Barack “The Rock” Obama Tells Banks: “We Want Our Money Back”

by Ben Hoffman

WASHINGTON – President Barack Obama told banks Thursday they should pay a new tax to recoup the cost of bailing out foundering firms at the height of the financial crisis. “We want our money back,” he said.

In a brief appearance with advisers at the White House, Obama branded the latest round of bank bonuses as “obscene.” But he said his goal was to prevent such excesses in the future, not to punish banks for past behavior.

The tax, which would require congressional approval, would last at least 10 years and generate about $90 billion over the decade, according to administration estimates. “If these companies are in good enough shape to afford massive bonuses, they are surely in good enough shape to afford paying back every penny to taxpayers,” Obama said.

Source

Of course, right-wingers will be outraged that capitalism isn’t allowed to reign free and Republicans will vote against it because they vote against all tax increases. Some two trillion dollars has been spent by our government over the past few years to help out the banking sector. This is only $90 billion. There needs to be far more tax increases to recoup our money. Glass-Steagall needs to be reinstated. Commodity trading needs to be re-regulated.

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68 Responses to “Barack “The Rock” Obama Tells Banks: “We Want Our Money Back””

  1. Mr. Hoffman,

    You have your facts wrong, again. Most of the banks have repaid the Tarp money. Plus your Hero wants to tax the banks who did not want or need or even take Tarp money. Socialism again. Take from the successful and give to the politically connected. What about all the money that went to Government Motors and the UAW? When is Obama going to get that money paid back?

    • The banks have repaid 4% of the money Alan.

      • Alan is delusional. And it’s not just the TARP money that they should pay back. In fact, the bailout could wind up costing us $23 trillion.

        [A series of bailouts, bank rescues and other economic lifelines could end up costing the federal government as much as $23 trillion, the U.S. government’s watchdog over the effort says – a staggering amount that is nearly double the nation’s entire economic output for a year.

        If the feds end up spending that amount, it could be more than the federal government has spent on any single effort in American history.

        For the government to be on the hook for the total amount, worst-case scenarios would have to come to pass in a variety of federal programs, which is unlikely, says Neil Barofsky, the special inspector general for the government’s financial bailout programs, in testimony prepared for delivery to the House oversight committee Tuesday.

        The Treasury Department says less than $2 trillion has been spent so far.]
        http://www.politico.com/news/stories/0709/25164.html

    • Gawd … I was hoping for something meaningful here; but after reading just a couple comments from Moe and Ben; forget it. It would be laughable if it wasn’t so sad to see what I figured are intelligent people so duped by his Lowness.

      Obama says “We want our money back”! That is the biggest crock of crap I’ve read in the last 5 minutes. OUR MONEY!!!??? geez.

  2. I would love for a truely indipendant bipartisan “Video Idiots Guide to the Banking Mess” to hit the market. Maybe the Discovery Channel could do it. First thing is to make sure not a single member of any political agency is involved in it’s production. I don’t think anyone “one” can be fingered to blaim. But that’s the problem with big govt isn’t it. There never is a “one” to blaim. Sure if I’m DNC it’s the “radical right”. If I’m the RNC ith’s the “socialist left”. It’s always something in the “big system” but never an individual. Amazing, the U.S. Congress is the only place of work in America where “nobody” is ever to blaim when something is screwed up. It’s always subjective and layered in B.S. but no failure is ever accounted for. Thousands of needless laws are passed each year with no thought to second and third order effects by people with zero background or experience in the respective areas. Besides they have a sweetheart deal written into it given the $$s for a pet project somewhere. When those effects cause something like a banking system metldown, after being comined with other muddled laws, there is never “one” to blaim. I’d love to tell Barney Frank to man-up and recognize his part is extorting banks into lending the idiotic sub prime mortages, but then I’ll get shouted down as a narrow minded right winger. I’d love to shove the unchecked George Bush Admin spending back into the closet, but that’s just Red State denial . I’d love to turn the mirror on the absurd spending, selfish disregard for the fundamentals of nonpartisan government, nonexistant oversight, 1930’s still closed door backroom vote deals, and self serving Congressmen and Women for the last 30 years but that’s just a dream.

    Or maybe it’s all because I’m a Detroit Lions fan and it’s a loooong way to the next season kickoff……….

    • Try the deregulation of the late 90s

    • Some interesting TV coming up this year (and I do mean YEAR). The newly formed commission looking into what happened opened Monday. Their first witnesses were the heads of the big four financial institutions (I can’t call them banks anymore). They’re say it’ll go on for a year and they will be calling US gov’t officials from Congress and both administations. Plus lots more people from the banking industry.

      I watched Monday and it was pretty delicious. So if you guys have time, catch a hearing or two. We can expect some fireworks coming down.

      (Of course, this may not result in any meaningful reforem, but it’ll be good theatre.)

  3. I’ll check it out Moe. Thanks for the heads up. My comment last night was a bit tongue and cheek, but I really do want to be as informed as possible from varied sources. As much as I can being a beer addled right winger who spends his time making plans on defending his home from the Zombie Hordes and making bad NFL playoff picks 😉

  4. This is what I’ve been watching re: who’s paid back what. (If this link is already up here somewhere, I apologize)

    http://projects.nytimes.com/creditcrisis/recipients/table

  5. [Of course, right-wingers will be outraged that capitalism isn’t allowed to reign free and Republicans will vote against it because they vote against all tax increases.]

    No, Ben, right-wingers are outraged that capitalism WASN’T allowed to reign free, and that the government got in the way of capitalism (and continues to) using money that isn’t theirs.

    How is it that these bonuses can even be paid in the first place? Because politicians a) bailed the institutions out using taxpayer dollars, and b) did so without creating ANY true accountability. Under true capitalism this would not have happened.

    To insinuate that free-reign capitalism is what has allowed for these outlandish bonuses is entirely incorrect. Greed is behind them, as is the motivations by politicians under both Administrations to allow these bonuses to occur once again. Funny how there’s all this profit there when another party (the taxpayer via the government) covers the losses.

    A tax on the banks or the bonuses by government? That will likely be a joke, too, as they government is sure to leave a whole bunch of loopholes for smart execs to offset or even dodge any taxes they’ll have to pay.

    • [right-wingers are outraged that capitalism WASN’T allowed to reign free, and that the government got in the way of capitalism (and continues to)]

      Vern – when in the modern era hasn’t this been true?

      Hell, it wasn’t even true when we settled the West. We gave away land – we even bought horses and wagons for people. Grant you, expansion as policy was in a category of its own, but it wasn’t capitalism that built the West. It was government intervention that created the conditions for capitalism to flourish in the West.

      You’re kind of libertarian (?). So do you object to agricultural subsidies? Fuel subsidies? Home mortgage exemptions? They surely interfere with capitalism.

      And by the way, I’m not happy either with the way the bailouts were handled. I honestly don’t know enough about fiscal policies to know if letting them fail would have been good or bad; I do however know enough to be furious that concessions and condiditons weren’t insisted upon.

      • I think we’re talking two separate things here. First, the principle: I don’t believe in NO government. Government has to create and enforce the rules that we ALL should play by. Besides, free reign capitalism is not intended to run in a lawless society, otherwise we could rob or extort anyone’s wealth by force right after they had earned it.

        Therefore, I agree with government involvement to the degree of creating and enforcing anti-competition laws, creating and enforcing securities regulations.

        In the case of the bailouts, Government initiated the financial crisis by deliberately creating and allowing rules that could be exploited. The politicians did this knowing full well that they were catering to their buddies in the banking and financial industry. I point to Dodd and Geithner as examples. Then, they create a campaign against capitalism, equating it with greed, and making it out that greedy executives are the problem and that somehow the greedy politicians behind them are the saviors. Again, the hypocrisy – they grill the execs for taking private planes across a few states to Washington, yet look at all the private jet all-expense-paid junkets Congress took across an entire ocean to Copenhagen. That’s just one example, but I digress.

        Attacking executives and blaming corporations keeps the focus off the greedy politicians and keeps them in power. Worse, it usually gets them more of it.

      • [ . . .making it out that greedy executives are the problem and that somehow the greedy politicians behind them are the saviors.]

        Greed is there. Will always be there. And we, as a society, need to constrain it to an extent, as you said. Idiot politicians lifted the retraints. And whooppee, off to the races.

        And THEN (and you’re right again) the pols act surprised and outraged.

    • [To insinuate that free-reign capitalism is what has allowed for these outlandish bonuses is entirely incorrect.]

      That wasn’t insinuated. Free-reign capitalism is what caused the collapse of the banking system. Even Alan Greenspan has admitted that Ayn Rand was wrong, and that a free market isn’t self-regulating.

      • Here’s where we disagree – I argue that the banking system was never “free reign”. Free reign capitalism involves risk, so tell me where the risk was to the financial institutions? The government conveniently took it all away. For one, to win political points with voters, and two, to keep themselves in favor with the “fat cats” they so publicly try to demonize yet very conveniently find cushy jobs with once out of office.

        It was their greed (and/or ignorance) that truly created this mess as an abuse of their power, and it’s the demonizing of capitalism and corporations that gives them a convenient smoke screen to grab more of it, like they have done in the past and are doing now.

        In contrast, take a look at Canada’s banking system (Royal Bank, TD, Scotiabank). They are JUST as greedy as the American ones, if not more, and they are massive. See how many bank failures there have been in Canada – I assure you it was not because they were any less greedy. It was because they operated in an environment that was more free reign in that Government did not remove their risk on loans to begin with or offer to bail them out in the end. Bigger, just as greedy or more, less government intervention (in terms of help, not laws) and look how they made out in this crisis.

        To your (and Greenspan’s) other point, that a free market isn’t self-regulating, I agree. I believe back in the early days it may have been, but that’s when things were tangible and we were on a much more even (and more local) playing field. Money is far too intangible now, and can go far to great a distance and back in milliseconds. That creates too many opportunities for the corrupt and the greedy, and worse, on too massive of a scale now.

        As I’ve stated in other posts, I’m not against government “intervention” by way of common laws to protect against greed, I’m against government intervention that furthers their own.

      • Vern –

        Again, I’ve no idea what the repurcussions would have been had Paulson et all not stepped in. But I will tell you what my brother in law (a man as liberal as there is and quite savvy financially) said when Obama appointed Geithner and brought Larry Summers inside. He said “that’s it; he’s a one term president”.

        The left doesn’t demonize capitalism, we demonize abuses of capitalism by corporations (most, not all). Capitalism itself is simply a philosophy. Incorporation is application of an organizing system. And that’s where the humans come in! And when I look at socialism as it’s practiced today, I just see capitalism with a lot more restraints.

        I think capitalism is like democracy – anarchy when it’s unbridled (direct democracy). Representative democracy is much tidier. And so is capitalism when it’s restrained.

      • Also Vern – I don’t think Canadian banks were allowed to mix it up with investment banks, the way we began allowing it here. From what I’ve heard, that is what made the difference.

      • Moe,

        re: your view on capitalism, nice to see it’s not totally hated on here. 🙂 I guess we all hate the abuses of capitalism, the question/difference is just who we blame more for it. My 1,2,3 on that is 1) Media, 2) Politicians, and 3) Us, but that’s just my opinion.

        re: Canadian banks “mixing it up” with investment firms, I think you’re right – it went the other way down here where they were able to play by a different set of rules.

      • [Here’s where we disagree – I argue that the banking system was never “free reign”. Free reign capitalism involves risk, so tell me where the risk was to the financial institutions? The government conveniently took it all away.]

        True, but the bailout wasn’t guaranteed. Lehman Brothers was allowed to go belly-up. These banks were engaging in risky behavior for years, knowing full well of the bubble they were creating would eventually burst.

        I remember seeing a special on the News Hour about five years ago about the credit default swaps and how baffling it was the the government allowed this behavior. But it was all legal, since the regulation that prohibited it was repealed in 1999 in the Financial Services Modernization Act — specifically, the repeal of Glass-Steagall.

      • [re: your view on capitalism, nice to see it’s not totally hated on here.]

        You’re not hated at all here, Vern. On the contrary. Your comments are greatly appreciated! It wouldn’t be much of a debate if we all agreed. 🙂

      • [You’re not hated at all here, Vern. On the contrary. Your comments are greatly appreciated! It wouldn’t be much of a debate if we all agreed. :)]
        I was actually saying that I was glad to see capitalism wasn’t totally hated on here, not me, but thanks for the compliment anyways, Ben! I enjoy the debates as well.

  6. Mr. Hoffman, Ms Holland,

    ” The banks have repaid 4% of the money Alan. ”

    You would seem to have better information than I do, perhaps you could share your source?

    You really have not demonized the true villains in all of this. Probably because they were run by your buddies in to the ground and were the real cause of all the trouble. I am talking about every body’s favorite Government banks Fannie and Freddie. Just when will these two pay back their Tarp money? Huh?

    I also hear they gave out nice bonuses.

    http://www.cnsnews.com/news/article/59848

    When will the GSEs and Government Motors start paying back their Tarp? Where are their new taxes? You guys ALWAYS say that taxes on the rich don’t hurt anything. So this won’t hurt GM or Fannie and Freddie?

    • I’m all for increasing income taxes on the CEOs earning millions a year.

      • It was fairly easy for those banks to cut costs in order to show a profit, but credit hasn’t really opened up, jobs aren’t being created, and the economy isn’t where it should be yet so I don’t think we should be handing these guys millions in bonuses as though just because the loan is paid back, they’re now out of the woods.

        So I’ll go you one further, Ben. Those bonuses should have been held for at least 2-3 years, and in the meantime, the government shouldn’t be getting just cost + 10% or whatever the deal is on those loans, it should be getting double plus a proportionate amount of the profits as shareholders, too.

        If any company of mine screwed up that bad to the point where I had to bail them out that much in a year, I’d be sure to be owning their a$$es for the next three just to make sure their recovery wasn’t short-lived.

      • Another thing that screwed things up was the incentive system they put in place, rewarding short term profits, and dear god help us that appears to be continuing. These folks must indeed be masters of the universe if it takes a $20 million bonus to get them to agree to do their jobs.

        And that easy deal they got for repayment – that just stunk.

  7. V.R. Kaine said:

    In contrast, take a look at Canada’s banking system (Royal Bank, TD, Scotiabank). They are JUST as greedy as the American ones, if not more, and they are massive. See how many bank failures there have been in Canada – I assure you it was not because they were any less greedy. It was because they operated in an environment that was more free reign in that Government did not remove their risk on loans to begin with or offer to bail them out in the end. Bigger, just as greedy or more, less government intervention (in terms of help, not laws) and look how they made out in this crisis.

    This paragraph is misleading. The Canadian banking system fared better than many other G20 nations because we have more stringent regulations that mitigate for the type of greed that got many Western economies into trouble.

    Therefore, to say that Canadian Banks did better because of less government intervention is not only erroneous, but at polar opposite of the reality of the situation.

    It is precisely because we have more government intervention and regulation that the Canadian banks were relatively unscathed during the ‘market correction’ of 2009.

    “It was their greed (and/or ignorance) that truly created this mess as an abuse of their power, and it’s the demonizing of capitalism and corporations that gives them a convenient smoke screen to grab more of it, like they have done in the past and are doing now.”

    I would disagree with your assessment of the demonization of Capitalism. Capitalism is about exploitation, if you are not exploiting one class or another then you are doing it wrong. So, there is no real smoke screen per-say, but rather, it is business as usual.

    • Arbourist,

      The word “intervention” is too broad for this discussion, so I attempted to narrow it down further. It’s one thing for government to “intervene” by setting up laws to prevent malicious monopolies or oligopolies (look at Canada’s telco industry), and it’s another for the government to basically tell the banks to write whatever bad loans they want and the taxpayer will guarantee them. The Government of Canada does not intervene with banks in this way.

      Comparing the US and Canadian system, the Bank of Canada has different rules regarding derivatives and what banks were allowed to consider as both assets and collateral. Furthermore, I would make the argument that the reason the banks didn’t take as many risks as the American banks did (as far as mortgage lending goes) is because of their concern over profitability, and return to their shareholders. In Canada’s case, the government didn’t tell them not to make risky loans, in essence, the shareholders and their competitors did. A strong case for capitalism, in my opinion.

      [Capitalism is about exploitation. If you are not exploiting one class or another then you are doing it wrong.]
      If that were even so, then I’m curious – what is your choice of a system that DOESN’T exploit one class or another? Socialism, Communism, Fascism, ?

      • [ . . . different rules regarding derivatives and what banks were allowed to consider as both assets and collateral.0]

        Vern – isnt this another way of saying Canada didn’t allow its banks to become investment houses?

      • In Canada’s case, the government didn’t tell them not to make risky loans, in essence, the shareholders and their competitors did. A strong case for capitalism, in my opinion.

        I think we may be arguing the same point but attributing it to different sources. The profit motive has been bridled, to a certain extent, and thus we had less exposure to the high-risk/high-reward loans that got other banks in trouble. Shareholders like to see big figures on the bottom line, without the regulation we would have been just as flummoxed as the rest of the world.

        If your argument was to be applied to the US system then it should have similar results – shareholders and competition curbing the excesses and dangerous investments. Clearly, that did not happen. Therefore there must be a unique feature(s) of the Canadian banking system that caused the different outcome vs the American banks.

        I would put forth, by your reasoning, that the difference had a great deal to do with the government regulation of the industry. Which makes a strong case for a mixed economy, as a opposed to a capitalist one.

        If that were even so, then I’m curious – what is your choice of a system that DOESN’T exploit one class or another? Socialism, Communism, Fascism, ?

        I support the social democratic mixed economic model. Capitalism has the capacity to generate great wealth, but at the same time it creates great inequalities in society. Strong redistributive measures can reduce the imbalance giving more people an opportunity to lead productive lives.

        I’m afraid that until we can get past scarcity of resources we will be saddled with a system(s) that entail that someone will always be getting the short end of the stick. I think a socialist mixed democratic system is the best compromise we can make given the current situation.

      • Moe,

        In a manner of speaking, yes. Canada allowed its banks to bring investments and insurance under it’s roof (you’re probably familiar with TD Ameritrade – that is Toronto Dominion Bank in Canada) but in doing so they were also brought under bank oversight.

        Canadian banks were still trading derivatives, but to a much lesser degree. Canada also didn’t have the CRA, or GSE’s like Fan and Fred which are what I consider to be the “intervention” that caused the problems, not capitalism.

      • One of the things we have in the US is a cultural ‘imperative’ saying that owning your own home is the fulfillment of ‘the American dream’. That’s a powerful motivator just by itelf, and ultimately shapes policy of all sorts. Then we add in the home mortgage deduction (making rentals appear to be more costly), the arrangement of our infrastructure around suburbia . . . I don’t know how much of that is applicable in Canada, but the creation of Frannie and Freddie were just inevitable.

      • Arbourist,

        You may be correct on us arguing the same point. In regards to the banks’ stability, credit has to be given to the fact that stringent regulation existed in the first place which curbed the banks from taking too big a risk. You also have the OSFI as oversight, and I agree that this in principle would have curbed a lot of the disaster that we see down here. On that point, I agree on the necessity and benefit of regulation.

        [If your argument was to be applied to the US system then it should have similar results – shareholders and competition curbing the excesses and dangerous investments]
        Not quite what I was saying. Let me try a different way: the way I see it, banks in Canada are not seen so much as “stellar return” investments as they are seen as “safe” investments with a decent return.

        Competition and capitalism drives them to try and be the safest as well as drives them to determine who can provide the best shareholder return. With a competitive focus rather than a regulatory one, they consequently achieve a higher level of safety than regulation could do on its own, automatically forcing them to better manage their own risk. In Canada’s case, their banks hold greater safety deposits than they are required to. Why? They do this of their own free will from a capitalist mindset as the profit motive is there to do so. In effect, they are able to profit from safety. That’s capitalism at its best.

        Government intervention down here took away the profit motive for the financial institution to better manage its own risk, so all the institution had to focus on was their returns. I argue that the risks these institutions took was not as a result of “free reign” capitalism, unless you believe the government gave them more “free reign” by guaranteeing their bad loans with taxpayer dollars. Nonetheless, since the profit motive to minimize risk was removed by government, capitalism in my opinion is not to blame, government is, and in thinking or expecting that government was supposed to prevent this all from happening, we are, too.

        On a side note, I don’t buy for a second that the execs down here didn’t see the writing on the wall. My banker up in Canada was worried about the mortgages he was writing three years ago with the rise in prices and the decrease in lending criteria even then.

        Damn – another novel. My apologies but your questions and comments (thank you) deserved a proper response.

      • Moe,

        Yes, I think owning your own home became too much of a social issue (greed!) and political as well (greed for votes). I consider, too, that back in my parents’ day a home was basically four walls, a floor, and a ceiling. They wouldn’t get a mortgage if they couldn’t pay it off in 5-10 years, and they certainly weren’t buying on credit the way we do today. Our tastes as a society became much more decadent and materialistic, I think. Doesn’t mean I’m giving up my 50″ TV though!

      • Arbourist,

        You said, [I support the social democratic mixed economic model.] Still exploits, I think, but I can better understand your position.

        I agree that while we’re faced with scarce resources, basically someone somewhere gets the shorter end of the stick. Forget hydrogen fuel cells – where’s our replicators like on Star Trek?

      • [Doesn’t mean I’m giving up my 50″ TV though!]

        Aren’t they great for watching football! 🙂

  8. The Arbourist,

    ” It is precisely because we have more government intervention and regulation that the Canadian banks were relatively unscathed during the ‘market correction’ of 2009. ”

    Question, does Canada have it’s version of Fannie Mae and Freddie Mac?

    • You mean, does Canada have a Fannie M’Eh’? (sorry, couldn’t resist!)

      Canada has the Canadian Mortgage and Housing Commission which guarantees mortgages. Arbourist, correct me if I’m wrong, but I think that’s the only one and it’s quite different from Fannie Mae and Freddie Mac.

  9. Mr. Hoffman,

    What exactly does Barak the Rock mean?

  10. “But he [Obama] said his goal was to prevent such excesses in the future, not to punish banks for past behavior.”

    Good strategy, and great goal! Haha! Heaven forbid he hold anyone accountable for allowing these bonuses under TARP in the first place, or punish the banks for not disclosing where the money actually went, or punish those in his party who rammed through a whole bunch of pork spending along with it.

    By that way of thinking, as long as Madoff doesn’t do it again, let’s let him go and just put some rules in place so it never happens again. In fact, let’s thank him for teaching us such an important lesson. 🙂

    Penalty of embarrassment by just grilling these guys on TV is hardly a penalty at all. I hope more serious consequences come to them.

    • Today on Fareed Zacharia’s show, GPS, on CNN, he had a panel on the banking failures (David Frum, Elliot Spitzer, Naomi Klein and one of the Freakonomics guys). Such a good panel – completely engaging.

      And they seemed to be pretty much agreeing with what you’ve been saying Vern – if I’m reading you (and them!) right. The consensus seemed to be that government safety nets allow caution to be thrown to the winds. That without that safety net, the incentives would not be as perverse.

      Isn’t the a bit what Greenspan believed? That markets would self correct in their own best interests? And that preservation of self was their best interest?

      • Yes, Moe, I think we’re tracking on what each of us are saying. I’ll look for the video on Youtube, or a transcript somewhere.

        It’s such a complex thing – “safety nets” – because they’re so many stakeholders involved. How do you balance them out so that it provides for a truly equal playing field? That is where I think these issues get caught up.

        As devout of a capitalist that I am, I don’t think the “self-correction” mechanism is as reliable as it used to be for reasons I stated before such as the velocity of capital. I belief the self-correction EVENTUALLY happens, but at what cost? I believe things can now get past the point of no return way too quickly.

  11. V.R. Kaine said: Nonetheless, since the profit motive to minimize risk was removed by government, capitalism in my opinion is not to blame, government is, and in thinking or expecting that government was supposed to prevent this all from happening, we are, too.

    What I see is that we are approaching the issue from different standpoints. I can ascertain that you support many ideas of capitalism, but are not unwilling to look at its faults as well. This quality of reflective thought seems to be spread quite thinly in the blogosphere.

    With a competitive focus rather than a regulatory one, they consequently achieve a higher level of safety than regulation could do on its own, automatically forcing them to better manage their own risk.

    Where we are meeting at loggerheads is the application of regulation in the argument. To me your argument is as follows.

    The US government has made risky investments tenable by ‘gaming the system’ so to speak and protecting banks from failure.

    So by limiting natural consequences of risky investing, the state has caused/contributed to the financial crisis.

    Therefore you argue that the regulations that have been enacted to prevent ‘catastrophic banking system’ failures are a bad thing and that if normal market rules were being followed the crisis would not have happened, or would be on a lesser scale.

    Conclusion: Regulation of risk is bad for the banking business.

    I agree with this.

    The problem is that when governments write legislation they often write it for the benefit of the class that they represent. So my worry is that what is passing for “free market” legislation is really laws meant to further enhance the position of the wealthy at the cost of everyone else in society, as opposed to the capitalist meritocracy that we are often told is how the market works.

    Essentially, those who run the game, make the rules for their benefit. Which runs into my preference of the government establishing regulations and programs that redistribute wealth/power that combat the trend of capitalist economies to concentrate wealth/power in the hands of a few.

    • Arbourist,

      Many hairs to split here on such a complex issue. First, yes, I do defend capitalism, but by no means am I altruistic about it or believe it is without its faults. While it provides what I believe is the only mechanism for a janitor to become a Bill Gates, capitalism can also ensure that it never happens when greed gets involved. I also believe capitalism assumes (ideologically?) that we all begin from the same starting point and all get a fair shot to begin with, to which I disagree. Some people don’t get the same fair shot that others do, whether that be due to a diminished mental capacity, lower social or economic class, poor access to education, physical impairment, or any number of things. It is on that level that you’ll find some of my views to be more social. I have spared those views here, however, trying to keep the discussion around the mortgage crisis and defending capitalism which I think has become now fashionable for many to attack.

      Second, you said “those who run the game make the rules for their benefit.” I agree with your statement and your disdain for this. The rules should be made for ALL to have a chance to benefit, prosper, and succeed. To me, that’s part of freedom.

      Lastly, you said your preference is to “redistribute wealth/power that combat the trend of capitalist economies to concentrate wealth/power in the hands of a few.” Here we will likely debate until the end of time. I think wealth and power always ends up in the hands of the few, even in your preferred system, and that politicians in acting like they’re redistributing wealth are really just increasing their own wealth and power, too – not the average citizens’. If the book “Game Change” has any truth to it, look at Edwards. Who was he really fighting for? Clearly his own wealth and power. There’s dirt like this on all these guys, I’m sure, Repubs and Dems alike.

      So instead of giving these guys my votes and my taxes – both that they waste – I prefer instead that they just get out of my way and allow me to fend for and take care of my own and those I care about. Capitalism allows me to do that.

      Not all us capitalists are evil! You won’t find me donating $25,000 to a symphony while there are homeless and hungry sleeping on the steps of it (I hate that hypocrisy), but you also won’t find me trusting government that an increase in my taxes is going to allow the government to help those people, either, and I hate when they try and use the “common good” as an excuse for anything, because it’s always b.s.. Sorry to be so cynical on that, but history prevails.

      Anyways, I’ve ranted long enough! I’ll bow out of the discussions now and leave the rest to my fellow right-wingers. 🙂

      • But Vern, you’ve opened up a whole new and interesting area of discussion with this:

        [you also won’t find me trusting government that an increase in my taxes is going to allow the government to help those people, either, and I hate when they try and use the “common good” as an excuse for anything, because it’s always b.s.. Sorry to be so cynical on that, but history prevails.]

        There is SO much here to mine and if you really are off to better things than this thread (and any person with a life would be), then I’ll have to wish you adieu and save it for another day.

      • Hi Moe,

        Just saying that for me it started with a modest defense of capitalism and ended up with paragraphs upon paragraphs that exhausted me. I figure I took up way too much space, and thought I should bow out having said my peace.

        I think if anything’s going to pull this country out of the mess it’s in, it’s entrepreneurship and innovation through capitalism so when it comes up, I’m quick to defend it. 🙂

        Re: my comment re: politicians and the “common good”, what did you want to share/have me respond to? I’ll be happy to…

      • Ah, argument for the sake of argument would lose steam quickly, so I’ll let you rest up.

        Come visit some day. I shall stop by as well.

      • [I think if anything’s going to pull this country out of the mess it’s in, it’s entrepreneurship and innovation through capitalism so when it comes up, I’m quick to defend it]

        I agree. And how do you promote capitalism? We could start with some protectionist policies that would bring some manufacturing jobs back here. And how about some tariffs on goods made with slave labor in China so manufacturers can hire people here instead?

      • [And how about some tariffs on goods made with slave labor in China so manufacturers can hire people here instead?]

        Ben, that is so important. And we hear next to nothing about it from Democrats – or Republicans. Why oh why? When are they going to figure out that corporations do not have any national allegiances?

      • Congress couldn’t even get a “buy American” clause in the stimulus bill. Every other country in the world that had an economic stimulus program had restrictions that the money had to be spent within the country. What the hell is wrong with our politicians that they don’t care about our own country? Oh, yeah… campaign contributions.

      • Ben et al – I really think it will always come back to campaign financing. We are in a fine pickle.

      • [I really think it will always come back to campaign financing.]

        That’s the root of the problems with our government, yet where’s the push for reform? What about voting machine standardization? With all the problems with voting irregularities, you’d think somebody would be offering proposals to fix the problems. But the wheels of change turn slowly in Congress. Unless, of course, it’s for tax cuts. Then they go through over night.

      • [With all the problems with voting irregularities, you’d think somebody would be offering proposals to fix the problems.]

        Ben – I’m far less concerned (right now – that could change) with money than with Diebold et al. As long as my congressman spends more time raising money than he does doing the business of the Congress, he’s not working for us. And it transcends liberal conservative. If we could clean that up, we might see a Congress that is willing to look at things like black-box voting.

  12. Ms. Holland,

    ” As long as my congressman spends more time raising money than he does doing the business of the Congress, he’s not working for us. ”

    Sometimes the less a Congressman or Congresswoman does the Business of Congress, the less mischief they do.

    ” The consensus seemed to be that government safety nets allow caution to be thrown to the winds. That without that safety net, the incentives would not be as perverse. ”

    You guys continue to miss the real reasons for the meltdown. Blaming Wall Street and the Banks for everything that went wrong is akin to blaming an alcoholic gambler for losing your money, after you got him drunk, wheeled him in to the casino, gave him your cash, and continued to order drinks all night for him. Wall Street followed a chain of events that the Government set in motion.

    Believe it or not, Wall Street firms and Banks compete with one another. I know that you lefties can’t grasp that, but it’s true. If one firm starts making bigger profits by taking bigger risks, the others by default have to follow. Greenspan and Bernanke started these frenzies by keeping interest rates low for too long and then raising them too fast. This caused the dotcom Boom and Bust under Clinton and the Housing Boom and Bust under Bush.

    When investors were screwed by low interest rates, they took on higher risks to make money. Wall Street came up with the Mortgage Backed Security, which Greenspan and Bernanke should have stopped. The ratings firms had incentives to put their USDA seals of approval on the rotten meat. And a LOT of what turned out to be rotten came through Fannie and Freddie and from Senator Dodd’s buddy Angelo Mozilo of Countrywide. Of course while President Obama is using class warfare on evil Wall Street he won’t do anything to Dodd’s buddy or his buddies who used to run Fannie and Freddie.

    Mr. Hoffman,

    ” With all the problems with voting irregularities, you’d think somebody would be offering proposals to fix the problems. ”

    You have got to be kidding. How do you think Al Franken got in?

    • [If one firm starts making bigger profits by taking bigger risks, the others by default have to follow.]

      That’s true, and deregulation allowed them to take those risks (see the repeal of Glass-Steagal). It’s also the reason Fannie and Freddie joined the gambling party.

      [Greenspan and Bernanke started these frenzies by keeping interest rates low for too long and then raising them too fast. This caused the dotcom Boom and Bust under Clinton and the Housing Boom and Bust under Bush.]

      I doubt any economists would agree that low interest rates caused the dot-com boom and bust. That was more due to irrational exuberance. It was also due to online stock trading and low capital gains taxes. Under Bush, it definitely played a role in the housing boom, but that alone would not have caused the bubble. It was more due to reckless lending practices.

      [How do you think Al Franken got in?]

      He got more votes than the other guy? But if you believe there were election irregularities, you’d agree that something needs to be done, right? This should be a non-partisan issue.

    • [Greenspan and Bernanke started these frenzies by keeping interest rates low for too long and then raising them too fast.]

      When did they raise interest rates?

      • Come on now, Moe… Right-wing talking points aren’t supported by facts.

      • Most talking points are never supported by a fact. Most are falicy laden BS marching orders from unelected party bosses to their spineless drones too afraid to buck the system and actually represent their constituants vs their party masters.

      • POT: While I might have put it a bit more delicately, I agree iwth you wholeheartedly on this part:

        [ spineless drones too afraid to buck the system and actually represent their constituants ]

  13. Mr. Hoffman,

    ” [How do you think Al Franken got in?]

    He got more votes than the other guy? But if you believe there were election irregularities, you’d agree that something needs to be done, right? This should be a non-partisan issue.”

    We on the right believe that your guys were using ACORN to cheat so Franken could win. You are the ones who want to loosen up voter registration. Your side says that people are being denied voting rights. Pure BS.

    If anyone really wants to vote, it is not that hard to register legally. All of this automatic crap just invites fraud. Now if you have a drivers license you are registered to vote. If you can walk, talk and chew gum you are registered to vote, even if you are registered somewhere else. If you are an illegal the Democrats under ACORN will register you to vote. You can even be dead in Chicago and vote.

    ” It’s also the reason Fannie and Freddie joined the gambling party. ”

    No, no, no. A thousands no’s. Fannie and Freddie were the Democrats private banks, used to push their socialist, lend to people who will never pay it back, policies. When regulators and Republicans complained about the cooked books and about the high risks the 2 GSEs had taken on, YOUR people protected the executives earning the giant bonuses. Funny how Obama never brings up Fannie Mae and Freddie Mac, when he talks Wall Street greed. Unlike you, I can prove what I say.

    “I doubt any economists would agree that low interest rates caused the dot-com boom and bust. That was more due to irrational exuberance. It was also due to online stock trading and low capital gains taxes. Under Bush, it definitely played a role in the housing boom, but that alone would not have caused the bubble. It was more due to reckless lending practices.”

    You are amazsing. You do not have to be an economist to grasp the truth, but you do need some investing experience to understand human behavior and how cheap money for too long causes bubbles. Greenspan’s ” irrational exuberance ” remark was to cover his own butt. Do you have any investing experience?

    If your great hero wanted to really punish guilty Wall Street types, he would turn his wrath against the ratings firms who certified all of the toxic assets that took down the system. Why don’t we ever hear that?

    And as far as “reckless lending practices” the GOVERNMENT encouraged and sometimes REQUIRED it. Your buddy Chris Dodd was a friend of Angelo who National Review called a ” kamikaze lender “.

    You keep denying that your Taxocrats had anything to do with the financial meltdown. Why is that?

    • [You keep denying that your Taxocrats had anything to do with the financial meltdown. Why is that?]

      No, again and again I’ve placed blame on Bill Clinton for signing the deregulation that led to the financial meltdown. You’re just so full of hatred and anger that you can’t remember anything.

  14. Alan, you never quit. I have to give you that.

    “The Federal National Mortgage Association (FNMA) (NYSE: FNM), commonly known as Fannie Mae, is a stockholder-owned corporation chartered by Congress in 1968 as a government-sponsored enterprise (GSE), but founded in 1938 during the Great Depression. The corporation’s purpose is to purchase and securitize mortgages in order to ensure that funds are consistently available to the institutions that lend money to home buyers.[3]” (Wikipedia)

    So 42 years ago, during the Nixon administration, the Democrats set out to bring down our economy. Sure took them a long time.

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