Amartya Sen writes in the NYRB about where capitalism has to go after this crisis:
Quote2008 was a year of crises. First, we had a food crisis, particularly threatening to poor consumers, especially in Africa. Along with that came a record increase in oil prices, threatening all oil-importing countries. Finally, rather suddenly in the fall, came the global economic downturn, and it is now gathering speed at a frightening rate. The year 2009 seems likely to offer a sharp intensification of the downturn, and many economists are anticipating a full-scale depression, perhaps even one as large as in the 1930s. While substantial fortunes have suffered steep declines, the people most affected are those who were already worst off.
The question that arises most forcefully now concerns the nature of capitalism and whether it needs to be changed. Some defenders of unfettered capitalism who resist change are convinced that capitalism is being blamed too much for short-term economic problems—problems they variously attribute to bad governance (for example by the Bush administration) and the bad behavior of some individuals (or what John McCain described during the presidential campaign as "the greed of Wall Street"). Others do, however, see truly serious defects in the existing economic arrangements and want to reform them, looking for an alternative approach that is increasingly being called "new capitalism."
The idea of old and new capitalism played an energizing part at a symposium called "New World, New Capitalism" held in Paris in January and hosted by the French president Nicolas Sarkozy and the former British prime minister Tony Blair, both of whom made eloquent presentations on the need for change. So did German Chancellor Angela Merkel, who talked about the old German idea of a "social market"—one restrained by a mixture of consensus-building policies—as a possible blueprint for new capitalism (though Germany has not done much better in the recent crisis than other market economies).
It's free to view so I won't paste the full thing. You can get it here:
http://www.nybooks.com/articles/22490
There was no food crisis.
QuoteThe question that arises most forcefully now concerns the nature of capitalism and whether it needs to be changed
Oh fuck not again.
Quote from: Valmy on March 11, 2009, 05:16:35 PM
QuoteThe question that arises most forcefully now concerns the nature of capitalism and whether it needs to be changed
Oh fuck not again.
It will be interesting to see what kind of "new system" will emerge from our current predicament. We live in interesting times.
Never mind that Capitalism isn't at fault for the crisis of the moment. Dodgy mortgages and other bad lending \= Capitalism. The heroes of socialism and mixed economies see their chance at the brass ring and they are going to go for it.
Quote from: Evil Spock on March 11, 2009, 05:20:21 PM
Never mind that Capitalism isn't at fault for the crisis of the moment. Dodgy mortgages and other bad lending \= Capitalism. The heroes of socialism and mixed economies see their chance at the brass ring and they are going to go for it.
This is true and quite sad.
Free market apologists are quite entertaining.
Oh no, that wasn't true capitalism. :D
A shorter version of the Sen article was in today's FT - I can't believe sheilbh didn't post it already. ;)
The economic system the prevails today is quite different in many respects than the system that prevailed before 1930. I don't know whether the changes that will be brought on by this crisis will be that extensive, but they will be significant and they will need to be.
Quote from: Evil Spock on March 11, 2009, 05:20:21 PM
Never mind that Capitalism isn't at fault for the crisis of the moment. Dodgy mortgages and other bad lending \= Capitalism. The heroes of socialism and mixed economies see their chance at the brass ring and they are going to go for it.
Indeed, that is what Sen says, actually. capitalism develops when society is mature enough for norms of adherence to contract to be a given. It would not work if you had to constantly pursue debtors. But one of her points is that financial innovation has outstripped formal and informal institutional capacity by distancing risk.
The economic system that is usually known as capitalism is prone to cyclical collapses. This one is just the result of decades and decades of the US government trying to contain what would be market corrections (the recessions of the 90s and early 2000s were very weak because of these efforts). As a result, we're now getting 30+ years of accumulated problems falling on our heads.
For the future? Despite grievous sufferning, the Anglo-saxon countries, like Britain, Canada, Australia, New Zealand and the USA [though I'm not sure the US can still be called that] will probably try to restart their economic model, just to get into another depression a few years down the line (after the authorities relax their oversight anew and a whole truckload of new financial errors [i.e. frauds] are made).
The other countries... will probably have had enough. The world isn't particularly fond of the anglo-saxon economic model (indeed, many nations even in the US sphere only followed it partially, like socialistic France and planned Japan), and it retained its clout only because the US economy was the worlds' strongest and seemed prosperous.
The second this changes and America is seen as a weak economy - the last remnants of this model will be purged from all across the globle faster than you can say "Wowza!"
omg my best bud just said negative things about my country. i am : so conflicted.
Quote from: The Minsky Moment on March 11, 2009, 05:28:58 PMI don't know whether the changes that will be brought on by this crisis will be that extensive, but they will be significant and they will need to be.
I am told that's because you are a socialist.
Quote from: Martim Silva on March 11, 2009, 05:50:04 PM
For the future? Despite grievous sufferning, the Anglo-saxon countries, like Britain, Canada, Australia, New Zealand and the USA [though I'm not sure the US can still be called that] will probably try to restart their economic model, just to get into another depression a few years down the line (after the authorities relax their oversight anew and a whole truckload of new financial errors [i.e. frauds] are made).
Given that it's still the best system availible, we'll have to stick with it. After all, there is no other system with even close to the stability of our own.
The problem of the "toxic" assets is that people are stupid and try to live with money they don't have...
Quote from: Neil on March 11, 2009, 06:09:43 PM
Quote from: Martim Silva on March 11, 2009, 05:50:04 PM
For the future? Despite grievous sufferning, the Anglo-saxon countries, like Britain, Canada, Australia, New Zealand and the USA [though I'm not sure the US can still be called that] will probably try to restart their economic model, just to get into another depression a few years down the line (after the authorities relax their oversight anew and a whole truckload of new financial errors [i.e. frauds] are made).
Given that it's still the best system availible, we'll have to stick with it. After all, there is no other system with even close to the stability of our own.
Not to mention the only one that follows objective laws of reality.
What are those objective laws of reality ?
Quote from: Oexmelin on March 11, 2009, 06:20:43 PM
What are those objective laws of reality ?
People want more
Want more what ?
Quote from: Oexmelin on March 11, 2009, 06:27:56 PM
Want more what ?
If a person has 1 he will want 1, if he has 2 and his neighbour has 3 he will want 4... etc...
Quote from: Oexmelin on March 11, 2009, 06:20:43 PM
What are those objective laws of reality ?
In a nutshell if you want something you have to work for it. Whether you are an anteater looking for his next meal or a day labourer working towards a down payment on a house you have to exchange effort for your reward. Socialism advocates transfer of wealth from the earned to the non-earned, in effect it is subsidizing a zero. It is in opposition to cause and effect, to reason and thus to reality.
That's a somewhat limited view of the human experience. Mankind has always lived in society (or groupings or polity, whatever you prefer) meaning that you always had people who were taken care of, people who banded together to «earn» their collective living, people who shared things freely, etc. The extent of what «earning a living» meant also varied considerably depending on the type of social structure or polity that existed, just as the nature of what could be considered exchangeable is also under considerable variation. I don't think any of this falls into «objective reality».
Quote from: I Killed Kenny on March 11, 2009, 06:29:54 PM
Quote from: Oexmelin on March 11, 2009, 06:27:56 PM
Want more what ?
If a person has 1 he will want 1, if he has 2 and his neighbour has 3 he will want 4... etc...
Octo-mom has 14 children. I don't want 15.
I don't advocate the abolition of charity, simply of redistribution of wealth by means of force. That is what socialism denies: volitional choice. It teaches that an individual 'owes' society without ever defining what that really means: everyone except you is entitled to your work. Inferiority becomes a claim on the productive ability of others and the masses vote themselves the content of the treasury which itself was appropriated by force. Force becomes the only arbiter of wealth, innovation and production become vices rather than virtues.
Quote from: Oexmelin on March 11, 2009, 06:37:25 PMyou always had people who were taken care of, people who banded together to «earn» their collective living, people who shared things freely, etc.
Has this been "successful" on a large scale, or was it always on a more micro/local level?
Quote from: garbon on March 11, 2009, 06:45:28 PM
Quote from: Oexmelin on March 11, 2009, 06:37:25 PMyou always had people who were taken care of, people who banded together to «earn» their collective living, people who shared things freely, etc.
Has this been "successful" on a large scale, or was it always on a more micro/local level?
Yes. In America it's called social security.
Quote from: Evil Spock on March 11, 2009, 06:32:25 PM
Quote from: Oexmelin on March 11, 2009, 06:20:43 PM
What are those objective laws of reality ?
In a nutshell if you want something you have to work for it. Whether you are an anteater looking for his next meal or a day labourer working towards a down payment on a house you have to exchange effort for your reward. Socialism advocates transfer of wealth from the earned to the non-earned, in effect it is subsidizing a zero. It is in opposition to cause and effect, to reason and thus to reality.
Socialism advocated from each according to ability. And it, as a system, did not collapse because of lazy workers. Neither have kibbutzim.
Further, I would be interested to see what your 'objective laws' have to say about those who can live a life of unimaginable luxury without having worked a day in their life. :P
Quote
Socialism advocated from each according to ability. And it, as a system, did not collapse because of lazy workers. Neither have kibbutzim.
Further, I would be interested to see what your 'objective laws' have to say about those who can live a life of unimaginable luxury without having worked a day in their life. :P
That is the monstrous reality of socialism : each according to his ability, each according to his need
Who defines ability? By what standard?
Who defines need? By what standard?
This creates a situation where those with ability hide it, and those with a 'need' wear it on their sleeves. Witness: our increasingly whiny civilization of entitlement growing today. A system built around 'man is his brother's keeper' will wind up with a lot of Caine and Abels.
As to inheritance, property passing down from one to another is no concern to anyone except the owner and the recipient. Such monies may sustain a life of sedentary pleasure for many years but it will not last forever.
Quote from: Warspite on March 11, 2009, 06:50:11 PM
Further, I would be interested to see what your 'objective laws' have to say about those who can live a life of unimaginable luxury without having worked a day in their life. :P
I thought about that and then realized that there are probably fewer of said people under capitalism than the number of "lazies" under socialism.
Quote from: Fate on March 11, 2009, 06:46:02 PM
Yes. In America it's called social security.
One program that doesn't really provide an adequate amount of money to survive on?
Quote from: FunkMonk on March 11, 2009, 05:22:54 PM
Quote from: Evil Spock on March 11, 2009, 05:20:21 PM
Never mind that Capitalism isn't at fault for the crisis of the moment. Dodgy mortgages and other bad lending \= Capitalism. The heroes of socialism and mixed economies see their chance at the brass ring and they are going to go for it.
This is true and quite sad.
Agreed.
Quote from: Evil Spock on March 11, 2009, 05:20:21 PM
Never mind that Capitalism isn't at fault for the crisis of the moment. Dodgy mortgages and other bad lending \= Capitalism. The heroes of socialism and mixed economies see their chance at the brass ring and they are going to go for it.
Particularly since those dodgy mortages were mostly a creation of the gov't to begin with.
Quote from: Hansmeister on March 11, 2009, 07:51:36 PM
Quote from: Evil Spock on March 11, 2009, 05:20:21 PM
Never mind that Capitalism isn't at fault for the crisis of the moment. Dodgy mortgages and other bad lending \= Capitalism. The heroes of socialism and mixed economies see their chance at the brass ring and they are going to go for it.
Particularly since those dodgy mortages were mostly a creation of the gov't to begin with.
Yet somehow the snakeoil of more government intervention is being sold as the 'cure'.
Quote from: Hansmeister on March 11, 2009, 07:51:36 PM
Quote from: Evil Spock on March 11, 2009, 05:20:21 PM
Never mind that Capitalism isn't at fault for the crisis of the moment. Dodgy mortgages and other bad lending \= Capitalism. The heroes of socialism and mixed economies see their chance at the brass ring and they are going to go for it.
Particularly since those dodgy mortages were mostly a creation of the gov't to begin with.
I've been waiting for Congress to annonce an internal investigation of itself, and at least two Presidential administrations. Or maybe, the US auto execs could grill Congress members on their wasteful practices, out of control spending, pork spending, incompetence and errors on noticing financial problems before things hit the fan, and more.... you know, the way Congresss grilled the auto execs. Hehe...
It is not so much that I demand militant ideological clinging to unfettered capitalism (whatever the fuck that is), it is more that whenever people say it is time to change the system their changes tend to be worse than the disease. In fact they are usually the same old changes we tried 80 years ago.
The very idea that France, Germany, and Japan should somehow be seen as stronger economies than the US is laughable anyway. They have not exactly been doing great the past 20 years or so you know. If there is a post-Capitalist system I have my doubts it would resemble a having a few massive Japanese style conglomerates dominating the economy.
Quote from: Martim Silva on March 11, 2009, 05:50:04 PM
The economic system that is usually known as capitalism is prone to cyclical collapses. This one is just the result of decades and decades of the US government trying to contain what would be market corrections (the recessions of the 90s and early 2000s were very weak because of these efforts). As a result, we're now getting 30+ years of accumulated problems falling on our heads.
I giggle at your conclusion this means the government should do even MORE to contain market forces.
'The US economy collapsed as a result of the US goverment trying to control market forces, as a result I conclude the US government should do even more to contain them.'
I also see no real difference between the 'Anglo-Saxon' model we have and what the French or the Germans do...we simply have slightly lower taxes. If the secret to prosperity is simply having really high taxes that might be a difficult political pill for the American public to swallow.
I just adore this thread!
Quote from: garbon on March 11, 2009, 06:45:28 PM
Quote from: Oexmelin on March 11, 2009, 06:37:25 PMyou always had people who were taken care of, people who banded together to «earn» their collective living, people who shared things freely, etc.
Has this been "successful" on a large scale, or was it always on a more micro/local level?
Not sure this is the point, as it was argued that there were objective laws of reality - the fact that such laws do not work with small scale human cultures show us that perhaps they are not as clear-cut as thought to be.
Human nature is a wonderful argument, but there are too many counter-examples of such things as "innate greed" to show that what is actually being argued about is that such cultural values are important within the culture - not universals at all.
I don't see the value in arguments about nature.
As a practical matter, there is no known alternative to capitalism that works in terms of achieving the goals most people in the present find desirable. It isn't even close.
However, capitalism is a pretty big tent as far as systemic design goes. So even if we aren't going to abandon it, there is still to talk about in terms of what kinds of rules and institutions we want going forward.
Quote from: PDH on March 11, 2009, 10:30:52 PM
Not sure this is the point, as it was argued that there were objective laws of reality - the fact that such laws do not work with small scale human cultures show us that perhaps they are not as clear-cut as thought to be.
Human nature is a wonderful argument, but there are too many counter-examples of such things as "innate greed" to show that what is actually being argued about is that such cultural values are important within the culture - not universals at all.
I can't hold onto my metanarratives? ???
Quote from: Evil Spock on March 11, 2009, 06:44:25 PM
I don't advocate the abolition of charity, simply of redistribution of wealth by means of force. That is what socialism denies: volitional choice. It teaches that an individual 'owes' society without ever defining what that really means: everyone except you is entitled to your work.
This is not how they/I would see things(by Socialism I take it you mean everything Redder than Rapture). No economic man is an island; even your most innovative member of society succeeds due to the thousands or millions 'below' him that make him possible. Even John Galt needed a baker.
I'd also argue that your kind of Market Liberalism has yet to provide much beyond the occasional hasty, unegalitarian bubble that collapses at the cost of global stability. I don't think the world could afford another Great Depression, as it is I am concerned about this recessions' plausible impact upon the least stable parts of the world.
Spock=Habbaku, right?
Quote from: Hansmeister on March 11, 2009, 07:51:36 PM
Quote from: Evil Spock on March 11, 2009, 05:20:21 PM
Never mind that Capitalism isn't at fault for the crisis of the moment. Dodgy mortgages and other bad lending \= Capitalism. The heroes of socialism and mixed economies see their chance at the brass ring and they are going to go for it.
Particularly since those dodgy mortages were mostly a creation of the gov't to begin with.
If Govt-inspired mortgages were the majority culprit, why are relatively free markets in Spain, Ireland and Eastern Europe falling like lead zeppelins? Why does the IMF currently list countries with serious government oversight of the banking sector (Turkey, Brazil) as a plus in the medium term?
Quote from: Queequeg on March 11, 2009, 11:54:05 PM
I don't think the world could afford another Great Depression, as it is I am concerned about this recessions' plausible impact upon the least stable parts of the world.
The world can withstand far more than another Great Depression.
If the Natbols take power in Russia than multi-cellular life on this planet wouldn't be around for long in any recognizable form. This is a serious possibility.
Quote from: Queequeg on March 11, 2009, 11:58:27 PM
If the Natbols take power in Russia than multi-cellular life on this planet wouldn't be around for long in any recognizable form. This is a serious possibility.
No, it's not a serious possibility. That you'd suggest this speaks ill of your mental health.
Ugh. It's so obvious, now. I forgot he always drooled irrationally over Melville. Thanks.
QuoteParticularly since those dodgy mortages were mostly a creation of the gov't to begin with.
Did the government encourage the securitisation of these debts into exotic instruments?
??? @ Evil Spock.
You're looking at capitalism with extremely rose-tinted glasses. The problem with virtually all of the mentioned financial systems, including capitalism, is a failure to account for human greed. We've shown an amazing proclivity for "working the system" in the US. Employers have gotten by, paying their full-time employees less than the cost of living for the area they live in; similarly, many executives' salaries would raise a lot of eyebrows if they were converted to wage and analyzed task for task...
I guess my problem is I'm actually starting to become jaded with financial matters, as I've been observing them. There are people out there who could greatly benefit from free market capitalism, but I'm becoming more and more convinced that Americans simply are not responsible enough for it to work correctly. I'm not proposing Ayn Rand-ish "anti-dog-eat-dog" legislation, however; it just appears that we need to manage acceptable risk centrally, and try to take on that American tendency to set goals to more than we've actually earned.
Quote from: The Minsky Moment on March 11, 2009, 05:28:58 PM
A shorter version of the Sen article was in today's FT - I can't believe sheilbh didn't post it already. ;)
I read the FT at work :p
Quote from: Queequeg on March 11, 2009, 11:54:05 PM
Quote from: Evil Spock on March 11, 2009, 06:44:25 PM
I don't advocate the abolition of charity, simply of redistribution of wealth by means of force. That is what socialism denies: volitional choice. It teaches that an individual 'owes' society without ever defining what that really means: everyone except you is entitled to your work.
This is not how they/I would see things(by Socialism I take it you mean everything Redder than Rapture). No economic man is an island; even your most innovative member of society succeeds due to the thousands or millions 'below' him that make him possible. Even John Galt needed a baker.
I'd also argue that your kind of Market Liberalism has yet to provide much beyond the occasional hasty, unegalitarian bubble that collapses at the cost of global stability. I don't think the world could afford another Great Depression, as it is I am concerned about this recessions' plausible impact upon the least stable parts of the world.
Spock=Habbaku, right?
Since the Great Depression was caused by the gov't interfering in the free market you are making my point for me. Precisely because we can't afford that type of cock-up we need to keep gov't out of messing with the economy. Having the gov't trying to solve this mess is what will lead us into a depression.
Quote from: Warspite on March 12, 2009, 05:06:03 AM
QuoteParticularly since those dodgy mortages were mostly a creation of the gov't to begin with.
Did the government encourage the securitisation of these debts into exotic instruments?
Of course not. They didn't have to, because pretty much every debt gets turned into securities in one way or another.
So that Evil Spock was Habbaku. Cute but clueless unfortunately.
-----
Anyhow the article made eminent sense to me. A balanced economy, with strong regulations to ground the market and prevent greedy bastards from abusing it, is far preferable to what we've been experiencing in the last 30 years. Although I still think we should use this period of instability to re-think many concepts we take for granted.
G.
Quote from: Queequeg on March 11, 2009, 11:54:05 PM
Quote from: Evil Spock on March 11, 2009, 06:44:25 PM
I don't advocate the abolition of charity, simply of redistribution of wealth by means of force. That is what socialism denies: volitional choice. It teaches that an individual 'owes' society without ever defining what that really means: everyone except you is entitled to your work.
I'd also argue that your kind of Market Liberalism has yet to provide much beyond the occasional hasty, unegalitarian bubble that collapses at the cost of global stability.
I think it has provided decades of unprecedented economic growth, wealth, scientific progress, an increased lifespan, vastly increased standards of living for pretty much everyone in the world, stability, reduction in wars and violence, and really good coffee.
Other than that, you are right - market liberalism/capitalism has been a disaster.
Quote from: Warspite on March 12, 2009, 05:06:03 AM
QuoteParticularly since those dodgy mortages were mostly a creation of the gov't to begin with.
Did the government encourage the securitisation of these debts into exotic instruments?
Yes.
In fact, when some people in the government started to worry about how the securitization of mortgages had removed risk form the lenders and increased shitty loan rates, the socialist lefts Wonder-boy Barney Frank personally made sure reform was impossible because it might mean that poor people could not continue to get loans for homes they could not afford.
Quote from: Berkut on March 12, 2009, 08:11:46 AM
In fact, when some people in the government started to worry about how the securitization of mortgages had removed risk form the lenders and increased shitty loan rates, the socialist lefts Wonder-boy Barney Frank personally made sure reform was impossible because it might mean that poor people could not continue to get loans for homes they could not afford.
That is an interesting story, but not an accurate one. The truth is that the Bush admin made some noises about addressing this issue and than quickly put it about #3,459 on the priority list once more important things came along like launching the Iraq War, announcing new faith based initiatives, and so on.
Neither faction in Congress had any real interest or appetite in reform b/c they all were taking money from the people making tons of $$ of securitization. During most of this time period, the much villified Barney Frank was in the minority.
Quote from: The Minsky Moment on March 12, 2009, 09:00:21 AM
Quote from: Berkut on March 12, 2009, 08:11:46 AM
In fact, when some people in the government started to worry about how the securitization of mortgages had removed risk form the lenders and increased shitty loan rates, the socialist lefts Wonder-boy Barney Frank personally made sure reform was impossible because it might mean that poor people could not continue to get loans for homes they could not afford.
That is an interesting story, but not an accurate one. The truth is that the Bush admin made some noises about addressing this issue and than quickly put it about #3,459 on the priority list once more important things came along like launching the Iraq War, announcing new faith based initiatives, and so on.
Neither faction in Congress had any real interest or appetite in reform b/c they all were taking money from the people making tons of $$ of securitization. During most of this time period, the much villified Barney Frank was in the minority.
Sadly, my story is rather simplified, but largely accurate.
Quote from: NYT article in 2003Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.
''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''
Representative Melvin L. Watt, Democrat of North Carolina, agreed. ''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said.
Nice job on regurgitating Franks press release where he tries to pretend he was on the other side of this issue. The fact of the matter is that Frank opposed any kind of reform, and fought it tooth and nail, and even once a bill was passed that was a piece of shit, watered down joke of "reform", he STILL voted against it.
I'm curious, how does a minority party in the House block or offer meaningful opposition to legislation? ???
You'd do better to find some super villain in the Senate. Surely then we can blame this mess on Democrats.
Quote from: Tiamat on March 12, 2009, 09:23:20 AM
I'm curious, how does a minority party in the House block or offer meaningful opposition to legislation? ???
By refusing to vote for it, expending political capital to oppose it, refusing to cooperate with it getting out of comitees, etc., etc.
Its not like the minority party is helpless or something.
Funny how people are so determined to apologize for obviosuly bullshit statemetns like "There is nothing wrong with FF! Quit trying to regulate it, because then poor people won't be able to but houses anymore!"
And more to the point - Frank may not ahve been in the majority party back in 2003, but he is now. And we are relying on him and his buddies, the supposedly smartest peoples in Congress, to fix the problem NOW. And this is the guy who insisted that everything was fine as the house was literally crumbling under his feet, all because he could not stand the idea of letting reality interfere with his social engineering project.
Quote from: Tiamat on March 12, 2009, 09:23:20 AM
You'd do better to find some super villain in the Senate. Surely then we can blame this mess on Democrats.
Who said anything about blaming the mess on Democrats?
My point is simply that the idea that someone like Frank is the
solution to this problem is ludicrous.
And the idea that the blame CANNOT be on the Dems at all, because they were not in the majority at some cherry picked moments over the last ten years, is equally ludicrous.
Quote from: Berkut on March 12, 2009, 09:29:03 AM
By refusing to vote for it, expending political capital to oppose it, refusing to cooperate with it getting out of comitees, etc., etc.
Its not like the minority party is helpless or something.
The majority party of the House is generally well disciplined. Frank could huff and puff all he wanted, but his vote was not required for the bill to leave committee. I doubt the Democrats could even offer amendments to the bill, given how the House has been run in recent decades.
The minority party
is helpless in the House, but they can certainly be obstructionists in the Senate.
Quote from: Tiamat on March 12, 2009, 09:33:29 AM
Quote from: Berkut on March 12, 2009, 09:29:03 AM
By refusing to vote for it, expending political capital to oppose it, refusing to cooperate with it getting out of comitees, etc., etc.
Its not like the minority party is helpless or something.
The majority party of the House is generally well disciplined. Frank could huff and puff all he wanted, but his vote was not required for the bill to leave committee. I doubt the Democrats could even offer amendments to the bill, given how the House has been run in recent decades.
The minority party is helpless in the House, but they can certainly be obstructionists in the Senate.
Bullshit. Who the fuck are you anyway?
The minority party is hardly helpless, or there would never be any debate. Neither party is super disciplined, and you need votes from the opposition as foten as not to get anything done. Powerful politicians like Franks manages votes in his own party, and influences others outside his party.
You act like Congress just sits there, with the non-majority party steaming while the majority marches in lockstep doing whatever they like. What a convenient position to take when it comes to recognizing that people like Franks had a direct hand in letting FF and the mortgage market slip the leash, because that is what they wanted.
Quote from: Berkut on March 12, 2009, 09:30:57 AM
And the idea that the blame CANNOT be on the Dems at all, because they were not in the majority at some cherry picked moments over the last ten years, is equally ludicrous.
Six years out of the previous decade is hardly a cherry picked moment. The reason credit default swaps weren't regulated is directly due to the actions of individuals like Phil Gram. I'll leave you to guess what
business scam he got involved in following his retirement from public life.
Quote from: Berkut on March 12, 2009, 09:36:17 AM
Bullshit. Who the fuck are you anyway?
The minority party is hardly helpless, or there would never be any debate. Neither party is super disciplined, and you need votes from the opposition as foten as not to get anything done. Powerful politicians like Franks manages votes in his own party, and influences others outside his party.
You act like Congress just sits there, with the non-majority party steaming while the majority marches in lockstep doing whatever they like. What a convenient position to take when it comes to recognizing that people like Franks had a direct hand in letting FF and the mortgage market slip the leash, because that is what they wanted.
House debate can neither be considered persuasive or meaningful opposition. Under Delay the House Republicans were exquisitely well disciplined.
You really hate Barney Frank, I get it. However, as much as Frank would have liked to, the man did not have the ability to stop Republican legislation until 2006. If such reform failed in the period of 1994-2006, one needs to look no further than House Republican leadership.
Quote from: Tiamat on March 12, 2009, 09:49:44 AM
You really hate Barney Frank, I get it. However, as much as Frank would have liked to, the man did not have the ability to stop Republican legislation until 2006. If such reform failed in the period of 1994-2006, one needs to look no further than House Republican leadership.
So he had to go around speaking in support of it?
Quote from: garbon on March 12, 2009, 09:59:32 AM
Quote from: Tiamat on March 12, 2009, 09:49:44 AM
You really hate Barney Frank, I get it. However, as much as Frank would have liked to, the man did not have the ability to stop Republican legislation until 2006. If such reform failed in the period of 1994-2006, one needs to look no further than House Republican leadership.
So he had to go around speaking in support of it?
I'll take Berkut at his word that Frank voted against the bill and spoke out against it. The fact remains that Frank didn't have the power to stop it in either committee or the floor.
Quote from: Tiamat on March 12, 2009, 10:02:13 AM
Quote from: garbon on March 12, 2009, 09:59:32 AM
Quote from: Tiamat on March 12, 2009, 09:49:44 AM
You really hate Barney Frank, I get it. However, as much as Frank would have liked to, the man did not have the ability to stop Republican legislation until 2006. If such reform failed in the period of 1994-2006, one needs to look no further than House Republican leadership.
So he had to go around speaking in support of it?
I'll take Berkut at his word that Frank voted against the bill and spoke out against it. The fact remains that Frank didn't have the power to stop it in either committee or the floor.
you don't ahve to take me at my word, the stories are out there. Go do a google search on Barney frank and Freddie Mae Fannie Mac.
That is a incorrect and simplistic view of how congressional politics works.
The majority party does not just get to do whatever they want, and the minority is utterly powerless. People like Franks have power whether they are in the majority or not, and they have influence.
Not every single Republican is going to vote for exactly what they are told to vote for, and the same with Dems. There is compromise and trading going on all the time.
I notice how you conveniently ignore the entire point though - Franks IS in the majority NOW. And he still believes that his job is to use the markets to ensure social equality or whatever such nonsense motivated him to bleat on about how reform must be stopped if it means poor people cannot buy a McMansion, as they so clearly deserve.
Quote from: Berkut on March 12, 2009, 09:18:42 AM
Sadly, my story is rather simplified, but largely accurate.
The Times piece you cite does not prove your case. It is a single quotation from Frank, and as it happens, his statement was accurate - in 2003, Fannie and Freddie were not yet facing a financial crisis. Indeed, the administration in proposing the legislation specifically stated they did not believe the GSE's were in crisis at the time.
The issue at stake in 2003 was whether the Treasury Department should be given primary responsibility for GSE regulation. While there was a prudential justification advanced for this proposal, the reality was the bill would not affect the way the GSE's did business and specifically would not affect the originate and distribute model that was at the root of the problem. (AEI criticized the legislation at the time on precisely these grounds). Frank and other critics expressed opposition on the grounds that transfer of regulatory functions to Treasury would risk unduly politicizing the GSE's. Put crudely, they didn't wanted to give the Bush administration greater control over the GSE management. In any event, the legislation died when it got bogged down in committee and the admin lost interest. The GOP of course had a siginificant majority at the time, but little interest in pushing a reform that had major private housing pressure groups opposing it.
QuoteNice job on regurgitating Franks press release where he tries to pretend he was on the other side of this issue. The fact of the matter is that Frank opposed any kind of reform, and fought it tooth and nail, and even once a bill was passed that was a piece of shit, watered down joke of "reform", he STILL voted against it.
I didn't cite any press release. ???
The point isn't that Barney Frank was right. The point is that singling out Frank for blame makes no sense. The oppportunities for reform were there and no one pushed it. The GOP had congressional majorities during the time all these proposals were being discussed, and in some cases never bothered to try to report anything out of committee. It was not a legislative priority for either branch, and no one wanted to seriously change the system.
Yeah this is not a parliamentary system and party discipline is poor, particularly for the Democrats who have alot of members more conservative than Republicans in some areas. The majority party theoretically has power, but in fact needs to get votes from sympathetic members of the other party to counter the renegades in their own ranks to get anything done.
Besides Franks is one of the most senior and prestigious members of the House. His opinion did and does carry enormous weight.
Plus he is giving the Leftist crowd what they want: a public authority pinning the blame for the crisis on greed and lack of regulation (which was a part of it) and deflecting blame from the Fannie/Freddie policies themselves (which also play a huge part). That is rather dangerous, as it creates a myth about the crisis that is not realistically the whole picture.
Quote from: Berkut on March 12, 2009, 10:32:32 AM
The majority party does not just get to do whatever they want, and the minority is utterly powerless. People like Franks have power whether they are in the majority or not, and they have influence.
They have some power and some influence, but not as much as the majority.
I understand what you are saying here - but it seems a little bizarre that when over the course of a number of years there is a party that controls both branches of government, and (a) no one even proposed a reform that would actually have had the effect of preventing this outcome, and (b) those watered down proposals that were made did not receive widespread support from the majority and were allowed to die in committees controlled by majority, that one would choose to single out one individual - and that one individual happens to be a member of the minority party in the House of Representatives.
Just so that we can clear about the nature of the "reform" that Barney Frank supposedly nixxed with his awesome powers of negation, here is a description from one the bill's senior backers, the then #2 guy on the committee (richard baker, LA):
Quote
Over the years, questions concerning mortgage-backed securities, leverage ratios, duration gap, bank investment concentration of GSE securities and a lot of other unique issues have been before the committee. I am, frankly, quite ready, in fact anxious to turn over the examination of many of these questions to a fully funded, properly constructed, independent regulator, full of professionals able to give analytical examination and appropriate answers to these myriad questions. . . . Others may suggest radical new capital regimes, perhaps unreasonable constraints on new product approval, or attacks on the basic structure of the charter. I do not intend and will not go there. Responsible regulatory oversight is the goal, and the closure that results from this effort will be beneficial, in my judgment, to all concerned . . .
As the Secretary has stated, Fannie and Freddie are world class financial organizations, and they require a world class regulatory structure, which is independently funded, with all appropriate authority, and the ability to make professional decisions absent political interference. That has been, and remains, my legislative goal. It is also evident that protracted discussion of these concerns really has had no adverse effect on home ownership opportunities. For those who continue to object to any structural change in regulatory oversight, I suggest just taking a deep breath. What we have enjoyed and continue to enjoy, the lowest mortgage interest rates in our country's history. I suggest that Alan Greenspan and his effect is more powerful than any action this Congress or this committee might consider. In fact, this effort is only to ensure that the secondary mortgage market has stability, not to place constraints that will in any way adversely affect any individual's ability to achieve the dream of home ownership.
Basically the motivation was to clear away the burden of regulatory analysis from Congress and slough it off to bureaucrats in Treasury. There was no intent to make any real change in the way the agencies did business. And that shouldn't be surprising because just like his colleagues on the Democratic side of the aisle, Rep. Baker received generous contributions from real estate and banking PACs, and had no interest in rocking the boat or endangering business as usual.
I am not trying to single out Franks for special blame, just use him as an example to refute the conventional wisdom that this disaster is the result of Republicans nixing regulatory oversight for their fat cat capitalist buddies, and the solution is to embrace socialism and have the Dems fix everything.
And Franks is a perfect example of how the other side of the aisle has just as much blame as the republicans, if not more.
Quote from: The Minsky Moment on March 12, 2009, 10:56:53 AM
Just so that we can clear about the nature of the "reform" that Barney Frank supposedly nixxed with his awesome powers of negation, here is a description from one the bill's senior backers, the then #2 guy on the committee (richard baker, LA):
Quote
Over the years, questions concerning mortgage-backed securities, leverage ratios, duration gap, bank investment concentration of GSE securities and a lot of other unique issues have been before the committee. I am, frankly, quite ready, in fact anxious to turn over the examination of many of these questions to a fully funded, properly constructed, independent regulator, full of professionals able to give analytical examination and appropriate answers to these myriad questions. . . . Others may suggest radical new capital regimes, perhaps unreasonable constraints on new product approval, or attacks on the basic structure of the charter. I do not intend and will not go there. Responsible regulatory oversight is the goal, and the closure that results from this effort will be beneficial, in my judgment, to all concerned . . .
As the Secretary has stated, Fannie and Freddie are world class financial organizations, and they require a world class regulatory structure, which is independently funded, with all appropriate authority, and the ability to make professional decisions absent political interference. That has been, and remains, my legislative goal. It is also evident that protracted discussion of these concerns really has had no adverse effect on home ownership opportunities. For those who continue to object to any structural change in regulatory oversight, I suggest just taking a deep breath. What we have enjoyed and continue to enjoy, the lowest mortgage interest rates in our country's history. I suggest that Alan Greenspan and his effect is more powerful than any action this Congress or this committee might consider. In fact, this effort is only to ensure that the secondary mortgage market has stability, not to place constraints that will in any way adversely affect any individual's ability to achieve the dream of home ownership.
Basically the motivation was to clear away the burden of regulatory analysis from Congress and slough it off to bureaucrats in Treasury. There was no intent to make any real change in the way the agencies did business. And that shouldn't be surprising because just like his colleagues on the Democratic side of the aisle, Rep. Baker received generous contributions from real estate and banking PACs, and had no interest in rocking the boat or endangering business as usual.
Obviously his statements are a response to the idea that this regulation and oversight will make it impossible for TEH POOR PIPPLE to buy the houses they so certainly deserve to own, so he is emphasizing that more oversight should not have that effect (even if of course it does).
You are cherry picking a particular argument made at a particualr time and tryuing to present that as the basis for the efforts that went far beyond that particular argument - as the article I posted points out.
And the idea that someone is opposing a bill because it doesn't do enough is a rather old legislative trick, and one Franks knows very well. He opposed it because he opposed all attempts to regulate "his" industry, and even when his opposition resulted in a watered down and ineffective bill, he opposed that as well.
Not that this strategy is not done by both sides, with the crap like bills names to be the opposite of what they actually do and such. Or putting business interests in charge of the EPA. But it is kind of sad when people actually regurgiate it and put it forth as a point in favor in an outside debate.
Quote from: Tiamat on March 12, 2009, 09:49:44 AM
House debate can neither be considered persuasive or meaningful opposition. Under Delay the House Republicans were exquisitely well disciplined.
You really hate Barney Frank, I get it. However, as much as Frank would have liked to, the man did not have the ability to stop Republican legislation until 2006. If such reform failed in the period of 1994-2006, one needs to look no further than House Republican leadership.
You hate Republicans and love Frank, I get it. The fact of the matter is, though, that some Republicans tried to get reform for Freddie and Fannie passed, and some Republicans and some Democrats (including Frank) successfully blocked all reform. That wasn't the fault of a party, but of specific politicians, among them Frank.
I know it blows your mind to even consider this in the absence of party demonization, but the rest of us (bar FB and Hans) don't have a problem doing that. Frank is the guy with the smoking gun in his hand, no matter his party.
Quote from: grumbler on March 12, 2009, 11:39:27 AM
Frank is the guy with the smoking gun in his hand, no matter his party.
No, the man with the smoking gun in his hand is Phil Gramm. Frank had at most a BB gun.
Quote from: Grallon on March 12, 2009, 08:08:21 AM
So that Evil Spock was Habbaku. Cute but clueless unfortunately.
It wasn't/isn't, but that doesn't stop you from being hopelessly misinformed about everything. I'd say you were cute, as well, but you'll probably be 50 next week, so it's best not to bring these things to attention.
Quote from: Berkut on March 12, 2009, 08:09:15 AM
I'd also argue that your kind of Market Liberalism has yet to provide much beyond the occasional hasty, unegalitarian bubble that collapses at the cost of global stability.
I think it has provided decades of unprecedented economic growth, wealth, scientific progress, an increased lifespan, vastly increased standards of living for pretty much everyone in the world, stability, reduction in wars and violence, and really good coffee.
Other than that, you are right - market liberalism/capitalism has been a disaster.
[/quote]
You notice the word "Your" there, Berkie? What do you think it means? I'm no Socialist.
And I fail to see how this has anything-at all-to do with my argument. The most deregulated financial markets in the world are collapsing like a toothpick Taj Mahal while more conservative economies (say, Germany's) appear to be surviving.
Quote from: Queequeg on March 12, 2009, 10:15:46 PM
The most deregulated financial markets in the world are collapsing
Which would those be?
Quote from: Habbaku on March 12, 2009, 01:10:01 PM
Quote from: Grallon on March 12, 2009, 08:08:21 AM
So that Evil Spock was Habbaku. Cute but clueless unfortunately.
It wasn't/isn't, but that doesn't stop you from being hopelessly misinformed about everything. I'd say you were cute, as well, but you'll probably be 50 next week, so it's best not to bring these things to attention.
I remember you being somewhat libertarian so, combined with your tenancy to be somewhat terse, I figured you were Spock. Fair enough guess, just turns out I was wrong, no reason to blame Grallon.
Quote from: Habbaku on March 12, 2009, 10:30:26 PM
Quote from: Queequeg on March 12, 2009, 10:15:46 PM
The most deregulated financial markets in the world are collapsing
Which would those be?
The ex-Soviet Republics, Ireland and some of the random free-market autocracies? They are all collapsing like stones and I tend to associate them with flat tax and free investment.
That said I'm willing to admit this is largely perceptive, I've read little about those financial markets, all I know is that Brazil and Turkey seem to be doing well now because of that awful ,evil, government oversight.
Quote
The ex-Soviet Republics, Ireland and some of the random free-market autocracies? They are all collapsing like stones and I tend to associate them with flat tax and free investment.
That said I'm willing to admit this is largely perceptive, I've read little about those financial markets, all I know is that Brazil and Turkey seem to be doing well now because of that awful ,evil, government oversight.
Don't most of the ex-SSRs and ex-eastern bloc countries with flat tax still have really high rates of public enterprise ownership? Or rather, kleptocrat-ownership...
Choose your flavor of interventionism.
Ireland is a popping bubble, and Brazil is on an oil investment boom. Last I saw, Turkey was hurting bad.
I am not aware that the HK economy, one of the most deregulated in the world, is collasping.