Business Must Answer to ‘Occupy Wall Street’: Adam Creighton

I don’t usually touch on economics at this blog, unless there is a clear science link, because it is not something I know much about. But I was so pleased to read the following piece by Adam Creighton this morning at On Line Opinion. It clearly articulates what I perceive to be right about the ‘occupy protests’, what is right about capitalism, and what is wrong with ‘the economic system’ at the moment.

I’ve been particularly disappointed to see many so-called right wing commentators so dismissive of the efforts of the protestors. People on the right too readily equate their ideology with the financial sector making lots of money, which is wrong.

Adam Creighton writes:

“AS the public squares of Western capitals fill with angry crowds – self-appointed representatives of the ‘the 99%’ – it is easy to poke fun. Railing against greed and inequality is akin to complaining about human nature. And far from being 21st century sans-culottes, these are mostly avec-ipods: relatively well-off, educated, and accessorised with the clothes and gadgets of the corporate culture they damn.

But their inchoate chants give vent to an increasingly widespread disgust with the economic status quo. Across the OECD the global financial crisis has thrown 15 million people out of work. Massive bank bailouts have triggered public debt crises in the United States and Europe that presage penal inflation and tax hikes. In Britain, whose public debt has surged £1 trillion, GDP per person is now 13% lower than its pre-crisis trajectory.

Ordinary taxpayers and voters are bearing these colossal costs, while those that abetted the crisis – bank staff, economic bureaucrats and politicians – remain and even prosper. If this is not galling enough, the steady drip of obscene ‘bonuses’ and gargantuan pay cheques in the wider corporate world is Chinese water torture for disillusioned taxpayers and reluctant shareholders.

They struggle to articulate it. But the public is not angry about inequality per se, they are concerned by an economic system that appears to be allocating rewards arbitrarily and unfairly. They are gobsmacked that the system’s shortcomings, starkly revealed, are being papered over, even exacerbated.

It is a public relations disaster for the intellectual ‘Right’ that vast swathes of voters worldwide are blaming capitalism for this offensive economic bog, and calling for greater government intervention. Even conservative writers like Charles Moore, former editor of The Spectator, are openly pondering whether the ‘Left’ was correct all along.

It is not surprising, though. The International Monetary Fund, self-anointed ringmaster of ‘free markets’, repeatedly endorsed our economic system before 2008. Countless books about globalisation over the past 30 years lauded how ‘capitalism’ was lifting millions out of poverty in the third world. Fukuyama’s end of history pinpointed something, but it wasn’t the triumph of capitalism as many imagined.

That people blame capitalism will be an economic disaster too, laying the groundwork for yet further shifts away from the ideals of a free society.

Indeed, the ‘occupying’ protestors should be agitating for more capitalism and less government. Capitalism rewards talent and effort, and leaves the biggest rewards for those that risk their own money and time to bring goods or services to market that consumers can voluntarily buy – think Henry Ford or Lang Hancock; the late Steve Jobs or John Symonds in our own lifetime.
Capitalism is not about giant corporations being able to dump their losses on taxpayers. It is not about allowing senior employees to feast with impunity on the profits of capital supplied by others simply because they can. Nor is it about armies of bureaucrats, corporate welfare, implicit guarantees for banks, or welfare states so pervasive and meddling they have sucked the appetite for individual responsibility out of their citizens.

Government has systematically shielded the biggest companies and their staff from the bracing but vivifying winds of ‘creative destruction’, what Joseph Schumpeter considered the hallmark of genuine capitalism.

Through direct spending and subtle regulations western governments have permeated almost every facet of the economy. In banking, governments and economic bureaucrats have acted as Dr Frankenstein, unwittingly facilitating monstrous growth in banks’ size, short-term profits and risk-taking with their implicit guarantees and feckless ‘Basel’ regulations.

Finally, despite patchy evidence at best, most economists agitate for Keynesian pump priming and artificially low interests rates to resuscitate economic growth. Yet their underlying models are often no less naive than the Leontief input-output tables that tried to animate the Soviet Union. Keynes’ quip about economics being most useful as a form of employment for economists was far more apt.

In short, Adam Smith and Frederick Hayek would recoil at the economic status quo. Indeed, the ‘left’ claim to be ‘progressive’ when much of its social democratic agenda is already fulfilled.

If genuine liberals want to maintain credibility, they need to distance themselves from corporatist and managerial rent-seeking as much as they do from the labour and bureaucratic kind.

The targets for reform are endless. Arguing for a greater role for owners of capital in our economy – shareholders – is one important way to encourage enduring support for capitalism. Adam Smith railed against the avarice and waste of the managers of the British East India Company. Indeed, economists have long recognised the gross inefficiencies that can arise when the link between ownership and control is severed, whether in government or private enterprise.

Limited liability companies are a gift and construction of the state. They came about to promote risky ventures whose success could bring wide benefits but the costs of whose failure would be borne by the owners. They have been a boon for western civilisation, but they require managers to exercise prudence and restraint, especially in the banking sector where limited liability for owners and no liability for bankers can have harmful social outcomes.

It is possible in some cases sufficient restraint is not being exercised, overseas or in Australia.

It is even more important that corporate governance is accepted and effective in Australia, where the fruits of workers’ labours are coercively siphoned off into superannuation accounts. On the bright side, this Australian model of dispersed share ownership offers a platform for ordinary people to have more say over the running of companies. Superannuation funds need to give vent to the views of their members when voting.

Even if the distribution of incomes and wealth is of no concern, how it comes to manifest itself is. If the current trend continues, whereby ever greater rent-seeking, bureaucratic and corporate parasitism contributes to ever greater disparities of wealth, our western democracies leave ourselves open to extreme elements that could remove the freedoms and liberties we still have.

As the Remuneration Tribunal is about to recommend massive pay increases to politicians and senior public servant – justified with reference to ‘market’ rates – it is worth considering whether corporate largesse is contributing to a creeping venalisation of the public service as well, which will only accelerate the erosion of public support for our economic system.

Adam Creighton is a Research Fellow at the Centre for Independent Studies. This article was first published by the Australian Financial Review on October 21, 2011. I first read it at On Line Opinion and it is republished here with permission from the author.

67 Responses to Business Must Answer to ‘Occupy Wall Street’: Adam Creighton

  1. spangled drongo October 24, 2011 at 1:45 pm #

    Just more over-indulged, undisciplined, delinquent teenagers who refuse to be accountable.

    D’you realise that police actually sprayed pepper on some of these “children”?

    With excess government being the only growth industry left in the western world it’s gonna get worse before it gets better.

    As one EU leader said, it’s not hard to solve this problem, just how to get re-elected when we do?

  2. jennifer October 24, 2011 at 2:25 pm #

    Spangled, Did you read the piece before commenting?

  3. spangled drongo October 24, 2011 at 4:01 pm #

    Well Jen, disregarding my opinion of the delinquent teenagers for now, I assumed it was the mad and bad regs of Big Govt with ever burgeoning bureaucracy that has led to the situation of Big Corp being “too big to fail”.

    IOW, the difference between Keynsian and Hayekian economics.

    And all the Western economies are now on the slipery slope with none of the leaders brave enough to do anything about it.

  4. spangled drongo October 24, 2011 at 4:05 pm #

    Are those teenagers demanding Hayek over Keynes?

    I must have missed that.

  5. debbie October 24, 2011 at 4:09 pm #

    These are the comments that touched me:

    They struggle to articulate it. But the public is not angry about inequality per se, they are concerned by an economic system that appears to be allocating rewards arbitrarily and unfairly. They are gobsmacked that the system’s shortcomings, starkly revealed, are being papered over, even exacerbated.

    That people blame capitalism will be an economic disaster too, laying the groundwork for yet further shifts away from the ideals of a free society.

    Indeed, the ‘occupying’ protestors should be agitating for more capitalism and less government. Capitalism rewards talent and effort, and leaves the biggest rewards for those that risk their own money and time to bring goods or services to market that consumers can voluntarily buy – think Henry Ford or Lang Hancock; the late Steve Jobs or John Symonds in our own lifetime.
    Capitalism is not about giant corporations being able to dump their losses on taxpayers. It is not about allowing senior employees to feast with impunity on the profits of capital supplied by others simply because they can. Nor is it about armies of bureaucrats, corporate welfare, implicit guarantees for banks, or welfare states so pervasive and meddling they have sucked the appetite for individual responsibility out of their citizens.

    Government has systematically shielded the biggest companies and their staff from the bracing but vivifying winds of ‘creative destruction’, what Joseph Schumpeter considered the hallmark of genuine capitalism.
    END QUOTE:

    I remember reading once that in the Agricultural world the 3 B’s are birds, bugs and bunnies. They sound harmless enough but the damage they can cause if allowed to get out of control is mind boggling. In the financial world, the 3 B’s are Bankers, Brokers and Bureaucrats…..and exactly the same applies to them….they sound harmless but if the they are allowed to get out of control….they wreak havoc.
    I agree that it is not capitalism per se that is the issue….it is the over regulation and over invasive 3 B’s who are behaving like parasites and sucking the life out of true entrepreneurial spirit and behaviour. They have become experts at ‘covering their ass’ and they have also developed slopy shoulders that allow all responsibility to slip off them and get dumped on something else….usually the taxpayer….
    Great post Jen.

  6. cohenite October 24, 2011 at 4:15 pm #

    “Ordinary taxpayers and voters are bearing these colossal costs, while those that abetted the crisis – bank staff, economic bureaucrats and politicians – remain and even prosper”

    That is only partially right; as in Australia which has a burgeoning nanny state apparatus, the US and Europe have squandered billions pandering to indulgent issue driven demands; by that I mean the elitists who have adopted such issues as AGW and literally thrown away money; you can’t spend a dollar twice but you can stroke your ego by creating an entitlement milieu which demands rights without responsibility; the issue of AGW is the poster-child, but far from the only example of this attitude which has created a grotesque “corporatist and managerial rent-seeking” class.

    The boofheads in the square, idiots to a dreadlock, are in fact not protesting against real capitalism [well in the sense they are because that system would make them get off their arses] but the nanny-state version which isn’t capitalism at all; to that extent Creighton is correct

  7. TinySherpa October 24, 2011 at 4:45 pm #

    I liked this – maybe a bit off topic :

    “If genuine liberals want to maintain credibility, they need to distance themselves from corporatist and managerial rent-seeking as much as they do from the labour and bureaucratic kind.”

    Last week we had Lindsay Fox telling us that if we did not like the executive remuneration we should sell our shares. As I understood it this was general advice not particular to his company. No doubt he was merely stating an attitude which is so common that he did not think anything of it. I hope that this cheek will be well rewarded by genuine liberal shareholders.

  8. RWFOH October 24, 2011 at 6:01 pm #

    Capitalism succeeds because it relates so well to the reptilian cortex, Socialism succeeds because it reflects the higher functioning of the frontal lobe. Too much of either and society delivers less than maximum benefit for the majority. The role of government is to mediate, facilitate and regulate between the two brain centres and the functional disposition of each.

    To suggest we need less government intervention in what is essentially a capitalist system is flawed because the failure of capitalism at this point is the emergence and ascendancy of the reptilian cortex in capitalism’s elites. Capitalism’s current failures are a result of poor or absent regulation, self-imposed or otherwise.

    You can have a veneer of civilisation over the reptilian cortex but it can’t, and didn’t, last. Extreme concentrations of wealth, brought about by instinctive acquisition and domination of resources through the arcane economic arts of capitalism, will only provoke responses with more traditional reptilian modes of acquisition and domination, i.e. through physical violence and menace. The hordes will only tolerate the gated communities for so long. The horde’s patience is being tested right now.

    Capitalism’s ‘make believe’ “Law of the Jungle” is all fun and games until someone loses an eye.

  9. cohenite October 24, 2011 at 6:26 pm #

    “Capitalism succeeds because it relates so well to the reptilian cortex, Socialism succeeds because it reflects the higher functioning of the frontal lobe.”

    Is that like saying: “Not to be a socialist at twenty is proof of want of heart; to be one at thirty is proof of want of head”?

    Capitalism only works if rights are married with responsibilities and this applies to everyone; this is true egalitarianism. It can never apply to socialism because the state assumes all responsibilities and dispenses rights as a matter of patronage.

  10. RWFOH October 24, 2011 at 6:33 pm #

    Humans evolved and survived through co-operative, socialist alliances. It is only within relatively recent times that the rights and privileges of the individual have been elevated to lofty heights.

    Robert Doyle was a private school teacher who became the leader of Victoria’s Liberal Party. He ditched his Mrs and family along the way and hooked up with the de rigour buxom blond bimbo. After failing as state leader he lowered his sights and used his political connections to become Lord Mayor of Melbourne. After a particularly embarrassing radio interview (for him) with a Occupy Melbourne kid, he sent cops in to remove what was a peaceful protest. If cafe and bar owners were worried about the impact on their businesses (which were set up on land that was excised from the city’s traditional city square), it shouldn’t have been too hard to talk to the protesters and organise pedestrian access to their businesses. No-one ever used the old city square anyway except for street kids looking for a mark. I guess Doyle was worried that Occupy Melbourne were introducing street kids to dangerous and revolutionary ideas?

    Doyle and Baillieu, like Kennett and Reith before them, reverted to neo-lib/con reptilian type and sent in the Boys in Blue. What is it with the Right Wing and bully boys with fascistic tendencies?

    Anyway, if you are fair dinkum about us having too much government intervention and regulation, let’s get rid of the Police and we’ll see if your current model has social license. Any takers?

  11. spangled drongo October 24, 2011 at 7:06 pm #

    Cohers, Right Wing Festival of Hate, as you can tell from his self proclaimed title, [reduced to an acronym these days to protect his innocence] is not someone you can have a logical discussion with on philosophy. Bit like Luke on steroids [or ecstacy].

  12. cohenite October 24, 2011 at 7:08 pm #

    “After a particularly embarrassing radio interview (for him) with a Occupy Melbourne kid, he sent cops in to remove what was a peaceful protest.”

    Details of Doyle interview with lead protestor:

    Occupy Melbourne protester Nick Carson and Lord Mayor Robert Doyle with Jon Faine on 774 ABC Melbourne yesterday:

    CARSON: The square opens up a space in our city in which we can begin talking about the issues that affect us. It is very crucial to the future of our democracy that we have this space . . .
    Doyle: It’s crucial to the future of democracy? I think you’re taking yourselves a bit seriously. I think you’ve made a valid point, you’ve made a protest . . .

    Carson: I don’t think we’ve made any point yet.

    Doyle: Well, what have you been doing there, then?

    Carson: We’ve just opened up this space and we are beginning to . . .

    Doyle: What does that mean? You’ve “opened up this space”?

    Carson: This is not about grandstanding, it is not about anything other than trying to strive for a real democracy. Because right now 99 per cent of the population do not have a voice in our parliament. We have to . . . scream and yell just to get heard . . . If I was a mining company, all I’d have to do is hire a giant lobby group and use my extraordinary wealth to bend the ears of politicians. Corporate greed exists, which means our democracy is not equitable.

    Doyle: No, Nick, that’s just silly. We live in a model Western democracy.

    Faine: Nick, if you’re going to be there until the excesses of capitalism are reined in you’re going to be there for a very, very long time . . .

    Doyle: Their point is they want to stay there forever and that’s not going to happen.

    Carson: We’re not trying to state what our point is. Because we don’t have a point.

  13. cohenite October 24, 2011 at 7:10 pm #

    “Right Wing Festival of Hate”

    Is that right SD; gosh there are some FW’s around today; bring back conscription I say; I can see luke in fatiques washing out the latrines for insubordination.

  14. Mark A October 24, 2011 at 7:10 pm #

    First bazza now this joker with his reptilian theories,
    What gives?
    Have they been banned from other blogs?

  15. RWFOH October 24, 2011 at 7:40 pm #

    Do you have a link to the full transcript Cohenite or did you just ‘cherry pick’ and parrot that from the un-Australian article?

    Better still, how about a recorded version so we can hear both Doyle and Faine haranguing and verballing the kid?

    It’s fine to cherry pick “we don’t have a point” before he was interrupted and had a chance to qualify his statement in a rapid fire verbal exchange where he was being double teamed.

    No, I want the recorded version so we can hear the full exchange where Doyle spits the dummy and verges on tears with the indignation of his “authority” being challenged.

    On the other hand, why nitpick one conversation when the the issue of fundamentalist capitalism has traction globally?

  16. Bronson October 24, 2011 at 8:11 pm #

    Was it fundamental capatalism that destroyed the Greek economy and has the other ‘PIGS’ states plus Italy teetering on the brink of insolvency?

  17. RWFOH October 24, 2011 at 8:18 pm #

    OK Bronson, I’ll play. I’m not going to defend all fiscal policy of the PIIGS states, but what was the trigger that pushed them to the precipice?

  18. cohenite October 24, 2011 at 8:55 pm #

    “Do you have a link to the full transcript Cohenite or did you just ‘cherry pick’ and parrot that from the un-Australian article?”

    Here you go: there were a number of links but I went to Bolt because you strike me as a Bolt fan:

    http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/protesters_admit_we_have_no_point/

  19. RWFOH October 24, 2011 at 9:04 pm #

    Sorry, as a matter of principle, I don’t hit Bolt. Would you like to provide a alternative or cut and paste?

  20. cohenite October 24, 2011 at 9:12 pm #

    No, I don’t believe in censorship; I believe the ABC should be abolished but I still go there. So stop being such a woose, man up and go to Bolt.

  21. Binny October 24, 2011 at 9:18 pm #

    In my opinion there are 2 key issues
    1- ‘Too big to fail’ there should be no such thing. At least in regard to the people in charge, the institution it’s self might live on in another form, but only under completely new management.
    2- There are 2 parts to the Keynesian principal, and the second part is that Govs tax more and spend less during economic up swings. It short it states that Govs should operate counter cycle to the economic sine wave, and smooth it out as much as possible.
    Problem is – Govs have been spending like crazy during the economic upswing, and now have nothing left to counter the down turn.
    The best we can hope for is 10 years or longer (the Japanese economy has been wallowing on the bottom since the early 90s) in the economic doldrums. The worst outcome (a.k.a. the Chinese/Indian economy crashes and burns) doesn’t bear thinking about.
    It is ironic that the economic fate of the Western world hangs on the savings, and economic resilience of Chinese and Indian peasants.

  22. RWFOH October 24, 2011 at 9:33 pm #

    Has it got the audio? I heard the original interview and my interpretation/version of events is based on the context of the subtle nuance of a conversational setting. Transcripts don’t reflect tone nor do they record interjections and distractions that occur in 3 way debates.

    Was Carson saying:

    “We have no single point”?

    “We haven’t yet formulated a set of policies”?

    “I am not authorised to comment”?

    Or something else altogether?

    My understanding is that OM claim to be non-hierarchical so I’m somewhat puzzled by media references to “leaders” and “spokespeople”. Hell, I’ll declare myself to be a OM leader and spokesperson and who can argue? I’m the Lord Mayor of Occupy Melbourne, turn off your computer and go to bed or my cops will have you!

    As for Bolt, I wouldn’t piss on him if he was on fire.

    Anyway Cohenite, stop being a pissant and deal with the issue which is whether extreme capitalism serves society well or subverts democracy to the detriment of the majority?

  23. RWFOH October 24, 2011 at 9:51 pm #

    “… I don’t believe in censorship;”

    Neither do I, but regurgitated offal from a bottom feeder isn’t news, independent or trustworthy in my opinion so I can’t see where the censorship is.

    At this point it would be remiss of me not to acknowledge that, over the years, JM has allowed me to have a crack at many people and things and I appreciate her intellectual honesty in allowing people to express themselves without the intervention of injudicious or biased editorial intervention. A rare gift.

  24. Bryan October 24, 2011 at 10:14 pm #

    Franco-Belgian bank Dexia has recently had to be bailed out.
    French taxpayers pay for the the greed of international banks and hedge funds.

    Major bondholders of Dexia are Goldman Sachs and J P Morgan.

    Goldman Sachs you will recall set up a giant hedge fund to short the housing market.
    At the same time its mortgage arm were told to grant mortgages to anyone who walked through the door.
    This enabled the hedge fund to make billions for the rich and ever greedy from a fixed bet.
    All part of the same greed that caused the 2008 financial crash
    So far no Goldman Sachs executives have gone to jail.
    However why should French taxpayers pay for Goldman Sachs bondholdings?

    Middle class and working class people watch as their pension funds, savings and living costs are squeezed and value transferred by trickery to the super rich.
    All part of the same process that leaves 30% of the British public on fuel poverty and official statistics that show 2500 people died last year from hypothermia.

    What else can the young unemployed and poor do but protest.
    If you get a chance go out and join them.

  25. cohenite October 24, 2011 at 11:06 pm #

    “extreme capitalism ” is the main source of funding for Green groups. Enron was up to its bloated chin in ‘green’ projects; name one bank which hasn’t got an active green division; who did the current head of the CSIRO used to work for; etc, etc ad nauseum.

  26. Craig Goodrich October 24, 2011 at 11:50 pm #

    “Indeed, the ‘occupying’ protestors should be agitating for more capitalism and less government.”

    Yes, of course they should. But they are not. The fact that crony capitalism and rent-seeking are rampant throughout the West does not alter the obvious fact that in the US at least, the vast majority of the protesters are certifiably delusional imbeciles.

  27. mkelly October 25, 2011 at 1:30 am #

    Have you ever noticed how some people you want “free” health care are against “free” music downloads? ie the producers of the music.

  28. WiseFather October 25, 2011 at 2:19 am #

    The anti-capitalism label is being used to stunt the growth of the “Occupy Wall Street” protests. I explain in a recent post how the left, right, and media elites want to keep the 99% from uniting. http://www.ragingwisdom.com/?p=412 Enjoy!

  29. John Sayers October 25, 2011 at 5:23 am #

    Yeah, the permanent political class – they’re doing just fine. Ever notice how so many of them arrive in Washington, D.C. of modest means and then miraculously throughout the years they end up becoming very, very wealthy? Well, it’s because they derive power and their wealth from their access to our money – to taxpayer dollars. They use it to bail out their friends on Wall Street and their corporate cronies, and to reward campaign contributors, and to buy votes via earmarks. There is so much waste. And there is a name for this: It’s called corporate crony capitalism. This is not the capitalism of free men and free markets, of innovation and hard work and ethics, of sacrifice and of risk. No, this is the capitalism of connections and government bailouts and handouts, of waste and influence peddling and corporate welfare. This is the crony capitalism that destroyed Europe’s economies. It’s the collusion of big government and big business and big finance to the detriment of all the rest – to the little guys. It’s a slap in the face to our small business owners – the true entrepreneurs, the job creators accounting for 70% of the jobs in America, it’s you who own these small businesses, you’re the economic engine, but you don’t grease the wheels of government power.

    Sarah Palin

    http://blogs.telegraph.co.uk/news/jamesdelingpole/100104496/sarah-palin-totally-gets-it/

  30. Bronson October 25, 2011 at 6:09 am #

    Whose playing RW obviously you have no idea or why ask – try for your self if you spend more than you earn are you in profit or lose?

  31. debbie October 25, 2011 at 9:44 am #

    Politicians, Bureaucrats, Brokers and Bankers have flown away to ‘planet policy, planet process and planet politics’.
    The rest of us are attempting to live on ‘planet practical’.
    Most of the damage has been caused by politically powerful employees and public servants who do not actually produce anything at all…except more policy, more process and self perpetuating bureaucracies.
    They are often very bright and they do believe in what they are doing and they also believe that they are making policy decisions for the ‘betterment of mankind’.
    The unfortunate part is that their lofty goals and visions have no basis in reality and they just do not work in practice.
    Hence…the ever increasing need to prop up their behaviour with the perceived ‘bottomless well’ of taxpayer money.
    Hence….the ever increasing examples of top heavy corporations and bureaucracies.
    I don’t believe it is born of malice….it is more ignorance and arrogance and a complete disdain for people with less lofty but much more practical goals.
    Their economic and social theories (and they are basically right wing socialist theories) just don’t work in practice.
    Their theories are diametrically opposed to entrepreneurial practices and therefore the ruling elite will create policy and processes to make life almost impossible for the entrepreneur.
    A quick study of political history and the failings of once robust economies reveal this simple truth.
    Their belief system is a bit like the pigs in George Orwell’s ‘Animal Farm’.
    Everybody is equal but some are more equal than others 🙂
    The other sad truth is that the real producers and the real entrepreneurs are way too focused on and way too busy producing real wealth and usually can’t be bothered with all this political, policy and process nonsense.
    A quick study of political history also reveals this simple truth.
    Unfortunately, as is the case now, people leave it too late to protest. By the time they do they are facing an incomprehensible political monster.

  32. Neville October 25, 2011 at 11:38 am #

    Just have to laugh about this misunderstood 99%. Just more proof that this 1% of certifiable numbskulls are really delusional and should be ignored and moved on .

    Debbie I can’t believe for a moment that the public servants and govts who promote these loony policies are very bright.

    Crap like co2 taxes are delusional nonsense and certainly can’t change the climate or temp in the slightest. There is zero excuse for not understanding this because the additions/subtractions/divisions used to derive these facts are simple to understand.

  33. RWFOH October 25, 2011 at 12:08 pm #

    Really, some of the comments here. I gave them a poke with a stick but turned my nose up in disgust. Even connoisseurs of roadkill have standards. They weren’t even comprehensible. What’s a collective noun for imbeciles? A smorgasbord of imbeciles?

    During the Clinton administration, two Republicans introduced a bill to repeal certain provisions of the Glass-Stegall Act (originally enacted to stop a repeat of banking practices that led to the Great Depression). Both parties and both chambers passed the bill and it became law. (democracy is broke because the Punch and Judy Show – Lib/Lab, Dem/Repub, Tory/Lab – is a charade to keep you occupied while the elites with real power pull a pea and thimble trick with the unwashed masses collective wealth)

    This was the foundation of NINJA loans that triggered the GFC. The law didn’t require institutions loan to borrowers of dubious capacity to repay, it was just no longer illegal to make those loans. There was no gun making them give loans to dodgy prospects.

    When these loans started to stink up the balance sheets, institutions like Goldman Sachs bundled the loans with half decent debt obligations and had their ratings agency mates rate (after suitable kickbacks to sweeten the proposition) these rebranded and repackaged CDOs (collateralised debt obligations) as AAA rated solid gold investments. These dogs were then flogged to mug punters like European banks, the government of Iceland, local councils in Australia and other banks that were not privy to the rort etc.

    Having moved hundreds of billions (trillions?) of $ of dud loans from their balance sheets, Goldman Sachs et al then set about shorting (betting against) the housing market knowing that the housing bubble was at bursting point. When the bubble burst they cleaned up again. What planet were they on?

    That was pure capitalism, unencumbered by regulatory interference from government. To be fair, some US gov agencies did try to run interference on the racket but they were cajoled, bullied and threatened by the likes of Goldman Sachs. Some of these nasty bureaucrats even had their jobs sacrificed on the altar of extreme capitalism.

    No-one went to prison. Instead, the US government gave them $trillions of taxpayers money to stop the whole system collapsing and within 12 months the executives were again paying themselves tens or hundreds of millions of $ in annual bonuses (each).

    Are you sure you want, and can trust, these people to regulate themselves? Really? Do you really believe you are part of the 1% and will help them fight that ungrateful 99%? Do you really believe this mess is socialist bureaucrats faults? If so, I’ve got this shiny new super fund and you’ll earn AMAZING returns.

  34. debbie October 25, 2011 at 12:14 pm #

    Well that’s true Neville.
    What I should have said is that they have University degrees that claim they are very bright.
    I have to totally agree that much of what they produce doesn’t show much intelligence at all.
    Having a piece of paper that says you’re bright doesn’t necessarily prove you are.
    It is actually what you achieve in the ‘real world’ that will ultimately test your true intelligence.
    Hence…there are very bright people and enormously successful and productive people who do not have one of those pieces of paper.
    Of course….those people would not ever contemplate a position in a ‘policy department’ in a bureaucracy or in a major corporation….they’re smart enough or bright enough to know that over half of what is produced there is self protective bureaucratic unintelligent mumbo jumbo.

  35. ianl8888 October 25, 2011 at 12:28 pm #

    @RWFOH

    >This was the foundation of NINJA loans that triggered the GFC. The law didn’t require institutions loan to borrowers of dubious capacity to repay, it was just no longer illegal to make those loans. There was no gun making them give loans to dodgy prospects<

    Not accurate

    Fannie Mae and Freddy Mac (combined, about 50% of the US mortgage market) were (still are) underpinned by lawfully passed legislation that forbids mortgage underwriters to Fannie and Freddie from examining the ability of loan recipients to make monthly repayments. Those underwriters that did examine this, and then refused underwritten loans to Fannie and Freddy on the basis that they would not be repaid, were successfully prosecuted for racial discrimination (this the gun you claim is non-existent)

    The result of this lefty stupidity may be seen in the swathes of now derelict cities and surrounds such as Detroit. The very definition of sub-prime

    Wall Street smarties such as Lehmann Brothers (Al Gore was a Director when it went down), Goldmann Sachs etc, attempted to bundle these huge non-performers with real loans and sell the bundles world-wide in an essentially stupid try at spreading the risk. I call this essentially stupid because, as noted, Fannie + Freddy = 50% US mortgage market … way too big to spread successfully

  36. RWFOH October 25, 2011 at 12:43 pm #

    Don’t forget to pack your brain when you go out to play Ian:

    http://en.wikipedia.org/wiki/List_of_writedowns_due_to_subprime_crisis

    http://en.wikipedia.org/wiki/List_of_bankrupt_or_acquired_banks_during_the_subprime_mortgage_crisis

    Freddie Mac and Fannie May were a small component in the sub-prime crisis;

    http://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932010#Subprime_lending

    Read up and stop the moronic parroting of those who are trying to deflect from their own culpability.

  37. debbie October 25, 2011 at 12:59 pm #

    RWFOH,
    The people you are complaining about are not true capitalists…they are employees working for over bloated and over protected financial institutions. They are also high profile gamblers who play on the stock market, the futures market etc and do so with other people’s money. They also try to manipulate and cheat those same markets….and each other….not unlike a race fixer or a card shark. When they stuff up, they want and actually expect someone else to pay for it.
    That is not capitalism.
    If you want to find the ‘true capitalists’ go to the small businesses who actually produce products and services that people are prepared to pay for and who understand that true profit and true enterprise does not usually need government and tax payer backing.
    The people you are complaining about are the parasites who feed off true free enterprise.
    They are also the parasites who feed off government (and therefore taxpayer) protections.
    There is a huge difference between businesses getting Govt support in times of stress ….as an example drought, fire, flood, earthquake or tsunami relief…and businesses basing their whole business model on Govt funding and Govt protection and dubious insurance policies.
    A huge difference.

  38. debbie October 25, 2011 at 1:10 pm #

    And furthermore…if you check your history…the people whom you are complaining about flourish under right wing SOCIALIST regimes! Go check your political history.

  39. Neville October 25, 2011 at 1:52 pm #

    RWFOH probably believes that the nazis were right wing as well. Hitler and Stalin were great allies and both invaded Poland in 1939. They’d signed a non aggression pact in 1938 and agreed to invade Poland togeter as part of that pact.

    In my opinion the political divide is between those who believe in freedom of thought, speech, religion etc and those who believe in groupthink, extremism, intolerance and totalitarianism.

  40. cohenite October 25, 2011 at 3:38 pm #

    Freddie and Fannie were not “pure capialism” as RW trolls; they were products of government patronage and left ideology; looking after the less well off and less capable is a laudable intention but as we have seen with this wretched ALP government under both rudd and gillard, with their ham-fisted intrusions into the private sector; think BER, Pink Batts and the most bloated of them all the NBN, when governments become businesses success is not an option.

    Simply RW confuses ideological taint of the capitalist mechanism with the mechanism itself; whenever government sets itself up as a monopolist or more rarely competitor the poo will hit the fan; what government should only ever do is as far as possible create an even playing field and suppress monopolistic tendencies; what sections of the community should remain exclusively government controlled is a matter of debate, probably defence is one obvious candidate with stringent and transparent competition amongst tenderers.

    Pure capitalism, a social arrangement where merit perfectly arranges the balance between supply and demand is a Shangri la; that is, unachievable. Given that capitalism will always ebb and flow with a dynamic between sufficient checks and balances, too few with corporate bastardry resulting or too much with some form of stifling socialism resulting it is still far better to tinker with what we have rather than throw the baby out with the dirty water.

    The protestors in the square, along with the supercilious idiot RW, at the end of the day, have nothing but platitudes to fall back on, because the other systems have been tried [and what fun they were, Stalin, Mao, Pol Pot, the charming lunatics thrown up by the pestilence of islam etc] and failed; capitalism is the best but like freedom requires eternal vigilance or at least perpetual smoothing by sensible governments. Currently we don’t have that luxury.

  41. ianl8888 October 25, 2011 at 4:07 pm #

    @RWFOH

    Using Wiki for reliable information is equivalent to picking lint from your navel – you seem to be quite good at that … productive, is it ?

    Try using the issues of The Economist (US edition) during 2003-2008 instead. I’ll help with the bigger words

    Freddie and Fannie were drowning 2nd and 3rd tier banks in forced, sub-prime unrecoverable debt. Wall Street efforts did not help this, which I already noted (you are unable to read the post that far) and simply added their own unique brand of irresponsibility to an already huge log-jam

    None – not the borrowers, nor the US Govt, nor the Wall Street banks, nor the European banks that bought the bundled loans – thought the price of real estate would crash. From newspaper reports, quite a few Aus Local Councils bought them too, on the same belief

    NOTE: Fannie + Freddie = 50% US mortgage market. This is not tiny and is the core of sub-prime. Do try adding up using ALL your toes

    That you are unwilling to see the combination of factors that formed irresponsible borrowing and lending is not really my problem … ho hum

    As a postscript, for those who cannot grasp what “too big to fail” actually means, remember the incident some 20+ years ago in Aus when an irresponsible radio show (I think John Laws) egregiously promoted some quite small Building Society (?) as being on the brink of failure – the queue to withdraw deposits before failure became a km or so long within an hour … then multiply that by many hundreds of millions, world-wide.

    If a bank where you have deposited your life savings is suddenly threatened with a 50%+ unrecoverable loss in non-performing loans, would you blame the bank, or try to withdraw your savings and then blame the bank ?

    The nub of the issue is not capitalism, but crony capitalism (where cronies include bureaucrats and Govt). I don’t see any simple fix to that – certainly not uninformed and incoherent street protests, nor elections based on unaccountable spin

  42. debbie October 25, 2011 at 5:19 pm #

    The term right wing and left wing actually comes from socialism. Righ wing socialism believes in everyone being looked after by a benevolent Govt and attendant democracy. It believes that ‘the gummint’ should be allowed to interfere wherever it deems necessary for ‘the greater good’ or some other iteration of a ‘good cause’….like perhaps the environment or the knee jerk reaction to that story on the Indonesian abbatoirs or any other ‘good cause’ that makes them look concerned and benevolent. They also believe in ‘social engineering’ for the greater good of all. Their greatest enemy is the entrepreneur who wants to create and live his/her own life on his/her own terms. Right wing socialism also believes strongly in tighter and tighter government regulation and having bigger and bigger bureaucratic departments to look after all these people who need looking after and severely punishing anyone who steps outside their control.
    Hitler’s party was the nationalist socialist party and stalin also was clearly a right wing socialist. They are the better known examples.
    As I said before…go check your history.
    In western democracies, the term right wing and left wing have been muddied up by the media. Somehow ‘capitalism’ is now ‘right wing’. That is not correct.

  43. Luke October 25, 2011 at 5:49 pm #

    Thought you lot need a laugh http://www.youtube.com/watch?v=WH_MBwQhGgA

  44. RWFOH October 25, 2011 at 7:06 pm #

    “Fannie + Freddy = 50% US mortgage market”

    “NOTE: Fannie + Freddie = 50% US mortgage market. This is not tiny and is the core of sub-prime. Do try adding up using ALL your toes”

    Obviously you didn’t read the articles I linked to Ian or you wouldn’t have made the same mistake twice. When the bubble burst, Fannie and Freddie owned or guaranteed 40% of all US mortgages ($1.4 trillion). The value of both company’s sub prime mortgages when the bubble burst was $168 billion. Therefore around 10% of their mortgages were sub prime. The value of all sub prime mortgages when the bubble burst was $1.3 trillion. Therefore Freddie Mac and Fannie Mae held about 10% of all sub prime mortgages when the collapse happened. Sub prime mortgages peaked at 20% of all mortgages. (“Nevertheless, only 25% of all sub-prime lending occurred at CRA-covered institutions, and a full 50% of sub-prime loans originated at institutions exempt from CRA.” CRA = Community Reinvestment Act)

    If Wikipedia isn’t good enough for you, read the source material that is cited in the WP articles I linked to. Or, you could do some revision with your copies of The Economist except don’t just look at the pictures this time, read the text and then provide me with the references where they claim that Fannie and Freddie held 50% of all sub prime loans.

    Are you intentionally misrepresenting the situation or are you just thick?

  45. jennifer October 25, 2011 at 8:36 pm #

    Ianl8888, RWFOH and others, The whole issue of the history of sub-prime loans, and how they were hijacked, is an interesting one… and a history I would like to better understand. My copy of Alan Greenspan’s ‘The Age of Turbulence’ is elsewhere so I can’t quote his comments on their original intension and importance. His memoir/the book was published in about 2004.

    Luke, Go and have a read of the link provided by WiseFather… http://www.ragingwisdom.com/?p=412 . Some wise words and he reads StarWars.

    Neville, You claim to rally against tribalism, but there is so much that is tribal about approach to many issues?

  46. Debbie October 25, 2011 at 9:50 pm #

    I would also recommend reading Robert Kiyosaki’s books on this subject. Paul Zane Pilzer has also written some interesting books on the same subject. It really has more to do with checks and balances and recognising which political systems have the greatest successes and create the best base for human ingenuity, human creativity and human charity. It is also necessary to make people accountable for their actions and responsible for their decisions. Quite similar to Binny’s comments.

  47. RWFOH October 25, 2011 at 10:01 pm #

    Jennifer, on Alan Greenspan:

    “As early as 1997, Federal Reserve Chairman Alan Greenspan fought to keep the derivatives market unregulated.” http://en.wikipedia.org/wiki/Late-2000s_financial_crisis

    “In the wake of the subprime mortgage and credit crisis in 2007, Greenspan stated that there was a bubble in the US housing market, warning in 2007 of “large double digit declines” in home values “larger than most people expect”.[49] However, Greenspan also noted, “I really didn’t get it until very late in 2005 and 2006.”[50] Time magazine placed him third on a list of 25 people to blame for the financial crisis.[51]”

    “In Congressional testimony on October 23, 2008, Greenspan finally conceded error on regulation. The New York Times wrote, “a humbled Mr. Greenspan admitted that he had put too much faith in the self-correcting power of free markets and had failed to anticipate the self-destructive power of wanton mortgage lending. … Mr. Greenspan refused to accept blame for the crisis but acknowledged that his belief in deregulation had been shaken.””

    http://en.wikipedia.org/wiki/Alan_Greenspan

    I know some people like to condescend about Wikipedia’s validity but the hothouse environment around contentious issues (like the causes of the GFC which has become a battlefield for culture warriors) means that all “sides” around any issue get to vet, correct or challenge contributions. The blend of fact and opinion can sometimes be a minefield but the extensive footnotes allow you to check sources for veracity/trustworthiness/biased perspectives etc. Is there any other on-line resource that can boast equivalent processes of input and review?

    Perhaps we need Left and Right Wikipedias where appropriate historical revisions can be published and we can all be comfortable without having dogmatic beliefs challenged?

    I imagine the right wing version on the GFC would explain how 5th column socialists infiltrated capitalist bastions and executed a bold plan to bring deregulation of markets and mind bogglingly convoluted financial instruments into disrepute. Cue Mike Meyers as Dr Evil…socialist mastermind.

  48. RWFOH October 25, 2011 at 10:10 pm #

    25 People to Blame for the Financial Crisis

    http://www.time.com/time/specials/packages/completelist/0,29569,1877351,00.html#ixzz1bnJt6UMf

    Have a look at the section on American consumers and note the parallels with Australia’s current situation.

  49. Warren Waldmann October 26, 2011 at 1:55 am #

    With the term “Crony Capitalism” in current use these articles become increasingly difficult to understand. Creighton finally alludes to a difference between free markets and crony capitalism far into this piece. Crony capitalism is not capitalism at all, it is facist economics as defined in Websters New World College Dictionary (Fourth edition). “….private economic enterprise under centralized governmental control…” This grew enormously under Clinton and Bush II but has exploded in the US under the Obama administration.
    Citizens are rightly enraged at the spectacle of a half billion tax dollars going to a company that burns through it in little more than a year and goes into bankruptcy. None of us are enraged at the large number of venture capitalists who lost hundreds of billions when the dot com bubble burst in 2000 and 2001. The right wing, of which I am a proud member, knows the difference. The reason we hold the OWS crowd in such low esteem is that they don’t know what they want or even what problem to treat.

  50. Schiller Thurkettle October 26, 2011 at 4:10 am #

    Here in the US, the Tea partiers are finding a lot in common with the Occupiers. Where they part company is where the Occupiers want neo-Marxist solutions, and the Tea partiers want Jeffersonian democracy.

  51. Ian Thomson October 26, 2011 at 4:33 am #

    Scroll down to the meat of this page and feel your stomach sinking. Good old George is in there.

    http://www.viewzone.com/discussion.html

  52. mkelly October 26, 2011 at 5:50 am #

    RWFOH October 25th, 2011 at 10:10 pm

    Read the 25 people list you posted. I find it odd that the person I hold most responsible for the mess is not listed. Try the guy who bought the home. If you don’t have job you know you should not be buying a home.

    There is lots of blame to go around but the one entity that has never said mea culpa is the government. Ultimately the government caused this and is not held responsible. Some bankers lost their jobs or went to jail, but Barney Frank et al are still in Congress.

  53. Neville October 26, 2011 at 8:16 am #

    Jennifer all I can say in my own defence is that I tend to change tribes as I grow .

    Once I sort of believed in religion and God,but don’t anymore, once I voted labor but don’t anymore, once I sort of flirted with AGW and worried about the environment ( still do in a sane way) but I don’t anymore, once I disliked the monarchy but don’t anymore, once I thought of becoming a socialist but don’t anymore.

    Guess what I grew up and realised that the left generally are the biggest pack of elitists and fraudsters unlike conservatives who are the ones who really believed in freedom of the individual.

    I still find the religion/God thing a bit of a problem. I’m definitely an agnostic because I’m sure I don’t know anymore than anyone else the origin of the billions of galaxies that make up the cosmos or universe(s)

    I’m sure that the God of the bible or Koran is man made nonsense and the stories in both mostly fiction with some facts. There probably was a Jesus (really Joshua son of Joseph}but he was a man born of a woman like the rest of us and Joseph was his dad. He also had brothers and sisters born the same natural way.
    But if a gun was held to my head the religion I would choose is still Christianity because after the reformation it gradually allowed more freedom to the individual to think for themselves with more logic and reason, leading of course to modern science and technology.

  54. debbie October 26, 2011 at 11:18 am #

    Neville,
    That is an honest and very personal response.
    One comment re:
    “But if a gun was held to my head the religion I would choose is still Christianity because after the reformation it gradually allowed more freedom to the individual to think for themselves with more logic and reason, leading of course to modern science and technology.”

    I basically agree with your sentiment here because Christianity has developed into allowing more freedom and individuality…..however….I am sadly watching science and technology, particularly the branches that are obsessed with projective computer modelling…become a new type of restrictive religion and shouting down anyone who dares to question its authority.

    It has become didactic and intolerant of free thinking and other ways to be creative that include logic and reason. Much like the religions of old.
    It is a sad thing to watch 🙂 or maybe 🙁

  55. RWFOH October 26, 2011 at 3:48 pm #

    There we have it. It fizzles out into cognitive dissonance from reactionary conservatives.

  56. cohenite October 27, 2011 at 9:07 am #

    What have you done for this country RW? Have you given back more than you have taken? If you haven’t you are still a child.

  57. toby robertson October 27, 2011 at 9:56 am #

    The capitalist system is in danger of collapse because of governments pursuing socialist objectives. Governments are now responsible for more than 50% of GDP in most of Europe and also in the USA. Nobody thinks governments use money efficiently and the continued use of funds in unproductive areas has the effect of lowering productivity and crowding out the productive private sector. Governments do not raise enough revenue to fund there massive socialist agendas and rely on debt to maintain government spending at unrealistic levels.

    Governments should increase spending during the bad times to maintain GDP and fill the void left by lack of consumption and investment. BUT they must run a surplus during the good times to pay back the borrowings from the bad times. Basically the only western government to achieve this over the last 3 decades has been Australia (and for a brief period clinton in the USA), thanks to the Liberals and our booming economy which allowed them to both save money and keep the middle classes happy with welfare payments.

    If “the people” understood the importance of budget surpluses in the good times and the importance of letting the productive areas of our economy grow, and not be crowded out by the government sector, I doubt the world would be in the mess that it is.

    Governments are to blame, and since we elect the governments we are also to blame.
    Too many people expect the government to solve their problems.

  58. kuhnkat October 27, 2011 at 11:53 am #

    It isn’t BUSINESS that is the problem. It is the elites that purport to be above the rest of us, including the smaller corporations, and manipulate the currency through the Federal Reserve, Central Banks, IMF, and individual Country regulations and taxes/fees…

    Toby,

    during the Clinton administration the US increased its debt every year even though Clintoon and the rest of the politicians made a big deal out of BALANCING THE BUDGET!! The loss was hidden by BORROWING from the Social Security and other funds. Yeah, they balanced the budget with their Credit Cards!! Our Republicans are almost as bad as our Democrats.

    Basically governments should NEVER deficit spend except in the most dire emergencies like war or, say, a CME taking out the electrical system of a country. There is simply too much lure of fast cash through corruption. Getting rich off the sweat of your descendants has to be one of the most vile practices on the face of the earth.

  59. toby robertson October 27, 2011 at 12:52 pm #

    Kuhnkat, i do not agree governments should only act in extreme conditions, but do not think we will persuade each other either way via a blog. That said i would agree they need to be careful about when and how they step in, but if they dont and unemployemnt gets out of hand the good old circular flow of money and confidence start to impact too heavily on consumption and investement, hence i see a role for government to step in in productive ways.
    Id forgotten about clinton’s accounting tricks!
    i completely agree with this statement however..”It isn’t BUSINESS that is the problem. It is the elites that purport to be above the rest of us, including the smaller corporations, and manipulate the currency through the Federal Reserve, Central Banks, IMF, and individual Country regulations and taxes/fees”…and all of that can i believe be brought back to poor government regulation.

    the profit motive is a highly efficient way of allocating resources, but regulation is required to limit the search for short term gain without consequence to the long term pain. This is where the government should be involved and why i think teh ultimate blame lies with them…whatever their political bent…..

    The route cause of the US toxic loans, bank exuberance, massive government debt etc lies firmly with bad governments.

    I think the world is in for some interesting and challenging times and i suspect the current unrest is the tip of the iceberg that that will develop over the next decade as unemployment continues to rise and potentially the financial system implodes.

    Neville most thinking people change their opinions and beliefs as theygrow, i certainly have been down a similar path to you. Only i decided i hate religion at a very early age thx to an over zealous grandmother. By the age of 7 she was no longer strong enough to drag me to church and i was already arguing with priests that if god can just be there , then so could the universe!

    Deb, fully agree the reliance and belief in the ability of models to predict the future has become a new religion!

  60. Debbie October 27, 2011 at 5:49 pm #

    Yes RW Cohenite is correct. I also suspect your use of the term ‘cognitave dissonance’ suffers from imaturity. Neville demonstrated a process of thoughts and beliefs gained by experience and well developed cognitave ability. He has also demonstrated an ability to learn and alter his belief system when evidence has convinced him to do so. That is far more reliable than your mouthing of platitudes and quoting reams of contradictory info from wiki. You may or may not agree with his conclusions as he may or may not agree with yours. Your comment however was definitely childish.

  61. RWFOH October 27, 2011 at 8:37 pm #

    The problem is that, after reading the comments, I formed the opinion that there was no point trying to proceed in debating people who have such tightly held ideological beliefs that they can only form infantile conceptions of our financial and political systems.

    So, in the case of the GFC, rather than look at a complex web of systemic failures and corruption, we have inane propositions such as “Socialist bureaucrats caused the GFC” (cognitive dissonance – it can’t be that capitalism has flaws…it must be socialists). That’s right up there with the Agenda 21 conspiracy theories. I’ll leave you to tweak you tinfoil hats and rally against “world government” by socialists. I’ve got better things to do than wrangle a intellectual creche.

    That is how I serve this country, I don’t abide fools and imbeciles.

  62. Debbie October 27, 2011 at 9:45 pm #

    Well of course capitalism has flaws. It still however underpins the most successful societies. Check your history.
    You seem to have missed the fact that these so called fools & imbeciles have developed into these beliefs from experience and study and discussion. You are free to disagree with their conclusions, that is a right you have in this country.
    You are also clearly confusing capitalism and conservative politics with right wing socialism.
    They both have their flaws as well as their advantages. They are however quite different in their basic philosophy about the depth of govt and bureaucratic interference in business and commercial activities.
    History proves that bureaucratic/socialist societies tend to implode as they become more and more self protective and more and more obsessed with social policy and process. They start to systematically discourage entrepreneurial activity in favour of rules and regulations and egalitarian policy.
    The most successful societies have learned to use checks and balances. The GFC demonstrates those checks and balances went missing.
    It wasn’t caused by conservatism or capitalism. It was caused by high profile employees and bureaucrats who played with the rules, the regulations and the policies, all protected by tax payer and superannuation funding.
    It imploded.

  63. toby robertson October 28, 2011 at 8:18 am #

    RWFOH, you appear to have an equally closed mind?
    Capitalism does have flaws, but we aint got anything better at this stage…do we?
    You seem to miss teh point that a true capitalist society would allow businesses that fail to actually fail. Instead governments of all colours have followed the principle of the big guys are too large too fail. This stops the important force of “fear” from playing its proper balancing role. Instead it is capitalism itself that so many are blaming.

    Have a watch of an enlightening documentary called “the inside job”, watch the interviews in the extras section.
    There are many people who should shoulder significant blame including; the rating agencies, bankers greed, Universities and their “no conflict of interest” in pushing ideas like derivatives for which they were being payed by banks to spruke!! The federal reserve, central banks…in particular the federal reserve and its dodgy relationship with wall street and government.

    But ultimately I remain firmly convinced that fault lies with corrupt and incompetent government and people like alan greenspan who felt that since derivatives were too difficult to understand they did not need to regulate them!!? This allowed banks to get into the irrational position that they did.

    I was calling for regulation in the 1990’s when it was already abundantly clear that markets were creating a bubble in derivatives. The removal of the glass-steagal act was another terrible piece of legislation. Add to that the fact that the ratings agencies were allowed to “rate” companies on a purely “buyer beware” principle whilst knowing full well their ratings were false, is yet another example of bad regulation and corruption between government/ law and business.

    Once again I advice you to watch “inside job” and to get away from the bias of the writers you must watch the individual interviews, uncut that tell a quite an amazing and scary story.

  64. debbie October 28, 2011 at 10:11 am #

    Good point Toby,
    That ‘fear factor’ and having to be accountable is most definitely one of the checks and balances that went missing.
    It was too easy to hide behind the bureaucratic protective mechanisms and rely on the tax payer and superannuation funding.
    Always put there in the name of a ‘good cause’ 🙂

  65. kuhnkat October 28, 2011 at 11:04 am #

    RWFOH,

    “So, in the case of the GFC, rather than look at a complex web of systemic failures and corruption, we have inane propositions such as “Socialist bureaucrats caused the GFC” (cognitive dissonance – it can’t be that capitalism has flaws…it must be socialists).”

    You, as many before you, conflate the fact that Capitalism is a general method of doing business with people’s religious beliefs in any number of mechanistic procedures that can be performed well or poorly, with good intent or bad intent, but, the system itself isn’t so much flawed as does NOT speak to human inadequacies and criminality.

    Socialism, democracy, communism, fascism, imperialism… can all be good or bad. The difference being the INTENT and actual activities of thos who end up making the decisions for others. It also makes a differnce whether virtually all of the citizenry are actively WORKING to make the system a success.

    We see here in the US that we have slowly movef from a Republican for to almost a straight Democracy tro Socialism and heading left and getting worse off as we go. You wonder why I would claim we are becoming worse off while we go from apparently one equivalent form of organization to another?? Remember I specified that they would work depending on the involvement of the citizenry and the INTENT and ACTIONS of those in power.

    In a Repuiblican form where every individual is responsible for themselves there is no looking to the government for handouts. With little government interference the individual is free to build to the maximum of their ability comparatively without being blocked by regulation and milked of revenue to maintain those who have decided to become wards of the state. In a Socialism, or worse form, the State decides to maintain everyone irregardless of their contribution, unless they decide those individuals are in the way and starve them to death, execute them… There is little atual motivation for those individuals to care for themselves.

    What is worse, we have systems that control individuals lives to a micro level. A high level government has never shown skill at controlling even the gros items like energy development and use much less how the individual lives their lives. The absolute power of the government is addictive and we end up with even more crooks, shysters, and control freaks that the loosely organized Free Republics.

    No it isn’t JUST the fact of Socialism or Communism that causes the collapse of economies. It is the combination of human nature and the lure of POWER that creates the situation even WORSE than virtually unregulated Business and banking of FREE economies that rapes the economy and the souls of the people.

    You would blame the Corporations of the US and others as the problem. I would point out that in every relatively successful Authoritarian form, similar to the current Chinese gubmint and progressively more here in the US also, the largest Corporations are only marginally separate from the gubmint. It is a merger made possible by the Corps paying Politicians to allow them to succeed and even enhance their success through lesser regulation for them than their competition. Again, it is the lure of greed and POWER that drives any form after a short time of Fervent Belief. Our Democrat party continuously blames all the problems on the richest yet accept the money from those organizations and individuals and write into LAW protections and advantages for them, as do the Republicans.

    The problem is TOO MUCH GOVERNMENT and too much dependence on the government by the individual. The gubmint has been providing progressively WORSE services to the individual as it expands the breadth of those services. There simply is NEVER enough money to both provide high quality services and absorb the losses from corruption and inefficency in gubmint systems where individuals are rarely held responsible for their actions, even when they ARE criminal!!!!!

    Basically our Founding Fathers understand that human nature barely changes over the centuries. The problems they were trying to deal with by limiting our Federal Government in its size and power will probably always be with us. Our current sorry state is a perfect example of their foresight.

    I’ll leave it there for now.

  66. TinySherpa October 29, 2011 at 3:05 pm #

    My error of fact :

    “Last week we had Lindsay Fox telling us that if we did not like the executive remuneration we should sell our shares”

    My apologies to Lindsay Fox, it was in fact Don Argus who said this.

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