@radx

I think the problem with say a 20 year time frame for Greece, is that same lack of trust and political inability to essentially prop up these governments with cash, year on year, for a period of that kind of time frame. I don't see Merkel being able to support this and not get pushed out of government. Functionally money has a time value so in essence, a long time frame is just more money. Rumour is Merkel is considering extending time frames on Greek loans (because most people don't understand that last point) but that will only come with a greater commitment to reform.

As far as collective punishment, it's more an issue that none of the other EU countries are responsible. I wouldn't characterise anything as being forced upon Greece, although I'm sure many feel that way. If they were to leave and reject aid they would be far worse though. The majority of Greece rightly wants to stay in. The Syriza win was about 'dignity' and basically getting better terms. But they won't get it because it would lead to parties in Portugal/Spain emerging and demanding the same thing. Morality doesn't really come in to it, I'm just looking at what's likely and/or possible.

As you mentioned, Germany went through its own period of austerity. It certainly constrained wage growth (which contributed to making its exports particularly competitive and put it in a good position to weather a downturn in the eurozone, when it can export to foreign markets) but I don't believe its inflation rate was vastly off. It was 1-2%, not vastly different to France for example. Either way politically, I don't see the German people being willing to pay these countries out of their troubles in effect.

I certainly agree though that eurozone rules were broken before the euro crisis, e.g. both Germany & France ran budget deficits in excess of agreed terms. Really it came down to the structural weakness of the eurozone's design. You can't have a monetary union (shared currency and central bank policy) without a fiscal union. What they had at best were fiscal guidelines and those weren't followed.

I don't see the eurozone collapsing though. Parties that want to leave are generally still fringe parties (excluding in the UK but it is the least integrated). France doesn't need bailouts, it just lacks growth (due to lack of the reforms Germany went through). The ECB's QE and the loose banking union for bailing out banks that they've developed will mean if Greece collapses these is unlikely to be any serious bank collapses or Lehman moments (or so the theory goes).

I don't really agree at the end with your characterization of a high German savings rate being culpability for inflating bubbles. That fault falls on the lack of domestic bank regulation within the respective countries, the lack of regulation to curb bad lending. In the same way I wouldn't blame China's saving rate for encouraging sub-prime US loans. Cash/liquidity is globally mobile and fungible. It's the responsible of the borrowers and their regulators to ensure they don't dig themselves into a hole. The lenders already stand to lose their investment if the loan goes bad.

While I actually agree with the report, I have to point out that Standard & Poor should have ZERO credibility on any issue. They're the same guys that were rating the sub-prime mortgage backed securities as triple-A. Their analysis of anything at all is, to say the least, highly suspect.

This is so misleading. It makes me sad. Of course "The Answer" is hogwash, but to say that "Positive Thinking" and the so called "Law of Attraction" are the same thing is a lie.

The Answer, by John Assaraf and The Secret, by Rhonda Byrne (whom Ehrenreich references) are not representations of what most people consider positive thinking, nor does it have much to do with the idiocy of firing those that warned about the dangers of out-of-control sub-prime mortgage loans.

In other words, this video confuses many separate philosophies and psychological principles, some of which are real, and some of which are false.

There have been numerous studies on positive thinking, meditation, and mental practice that point to positive gains in actual performance. Retorhic and references to George W Bush, don't make this video accurate, though they do garner applause, as evidenced by the number of votes and promotes this video has earned.

Research points to the following benefits of positive thinking:
Increased life span
Lower rates of depression
Lower levels of distress
Greater resistance to the common cold
Better psychological and physical well-being
Reduced risk of death from cardiovascular disease
Better coping skills during hardships and times of stress

Positive thinking SHOULD NOT be confused with blinding yourself to realities and dangerous actions, as in the George Bush example given, nor should it be confused with "The Law of Attraction," as in the numerous references she gives to people getting things simply by thinking them.

Positive Thinking is a very powerful force that can lift one into a self reliant and full life. Positive thinkers impact the world with invention, ingenuity, and an uplifting influence on their community.

http://en.wikipedia.org/wiki/Creative_visualization
http://www.mayoclinic.org/healthy-living/stress-management/in-depth/positive-thinking/art-20043950
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3156028/
http://www.huffingtonpost.com/james-clear/positive-thinking_b_3512202.html

I don't understand why any of the ratings agencies have the slightest credibility. They were -all- assuring everyone that the sub-prime CDOs were triple-A quality.

Now that they're throwing their former compatriots under the bus...why the hell should we believe them this time?

>> ^marbles:

You know who's the biggest fan of socialism? Corporations.
You wanna punish those evil "capitalists"? Make them actually have to compete in a real free market instead of lobbying congress for special interests. Let them suffer the consequences of leveraging their business with 30 to 1 bets. Hold government accountable for colluding with them and giving them trillions in free "loans" to manipulate the market. Hold government accountable for ignoring and refusing to go after banking fraudsters, the same fraudsters that are "donating" millions to election campaigns and special slush funds for government officials.
Socialism always has and always will be a deception. On multiple levels. You give power to one group of people (government) to plunder from another and you think this group of people is going to be fair?
And if any government around the world does practice something closer to true socialism (like Libya for example), then we're going to bomb the shit out of you. And all you so-called progressives will be leading the cheer for it.


There is never a "free market" and "free maket " as a saying is redundant and useless people use it all the time to counter socialisum but it makes no sense.

for example say you removed governments from the markets compleatly and just let market forces dictate everything , who do you think would win out ? the people with the most money would and the people with the most money would use that money to advertise more and more so regardless of the actual value of there product or service they would still make money.

the deregulation of the markets is specifically what lead to the sub prime fiasco , and ethor way raw consumption based capitlosum is fundimentaly floored when there are finite resources and ultimately things have to be managed by what makes things better for people and not whats the most profatable thing to do.

I would be intrestead to know what you would define as "free market" because I'm prity sure that people using the term "free market" in reality mean highly regulated capitlisum but with the regulation coming from the general population and scientific consensus instead of what we have now where the regulation comes from cooperate interest.

If that's the case you are basically talking about a socialist society with capitlisum balted on not a "free market" capitlist society.

The government forced them to create CDO's? to bundle up non-AAA holdings and sell them as AAA? to extend themselves beyond their ability to cover their loses?

In a word - yes - the government forced the issue. Before the government interfered, lenders had actuarial tables and KNEW with 100% certainty who could and couldn't afford a loan the second they walked in the door. Mortgage rates were in the 8% to 10% range. Banks 'made' money on loans with the interest. People who earned less than 30K a year had a tough time getting into a house because (DUH!) they didn't really earn enough money. It was common sense. People that were POOR couldn't just go out and buy houses willy-nilly.

Then the government came along. They wanted people to get loans cheaper and more often and entirely for political reasons. But banks aren't charities and if they can't make the money on the interest (which you can't with sub-prime) then how do you make money? Hmmm... Oh yeah - let's get rid of this little thing called "Glass Steagall"! Now let's use the Fed to jack around interest rates until they are below 5%. Now you banks are commanded by government to make your profits by bundling the loans as derivatives. Now it is almost impossible to survive as a lending institution without doing what we tell you. Oh yeah, you banks? When it all blows up down the road it is YOUR fault... There you go banks!

That was government meddling with the market. They changed the rules so Barney Frank could tell voters that they had "UFFODUBBLE HOW-SING!". It was true left-wing, neolib stupidity on parade and it screwed up the entire planet. They were the ones that changed the laws. The private sector had no choice but to react to the rules that government barfed up.

The system that GOVERNMENT established turned the housing market within a very short time from a staid system of "moderate loans paid off by interest" into a crazed gold-rush of "cheap loans for everyone paid off by bundling". Banks had no choice to play that game because that was playing field that GOVERNMENT created. Any bank offering a SANE loan at an 8% interest rate and making its profits over 30 years was getting clobbered by lenders handing out loans at 2.5% ARMs that were making a bundle on the back end. Banks knew it was crazy, but those were the rules that GOVERNMENT set up and they didn't have any choice but to operate within that rubric. But government said, "Hey - if the loans blow up don't worry about it! We'll cover those bad loans with Freddie/Fannie and you won't be on the hook for it..." Government.

You see, that's what that happens when government interferes with the market and picks the winners and losers by changing rules, laws, and policy. The whole thing would have been impossible without a corrupt government starting the ball rolling for political purposes.

Everybody on the planet learned after the Great Depression that having an 'environment' where bundling and other such investments could exist was not good. That's why Glass-Stegall was created. It stopped a BAD investment practice and it worked for over 50 years without government being "involved" in a single, bloody thing. That's what !good! government does. It establishes a simple, basic set of rules and then STOPS INTERFERING. The reason for the housing failure was not because government WASN'T regulating the market. It was because the government WAS regulating the market in a terrible way.

Reinstate Glass-Steagall - a common sense law - and then ban the government from EVER interfering with the housing sector again. Things work just fine when you set up a simple, transparent system and then forbid the government from coming within a million miles of it.

>> ^snoozedoctor:

I have yet to hear one of the protesters voice a plan. I'm with Cain, I don't know what they want. Was there greed involved in the sub-prime fiasco....YES. WE ALL KNOW THAT. PEOPLE ARE, BY NATURE, GREEDY. Congress's explicit approval of sub-prime lending, under the banner of "affordable housing for all" was mostly a lefty dem deal, (I think I hear Barney Frank somewhere), although both sides of the aisle should have been pistol whipped for letting such an obvious fleece go on for so long.


http://videosift.com/video/why-Occupy-WallStreet

Well - the video gets one thing right. Repealing Glass-Steagall was a horrible mistake. Where they get it wrong is that it was not 'banks' or 'Wall Street' that was pushing for it.

Glass Stegall's repeal is a long story that begins with Jimmy Carter and ended with Bill Clinton. They leaned hard on banks because they wanted more poor folks owning houses. But the dang awful truth was that the poor folks just couldn't actually AFFORD to pay for those homes, and banks weren't in the business of giving them houses for nothing.

So Congress (with both the GOP and Democrats) began pushing for a change. It is very true that there were companies (notably AIG) who also pushed for this because they saw a way they could profit from it. But "banks" did not want this at all. They were forced into it. Once the housing bubble started they had to start in with the sub-primes just to compete but a lot of them knew it was very risky. But for a while it seemed to be working and everyone was making money hand over fist. And it has to be said also that CONSUMERS weren't exactly ethical either. Many people bought homes they knew they couldn't pay for just to make a quick buck.

That's the history and fact. Glass Steagall didn't go away because of evil banks. It went away because of governmetn social engineering. So bring it back already! Oh - yeah - that would interfere with Obama's CURRENT PRACTICE of forcing banks to give away more loans in minority communities...

http://www.investors.com/NewsAndAnalysis/Article/577794/201107081851/DOJ-Begins-Bank-Witch-Hunt.aspx

The real problem is government. Get the government OUT of the market. Establish a simple set of basic, fair guidelines and then tell government to get out of everyone's way. Glass Steagall would have never been repealed without a corrupt government pushing for it.

I think I may not have been clear about what I meant in my statement. I believe we're talking about two different segments of the same problem.

I absolutely agree with you that there has been very poor management of the U.S. debt over the past few years, especially in over the financial bail out/sub-prime mortgage/housing bubble fiasco. And yes, some (many?) of those individuals culpable are working with the current cabinet.

However, my thoughts were more to the fact that 1/2 the American national debt (some $5+ Trillion) is interest. I see this as a crime no single individual could commit over night. Yes, the last few years have had fuck-ups and thefts of the common purse on a colossal scale, but the majority of the (compound) interest on the the U.S. debt was accumulated before the bank bail out. I see those responsible as being the people who permitted the system with a privatized central bank. Money is now created by private companies through debt which the taxpayer is charged compound interest on.

NEW YORK -- Here's a new way to think about the U.S. government's epic borrowing: More than half of the $9 trillion in debt that Uncle Sam is expected to build up over the next decade will be interest.

More than half. In fact, $4.8 trillion.

If that's hard to grasp, here's another way to look at why that's a problem.

In 2015 alone, the estimated interest due - $533 billion - is equal to a third of the federal income taxes expected to be paid that year. /CNN, 2009.

I have yet to hear one of the protesters voice a plan. I'm with Cain, I don't know what they want. Was there greed involved in the sub-prime fiasco....YES. WE ALL KNOW THAT. PEOPLE ARE, BY NATURE, GREEDY. Congress's explicit approval of sub-prime lending, under the banner of "affordable housing for all" was mostly a lefty dem deal, (I think I hear Barney Frank somewhere), although both sides of the aisle should have been pistol whipped for letting such an obvious fleece go on for so long.

The example of "fair share" could just as easily been about receiving medical care, or any other service that the government provided. So, I think the logic holds. A "fair share" of the funding of Medicare would be everyone paying the same amount, assuming everyone gets an equal share of the benefit, which they currently do when they qualify. I'm not sure that an individual "benefits more from society" if they are rich. Maybe I missed the logic in that. Maybe you mean that they benefit more from society wanting the products/services they provide, the circumstance that makes most of the rich, rich, or just that they can purchase or consume more of what society has to offer?
The place to start with increasing government revenues is reforming the IRS and its complexity. And yes, doing away with some ridiculous deductions allowed, say the deduction on the mortgage of a second home. Increasing taxes does little to make businesses more honest, and we all know major deception occurred in the sub-prime mortgage debacle. Enough greed to go around the table there though, from home buyers/mortgage companies/banks/insurers/.....
It's a simple fact, already pointed out in this thread, that increased tax revenue will only put a dent in the deficit crisis and only serious spending cuts can get us out. Since entitlement programs represent the bulk of Federal spending, they have to be on the table to make meaningful budget improvement.

I think it's difficult to dispute that you weren't arguing against free trade in your previous post even if that wasn't your intention. The first paragraph seems clearly about it when you talk about being up in arms about your job going overseas, and I think in the second you misunderstand how capitalism works. But anyway, I don't think that we disagree on a great deal then. Like I stated in my original post, I believe in necessary government regulation and oversight in a capitalist economy, preventing deterimental effects like market failure, and financial, environmental or other crises.
>> ^Asmo:

>> ^RedSky:
Well, at this point you're simply arguing against free trade.
Would I be infuriated to lose a job because a firm has chosen to use cheaper labour from overseas? Sure. I go about preventing this from happening by studying about and working in an area that requires technical knowledge that cannot be easily substituted. As a comparison, would you be for sticking to old technologies purely because there are workers only trained in them? Should be have avoided embracing computation simply because previous generations were unfamiliar with them and stuck to letters and typewriters? Obviously given that these factors are mostly out of people's control, specific and unemployment assistance should be and is provided in most highly developed countries. The countries which don't have generous unemployment benefits are usually the ones that simply can't afford them. Typically though, they're the biggest relative beneficiaries of free trade though.
The better question should be, are willing up to give up the drastically lower prices, product variety and willing to scare of businesses who bring employment? Because you can bet that if you restrict companies from laying off workers in favor of cheaper employment overseas, they'll move overseas in droves to countries which do not and you'll have created a self fulfilling prophecy.
Free trade works two ways as well, which people seem to blissfully forget. Where do you think developing countries go to get their technical expertise?
Free trade leads to lower prices not higher profits. When all firms lower their wage costs, this creates the incentive to lower prices and capture more market share. Once one company in an industry does that, everyone follows suit. If that doesn't happen, it's a failure of competition policy and anti-trust and has nothing to do with free trade.
No offence, but I honestly think you should take Economics 101, or at least Wikipedia the basic concepts.
http://en.wikipedia.org/wiki/Supply_and_demand


None taken, but you've become so impressed with your own rhetoric (and wandered off in to free trade) that you've ignored the key element...
Exploitation. Foreign outsourcing was an example of 'free' trade (rather than 'fair' trade). But exploitation wears many coats. Usury rates on credit cards combined with stagnant wages, for example. Or sub prime mortgages for another. Destroying the environment to squeeze the last few drops of resources out.
And this is the core of the penultimate capitalist ideal (as opposed to individual flavours). Accumulate wealth. The more corners you cut, the faster you can accumulate wealth. Then you die and someone else get's it. Yay, you win.
Regulation, fair trade, competition laws etc are all ideals forced upon capitalists because people generally recognise that capitalism without checks = a disaster (BP + gulf, Union Carbide/Bhopal disaster etc). There is nothing wrong with working and expecting fair recompense for your labours but too often these labours aren't honest. They game the system and exploit (there's that word again) not only the workers but the customers as well so the man in the middle can make as much cash as possible.
ps. For the record, I don't have an issue with fair trade and the commensurate rise in prices if quality rises with it. That's the whole point of fair trade, not increasing wages for sweatshop quality.

>> ^RedSky:

Well, at this point you're simply arguing against free trade.
Would I be infuriated to lose a job because a firm has chosen to use cheaper labour from overseas? Sure. I go about preventing this from happening by studying about and working in an area that requires technical knowledge that cannot be easily substituted. As a comparison, would you be for sticking to old technologies purely because there are workers only trained in them? Should be have avoided embracing computation simply because previous generations were unfamiliar with them and stuck to letters and typewriters? Obviously given that these factors are mostly out of people's control, specific and unemployment assistance should be and is provided in most highly developed countries. The countries which don't have generous unemployment benefits are usually the ones that simply can't afford them. Typically though, they're the biggest relative beneficiaries of free trade though.
The better question should be, are willing up to give up the drastically lower prices, product variety and willing to scare of businesses who bring employment? Because you can bet that if you restrict companies from laying off workers in favor of cheaper employment overseas, they'll move overseas in droves to countries which do not and you'll have created a self fulfilling prophecy.
Free trade works two ways as well, which people seem to blissfully forget. Where do you think developing countries go to get their technical expertise?
Free trade leads to lower prices not higher profits. When all firms lower their wage costs, this creates the incentive to lower prices and capture more market share. Once one company in an industry does that, everyone follows suit. If that doesn't happen, it's a failure of competition policy and anti-trust and has nothing to do with free trade.
No offence, but I honestly think you should take Economics 101, or at least Wikipedia the basic concepts.
http://en.wikipedia.org/wiki/Supply_and_demand



None taken, but you've become so impressed with your own rhetoric (and wandered off in to free trade) that you've ignored the key element...

Exploitation. Foreign outsourcing was an example of 'free' trade (rather than 'fair' trade). But exploitation wears many coats. Usury rates on credit cards combined with stagnant wages, for example. Or sub prime mortgages for another. Destroying the environment to squeeze the last few drops of resources out.

And this is the core of the penultimate capitalist ideal (as opposed to individual flavours). Accumulate wealth. The more corners you cut, the faster you can accumulate wealth. Then you die and someone else get's it. Yay, you win.

Regulation, fair trade, competition laws etc are all ideals forced upon capitalists because people generally recognise that capitalism without checks = a disaster (BP + gulf, Union Carbide/Bhopal disaster etc). There is nothing wrong with working and expecting fair recompense for your labours but too often these labours aren't honest. They game the system and exploit (there's that word again) not only the workers but the customers as well so the man in the middle can make as much cash as possible.

ps. For the record, I don't have an issue with fair trade and the commensurate rise in prices if quality rises with it. That's the whole point of fair trade, not increasing wages for sweatshop quality.

For starters, I am not at all adverse to having more information on the mechanics of the orchestrated and executed, sub-prime collapse-Real Estate is one of the hats I have worn....CBS' take on it should be considered trivial at best, and while we may or may not be able to suffer the slings and arrows of repeated advertisements for PHIZER products, or justify another second wasted on examining the symptoms of a greater and more insidious problem, that of continuing in a system which will inevitably force the majority into another fiasco of similar proportions, we can down-vote insidious product placement designed to garner twice the votes for having had to suffer a miniaturized version of one of the worst mechanisms of propaganda and control on planet earth.

And now we break for commercial, then to editorial, then to.....Oh I'm sorry..no practical solutions can be suggested here that don't involve the bending over and taking of foreign objects against our instincts, up the anus.

There are some BIG problem with this video: it either, 1) omits key aspects of the issue (e.g., pressure on brokers and banks to repeatedly cold call & pressure current renters [i.e. potential homeowners] with unrealistic mortgage offers, selling of sub-prime mortgages to prime borrowers [because investors get a higher rate of return for sub-prime loans], and - very importantly - Wall Street's lobby to congress to deregulate lending laws so that Wall Street could create new mortgage products for less-than-prime borrowers or, 2) flat out gets some information wrong (the portrayal of sub-prime borrowers as neglectful or bad people (too many kids & cigarette smoking? really???); especially without informing the audience that most subprime borrowers only defaulted at the 5 year mark on their mortgage, when the monthly interest payment ballooned from 3 or 4 percent each month to 10 to 12 percent each month (an aspect of the mortgage agreement that most brokers assured borrowers would never happen: that by the time the balloon payment was due, that the homeowner could then refinance to a fixed rate at 6-7 percent -- that is if the broker explained that the balloon payment at all (many brokers covered that fact up).

These are key deceptive maneuvers conducted by banks, investors, lenders, brokers -- all in the name of making quick money. THEY were the ones lending, it was their job to properly discern who to and not to lend to; to specifically target people more likely to default and put families already struggling to make ends meet at risk of bankruptcy and homeless just to get a higher rate of return is criminal.