Myths About Capitalism

[Obama 2012 1,714]

Phew. I'm relieved to hear you say that. As my earlier post demonstrates, even Alan Greenspan recognized the flawed thinking that these institutions can regulate themselves.

Alan Greenspan recognized nothing really until he was called out on it a couple of years ago. He preached his hands off Ayn Rand approach all through the 90's and then even in to the beginning of the melt down.... Not until he was called to testify did he dare to say that he might have been wrong.

That asshat destroyed Brooksley Born and her agency and made sure they couldn't touch the derivatives market. Greenspan's explanation was that if we regulated the derivatives market, that it would cause the economy to collapse. Of course what else would you expect from the Chairman of the Fed. The Fed doesn't look out for the American people. That's not its job and never has been, nor will it ever be. Its job is to look out for itself and its investors.

The Fed is happy as can be with the fact we are printing more money @ interest with them right now and we and they have dear ole mr. Greenspan to thank for that as well as the Clinton/Bush administrations.

[JohnSmith2007 353]

BY - That's a troll ID. Lesotho is just a placeholder.

Actually its the country surrounded by the Republic of South Africa. And this is my one and only ID. Perhaps you would like Ewok to verify that? PM him and find out.

[one...two...tree 2,762]

Actually its the country surrounded by the Republic of South Africa. And this is my one and only ID. Perhaps you would like Ewok to verify that? PM him and find out.

I don't care who you are John, I like you in spite of our disagreements.

[Texanadian 10]

Danno this is the biggest horseshit I have read in a while. For starters, DMV is not a customer service agency.

Darn right the DMV isn't a customer service agency. I had to wait 2 hours in their stuffy sweaty lobby the last time I went there.

Here is my favorite "myth" about capitalism.

• Goldman Sachs pays out $16,000,000,000 in bonuses in 2009
• Goldman Sachs is charged with deliberately defrauding investors.
• Goldman Sachs just announces an additional $5,000,000,000 in bonuses.

Yeah, and the NY Yankees have the biggest payroll in all of baseball. But I don't care because I don't have to support the Yankees. I do have to support Goldman Sachs though. It's only because of the taxpayer bailout to Goldman Sachs that people are pissed off about all their high end bonuses. This is anti-capitalism. Nobody cares that Apple makes a ton of money on their I-products or that Samsung or Sony make a lot of money selling TV's. We're not subsidizing them.

What I mean is that free enterprise and competition works to promote improved efficiency, service, value and product quality until there are too few players left and monopolies begin to dominate. When that happens then consumers are taken advantage of and a few become very rich while the losers in the business arena pay dearly. There are examples everywhere - and why most anti-trust legislation is in place. Microsoft is a prime example where no real competition remains. Goldman Sachs may also fit this category. It is much the same in the agriculture industries where huge agronomic companies dominate and farms get larger and larger. Many if these institutions then become "too big to fail" because of their impact on the GNP and on the lives and financial stability of so many.

I am not sure what this all means. But I see it as a serious flaw in Capitalism and free market economies. This system has produced tremendous gains for us all, but at the point of maturity serious problems can develop.

Monopoly exists more often WITH the help of government. If we had a 100% tariff on all foreign made cars, we'd mostly buy American cars. Who gets the most farm subsidies from government? Rich farm owners. Who gets the least? Small farm owners. So government is knowingly working against anybody who wants to get into farming by helping out the big farms.

Microsoft does have a large share of the operating system market. But Apple is just as strong in that area. It's not as big of an issue because most of us use the product every day but only pay for it once. I'm using XP. It's a 9 year old operating system. Microsoft isn't the money machine it used to be. I wouldn't be surprised to see operating systems released for free on a larger scale in the future. It wasn't that long ago that Netscape Navigator had as much domination in the web browser world as Microsoft does in the operating system world. And you had to pay to use Netscape. One need only look at how much money Google makes despite offering free search, free email, free picture viewers etc.

Getting back to Goldman. We watched as their competition went bankrupt and was allowed to fail. But we propped up Goldman with bailout money. This is another example of government induced monopoly.

Edited April 21, 2010 by Texanadian

[scandal 951]

You cannot have a completely free reign $55 trillion unregulated derivatives market and expect things to workout AOK.

Phew. I'm relieved to hear you say that. As my earlier post demonstrates, even Alan Greenspan recognized the flawed thinking that these institutions can regulate themselves.

NB - there's a difference between (i) unregulated (ii) self-regulated (iii) government regulated. It's not a binary choice, it's (at least) a 3-way choice.

Unregulated means that there are no rules at all. That's essentially what happens in the OTC markets for fixed income, FX, interest rate swaps, and the more exotic derivatives like CDS.

Self regulated means that an industry polices itself. The major US exchanges are self-regulated. NYSE/Arca, Nasdaq, CME Group, ICE, CBOE all have regulation committees that require members to post collateral and meet certain standards and certifications before being allowed to trade. There are also industry bodies that provide regulatory frameworks for their members (e.g. the NFA).

Government regulated means that a government oversight body provides oversight - the SEC and CFTC are the most notable examples.

Most exchange based trading in the US occurs under both self-regulated and government-regulated frameworks. There is value in both.

The problem in my view is not self-regulated trading, it's unregulated trading. If we learned anything at all from the blowup, it's that we can't let the banks float huge mortgage backed securities and CDOs into the unregulated bond market, and allow participants to buy and sell unregulated CDS contracts on those bonds. That trade needs to be brought into an exchange framework where participants post margin and where trades are centrally cleared.

[Hilarious Clinton 452]

Danno this is the biggest horseshit I have read in a while. For starters, DMV is not a customer service agency.

Hey, the guy is a talk show host, a career path that you guys seem to worship. Surely if someone has his own radio show, they are some sort of business and economics genius.

Read the myth SLOWLY this time. Feel free to use your lips. I've actually seen a 'customer' get yelled at for not mailing in a renewal form (he paid an extra $5 for crappy treatment). Should he go to a different company to register his vehicle? Oh wait a minute...... HE CAN'T!!

Myth No. 3: Government is more fair and reliable than business.

"Remember the last time you went into Starbucks, and then remember the last time you went into the DMV to get your license," Medved said. "Where did you get better treated? And it's not because the barista is some kind of idealist or humanitarian. She wants a tip. She wants you to come back to the Starbucks ... ."

But the left doesn't get it.

"This is the suspicion of the profit motive -- the idea that if somebody is selflessly serving me, they're going to treat me better than somebody who wants to make a buck," Medved said. But "(i)f you think about it in your own life, if somebody is benefiting from his interaction with you ... it's a far more reliable kind of interaction than someone who comes and says I'm in this only for you."

[Ali G. 37]

Read the myth SLOWLY this time. Feel free to use your lips. I've actually seen a 'customer' get yelled at for not mailing in a renewal form (he paid an extra $5 for crappy treatment). Should he go to a different company to register his vehicle? Oh wait a minute...... HE CAN'T!!

Myth No. 3: Government is more fair and reliable than business.

To be honest, I have had excellent service from various US government agencies in America. Yet all of my negative and shitty experiences involve private monopolistic companies. Point being, good or bad experiences depend on what you pay, what they pay their employees and how the organisation is operated and managed. Contrary to Rush and Co's personal beliefs, shitty service is not restricted to government.

PS If the DMV charged like starbucks it would cost 5 times as much to get a service. Of course you would be served in a matter of no time. I recently had my license renewed in AUS and it took under 5 minutes. However, it does cost over $130 to have it done.

Edited April 22, 2010 by Ali G.