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How Wall Street Creates Socialists

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Posted on Apr 28, 2010

By E.J. Dionne, Jr.

Maybe the next time someone calls Barack Obama a socialist, the president shouldn’t issue a denial. He might instead urge his accuser to read the hearing transcript of this week’s congressional testimony from the Goldman Sachs guys in their beautiful suits.

Capitalism has not taken a hit like this since Mr. Potter made his appearance as the evil banker in “It’s a Wonderful Life.” No leftist polemicist could come up with as damning a description of contemporary capitalism as the contents of an e-mail that Goldman’s Fabrice “Fabulous Fab” Tourre sent to his girlfriend.

“Well,” he wrote, “what if we created a ‘thing’, which has no purpose, which is absolutely conceptual and highly theoretical and which nobody knows how to price?”

Perhaps Fab once read the Karl Marx who wrote: “The more abstract money is, the less natural its relationship to other commodities.”

If money is an abstraction, the investment industry’s creative inventions are abstractions of abstractions of abstractions. Banks no longer just give people loans to buy houses. Now Wall Street’s geniuses—and they are ingenious—trade bizarre financial products in which the original loan is packaged with thousands of others and buried under piles of equations and economic gibberish.

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Goldman may face SEC charges, but it’s the entirety of our deregulated financial system that’s on trial. In this new order, the inventiveness of our entrepreneurs goes not only into creating products that actually enhance our lives (from refrigerators to laptops to iPods) but also into fashioning “absolutely conceptual and highly theoretical” financial products whose main function is to enrich a very small number of well-placed people.

The ever-more-complex financial instruments are defended on the grounds that they make life better for everybody. Tourre offered this justification in another of his revealing e-mails: “Anyway, not feeling too guilty about this, the real purpose of my job is to make capital markets more efficient and ultimately provide the U.S. consumer with more efficient ways to leverage and finance himself, so there is a humble, noble and ethical reason for my job wink

Then he added: “amazing how good I am in convincing myself !!!”

Tourre’s unconventionally punctuated observations go to the heart of the debate we need to have: How many of the arguments offered on behalf of these exotic transactions are nothing more than rationalizations for the capacity they give a few investment bankers to get very, very rich?

Does it make sense to have investment houses playing the role of “market makers” peddling financial junk with one hand that they then bet against with the other? Let’s assume for the sake of argument that this is perfectly legal. The real question is: Why should it be?

I’m prepared to believe that some of these financial innovations do real work for the real economy. Yes, it’s good that farmers can use the futures markets to lock in prices, and the secondary mortgage markets may well free up capital. But Wall Street has gone way beyond the original purposes of such devices and created a world unto itself in which the gains are reserved for privileged insiders and the losses are borne by everybody else.

At one point during the hearings, Sen. Carl Levin played the Jimmy Stewart good-banker role from “It’s a Wonderful Life” by describing capitalism as it’s supposed to be. Levin noted that Wall Street “has been seen as an engine of growth, betting on America’s successes and not its failures.”

Well, that’s what Wall Street proclaims in its advertisements for itself. But when defending themselves against legal charges, Wall Streeters retreat to honesty by saying that everybody knows they are really there to make money and that it’s naive to hold them accountable for the social impact of what they do.

It is, indeed, naive to expect Wall Street to act as charitably as the Salvation Army, and you have to respect Fabulous Fab’s brutal candor about this. Which brings us back to socialism.

Marx’s predictions about the inevitable collapse of capitalism have been wrong so far because the system has worked reasonably well thanks to the rules and redistributive programs established after the Great Crash.

The lesson is that the surest way to save capitalism is to regulate it in the public interest. The surest way to create socialists is for everyone to experience the economic consequences of counting only on the goodness in the hearts of Mr. Potter and Fabrice Tourre. 

E.J. Dionne’s e-mail address is ejdionne(at)washpost.com.
   
© 2010, Washington Post Writers Group


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Anarcissie's avatar

By Anarcissie, May 3, 2010 at 8:53 am Link to this comment

I don’t know that there will always be a working class.  If the powers of technology and industry continue to advance, at some point it will become impossible to maintain scarcity, at least of basic goods, and a sort of breakup of the existing social order will occur.  It is possible, of course, that things will go the other way, as the present disaster in the Gulf and the bankrupting idiocy of continuous war and imperialism show.  But if present long-term trends continue, it will be possible for many people to live reasonably well without having a job, in which case the conditions of employed labor will change radically, since the laborer and the employer will now be bargaining from roughly equal positions.

Inflation is a way of taxing poor people, so my guess is that it will remain very popular with ruling classes and governments.  I have been thinking about private money systems, some of which already exist, which might be uninflatable.

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Fat Freddy's avatar

By Fat Freddy, May 3, 2010 at 6:37 am Link to this comment

Anarcissie,

I don’t know if you read the links. But you’re right in the sense that there will always be a working class. The difference in a Capitalist system is the opportunity for the workers to start their own businesses. Many of the farm workers in the early years of my town, went on to buy their own farms. In fact, in Vineland’s “sister” town, Hammonton, four brothers saved their money and bought a small 5 acre farm and started growing blueberries. They did this part time while maintaining full time jobs. They bought a few more acres here and there, and to make a long story short, the family now owns the largest blueberry farm (1,300 acres) in the world, Atlantic Blueberry. The farm is still family owned and operated. Now, are you suggesting that somehow the owners of this farm should give ownership to their workers? How is this fair? I certainly wouldn’t classify the Galletta Bros as “elite”. The workers show up, they work, and at the end of the week they get an honest pay for honest work. If they so choose, they can sacrifice, save their money and take a chance like the Gallettas, and start their own farm. And with some hard work, a little luck, and smart decisions they can provide the necessary competition to the Gallettas to keep them “honest”. Eventually, enough smaller, more efficient farms, could possibly put the Gallettas out of business. The piranhas eventually destroy the giant vampire squid. The Gallettas know this. They understand that their own internal bureaucracies are bloated. They have management on top of management on top of management. And all of these managers draw high salaries with lots of benefits. The Gallettas need some sort of advantage over their smaller competitors in order to survive. Perhaps, the Gallettas decide that they need more capital. They can either go public and sell shares of ownership, or leverage their assets, or both. They soon realize the true cost of these moves. Quarterly profits must increase in order to make money, and eventually loans must be paid. They then turn to the government, and the Wall Street insiders. They lobby the government for tax subsidies, and tougher regulations. Wall Street, being vested in their company, manipulates the price of blueberries and drives the prices down. The smaller farmers can not make as much money on their crops and face their own foreclosures and bankruptcies. The Gallettas, their shareholders, and creditors then buy up all of the smaller farms and expand their operations, and very effectively, eliminate the competition. This is the end of true capitalism, and the beginning of crony capitalism. Under this system, the workers, the consumers and the tax payers all suffer. The nature of true ownership is lost. This leaves the entire capitalist system open for attacks by socialist/Marxist/egalitarians. We all know how that story ends.

The story of the Gallettas and Atlantic Blueberry is true up to the point where they go public. It may not be necessary because there are already huge impediments for entry into the market by new, small businesses. Regulations, tax subsidies, and high land prices due to speculation already exist. However, it is the monetary system, in general, that is the most destructive. Our monetary system is intentionally based on creeping inflation. This system discourages savings and investment in production, and encourages long term debt and risky investments in worthless paper. True societal wealth can only be achieved through savings, production and real ownership.

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By Hammond Eggs, May 2, 2010 at 10:52 pm Link to this comment

The last stage of certain kinds of cancers is when it metasticizes into the brain.  That is what has happened to the United States.  Goldman Sachs and its ilk are the cancer that has spread into the American brain. The prescription from Obama, the oncologist who matriculated at the Richard Daley School of Medicine, is a heavy dose of coffee enemas. Guess what . . . the patient is 100% certain to perish.

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By rollzone, May 2, 2010 at 3:45 pm Link to this comment

hello. there are some healthy thoughts about capitalism here, but many are textbook. there are only a few crooks perpetrating fraud on Wall Street, and they do considerable damage. the globalism today seems to gleefully mock our regulations with threats, cronyism, and bribes. Wall Street crooks are encouraged when: (as many point out) there are no orange prison suits, no monies are returned, and perhaps a token fall guy takes a rap. they have been allowed to write their own rules. the system is good if it is enforced. globalists respect no authority, and are winning. one example today could be the oil blowout by Transoceanic! was financed by GoldenSacks, and to prevent another Enron on investors- they will be allowed to take their sweet time corralling the drilled well, and acquiring return on their investment- at the catastrophic detriment of the entire SE fishing industry- instead of immediately sealing the well and losing return on investment. this is currently how much power resides on Wall Street. it may cause a decade of damage, but by gosh, those Golden investors will see a positive cash flow. there is no way our government will oppose the corporatist. this is the source of their power. capitalism is a fantastic system when it does not corrupt politics. people are allowed to invest in good products to replace bad ones, and we progress. the concept that too many shareholders invested in a failing enterprise will be devastating: is opposite of the truth. failure is healthy, and as in this example: the oil well should have been sealed off 3 days ago, and safeguards implemented to see it can not happen again. BeeniePopper got under the radar with this one. corporatist agenda runs Wall Street, and Wall Street runs the Beltway. i completely agree capitalism does need to be regulated in the interest of ‘We The People’. currently our precious Gulf is being devastated, and the corporatist is running the shew.

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By Anarcissie, May 2, 2010 at 10:12 am Link to this comment

Fat Freddy, May 2 at 1:36 pm:
’... Sure, it’s a bit dated, but it should give you an idea how communities are built; by giving individuals the opportunity to control their own destinies.’

It’s probably not capitalism in the traditional sense, then.  Capitalism is the private ownership and control of the means of production, presumably (and historically) by an elite, which necessitates the existence of a working class who don’t own or control the means of production, and are therefore dependent on and subject to the will of the capitalists.  The workers are disindividuated by the conditions of their work, the capitalists by the necessity of competing with other capitalists.  Hence the remarkable uniformity of products in industrially advanced areas during the 20th century.

Granted, any form of industrialism would be highly social, therefore collective, therefore non-individual.  Capitalism does not escape from this necessity, or at least it hasn’t yet, but neither do its alternatives.

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By Fat Freddy, May 2, 2010 at 9:36 am Link to this comment

Yes, very good. Contemporary Capitalism. That says it all. Better yet, Crony Capitalism.

For anyone who is interested, this is how Capitalism is supposed to work.

http://www.westjersey.org/vland.htm


Also, see:

http://bit.ly/bTx1XL


Sure, it’s a bit dated, but it should give you an idea how communities are built; by giving individuals the opportunity to control their own destinies.

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By Inherit The Wind, May 1, 2010 at 7:01 pm Link to this comment

All kinds of questions come to mind.
1) Why malign casinos? In Vegas, AC, and on cruise ships, the games aren’t fixed. They don’t have to be.  The house odds are set by the rules of the game and if you work hard enough, you can figure out what they are.  This is why serious gamblers, the professionals, only play Black Jack.  If you can count cards (and it’s not nearly as hard as it sounds) you can optimize when to double, triple or quadruple your bet.  If you simply play hand by hand, even if you play perfectly, you will ultimately lose.  That’s why counters count. And that’s why casinos hate them.  But they are only playing by the casino’s rules.

But Goldman was different.  They stacked the deck, loaded the dice, but didn’t tell their customers they were doing so.  They set the rules of the game, but secretly changed them so only THEY could win.  As I said: it maligns casinos!

2) Even Ayn Rand understood the difference between MAKING money and simply GETTING money.  She would have been all over Goldman like stink on a skunk.  Her banker character, Midas Mulligan, only invests in a business he deems will succeed, and that has to be a business that actually DOES somethng.

3) With the destruction and loss of most of our manufacturing base, what good will nationalization do?  All long-term nationalization does is create a management team that is no longer accountable, even to investors.

4) The argument that since capitalism cannot work without regulation it must be a failure is absurd.  ENFORCED RULES are how society functions in interactions.  Should we do away with all traffic laws and live in Mad Max’s world?

5) Nobody’s saying things are GOOD except the right wing loonies who also think the BP oil spill is not a big deal and, naturally, Democrats and Liberals’ fault. Go figure out THAT pretzel logic!

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By Bushfatigue, April 30, 2010 at 2:28 pm Link to this comment

State laws around the country hold that a person cannot insure a home he does not own or have an interest in, just as one cannot buy life insurance on the life of a stranger—the “moral hazard” being the rather obvious—the possibility that you might just get tired of waiting for disaster, and torch that home, or end someone’s life a bit earlier than what might have been its normal course.

Yet these Wall Street creeps could sell “synthetic” swaps and CDO’s and all sorts of other exotic crap, on the value of assets that the buyer didn’t even own—that sure looks like gambling to me, and some of these people had enough money and power and friends in high places, that they could influence the value or stock prices of the entities they bet on,  end the (financial) life or well being of the companies and assets they were betting on, and cash in.  There was much talk in 2008 of manipulators driving down the stock of certain banks, and my guess is those low-lifes benefited handsomely.  When the thinly capitalized “insurers of such junk instruments could not pay,” the taxpayer had to step in the make the promises good, and some of those gambling banks and financial institutions who could make good on the bets were dramatically weakened.

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By firefly, April 30, 2010 at 2:17 pm Link to this comment

WriterOnTheStorm,

I agree 100% with your brilliantly articulated
comment. I’d like to add that the argument that so
many critics of socialism frequently use is that it
leads to Russian/Chinese style dictatorships. The
French (for example) who, as you say have a mix of
socialism and capitalism, also have democracy, as do
we (in theory). It is democracy that is at risk when
you have extreme capitalism. The point is that the
people must be able to choose their government, and
the government must remain accountable to the people
whichever system exists.

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Anarcissie's avatar

By Anarcissie, April 29, 2010 at 9:25 pm Link to this comment

WriterOnTheStorm, April 29 at 6:08 pm:

‘Everyone is a socialist eventually.

You are a socialist the moment you put the interests of greater society above that of the individual. Only tyrants and megalomaniacs believe that individuals should be permitted to pursue their own happiness at all costs and to the detriment of all others. ...’

I must disagree.  To begin with, tyrants almost invariably speak with a mouth full of communitarianism and social uplift.  It is most convenient for them if their policies and actions can be declared to benefit vague expansive generalities instead of any particular individuals—they never need to actually do anyone any good.

In any case, socialism—“the ownership and control of the means of production by the workers”—if truly practiced as it was originally defined, is designed precisely to benefit the particular individuals who participate in it, by giving them a share of the control of their work and of its rewards.  It is not altruistic (although there is nothing to stop socialists from being altruists if they like).  It is an expression of self-interest which is enlightened enough to take the responsibilities and rewards of adult life.

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By minutemenmedia, April 29, 2010 at 8:03 pm Link to this comment

Brilliant article, good research, but why is it that every one—at least all of you so-called “mainstream” journalists choose to ignore the obvious, and instead stretch your craft with such silly “marxist” and “socialist” diversions.
It seems pretty clear to me, it started with Rubin, he went from Goldman Sachs to the Treasury, and started unwinding Glass-Steagal, as well as other SEC restrictions.  Rubin, Summers, Paulson, Josh Bolten and now Geithner ... kinda looks like a financial coup to me, and keep in mind, the Federal Reserve (which is, in reality ... neither) controls the interest rates that are so tightly bound to so many interest rate derivatives.
Call it “marxist” or “socialist,” I just call it a Financial Coup D’ Etat, an absolute distortion of our Treasury and economy at the hands of Foreign Banks acting through the Federal Reserve.
It is only in such an absurd arena, the aftermath of a successful coup, that bankers would have the open arrogance witnessed in the copy of Paulson’s first Bailout Bill.  It is only in the wake of such a coup, that a so-called “Reform” bill actually includes yet another, 50-billion pool for bailouts.
Please, just call this what it is ... for once.

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By samosamo, April 29, 2010 at 7:37 pm Link to this comment

**********************

 

Isn’t all this logic and recollection of marx and what is needed
for a capitalist system to ‘recover’ and become a useful system
in this county and the world is for at least the american
congresses to stop all the stonewalling, bickering, finger
pointing accusations and paying homage to those criminal
bribers, the lobbyists, and rewrite Glass-Steagall and strengthen
the role of the oversight, auditing, increase transparency, have a
strong prosecutorial and justice system put back in place?

Possible, but it would have to be a congress that was not totally
infected with all those unfettered ways to make money and since
congress IS as big a part of the problem by taking the lobbyists
bribes to enhance their personal financial gain, it would take
electing people who would care more about a return to the
democracy that was built for this country by the founding
fathers and actual investigation, prosecution and punishment
for those found guilty of crimes against the U.S.A.

And that would take people running on the stance of shutting
down lobbyists and all they stand for and to do away with the
hiring of people to ‘stand in lines’ of committees holding places
for lobbyists to come in and give rigged and paid for testimony
for beneficial legislation for the corporations they represent.

And beware of charlatans as this florida governor about to
change his ‘republican’ clothes and run as, I guess, an
independent, making him the republican ‘joe libermann’ if he is
elected. But such things are just more of an indicator of how
broken the country is, much to the delight of the people who are
pulling the strings of the puppets, the people who control the
money.

As mayer rothchild once said, and I paraphrase:

‘Give me control of the money and I care not who makes the
laws’.

And since the federal reserve is that secret organization that
controls our money and with out audits and oversight and
regulation,(hell, bernanke refused to reveal who sat on the
board of the reserve as if he was special protector of those
heinous bastards) wouldn’t that be enough to prove where the
problem exists?

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By Lesley Palmer, April 29, 2010 at 7:21 pm Link to this comment
(Unregistered commenter)

As the Frontline documentary on neurobiological challenges to the “Chicago School of Economics” (ie, economics as math-based formula models, depending on the premise that with regard to money transactions, most people act in a predictable and rational manner)shows the big secret that everyone already knows:  people don’t always behave rationally!!! Fancy that! I hate to drag faith into this mix, but if you are a Christian, your Bible will teach you everything you need to know about the “rationality” of humans.  It is astonishing to me that “Christians”, in the name of “freedom” and “liberty”, deny the human impulse to break the rules, take unfair advantage of their neighbors, enrich themselves at others’ expense, etc…A good Christian would demand that there be reasonable rules for all business conduct, just from their understanding of their own book of faith.  Why are evangelicals, “born-again” individuals, not asking the government to regulate these industries, knowing what they know is true about human nature.  It is the ultimate in hypocrisy. It leaves me shaken to think that people of faith know so little about their Bibles that they do not defend the poor and those who have no power from the abuses of the wealthy and powerful.

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McTN's avatar

By McTN, April 29, 2010 at 4:57 pm Link to this comment

Barack Obama was accused of being a socialist due to his plan to discontinue tax cuts for the rich and give tax credits to the middle and lower classes. Redistribution of wealth, the right cried.

A HuffingtonPost column by Andy Ostoy, back in the days of Joe the Plumber stated:

“Was it not a redistribution of wealth eight years ago when President Bush took billions out of the tax pool and gave it back to America’s richest citizens? Was that an act of socialism? Or is it only socialism when the little guy benefits? Republicans can’t have the argument both ways. If raising taxes on the rich is considered socialism, then lowering their taxes is also a redistribution of wealth.”

But I wouldn’t even honor what banks have done by calling it socialism.  I’d call it terrorism, equal to the plan bin Laden had to crash the economy of the United States. And they should be arrested and Guantanamo reopened just for them. Put them in orange suits and black bags and let them rot away on the scorching island. Enron was just a foreshadowing of what was to come, a rehearsal for the ultimate heist of the citizenry’s savings.

I say we the people open our own bank—let’s call it “The Mattress,” to symbolize the day when that was the safest place for our money.

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amunaor's avatar

By amunaor, April 29, 2010 at 2:31 pm Link to this comment

((RE: Dean Taylor, April 29 at 5:39 pm>>
Late capital—i.e., rentier-controlled, debt-underwritten finance capital—cannot be rehabilitated.))
***

I say, move Wall-Street gamblers out into the desert, and put a ‘NEW’ Fire Wall around these unchecked egos.

Since they were fraudulently obtained; under false pretenses, I don’t see why these, ‘nefarious’ contracts could, or should not be easily contested and broken. Now that the chink in their armor has been exposed, produce the Big Chisels!

The alternative is to remain fearfully prostrate within the shadow of a mountain that isn’t there.

Exposure, exposure exposure; sunlight is always the best disinfectant!

Peace, Best Wishes and Hope

WikiLeaks—Collateral Murder:
http://www.collateralmurder.com/

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By WriterOnTheStorm, April 29, 2010 at 2:08 pm Link to this comment

Everyone is a socialist eventually.

You are a socialist the moment you put the interests of greater society above
that of the individual. Only tyrants and megalomaniacs believe that individuals
should be permitted to pursue their own happiness at all costs and to the
detriment of all others. If you are not deluded enough to be a tyrant or disturbed
enough to be a megalomaniac however, chances are you believe a) there is a line
beyond which someone’s pursuit of self interest does more harm than good, and
b) that individuals should not be permitted to cross it. If you believe in that line,
congratulations, you are a socialist. The rest is just a scrimmage over where you
draw the line.

Marx is completely correct about capitalism’s inevitable self destruction if left
unchecked. But capitalism can be sustained with a few rules designed to arrest
radical self-interest. When these rules or regulations are effective, everyone
wins over the long haul. This is what European social democracies try to achieve.

Their idea is to take what is good about capitalism — entrepreneurial spirit,
innovation, economic dynamism, etc—and to eliminate or minimize
capitalism’s dark side—wage slavery, extreme wealth/poverty, private
exploitation of public resources, corporate predation, entrenched power
(oligarchy).

In Europe there is a broad spectrum between pure capitalism (free market) and
pure socialism (communism). We have never had pure capitalism in the US, and
a good job it is too, since such a system would self-destruct in a matter of a
few generations just as Marx suggested. Let me say that a different way for
emphasis: in the sense that we are not pure capitalists, we already have
socialism in the US. Our ratio of gov’t to private industry is roughly 40/60,
compared to France which is roughly 60/40. Yet we continue to frame the
debate as an adolescent, black and white choice between Lenin and the gulags,
or Blankfein and street beggars.

There is a third way. Europe has found it. But to get there, we have to grow up
and accept the fact that we are not all going to get fabulously rich and famous.
We have to stop thinking that we are exceptional and entitled to more than any
other inhabitants of earth. We have to learn what enough is.

Ultimately, it doesn’t matter if we accept these things or not since, as the crash
of 2008 makes abundantly clear, our current system is unsustainable. Even if we
have to learn these things the hard way, we will learn them. Wether by choice, or
by necessity, everyone is a socialist eventually.

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Anarcissie's avatar

By Anarcissie, April 29, 2010 at 1:45 pm Link to this comment

Adam—“free market” is actually a rather tricky concept.  A market necessarily takes place in a context or framework which contains a lot of rules, such as who can own, what they can own, who can trade, how they can trade, and so forth.  At base, unless the market is extremely primitive, you need well-elaborated laws of property.  That doesn’t mean markets are bad, but it does mean they are not simple and not panaceas.

An additional complexity is put into the game when we are talking about labor markets and people’s livelihoods, because we have grossly asymmetrical traders.

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By Dean Taylor, April 29, 2010 at 1:39 pm Link to this comment

“Marx’s predictions about the inevitable collapse of capitalism have been wrong so far because the system has worked reasonably well thanks to the rules and redistributive programs established after the Great Crash.”


Marx’s predictions about the inevitable collapse of capitalism still hold up because, in addition to the “economy” (as envisioned and effected by rentiers like, e.g., the Tourres, Blankfeins, and Greenspans of the world) being unregulated, it is now largely debt based—and not production based as it had been until, say, the unpegging of gold from the dollar in the early seventies. Our economic future rides upon a freewheeling, moveable-feast of a casino—with a “regulated” casino begin somewhat less nefarious than the one in place since the repeal of Glass-Steagall on Bill’s watch with Gramm–Leach–Bliley.

That is, neither the regulated unbridled greed nor the unregulated unbridled greed conduce to a sound Commonwealth, i.e., one which functions from day to day for the good of the nation as a whole—versus one which is established to primarily serve the entitlements of the elitist Masters of the Universe (both the Wall Street and the DC varieties).

Capitalism, as Marx noted, does contain the seeds of its own destruction, seen, for example, in the fact that 72% of the GDP is household spending. This implies a living wage for the vast segment of American labor not obsessed with the coming and goings of capital—a “living wage” that exists in the memories of those who recall a production-based economy conjoined to a workforce represented by unions agitating for a fair wage.

Those days are gone—regulation or no regulation. Late capital—i.e., rentier-controlled, debt-underwritten finance capital—cannot be rehabilitated. Somewhat ironically, had there been an economic meltdown not “rescued” by the very collective being entirely screwed by the System, the money-obsessed, predatory financiers would have plummeted through the depths repeatedly swallowing their own entrails in a macabre death dance to the bottom, like moribund sharks eviscerated by bang sticks. As it is, though, the money-addicted/money-obsessed Tourres, Blankfeins, etc., will be enabled in their addictions and return to the flatscreens to ravage American labor (i.e., the lesser classes, in toto, worldwide) anew—and real soon kids! You betcha!

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By amunaor, April 29, 2010 at 12:29 pm Link to this comment

((E.J. Dionne—
Fabrice “Fabulous Fab” Tourre: “Well, he wrote, “what if we created a ‘thing’, which has no purpose, which is absolutely conceptual and highly theoretical and which nobody knows how to price?”))
***

Just say it like it is, it’s the old shell-game con.

‘Market-Maker’, ‘Fabulous Fab’ having conned the pubic into investing the fruits of their ‘labor’ – real work - into his ‘thing’ or ‘structured product’ – a bag of air – Fab does the grand switch-a-roo, now you see it, now you don’t.

Fab places his ‘structured product’ a debt noose around J.Q. Public’s neck, which drains it of its life blood. Other than slight-of-hand algorithms built into Fab’s scamming machine; without any real investment on his part, after the debt noose becomes unbearably tight, market-maker, Fab , plucks the low hanging fruit; taking possession of your home, car, and savings.

On the other hand, we, the public, need to rethink the meaning of the ‘Family Home’ and dump the ‘Shitty Deal’ notion the Marketeers have conned it into believing; the idea that the ‘home’ is some sort of cash cow for never ending trips to Disneyland.

***
((RE: Adam, April 29 at 1:42 pm >>Adam Smith was arguing for capitalism in his day because he was arguing against ‘mercantilism’ where the king gave royal charters to his henchmen and they thus controlled the markets.))
***

All ‘Corporations’ are creatures of the State; they operate under Charter; this is their Achilles Heel. As such, banks too are ‘Corporations’; as Creatures of the State, have absolutely NO Constitutional validity what so ever. Do research! Wal-Mart Charters have been successfully denied under this very legit argument.

Perhaps, this is why ‘Corporations’ continue to seeking citizenship status; the status of a person, for they know that they have a shaky foundation. But, even as persons, Corporations, wish to enjoy the privileges of citizenship, while deflecting to carry any of its burdens; not unlike ‘Market Maker’, Fab’s ‘Structured Products’—- Socializing its losses onto the backs of the public, while privatizing it’s profits into the hands of the few.

Peace, Best Wishes and Hope

WikiLeaks—Collateral Murder:
http://www.collateralmurder.com/

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By gerard, April 29, 2010 at 12:02 pm Link to this comment
(Unregistered commenter)

“Playing” the stock market is gambling. Gambling is a “game” where the “house” knows more than the “gamblers” which means the game is “rigged in favor of the house.”  The house is in “business” to make as much as money possible. The house has to let the gamblers “win” sometimes because otherwise they wouldn’t gamble.
  The gamblers are so delighted to “win” sometimes that they are willing to “lose” most of the time because they think they will “win” the next time.  Nobody does any actual work, gamblers or the house.
  The house does not have to reveal its secrets about rigging, which enables them to “steal” as much from the gamblers as possible, unless the gamblers discover the house secrets, in which case the gamblers will be shot in some dark alley and bleed to death before morning.
  Wall Street is the world’s biggest casino.

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By Aquifer, April 29, 2010 at 10:58 am Link to this comment

sorry about that, I meant to say “approach with regard” instead of “logic” .....

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By Aquifer, April 29, 2010 at 10:51 am Link to this comment

Fair,

To take your analogy in a slightly different direction;

We accept the validity of a government agency (FDA) actually taking a drug off the
market if it proves to produce significant harm or even significant risk of harm,
even though that drug might be shown to be useful in certain circumstances. Why
can’t we employ that same logic to financial “products”?

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By fair, April 29, 2010 at 9:50 am Link to this comment
(Unregistered commenter)

One interesting rule for any free and fair market would appear to be that the seller of anything should be required to show that he/she actually possesses the thing and thus is a legitimate seller.

What would you think of an EBay seller who put up items for bid that they didn’t possess? 

Watch any tv cop dealer showing a drug deal.  At some point, the seller has to show he/she has the goods.

So, why are people allowed to sell goods they don’t own and don’t possess in our ‘modern’ markets?  That alone seems like fraud.  But its a fraud that we’ve become so accustomed to that we no longer seem to question it.

A farmer making deals to sell the crop he is growing at some guaranteed future price is one thing.  He could show a potential buyer his fields to show he actually has this good to sell.  A speculator who’s placing a phantom bet to sell goods at some future date is a different case.  A stock trader show is ‘short selling’ by promising to sell shares they don’t own is also a different thing.  Neither could show they actually own the goods.

Make them invest. Make them actually buy the goods now that they intend to sell in the future.

Would you trust a seller on EBay who couldn’t show you a picture of the item, but instead only gave you a vague promise that they’d buy the item from somewhere else and then sell it to you once they’ve got your money?  Why on earth do we trust the wall street crooks when they do the same?

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By Adam, April 29, 2010 at 9:42 am Link to this comment
(Unregistered commenter)

Anarcisse misses one key point.  Capitalism and markets aren’t supposed to be about leaders.

He is correct in saying that we should not rely on leaders to manage our lives for us.  That is of course sure to end in tears, as the ‘leaders’ will undoubtedly manage for their own well-interest and not ours.

The key is that markets and capitalism aren’t supposed to be about leaders.  They are supposed to be about ‘free markets’ where anyone can come and participate fairly.  The very idea of free and fair and transparent markets where anyone can participate is one of trying to take power from ‘leaders’. Adam Smith was arguing for capitalism in his day because he was arguing against ‘mercantilism’ where the king gave royal charters to his henchmen and they thus controlled the markets.

Of course, this is an easy mistake to make as today’s version of American capitalism has very little to do with free markets.

In fact, this whole story is about how the markets were manipulated such that they weren’t ‘free’ and thus the insiders were able to steal fortunes.  That’s not necessarily an indictment against markets and capitalism.  But its definitely a case why these gentlemen should all have been testifying wearing orange prison jumpsuits.

Where are the manacles?  Why hasn’t every dollar owned by these criminals already been seized to help repay the American people back the money that their fraud stole from them?

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By Emma, April 29, 2010 at 9:34 am Link to this comment
(Unregistered commenter)

I don’t understand why every customer of every US bank isn’t automatically a socialist from the awful experience.

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By samosamo, April 29, 2010 at 9:14 am Link to this comment

*************************


Clear evidence that the rights of people are bereft such that
terrorists, in the case the financial wall street terrorists, are
protected from those people who should, by all rights of their
self defense, be able to go into their offices or places of
business, beat the pulp out of them and then give them a tar and
feather bath while all their assets and wealth are taken from
them for coming up with such toxic and blatantly criminal means
of grand larceny. Which is built on that old time favorite and time
honoured institution of fantasy that soooo many people through
the ages have been cajoled into taking as truth. It makes it out to
be like a religion, ‘believe and have faith and all will come to
you’. Unfortunately, too many of our congressional ‘elite’ have
this belief and think that, there is no wrong done here, move on.

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By balkas, April 29, 2010 at 8:55 am Link to this comment

Sorry folks ab interupting this conversation by going on a road up to now ?entirely untraveled.
We cld call this road: the road of linguistic pollution.

Yes, dear folks, our languages are over-polluted with dys- and and euphemistic labels; which, of course, not only not proffer an enlightement but cause untold damage in our interpersonal relationships.

The study of the structure of any language cld be also described how a great tool like a language became such a potent weapon against all of us and biota.
But first a question to people who might read this post: do not all or most fights, wife and child beating,exploitation, feelings of shame-guilt-helpelesness, wars and just ab every ill that befalls us, start with words?

And arent mostly the eu- and dysphemistic labels that cause ?all these maladies or unwanted happenings?

So, the first step to a better life for all humans wld be to eliminate labels such as stupid, arrogant, ignorant, lazy, stubborn, etc., and even most euphemisms.

Let us recall please that nature-god does not create categories; we do that. It is we who dichotomize people into less-worthy and more worthy or even, broadly, into people and nonpeople.

Wld americans wage so many wars if they wld not dichotomize people into people and nonpeople? And by labeling solely?

Not only that labels do not proffer an elucidation- they cause all the damage on interpersonal relationships.

So let us cleanse our languages of irritants, pollutants,etc. These labels are causative factors for ?all ills that befall us on int`l and interpersonal levels.

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By RubberPimple, April 29, 2010 at 8:13 am Link to this comment

Anarcissie

It should be saved because when it IS well regulated (“jury-rigged” in your words)
it is an extremely effective system for creating economic opportunity.

Just because something requires regulation doesn’t mean it shouldn’t exist.
Children require lots of it before maturing into adults.

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By birdieman073, April 29, 2010 at 8:11 am Link to this comment

anarcissie - much respect there.  It is time for our
society to grow up, and not just in terms of
economics…

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By Anarcissie, April 29, 2010 at 7:14 am Link to this comment


‘... The lesson is that the surest way to save capitalism is to regulate it in the public interest. ...’

 

So, if it doesn’t work without a lot of jury-rigging, why should we “save” it? 

Maybe it’s time to move on from expecting elites to manage our lives for us—to grow up, one might say.

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By LostHills, April 29, 2010 at 6:46 am Link to this comment

“Socialism is the only thing worth fighting for.”
Woody Guthrie…

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By Mike789, April 29, 2010 at 5:40 am Link to this comment

Spot on column…and I’d like to make an additional observation in regards to: “Yes, it’s good that farmers can use the futures markets…..”. Prior to the deregulation of these markets 70% of all options traded on the mercantile exchanges were placed by participants taking delivery of the underlying commodity. The percentage has now reversed. In fact speculation has effectively made corrupt the entire purpose for which these markets were established.
  Money for the sake of money is a house of cards, plain and simple. The original value structure has evaporated into a cloud of abstract fomulation. Without re-regulating there is nothing to prevent the recurrence of leveraging 350 billion (or whatever the “flip”) in bad mortgages into 6 trillion of unreal debt obligation.

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