St, and their effort to corrupt the government, is the primary bearer of blame for the 2008 crash, which has landed untold amount of suffering on the people of the USA, and the bailout which is outright bankrupting the nation. No other center of criminality in the country comes anywhere close to generating this amount of pain. It many order of magnitudes larger.
Again, please read the article attentively. Your counter-arguments are missing their mark.
At 39%, the US certainly has one of the highest corporate tax rates in the developed world.
What you posted is corporate income taxed relative to GDP. That is not very insightful to our discussion as GDP is made up of much more than transactions by corporations.
With regards to reading Rolling Stone, it's not exactly an established and credible source of news on the financial services industry. For instance within the first page:
"This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world's wealth ...Not a single executive who ran the companies that cooked up and cashed in on the phony financial boom — an industrywide scam that involved the mass sale of mismarked, fraudulent mortgage-backed securities — has ever been convicted..."You put Lloyd Blankfein in pound-me-in-the-ass prison for one six-month term"
This is not what one would call a scientific analysis or even objectivity written piece. I don't think it should take a finance expert here to figure out that he's selling the reader a good story rather than uncovering anything meaningful.
He goes on to talk about scandals that fit his agenda. He mentions Enron and Worldcom but doesn't mention that both company's executives were sentenced to jail. He also talks about a Hedge Fund who was purchasing shares of Heller and the Lucent deal with MS. He makes it sound like corrupt transactions but doesn't actually give the reader the details of the transaction or the context in which it happened. Just because the author spins it to make it sound illegal doesn't mean it is. For instance, he states that Samberg started buying shares of Heller Financial. Well, normal practice is to brake up the quantity you wish to acquire into multiple blocks of trades in order to not affect market prices. Additionally, on slow days in the market, prices are cheaper and a better deal rather than being part of some illegal scheme.
Without a doubt, illegal things happen on WS just as they do in every industry. But really, most of the issues are very subtle, as in certain accounting policies that are completely legal but give a false impression of a company's financial standing. There was no industry wide conspiracy in the recent crisis. Look at the price of stock for WS's biggest players and the layoffs that pursued. Is that supposed to be some kind of benefit?
One thing I would acknowledge is the incentive structure where more weight is given to short term rather than long term gains. But this has already been largely addressed with long term claw back features of pay to high bonus earners.
And, just because certain policies and practices from WS sound peculiar to non-industry people, doesn't necessarily make them out to be villainous.
Anyways, I don't have time to read anything. But if you want me to read one specific example, I can give my thoughts on that.
Once again, thank you for pursuing this conversation. I celebrate your effort to reach across the left-right ideological divide.
I find the tax/GDP to be a more reliable metric than the raw rate. The American corporate tax code is dominated by exceptions, subventions, and loopholes. The raw rate doesn't matter when everyone finds ways to squirt it.
Here too, you are arguing style-over-substance, and with the 'fit his agenda' line, you are essentially disagreeing with an argument because you disagree. It's circular, it's not convincing, and it's not useful.
Right, that's where you come in. If you have those details, we'll be grateful for the contribution. Argue the substance, provide information.
Your counter-argument misses the point Taibbi makes. He writes:
Aguirre found himself focusing on one suspect as the likely source who had tipped Samberg off: John Mack, a close friend of Samberg's who had just stepped down as president of Morgan Stanley. ... The deal looked like a classic case of insider trading. But in the summer of 2005, when Aguirre told his boss he planned to interview Mack, things started getting weird. His boss told him the case wasn't likely to fly, explaining that Mack had powerful political connections.
The charge are of insider trading and of corruption. The volume of trade itself isn't illegal, it's just the tip off for the investigation.
As a general rule, you should avoid making counter-argument for anything except the center-piece of the argument you are making a stand against. It's too easy (and too slow) to nibble around the edge. Go for the center. You are at DH4 on Paul Graham's scale of argument quality. You want to be at DH6.
The charge is that the CEO of the bank made themselves grossly rich, at the expense of the tax-paying public, the economy, and at the expense of their own stockholders, many who were openly revolting against the officers before the crash.
The most problematic incentive is towards a corporate take over of the government, the phenomena is called regulatory capture. Once deeply entrenched, regulatory capture is gangrene on the democratic nature of a society, since it voids the power of people's votes. Once people's votes are muted, normal routes for peaceful social change are closed. It's very dangerous.
That's the first half of the problem.
The other problem is also an absence of incentive to take care of the common good. If all the bankers follow their local incentive (both long-term and short-term, it doesn't matter), they can take down the entire economy, and end up with a vastly worse result for everyone. Are you familiar with local minimums in Nash Equilibriums? It's much easier to understand the rationale for bank regulation with an understanding Nash Equilibriums.
But the proof is in the pudding. Canada never went through the deep financial deregulation the USA did, and as I result it survived the crash unscathed.
That's why Simon Johnson's prescription has two panels. One panel to get rid of corruption, and one panel to re-establish protections against the nasty nash equilibrium that exists at macro-economics scales.
Gmarceau be nice:) We are trying to come together and this means we will have a lot of opinions, advice and disagreement for a little while... it is enough for now if we all agree there is something wrong. Now we need to try to be more welcoming and friendly so we can all start getting on the same page, lol and that will not be easy Our list of grievances is almost a book now due to: 1) We the people being ignored for the past 4 decades 2) Lack of past participation (our own fault) from we the people (WHICH WE ARE CHANGING NOW ... Together)
And yes the point you make G> It seems to be a common assumption that those FOR the Occupation are somewhat "less Informed" ... au contraire Mon Ami > Some of these people are very smart:) Smart enough to know that it will take time to reach consensus on anything with so large a group.... but we will<3 POWER TO THE PEOPLE
There is a big difference between being informed on a particularly complex subject and being smart. I never said that anyone was not smart.
Just as one probably wouldn't criticize an engineer that''s building a bridge, I would find it hard to criticize MBA's and PHD's that have vast amount of financial experience on everything they do.
HELLO? PRAGMATIC Since you posted you may have interest< AND YOU SAY YOU HAVE EXPERIENCE< now go a step further< get curious and really investigate the world you think you know> AND THE GO HELP THESE "kids" as you class them organize:) What is Occupy Wall Street? Occupy Wall St. has been called a "pointless sleepover" by some, a "Non Event" by others. Many are impatiently waiting for "something" to "happen"> disappointed, and easily distracted because they "see" no excitement and feel no clear "purp...ose" to relate to. We The People need to stand firm and be patient, and continue working together to promote awareness and encourage others to "get on board". Become a Board Member for a Better America. PEOPLE HAVE QUESTIONS AND WANT TO KNOW,
Many people are saying that they are not hearing much on the news and don't understand what Occupy Wall St. stands for, they would like clarification:
"What am I getting on "board" for?"
"Every good protest has a specific cause and clear set of demands outlining what is required to end the protest, what are the demands of the Occupy Wall St. movement?"
THIS GENERAL STATEMENT MAY HELP EXPLAIN THAT FOR THOSE INTERESTED BUT UNSURE
"Organizing immense masses of individuals does take time. We are divided not only by physical miles, but by cultural and historical, ethical and ethnic space as well. We have many differences of opinion, but we do agree there is "something wrong", and fueled by a sense of compassion and frustration we are coming together, and for the moment that is enough."
Continued unity with open and intelligent discussion and information sharing will determine the most pressing Needs and Concerns of The People. It will be the NEEDS of the people that will determine the demands; until this very complex process is completed specific "demands" will not be presented.
We're informed enough to know when we're getting screwed by previous generations of 'pragmatic economists'.
We're informed enough to know who our enemies are.
See you in the streets, homeboy.
You're not informed enough, which is the problem. If you were, you'd have specific examples of issues and a specific agenda to remedy them.
If you were, you wouldn't be camping outside Broadway.
You want "issues"? Go here: http://wearethe99percent.tumblr.com/
Our "issues" are a political establishment that is bought and paid for by corporations, insurance companies, and other private special interests; that erodes protective legislation like Glass-Steagall and then turns around and gives $16 trillion in bail out money to the same banks without any strings attached. Not to mention another addition $1 trillion + spent on over 10 years of war and foreign occupations. Meanwhile at home there's no money to pay for education or healthcare, instead citizens are expected to go into DEBT to provide both the necessities of life and the basic provisions of a civilized society. The result is a country where 50 million Americans live in poverty, 50 million have no health insurance, record numbers are on food stamps, unemployment is at over 9% (closer to 20% if you look at the data without the filters from the BLS), etc. Name any metric you want, this society is in decline and it's young people, students, and the working class that are bearing the brunt of it while wealthy firms continue to rake in record profits. When GE pays less tax than a single mother struggling to get by, there is something seriously wrong.
"The problem", in short, is the entire social contract, which has been torn to shreds. The "problem" is the entire edifice of the political and economic system, which have become completely intertwined to the detriment of everyone in this country but the richest Americans.
There is no point in pushing an "agenda" when no political institution represents us and will not represent us because they are bought and paid for.
Therefore, we take to the streets.
Many of us are informed> Many of us are among the too few numbers who have represented, written letters, attended protests> to no avail because not enough people come to draw attention < this has gone on for the past 4 decades> You speak of knowledge? We HAVE knowledge< Have you protested any of these Bills you cite? Some of us have, and many others. Knowledge is to be shared, not argued over who has the most or the best< we need all the info> and We need to respect each other and resist digs etc...
No I didn't actively protest these bills. I protest through my voting rights.
But now I get the challenge of attempting to implement them and minimize their affect to continuing operations.
Oh boy thank you have a lot to say
According to the demands you listed, sounds to me like you guys should be camping outside Congress.
OCCUPY WALL ST IS THE SAME AS IN FRONT OF CONGRESS PRAGMATIC< :) LOL
How so? WS doesn't make the rules, congress does. WS has to play by them as does everyone else.
And please avoid trying to explain to me how WS owns congress. Is that why the financial industry is the most regulated industry in the US. Not to mention the new regulations (Dodd-Frank, FATCA, FRB BHC regulation, Form PF) which are currently being implemented and causing small local banks to close while the big firms, which benefit from economies of scale, are forced to lay off people and close product lines? At the end of the day, the costs of all of this will be passed on to the average citizen who will face less quality products, higher rates and a slower economy as small firms find it increasingly difficult to borrow money for investments in growth.
Hi Pragmatic:) All I am saying is right now it is about occupy anywhere> WALL St, Columbus, France, Canada< your town, my town, and refuse to move until we are listened to<
It Is the White House We are asking to listen< not the banksters< not the corporations, They (corporations) do not have to and have no legal obligation to listen to us but our Government does< BUT HAS NOT SO FAR
WE cannot change how these corps rape and pillage until we get our Congress to get off their butts and pass laws w/out loopholes>
right now all these over regulations they have passed are doing exactly as you say< we all agree > hurting small business (us), because the BIG RATS know how to use all of the loopholes in the tangled mess of regulations to do what they want<
and they often get govt funding from taxpayer dollars to do it to boot<
Like I said you are right about the problems that exists, problem is it is our Reps in WH that passed the laws that let it happen< and it will take a massive, united peaceful protest to get it through their thick spoiled blue blooded silver spooned heads that WE WILL BE HEARD> you'll see< disorganized right now, but building quickly< as it does we will need intelligent people like yourself that can use these Bill numbers and names effectively as we formulate demands.
Also< as with any protest that does demand something< One can only effectively make but so many request< SO we need to really get focused on our "demands"< because there is a whole lotta change that needs to be done> Corporate legislation and accountability and responsibility and corruption all need to be addressed > This may be best tackled by insisting on big change at the LOBBYIST LEVEL> A long time ago a lobbyist was someone who represented the thoughts of the population to our govt., but as we know LOBBYISTS are at the root of most of our corporate crookedness< Also IF WE WANT CONGRESS TO ACT RIGHT>>> NONE of them should be able to own stocks, or sit as as CEO's @ these corporations, they are supposed to be there to serve us, not fill their pockets with stock profits because they know in advance what bills they will pass or what drugs or GM food they will approve next.
Don't worry Pragmatic< right now yes we are in NY on WALL St.... but soon we will be on the steps of the White House< I hope to see you there my friend< keep spreading the info< while I know and agree with the problems you point out, there are many who do not know just how crooked and corrupt things have gotten>
Most are unaware that key infrastructures in America> Bridges, tolls, ports, have been sold/leased to other countries> which took profits from the the states and towns they were in, and many of these key infrastructures have not been maintained for years, yet tolls keep rising> $12.00 to cross a bridge nowadays? and not even going into a USA pocket? Shameful shameful actions of the past decades ... and ALL will be revealed eventually> Patience
Goal: Get Out! (Remove the IFM & Repeal the Federal Reserve Act(1913) & Remove involvement with the United Nations Charter). Organization: Everyone participating should sign a digital petition clearly laying out our goals and ambitions.
Power engineers! Financiers irresponsible idiots!
I said right from the start that this should be about getting Wall Street's money out of our political system. Everything wrong with our economy, trade, taxes, banking, regulation (or lack thereof).... EVERYTHING stems from this.
Getting the Wall Street influence (campaign donations via superpacs, lobbyists, etc) will win the first half of the war to restore true democracy. It will begin a domino effect of toppling bad policy choices amassed over 30+ years.
The road to true democracy starts there. Not with things that came later. Not housing issues. Not student loan issues. Not the Fed. Not even the jobs crisis. Resolving a series of issues, REQUIRES resolving the primary driver that led to them.
Wall Street influence in Washington. If you fail to recognize that, you may as well pack up and go home right now.
Yes Allen> This may be best tackled by insisting on big change at the LOBBYIST LEVEL> A long time ago a lobbyist was someone who represented the thoughts of the population to our govt., but as we know LOBBYISTS are at the root of most of our corporate crookedness< Also IF WE WANT CONGRESS TO ACT RIGHT>>> NONE of them should be able to own stocks, or sit as as CEO's @ these corporations, they are supposed to be there to serve us, not fill their pockets with stock profits because they know in advance what bills they will pass or what drugs or GM food they will approve next. BUT ALSO REMEMBER those other things> housing, student loans jobs, poverty, because they have been allowed to be "bad" for so long, these pple need some immediate measures passed ASAP as well< We DO recognize WALL St. Influence< hopefully ALL will soon< THAT is why Occupy Wall St. was the best place to start:) Stick with the movement it will get more organized with time:) WE CAN DO THIS!
Its no different than insider trading.
The key to forcing broad change, lies within the common root of every bit of bad policy. Contrary to PragmaticEconomist's assertion that government needs to get out of the way (or take some comparatively smaller role in business), government DOES have a role. And that role is big. However, it needs to be more focused. Policy decisions need to follow three basic tenets:
1) The health and well-being of the public interest without preference 2) The enforcement of that well-being in every regard 3) The just and responsible management of the people's economy
Those three basic principles should guide EVERY policy decision. Whether its common law, trade, banking, or taxation.
I never said the government shouldn't have a role. But I think it should be a concise, "Pragmatic" and a fair one. Currently, regulations are layers upon layers of tax incentives, tax brackets, subsidies, exemptions, fees, etc. The current system is a mess - and it creates loopholes for some while others face higher burdens. Small companies face huge barriers of entry to compete against large ones because they don't have the scale to higher a team of experts. It is a big cost for anyone doing business. The only ones who benefit are accountants and lawyers, the latter of which is the background of the majority of our politicians.
My general solution is to simplify and streamline regulations. You want jobs? Better jobs and a higher standard of living? Let entrepreneurs and small businesses prosper by decreasing their costs of administration.
These small business owners disagree with your regulations argument:
Big fan of getting Wall Street money out. Unions contribute at least as much money as much to politicans as corporations. Have you thought about bannign their contributions as well? There's a good princeton study from 2005 titled "Economic Inequality and Political Representation" whihc shows that the money from both sides causes both parties to ignore all but the wealthy.
I support publicly funded elections, no contributions from corporations, unions, etc. Let each candidate be given an equal amount of funding from a public campaign chest AND be guaranteed equal time and space to present their platform.
ALL donations from ANY organised entity (pac, superpac, union, etc.), should be either disallowed entirely, or heavily restricted in total contribution. Starting with the reversal of the Citizens United decision.
All campaign contributions should be individual and public, and ONLY an individual being should fall under the term of "person".
Union workers are fully capable of supporting the candidate they support at the individual level. They don't need a "representative agent" to decide for them.
What does that even mean? Do you advocate making corporate political contributions illegal? Or creating laws against corporate lobbying? How would one even find a practical way of implementing this?
Sure, getting “Wall Street Money out of Politics” is a sincere idea. Conversely, getting “Politics out of Economics and Business” is also a good idea. But, though closely related, it’s only a side note to this discussion.
You seem to use a lot of blanket statements. I’m not sure what your intent is with mentioning “housing issues” and “student loan issues” but I’ll assume, to put it elementary, that you generally think mortgage loans and student loans are bad. Well, neither is required to buy a house or attend school, respectively. These were created to address the rising costs of both; the rising costs, which are outside the scope of Wall Street. Thanks to WS, many responsible people were able to afford these things. In fact, the majority of “bankers” themselves have mortgages on their homes and student loans to pay. But perhaps you feel that the government should provide the seed money for people wanting to take their small shop to the next level. After all, the government are experts in everything. Such as with Solyndra.
With regards to the FRB, I’m in no way a strong proponent of the institution. On the other hand, I fail to conceive of anything that we can replace it with. Furthermore, if one would look at economic history prior to the establishment of the FRB, they would see that the picture wasn’t so rosy. In fact, there were many more variations in growth, otherwise known as recessions and depressions.
With regards to your lack of regulation, I would counter that the WS is the most regulated industry in the US. In fact, because the Financial Services industry is so regulated – with poorly written regulation, I might add – there are often spillover effects that create asset bubbles.
I’m not sure why you recommend I leave. I live in the city and also work in Financial Services.
"In fact, because the Financial Services industry is so regulated – with poorly written regulation" - this is exactly the point, just for a test argument going forward - how should this regulation be written, where it could be simplified and still be broad enough to insure no fraud? I think we are on to something here!
Irony overload. Unfortunately, that irony negates the merit of the rest of your comment.
The Solyndra mention was a cheap shot at Obama. But Solyndra is no "scandal" as I'm sure you think it is. It was one example of about 40+. When the other 39+ follow Solyndra's fate, maybe then you'll have a point.
Ok, thanks for commenting on one sentence.
Did you consider asking yourself why the government is using our money to choose winners and losers in the first place? We have Venture Capitalist firms for that. Government should't be taking risks with our money by betting on individual companies.
I ignored the rest of your comment, because you resorted to a cheap shot, which just happens to be the same exact cheap shot that many of our do-nothing members of congress seem to have latched onto, indicating a pretty obvious bias.
Again, Solyndra was a single example of 40+ companies. As for your question, Yes, I have thought about it. And in this particular instance (green energy products and research), I DO think our government should be taking whatever necessary steps it can to assist businesses seeking to further our nation's energy independence.
Now you ask yourself this question:
Why does Europe have vehicles running around the country getting upwards of 60 MPG, while we seem to be stuck in the low 40's?
The answer is, because multinational oil and gas corporations squash whatever energy alternatives they can, because they are counter-productive to their shareholders bottom lines.
So yes. Given the environment they're trying to grow in, when our government can be a partner to a company whose success has the high potential of benefiting the nation as a whole, they SHOULD. And if one or two of those MANY investments fall to the wayside, I can live with that. Because more times than not, the investment was at least beneficial enough to keep the company's employees on the job a while longer.
As someone allegedly in the "financial services industry", you sure don't research the subjects you exemplify very thoroughly. Because apparently, you don't know that along with the $535million of gov't backing, there was also over $1billion of private investor capital involved.
Europe has cars with better fuel economy because they didn't regulate diesel out of the market like the government did here. They subsidize diesel. Not to mention that Europe has a completely different car culture than the US. Nevertheless, their petrol and gas prices are both roughly 3 times the cost of ours.
Sorry, the government should not be playing Mr. Venture Capital with tax payer money.
With regards to private investment in Solyndra alongside the Fed govt, so what? What difference does that make? Private individuals with surplus capital choose to make investments though PE, VC and Hedge Fund firms everyday - that's the beauty of having economic freedom. They are aware of the associated risks and the correlation between risk and expected reward. They have a portfolio of assets with hedging strategies to minimize losses as they face repercussions should their investments turn out badly. The government does not. They have free money from tax payers - who have no choice on the matter - being redistributed by politicians - often because of political motives and without relative expertise - without much fear of retribution should things go wrong.
Furthermore, as someone that is allegedly in Finance - though admittedly not in VC - I know that when the Federal Government steps in to grant loans to companies, additional investment from private companies is stifled. This is because there is a hierarchy in repayment schedules to creditors should a debtor company restructure their debts or default. When the government invests, it automatically moves to the front of the line in repayment knocking everyone else down a notch and increasing the risk of payback. In the end, private firms view loans to that company as riskier and require either higher rates or better terms, which in the end often dries up the company's possibility of gaining additional capital for investment.
In the end, the government should focus on its originally intended fundamental tasks. I think you would be hard-pressed to find many people agreeing that they even do this right.