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Forum Post: Stop all the hate

Posted 3 years ago on Oct. 11, 2011, 6:42 p.m. EST by reverandmaynard (5) from Asheville, NC
This content is user submitted and not an official statement

I feel that, as always, the truth and the solution lie somewhere in the middle. There is a lot of name calling and shouting going on between both sides.

On the one hand, you have protests that proclaim to be for equality and anti-greed, railing against perceived corporate greed and the "one percent" that control most of American wealth.

On the other hand, you have non protesters who view this protest as an anti-capitalist (and in some cases, a pro-socialism) movement.

There is a problem in America, but the problem does not lie with the 1% "uber wealthy". The problem lies with our government not properly regulating commerce and trade on many levels.

This whole fiasco began with the crash of the housing market. So many banks that were "too big to fail" were heavily invested in mortgage backed securities that became either heavily de-valued or flat out worthless when the housing market fell. Because of this heavy investment, many banks either took a major hit on their balance sheets. In some cases, banks actually failed because of this.

This string of heavy losses on balance sheets and failure of large banks shook our overall confidence in our financial system and in our credit markets, constricting flow on capital that many small and medium businesses rely on for day to day operations.

This constriction on the flow of business capital is a primary reason why so many businesses had lay-offs and are reluctant to hire even today. It's not helping that Europe is facing a similar crisis with their banking system and, with our modern intertwined global economy, any major failures in Europe would send a shock wave through the global economy.

The catalyst behind all this was the crash in the housing market. You could make the argument that greed caused housing prices to become so overvalued that a crash was imminent. This is true. It's also true that if the banks hadn't been so heavily invested in mortgage backed securities they wouldn't have been so negatively affected by the housing crash.

What you can say for certainty is that if we had proper regulations in place to prevent housing prices from becoming so over-inflated in the first place (a price ceiling), or if we had regulations in place to prevent banks from investing in obscure and abstract securities (such as those tied to the valuation of home mortgages) then none of this would have happened.

As they say, hindsight is 20/20. The moral of the story? Our system, while flawed, is still the best system in the world. One of the beautiful things about our system, though, is that it can be changed. A few regulations here and there will keep this problem from surfacing in the future.

15 Comments

15 Comments


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[-] 1 points by THETRUTH (10) 3 years ago

Is it hate or simply the banality of evil which allows a corporate leader to lay off thousands of people while making millions in bonus and perks? Indeed, if leaders were motivated by ethics rather than monetary gain and the fetishism of the all-mighty dollar, then decisions that affect human lives would be significantly more pro-life. You have to pay someone millions, or at least find someone willing to respond to such profit motives, just so you can get them to damage as many lives as are needed to provide a return too shareholders,

[-] 1 points by reverandmaynard (5) from Asheville, NC 3 years ago

A lot of nihilistic sentiment in that, but I get where you're coming from. It's easy to feel nihilistic in this environment, I get that way sometimes myself.

If a CEO decides to lay off thousands of workers, was it to improve profitability or save the company from going under? If it was to keep a company from going under, then laying off thousands probably saved the jobs of tens of thousands (or hundreds of thousands). There's an old saying that you sometimes have to cut off a finger to save the whole hand.

Those that are laid off mustn't feel disheartened though. Ours is a society where they have opportunity to go back to a technical school or community college to learn new skills to re-enter the workforce.

My own father was laid off in 2003 at the age of 53 from a job he held for 15 years. He worked in the payroll office of a local paper mill that was bought out, then purposefully driven under by a corporate raider. He went to our local technical school and got a degree in networking. After about one year of job searching, he found a job at the local hospital maintaining their network and phone systems, and has been there since.

These times are trying, but laid off employees are presented an opportunity to refine their skill set to re-enter the job force. Beating yourself up and believing humanity as a whole is doomed to oblivion are the least productive steps you can take.

[-] 1 points by April (3196) 3 years ago

Our political system is flawed. It is not the best system in the world.
1% buys their representation in government, 99% are left with the scraps. Money speaks too loudly in our political system and this is what must be changed. We need to fight for 100% publicly financed elections so that all of our voices are heard equally and fairly in government.

[-] 1 points by thejunkie (50) 3 years ago

They want to continue using the drug but without the consequences or destructive symptoms. Junkies protesting for cheaper drugs and blaming the dealer for their suffering.

[-] 1 points by NintyNiner (93) 3 years ago

Politicians need better rules to follow to prevent lobbying! We tax payers should also fund important elections, so the best person wins and not the one with the most money!!! The movement needs at least these 2 demands!!! Politicians need to be fair and keep it balanced for all and not start class warfare! They all need fired so we can start over but next time they work for everyone and not favor one group over another. Write it down and pass the word!!!

This is what I want first then I want the Politicians to fix it! Plane and simple!

[-] 1 points by reverandmaynard (5) from Asheville, NC 3 years ago

You raise a very good point. A huge problem is lobbying, which allows politicians to be bought like a commodity. If lobbying were made illegal, or at least had limitations imposed on it, America would be much better off

[-] 1 points by ExitWallStreet (4) 3 years ago

You make too much sense.

Most of these kids lack the perspective to understand what you wrote. They're little babies who want to blame an easy target, no matter how irrelevant that target is.

People, it's the system that collapsed, and a weak banking system is a symptom of a larger problem.

I suppose my words will get lost in the anger and frustration just like OP's post will.

[-] 1 points by reverandmaynard (5) from Asheville, NC 3 years ago

Thank you :)

Really both sides in this debate aren't right OR wrong. They seem to be skating around the key issue which is an improperly regulated system which started a domino effect, resulting in our current state. Economics really does follow a sort of "butterfly effect"

[-] 1 points by Chromer (124) 3 years ago

Our government, or should I say your government, is bought and paid for. Both sides

[-] 1 points by WhyIsTheCouchAlwaysWet (316) from Lexington, KY 3 years ago

Corporate influence and private money have no place in the public sector. This is the root of the problem and the first thing we need to address.

[-] 1 points by kateoftheredcrossing (4) 3 years ago

I am so glad you're saying this. Someone has to. It's not just the housing market that needs regulation anymore, though - corporations really are not doing as they should, and the government isn't adequately taking care of the people (though not for want of trying - because higher taxes are opposed, health care is also opposed and education is put in jeopardy, among other things). It's a multifaceted problem. But I certainly agree that we're not going to get anywhere if we keep arguing about things. It would also be really nice to know some hard and cold facts, maybe even containing numbers, so that we can start somewhere realistic.

Thanks!

Kate

[-] 1 points by reverandmaynard (5) from Asheville, NC 3 years ago

Thank you :)

And you raise a good point that a lot of things need regulation. I am a capitalist, but one who believes we require a moderate amount of regulations to operate properly.

Regulating everything you mentioned will be a slow and steady process, but is certainly do-able.

[-] 1 points by kateoftheredcrossing (4) 3 years ago

Yes, it will, but that's okay. As long as it happens. I see the government as the best non-profit a nation has, and combining that with the knowledge that in an economic sphere, equity and efficiency work inversely proportional to one another, it is important that a non-profit is regulating that economy in an attempt to maximize both of these things. This is quite difficult; I mean, in microec class, it's just derivatives and algebra, but in the real world it's trial and error, and seeing how much a company can get away with before the unions strike. I wish I could say that I'd like to err on the side of equity when it comes to this, but I know that that wouldn't work. It would be really nice to find a way to balance those opposing forces, and make the market work maximally well with minimal ill effect.

[-] 1 points by reverandmaynard (5) from Asheville, NC 3 years ago

Very very true. In real world practice, managing economic policy is like playing Jenga. You have no idea how changing one piece will affect all the other pieces.

Economic policy needs to be balanced so that it fosters investment and entrepreneurship, but at the same time it must restrict price explosions in certain markets (ie: housing, agricultural commodities like corn, and oil). It's a very delicate balancing act, but one I believe we can eventually perfect.