Oh crap…Trump’s subprime bond was rejected. The company hasn’t provided proof they can pay when trump loses his appeal.

Recent example of what happens when private companies are allowed to discriminate:

Countrywide Agrees To $335 Million Settlement Over Discriminatory Subprime Loans

In the largest residential fair lending settlement reached in the Justice Department’s history, Bank of America has agreed to provide a $335 million fund to compensate victims of what one top DOJ official called “discrimination with a smile.” DOJ alleged that Countrywide, before it was owned by Bank of America, engaged in a “widespread pattern or practice of discrimination against qualified African-American and Hispanic borrowers” in their mortgage lending practices from 2004 through 2008.

The complaint, filed in the Central District of California on Wednesday, alleges that African-American and Hispanic borrowers “were more than twice as likely to be placed in subprime loans than non-Hispanic White wholesale borrowers who had similar credit qualifications.” Subprime loans carry higher interest rates.

Attorney General Eric Holder stressed at a press conference that the over 200,000 African-American and Hispanic borrowers named in the suit were qualified for the loans.

Banks are not forced to make huge profits that drive up their share price and create huge dividends for their stockholders. They CHOOSE to make huge profits that drive up their share price and create huge dividends because they CAN. They didn't used to.

You speak like banks are supposed to act like a charity, or a public work like a sidewalk. Banks didn't 'used to' try to earn profits? When was that - exactly? Profits on home loans used to be based on the interest. Why did that change? Because politicians changed the laws. Loans became cheap and the poor, middle-class, and rich all started getting bigger loans (or more loans) that they couldn't have gotten under the old system. They all did it not because banks were 'forcing' them, but because they could make out like bandits while it was all clicking.

Canada didn't have the same problems our country had, because they had BANKING REGULATIONS.

Regulations that the US also had before government interfered in the marketplace. Government removed Glass-Steagall - not the banks. Prog-libs may whine about the banks acting unscrupulously, but you don't see mass arrests and prosecutions do you? Why? Because the cold hard reality is that banks did not break any laws. They simply followed the laws that government created. Don't like what they did? Blame the government. Prog-libs say government didn't 'force banks' to lend bad money. True. But you know what? Banks didn't 'force consumers' to borrow bad money either. But both banks and consumers acted stupidly for the same reason... Because government said it was fine.

And when you say the government pushed for subprime lending so everybody could buy a house, don't you mean bank lobbyists told Bush to push the idea in the first place?

The whole push for this started under Jimmy Carter, built up in the 80s & 90s, and finally took place with Bill Clinton in 1999. Did bank lobbyists push for it? Of course - mostly the bigger financial houses who were really limited by Glass-Steagall. The GOP was all OK with it too - alas. Democrats (particularly Barney Frank) were salivating over it. The rhetoric that built up to the final passage was mostly about how banks who were redlining poor minorities, and repealing G/S wouldu help everyone get homes, increase bank profits, fix your truck, and cure cancer. Both the GOP and Dems let this happen. Nowhere near enough people tried to stop it.

But let's call a tiger a tiger here... Standing up for Glass-Stegall in 1999 was a tough position to take. The proponents of the change were blasting anyone who opposed it as a racist, or a rich fat-cat that just didn't want 'the poor' to get a break. If you were against the repeal, all you could do is point at the Great Depression, and very distant macro-economic philosophies. We now have the 20/20 hindsight to see clearly that it was really the people trying to repeal G/S who were the jerks, @$$hats, and slimeballs. But in 1999 it was very different. Bush never 'speechified' it. In fact, Bush tried to get some reforms going in 2005 long before the bubble popped. But it was slapped down for the same reasons as the before. Wasn't until September/October 2007 that reality finally hit.

And when you say the government pushed for subprime lending so everybody could buy a house, don't you mean bank lobbyists told Bush to push the idea in the first place? I'm not saying Bush was the only one in the deregulation game, but I remember him speechifying about it being the American dream for everybody to own a house, and what he was going to do about it.

Only a dogmatic right winger could say that with a straight face. And in the later sentence you proved it. You're so convinced it couldn't have been the free market, you are willing to accept any explanation for the economic collapse that pinned most of the blame on the government.

And it's categorically absurd. Yes, absolutely, the gov't played a role, but the overwhelming majority of the collapse was due to derivatives and CDOs. The only conceivable explanation for the gov't being the primary root cause is either they didn't regulate as they should have, which actually ends up being the antithesis of your argument because it advocates gov't taking a much more involved role from here on out, or it's because of initiatives by the gov't to increase homeownership by giving loans out to people who had little chance to pay it back. Of the later, the simple fact of the matter is the vast majority of the subprime loans were given out by subprime lenders, not Fannie and Freddie, before Fannie and Freddie entered into that market. Even when considering in the end all subprime loans including Fannie and Freddie, the odds of default on subprime loans were several fold higher with subprime lenders than Fannie/Freddie.

And why did CDOs containing subprime loans get pushed up into investment vehicles that could be purchased by retirement programs like 401k, etc., which fueled their growth? Fannie and Freddie backed loans and non-Fannie/Freddie backed loans were both in funds rated AAA by ratings agencies that were not regulated by the US gov't. Instead, they were paid by the investment houses that gave them the investment funds to rate in the first place. No gov't agency put a gun to their head and made them slap lipstick on those pigs.

Absolutely, Fannie and Freddie helped to legitimize subprime lending, but the simple fact of the matter is Fannie and Freddie were late to the subprime game. They even thought that they almost had to in order to, survey says, COMPETE THE MORTGAGE MARKET! Oh yes, that's right, they were compelled to enter into these dangerous loans because they were losing market share to the Countrywide's of the mortgage industry. While gov't certainly liked the idea of the result in increased home ownership rates this would cause, no gov't agency put a gun to their heads to issue subprime loans specifically. They chose to jump into those waters.

The Great Recession is in the end more about what happens when the free market, particularly the financial sector, isn't regulated effectively. I don't blame the financial industry for inventing derivatives and CDOs. Both instruments can be used to reduce risk for all parties involved, and potentially to the entire system. But they inadvertently created a system that led to its own collapse because no entity watched over the system as a whole. How could the investment banks have known they comprised entities that should any of them fail, they would cause the entire system to collapse because of the intricate web of these CDOs and derivatives? How could they possibly know AIG was overextended on derivatives? They simply aren't equipped or structured to know this. But some entity should have, and the ONLY possible answer is the gov't. I'm even sympathetic to the view the gov't as is cannot possibly do this, but that means we need to fashion a gov't that can. It's the only answer.

>> ^lantern53:

Now Wall St. may have fouled up but it was the US gov't which was holding the gun to it's head. Only a gov't could foul things up this badly.

@westy

Yes nearly every business tries to game the system that's the point of capitalism and that's why it will always fail ( im not on about simply ballencing your books and deprecaiting assets and playing that sytem , evan though that is gamed in the same way) I'm on about the system at large , surely you can see the difference between a butcher and a company that offers high interest loans to desperate people , when instead of offering the loan the ethical thing would be for them to tell them to contact citizens advice ?

I don't think capitalism (by which I mean a regulated but moderately free market) will fail as (at least so far) it's provided the best manner of funneling people's naturally selfish/nepotistic tendencies in a productive way.

Let's be clear here, generally brokers were responsible for writing subprime loans with botched (or outright false) assessments of income and capacity to pay. These brokers were essentially gaming the investment banks (like Bear Sterns) into buying fraudulent securitised loans. Bear Sterns along with Lehman Brothers didn't survive and many other banks got taken over. There was clear motivation for them to perform more due diligence and they paid for their mistakes by going bankrupt or being taken over. The credit rating agencies and the insurers who backed CDOs also had poor judgement. My point is, the people who benefited from writing these bad loans weren't the banks.

thats the piont im making , you can have companies that game the system but also privde a service but the people that have caused this economic crisis are people that are at the pinicale of gaming the system and do not care to provide a service and purely participate to game the system purely exist to make money at whatever cost to society.

They're not gaming the system if they're going bankrupt. You know as well as I do that banks borrow money from those with savings and selectively lend them out to generally good investments thus creating economic growth and jobs. Let's not get carried away with populism here.

luckily we have people that are ethical and don't just think of the profit bottom line , but in general you will see that a good proportion of those successful at business and profiting are ones that couldn't give a shit about other people or there effect on the environment.

The difference between the butcher and a large financial institution is size. If this was a national specialty chain business, you can bet that they would be lobbying their congressman and receiving favors and payouts. Don't get me wrong, I'm not for crony capitalism and I understand that banks weild considerable leverage over the economy and politicians. They should be more regulated commensurate to their significance and intractability with the economy, particularly shadow banking system (securitisation of loans and credit derivatives) should be regulated to prevent crises. This is a failure of regulation though, not a failure of banking in general. As I mentioned, every large industry/corporate body curries favors.

"Either way they are both pretty beneficial to a functioning economy"

so the bankers that turned a blind eye to the toxit assits were beneficail to the econimy ?

how about the lobiests and deregulation that made it possable ?
what about the real estate agents that knew the people they were selling the houses to could not maintain the mortgage?

What about the marketeers that designed the sales materail to obscure the mortgage rates to hide the fact that they would increase and specifcaly designed the brouchers and trained the sales teams to exploit unknowlageable people ?

No they weren't and many of their businesses went out of business. These are all issues of regulation. Corporations (as opposed to say partnerships) are by legal design geared towards maximising profit. If you come in with expectations that any corporation will not do this, you are making flawed assumptions.

"hedge funds don't gamble shares, they trade them based on discrepancies between actual price and fundamentals"

Defanitoin of Gambling from Wikipedia - "Gambling is the wagering of money or something of material value (referred to as "the stakes") on an event with an uncertain outcome with the primary intent of winning additional money and/or material goods."

something doesn't have to have unfavourable odds to be considered gambling for example there are many professional gamblers that make a living of horse betting , and in that exact same way there are many people that profestinaly gamble on the stock market , and I would argue that they are themselfs not providing a use to socity. I would however contrast that against sum-one that invests in a company because that company is doing good or employs many people or is developing beneficial technpligy.

the problem is in general capitalism in its current form is fucked , and i belive we need to move towards something that is what I would describe as a

"democratic socialist capitalist system" where we have as free a market as possable and that is achived through democratic regulation guided by socialist princapels. so you try to give every citizen as equal a chance as possible at having free will and succeeding in what they want to do.

the current system allows the top 10% fantastic freedom and chances but at the expense of the majorty of people.

It's not a wager of value, it's a transfer of value. Which is critically what makes it different from gambling. If you have agricultural produce and you want to hedge the risk that your harvest will go down in value when it comes to fruition, it's typically an investment bank/hedge fund/commercial bank that takes the counterparty position. Without someone taking that counterparty position, you couldn't eliminate your risk of a fall in prices. If someone buys a newly listed share of your company, they're contributing to your capacity to invest and pay wages. During the process of gambling before someone is declared the winner, there is no value being created. That's a pretty crucial difference. The main point is though that banking creates value, hopefully I've already illustrated that beforehand.

I don't disagree with what you're saying at the end, but as far as I'm concerned you should be resentful towards campaign finance rules. Instead, it's like trying to treat the symptom not the cause.

...if the left could prove that man-made global warming was dangerous, and there was a solution to be found to the global warming "problem", the solution wouldn't arrive via socialist edicts, the free market would find it.



First off, thanks for proving my point. You have no interest in hearing about any problem that turns your political ideology on its head. This pretty much seals the deal of what your motives actually are.

Secondly, this is a shockingly ignorant statement considering how many times the market has failed in protecting resources that can't be owned, and what benefits the general good, not specific people. Free markets do a great job incentivizing acts of self-interest.

How would free markets possibly work to stop human made global warming?

Time and time again, free markets horrifically fail in protecting the common good, or property that is not owned by anyone. This has been a traditional, valid criticism of capitalism since its inception. No one owns specifically the climate. Without gov't regulation, why would anyone go to the trouble of disposing of hazardous materials properly as an example? It won't make a significant difference for that one person if they don't do that, but it will make a difference for everyone is everyone doesn't pour oil into their backyards.

Why should businesses not dump toxic sludge into the nearest river? After all, properly disposing of these materials costs more than dumping it into the nearest river, which cuts into profit.

This has happened and will continue to over and over and over again in free markets. This is why it is absolutely necessary to have societal institutions that expose this behavior, and punish it as a means to prevent it from occurring.

In the case of global warming, just for the sake of this discussion, assume that yes, burning of fossil fuels is causing global warming, and that global warming is in fact detrimental to humans. Now, why would consumers want to buy hybrids, electric cars, or other vehicles if they cost more than conventional cars, strictly speaking by market forces? The only mechanism markets provide is to drive prices of fuel to be really expensive either from deplinishing supply or increasing demand, but those prices won't get driven up simply because global warming is occurring. Translation: in that scenario, the free market is not self-correcting. In fact, we can look through history and find repeated examples of how free markets fail to self-correct.

As the economies of countries around the world become more closely integrated through free trade, we actually see quite a bit of push against environmental regulations domestically for fear that we won't be able to compete with countries that do not have the same regulations. That is after all one of the primary arguments against the Kyoto Agreements. That actually is an indictment against free markets, because it suggests that if we leave everyone to their own devices individually, companies/countries will choose to not reduce emissions for various reasons, one of which is a fear of not being competitive because producing in a manner that reduces emissions can be more costly, which would reduce profits if competitors don't have to do the same thing. This of course is in complete disregard to what conducting business in such a manner does to the common good globally. The chief issue of course is China won't bear vast majority of the burden for not following these standards; it will be the entire globe, which causes a fundamental breakdown in market ideology. It's the same reason why subprime loans took off once the responsibility for granting a bad loan became divorced from the people who granted them. I could give a million other examples of this in a market economy.

The most effective way to deal with such a problem for capitalists is simply deny the problem actually exists. Your problem is you desperately want there to not be a problem to fit your capitalist ideology, so you will not ever be convinced that global warming is real and human influenced. This is largely because if it is real, it likely cannot be dealt with using market forces solely, and your ideology will be irreparably destroyed.

Now, I'm sure that means you'll label me a socialist/communist, etc. That's of course not true. I'm not married to any of those ideologies exclusively. In fact, I believe market forces work a large majority of the time, but I'm not blinded by ideology to pretend it works so well we don't need some regulation. This is just one more example. Go ahead and say socialism doesn't always work; I agree. I don't particularly care to argue even which works a majority of the time. I just use what works best for each situation.

Tags for this video have been changed from 'overdose, financial crisis, subprime, peter schiff, Johan Norberg' to 'overdose, financial crisis, subprime, peter schiff, Johan Norberg, Bush, Obama, debt' - edited by blankfist

It's not "you're racist", it's "you didn't think".

It’s actually quite the opposite. I’ve thought about this topic about 10 levels deeper than everyone else. They just don’t like it because I’m daring to bring up politically incorrect, uncomfortable truth.

You went on about how responsible home ownership says something about a person...implying it qualifies you as good.

Responsible home ownership does say good things about a person. It does not mean you are a good person, but it does generally show a person is good at managing their finances.

Taking away someone's right to vote because they did something society doesn't like is a different issue, and you're confusing the two, IMO.

No I’m not. I’m applying the idea fairly, and that disturbs some people. Is it not logical to say that the people who took out subprime loans they knew they could not afford did “something to society” far more harmful than the collective actions of U.S. mass murderers? So, why are people mentally comfortable with limiting the voting rights of murderers (who do comparatively little damage to overall society) but are uncomfortable limiting the voting rights of bad borrowers who cause far more societal damage?

IMO it's a bad idea to give government lots of powers to disqualify people from voting. It's WAY too easy for it to be abused, modified in stupid ways, etc. It's a serious slippery slope without all the normal exaggeration the phrase "slippery slope" usually comes with.

When the full public has unlimited voting rights, the eventual dynamic result is that the primary concern of the voter becomes the claiming & retention of personal benefits. The resulting loose, debt-heavy fiscal policy collapses the government. Is that not a “slippery slope” at least as alarming as the slippery slope of limiting voter rights? Which slippery slope do you choose? Regardless, the left has routinely pooh-poohed the entire ‘slippery slope’ argument. The opposition to Obama’s health care bill was based on ‘slippery slopes’ of death panels and socialism but it was mocked as ridiculous. Why is the ‘slippery slope’ so absurd when it is applied to leftist political philosophy, but so pertinent on voting rights?

Voting needs to be easier, not harder.

Easier? Sure. But more restricted too. A good start would be to require a valid U.S. birth certificate, and current photo ID at the site of voting.

This is abhorant, fascist thinking. Godwin be-damned if I can't call a spade a spade. I normally ignore your comments, but this latest set of talking points needs to be called out for the bull that it is.

I think that your hyperbolic overreaction suggests that your policy of self-recusal should be reinstated, because this entry into the crucible of debate is woefully inadequate. Clearly you are unable to control your emotions when grappling with issues, and therefore you should quit the field to spare both yourself and others from your abecedarian efforts. Or you could just go breathe into a paper bag for a bit and come back and try again. Your call.

What's different is that the left understands that we shouldn't be taking away people's civil rights because people use them in ways we disapprove of instead we think we need to do a better job of getting the facts and our point of view out to people.

When the left loses in the court of the national discourse, they do not just shrug and try to ‘get facts and a point of view out’. They demonize, attack, insult, and slander. When that fails they dictate by fiat against the will of the people. In short, they take away people’s civil rights when those people use their freedom in ways they disapprove. So your statement is patently false. The left is only interested in ‘civil rights’ insofar as it advances their pet agendas.

Liberal electoral reforms are always aimed at making it easier for people to vote, and growing the percentage of the populace who vote.

You need to correct your position, because it ignores a lot. The left always finds a way to make it easier for the people it WANTS to vote, but always seems to oppose easy voting for groups it opposes. Regardless, the whole civil rights argument is a cheap rhetorical dodge. Nations routinely monitor, restrict, and regulate voting rights. Requiring vital documents, proof of citizenship, and basic intellectual capacity is not some sort of crazy, dictatorial power grab. It happens all the time in every civilized country.

Mostly these days that's making sure there are paper trails for electronic voting machines, but it's also making sure the people working the polling places are treating everyone the same. Curiously, the right always finds a reason to oppose every one of the above.

I disagree. The left that is the routine, documented, proven opponent of a rigorous, fair voting process.

@blankfist, I'm kinda surprised at you. Perhaps you fell for the title, but here are some of the things Bill Black says:

1. Yes, [the bill's provision for running derivatives through a government-run exchange] is a good idea. You shouldn't be doing non-exchange traded derivatives, and this bill encourages exchange-traded derivatives. But it has loopholes that allow people to evade it, so it's probably not going to be terribly effective.
   
   Which is to say, the new regulations on derivatives are good, but they are too easy to circumvent.
   
   
2. What else do we know created perverse incentives? Professional compensation.
   
   
3. We know that the Goldmans of the world deliberately put the rating agencies in competition with each other in what in economics we call a "competition in laxity". In other words, whoever is willing to give the most absurdly inflated rating is who will get my business.
   
   Note: rating agencies are privately owned, for-profit companies.
   
   
4. So when we say the rating agencies screwed up, we don't mean that they took something that, you know, should've been a single-A and they call it a triple-A. No, we're talking about something that should have been 25 levels lower, and they called it AAA. If they're willing to do that, then they're going to be willing to bless the next insane thing, as long as the competition and laxity is allowed to exist.
   
   
5. Americans don't know that over 10 percent of all appraisers in America have signed a petition calling for the government to step in and regulate and enforce because of this Gresham's dynamic. A Gresham's dynamic is where cheaters and the least moral people prosper, and they drive the honest, moral people out of the marketplace. And that's what the appraisal industry was telling us. And the regulators refused to any do anything. And now, after a crisis measured in trillions of dollars of losses—and a trillion dollars is a thousand billion—we have, supposedly, the greatest reform bill since the Great Depression, and it completely ignores this causality.
   
   
6. The consumer bill was the other thing you asked me about. That is a good thing. But you can tell somebody has a really malicious sense of humor, because they put the new consumer agency into the Federal Reserve—the leading opponent of protecting consumers. This is the agency that under the HOEPA law [Home Ownership and Equity Protection Act], which goes way back to the '90s, had unique authority to protect us from otherwise unregulated mortgage bankers and anyone else who made mortgage loans. And even board members at the Federal Reserve went to Alan Greenspan and asked him to take action against these enormous abuses in the liar's loans and subprime, and Greenspan refused to act.
   
   This probably got your juices flowing, since it places some blame on the Fed. Unfortunately, it places blame on the Fed for refusing to regulate. Oh, and it was Republicans who insisted that the consumer protection agency be housed at the Fed.
   
   
7. So [in the subprime lending market] we had the exact opposite of what economics predicts: both parties to the transaction were made worse off. Well, why? Because the agents were made better off. Who were the winners? The rating agencies, the senior officers who walked away rich, the least moral appraisers, the least moral of the outside auditors at the big accounting firms. They were all the winners. They got rich by betraying their responsibilities. And so if you had had an Elizabeth Warren and if she had banned this nonprime product to protect consumers, now, that would enormously reduce this financial crisis.
   

In all, he's making all the usual liberal criticisms of the bill, which is that the bill's new regulations aren't nearly tough enough; which itself is based on the premise that unchecked greed and dishonesty was the root cause of the crisis.

Oh, and @marinara it doesn't "ensure Wall Street Scams keep running", a fair representation of his comments would be "doesn't crack down on Wall Street Scams."

@blankfist, since you seem to want my thoughts on this (but for some reason, wanted to edit the comment to look like you were just clearing your throat), I'll give you my rebuttal.

I'll take his three points in reverse order.

#3 about regulatory uncertainty is one of these universal conservative economic fantasies. There's no evidence that this really has any kind of macroeconomic effect. Certainly the usual conservative and business advocacy groups always get a laundry list of businessmen to all line up and say how they won't be able to function if they have to pay compensation to workers injured on the job, have to check to see if the products they produce are poisonous or otherwise unsafe, can't dump toxic chemicals into lakes and rivers, can't use slave labor, etc, etc. They always fight against efforts to stop them from being able to leverage negative market externalities for extra profit.

#2 The Yahoo Finance link itself debunks this, because what Schiff says is a flat-out lie. Here's what that link says:

In contrast to Schiff's warning, the law does the following, according to Reuters:

“The bill would set up an "orderly liquidation" process that the government could use in emergencies, instead of bankruptcy or bailouts, to dismantle firms on the verge of collapse.

“The goal is to end the idea that some firms are 'too big to fail' and avoid a repeat of 2008, when the Bush administration bailed out AIG and other firms but not Lehman Brothers. Lehman's subsequent bankruptcy froze capital markets.

“Under the new rule, firms would have to have 'funeral plans' that describe how they could be shut down quickly.”

Liberal critics also question whether the bill addresses "Too Big to Fail", but they're talking about limits on the overall size of banks.

#1 I've covered this fantasy of Schiff's about the nature of the crisis before. Here are two quick points I always make, which you never respond to: low interest rates don't create moral hazard, and Fannie and Freddie weren't even remotely the biggest players in the subprime mortgage-backed security space, much less the chief source of moral hazard.

All the moral hazard was created by the financial industry thinking it had found a way to insulate itself from the risks involved in bad mortgages using CDO's and CDS's -- without relying on government backing of any kind.

I'm happy to go into much more depth on #1 if you like, but you've never really demonstrated that you have any interest in listening to what I have to say on the topic with anything like an open mind.

Oh, and liberals agree that this bill doesn't really do enough in addressing the underlying problems that led to the crisis (the real ones). Basically, they say there's not enough rating agency reform, no leverage caps on investment banks, no Glass-Steagall separation of traditional and investment banks, no commitment to break up banks that grow beyond a certain size, etc.

In fact, from what I've read, the strongest part of this bill is exactly the part Schiff lied about -- it should prevent future Congresses from being forced to do taxpayer-funded bailouts. Instead, it'll be like the standard FDIC process for failed banks, only scaled up to deal with corporations of this size and complexity. Under that process, the bank shareholders, owners, and management get wiped out and fired, but the bank's creditors and depositors are made whole. The bank fails, but it doesn't take a huge chunk of the economy with it when it goes.

This is really well done. I wish I could invoke *quality, but my status as a subprime sifter denies it.

In reply to this comment by enoch:
oh man.
your right netrunner..
marinara pulled a bait and switch on us!
i didnt even look at the tags.i saw bill moyers and hit play.that old dude rocks.
but yeah..for those of you just joining us.this video is about net neutrality not lehman bros.


ROFLMAO

>> ^Psychologic:

I can see why the Tea Partiers dislike Paul... his speeches must confuse the hell out of them.
Free Market = Good
Corporations = Bad
Corporations -> part of the Free Market
More Regulation = Larger Government
Less Regulation = Stronger Corporations?
Medicare/Social Security = Bad?
It's much simpler to think that corporations are the victims of big government and that the budget can be cut significantly without touching entitlement programs.


You and several people in this thread seem terribly confused about his viewpoint, so maybe a libertarian like myself can help you. The "free market" is a term tossed around a lot. What we mean is essentially mutually agreeable trade between producers and the right to make contracts. We believe in courts to adjudicate disputes, penalize and deter fraud, enforce (not interpret) the constitution, etc.

The key oversight for most Dems I talk to is that they want to police/regulate effects rather than eliminate the policy that is producing those effects. I despise "goosing" laws that attempt to reward/induce one legal behavior over another legal behavior, indiscriminately, across an entire populace. I also despise laws that offload one party's risk onto another. Most of the time, I think they're created by well-meaning people who think goosing the populace is their job only to have their goosing backfire. Even if they recognize it was their fault after the fact, a politician will always say the problem is not what they did, but what they didn't also do.

The best analogy I can think of is some cops throwing a bunch of candy on the street, then using the subsequent accidents to justify full-time crossing guards at every intersection. Those are unproductive jobs which can only exist at the expense of private ones. A libertarian sees that the ROOT problem is the policy of throwing the candy in the street, not the accidents it begets. Without a central bank price fixing interest rates well below where the market would have had them, the true risk of borrowing would have been realized, and demand which fueled creative lending wouldn't have existed. Banks naturally do not want to loan money unless they believe they are going to be paid pack, but the GSEs called Fannie May and Freddie Mac were buying and standing behind subprime loans on a massive scale from the commercial banks originating them. The whole concept behind those GSEs is based on the socialist policy that home ownership is more American than renting. That needing a downpayment and good credit before an institution will lend is discriminatory to poorer people. Which is just ridiculous, because that's prudent lending.

And what do they do after the whole thing? Another goosing. Bailing out the failed banks with money from everyone, including their small competitors who were looking to replace them. When you penalize good behavior and reward bad behavior, you create a self-fulfilling loop. I see people who voted for the heavily lobbied, popular, liar candidates and they are POed at CEOs of TARP recipients giving themselves huge golden parachutes. What did they think was going to happen when you gave these idiots MORE money? They are compounding the mistake, over and over and over again.

If you understand Paul's perspective, then you believe that most of our problems, our debt, our military empire, our recurring speculative bubbles, is not from a lack of government intervention, but too much of it in key places. No domestic currency is allowed to compete with the dollar, interest rates aren't set by the market, banks get blanket federal insurance on deposits so they don't have to compete on safety of those deposits. We have subsidies, a concept that presumes a politician spending someone else's production is more effective than the producer himself. We have different tariffs for different industries. It's not that companies are innately bad, it's that we have failed to create a constitution that could not be subverted by rogue judges. You can't be influenced into exercising a power you don't have. Once a judge interprets something to say "yeah, you can do that so as long as you say it's for the general welfare," then the government becomes a conduit for corporate welfare that it wasn't beforehand. People don't understand how powerful the government is. They literally have the power to take money from you by force. It's a necessary evil that they have that ability. That is why it is so god damned important to define and restrict its functions so that groups or businesses don't use it as a conduit to gain an unfair advantage, tapping into involuntary appropriations in what is supposed to be a free/voluntary marketplace.

>> ^rougy:
Our government is corrupt and ineffectual. Our military is bloated and not really ours as a nation but "ours" in the multi-national corporate sense. If you have no money, you have no justice. A fraction of a percentage of people are allowed to get rich, and everybody else has to fight it out and claw their way through life just to stay alive. Financiers like Goldman Sachs and J.P. Morgan make a living out of figuring out ever better ways to fuck people over and get a slap on the wrist when they're caught, if that. We torture people. We murder innocents overseas for the sake of convenience. We overthrow governments that we don't like, that won't march to our tune, and call it spreading democracy.
Worst of all, nobody here knows anything. We have to be some of the dumbest people on earth, especially in regards to what's being done overseas on our name.
And I'm supposed to swear my blind, undying allegiance to that? I'm supposed to point to Mexico and exclaim proudly "Things could be worse!"


You forgot to mention how you continuously vote for people who believe in continuing all of those things, either directly or through policies that enable it. And then you spend the rest of your time trying to convince everyone that the problem is we're not all registered Democrats. The real problem is that we allow people to vote on things they shouldn't. The constitution sealed its fate with the general welfare clause.

When America defaults on its debt, it will be because the constitution failed to prevent idiots from trying to steal from each other or borrow money that they would benefit from, but that future generations would have to pay. Because it failed to ban the public sector from voting in elections. Because it failed to prevent a central bank from price fixing interest rates and monopolizing the money supply with unbacked paper they can print for themselves while we work to obtain it and watch it's scarcity/value siphoned. It is so much easier to just print more money and redirect its value than appropriate the money itself. Whatever you think you got out of this is crumbs compared to government employees and politically connected companies.

People like you are constantly fooled into enabling what you despise. Government destroys free market self-regulation and then claims lack of regulation is the problem. They loan banks money well below realistic interest rates. They insure every bank's deposits so banks don't have to compete on the safety of those deposits. GSEs like FM&FM implicitly backed subprime and so everyone thought that was a riskless bet as well. The tax code encouraged flipping property over real investment by making certain home sales completely exempt from capital gains. You may as well dump candy into a busy intersection and blame people for getting hit by passing cars. And instead of stopping the candy dumpage, your solution is to borrow even more money from China at interest to hire 10,000 full-time crossing guards. That is how insane the socialist rhetoric has gotten. When their social engineering fails, the problem isn't something they did, but something else they didn't do. Well, it's only going to last until China realizes that dollars are no asset, no product placeholder, when you're accumulating them in perpetuity.