It's the Government! No, it's the Corporations! No, it's the Government!

[don]

in a nutshell . . .

[Ghent12]

Re: It's the Government! No, it's the Corporations! No, it's the Government!

Very succinct.

[wayiwalk]

Re: It's the Government! No, it's the Corporations! No, it's the Government!

Perfect. My line to people from both side of the political fence is that until the tea party and OWS realize they must fight their common enemy, we are lost....

[gwynedd1]

Re: It's the Government! No, it's the Corporations! No, it's the Government!

Its the corporations...Yes government does funnel some money to public employees but a big pension just does not add up to what can be accumulated privately. The real money is made privately. How many people become billionaire politicians? Government is the tool.

[aaron]

Re: It's the Government! No, it's the Corporations! No, it's the Government!

It is the monetary system. Without being able to borrow money into existence, wealth would not be concentrated in such few hands.

company A borrows money from company B(ank) and buys small Corp C

Company B created the money out of thin air, but gets a share in profits from asset C in the form of interest payments.
Company A also now gets to borrow new money from Company B using the balance sheet of Corp C. They pay themselves a lot, and use the rest of the borrowed money to buy company D. Again, Company B created the money out of thin air....

Rinse and repeat a few times, obviously with a few more "players" involved, and you end up with immense concentrations of real wealth.

With great wealth you can buy anything. Government becomes your tool to beat the other guys in the game of power accrual.

If you can print money, you can buy anything. Banks can do that. If your friends own banks, then you have access to unlimited money to buy real assets.

Once the right people have "enough", inflation will be allowed to proceed.


An intelligent, informed voting population could stand up to this. However, that is not possible in America today. The propaganda machine is too strong.

[Ghent12]

Re: It's the Government! No, it's the Corporations! No, it's the Government!

Its the corporations...Yes government does funnel some money to public employees but a big pension just does not add up to what can be accumulated privately. The real money is made privately. How many people become billionaire politicians? Government is the tool.

Government is the tool, but it's the only one we have some measure of control over. If you look at the players in FIRE, you can easily see that it's not "the corporations" that are at fault--they all behave pretty much the same way! It would be easier to imagine corporations as forces of nature which constantly seek to enhance their revenues and profits while reducing their liabilities and costs, because those are the normal incentives in any market-based economy. Since all of them act according to those incentives and often times entire industries can be seen to behave nearly in unison, plus or minus differences in structure, then it is clear that it is not corporations which are the root of the problem.

Our "control" over corporations is limited by our choice to use their services or not. Yet we, as some type of republic or democracy, should have significant control over government. We are ultimately responsible for not demanding our government resist industry capture.

Government and pseudo-governmental agencies are the ultimate enablers of "irresponsible behavior" by corporations. The Federal Reserve fuels FIRE with its price cap on money. External costs such as pollution could allow people to sue for damages, but now liability is most often capped by the government and there are numerous impediments to suing for legitimate claims all in the name of "tort reform" or whatever phrase du jour.

As an example of how government enables reckless behavior, you need look no further than the BP fiasco in the Gulf of Mexico. Yes, it was a collaboration of private companies which did the drilling, but they probably wouldn't have drilled there in the first place if their liability hadn't been capped. If not BP and Anadarko, it would have eventually been some other corporation; but you can't blame corporations in general for doing the things that only corporations do, such as drill for oil in a non-nationalized industry. Liability caps have no place in a market economy and only incentivize taking risks by capping the potential costs. Liability caps are a form of government protection for corporations against the people who have legitimate claims. Just the mere absence of the threat of commensurate liability costs for damages meant that there was a significantly reduced incentive to prevent those damages from occurring. One can only imagine the safeguards that might have been in place had BP and Anadarko known they were fully on the hook for all potential damages, both on the parts of those companies and on the demands of their insurers. Many claim that that type of drilling wouldn't be likely to occur if liability caps were not in place, and I cannot see how that is a bad thing. If you can't handle the risks of your actions or the costs of insurance for those risks, why should you be enabled to take them under the protection of government?

[gwynedd1]

Re: It's the Government! No, it's the Corporations! No, it's the Government!

Government is the tool, but it's the only one we have some measure of control over. If you look at the players in FIRE, you can easily see that it's not "the corporations" that are at fault--they all behave pretty much the same way! It would be easier to imagine corporations as forces of nature which constantly seek to enhance their revenues and profits while reducing their liabilities and costs, because those are the normal incentives in any market-based economy. Since all of them act according to those incentives and often times entire industries can be seen to behave nearly in unison, plus or minus differences in structure, then it is clear that it is not corporations which are the root of the problem.

OK I should have been more specific to FIRE but Walmart, GM, GE all have huge FIRE sectors. Sears sold off its FIRE sector ..Discover, All State, Sears Credit etc and destroyed itself. So any corporation that survives today must engage in FIRE in some way. Corporations have the ability to engage in FIRE economics.

Our "control" over corporations is limited by our choice to use their services or not. Yet we, as some type of republic or democracy, should have significant control over government. We are ultimately responsible for not demanding our government resist industry capture.

We don't have much control. Make a life preserver law and we are required to buy them. Look at all the government contracts. I don't want all the crap corn and soy stuff but I have to pay for it anyway.

Government and pseudo-governmental agencies are the ultimate enablers of "irresponsible behavior" by corporations. The Federal Reserve fuels FIRE with its price cap on money. External costs such as pollution could allow people to sue for damages, but now liability is most often capped by the government and there are numerous impediments to suing for legitimate claims all in the name of "tort reform" or whatever phrase du jour.

As an example of how government enables reckless behavior, you need look no further than the BP fiasco in the Gulf of Mexico. Yes, it was a collaboration of private companies which did the drilling, but they probably wouldn't have drilled there in the first place if their liability hadn't been capped. If not BP and Anadarko, it would have eventually been some other corporation; but you can't blame corporations in general for doing the things that only corporations do, such as drill for oil in a non-nationalized industry. Liability caps have no place in a market economy and only incentivize taking risks by capping the potential costs. Liability caps are a form of government protection for corporations against the people who have legitimate claims. Just the mere absence of the threat of commensurate liability costs for damages meant that there was a significantly reduced incentive to prevent those damages from occurring. One can only imagine the safeguards that might have been in place had BP and Anadarko known they were fully on the hook for all potential damages, both on the parts of those companies and on the demands of their insurers. Many claim that that type of drilling wouldn't be likely to occur if liability caps were not in place, and I cannot see how that is a bad thing. If you can't handle the risks of your actions or the costs of insurance for those risks, why should you be enabled to take them under the protection of government?

The reason why liability is capped is because that is what big business wanted.


I just use very simple output based conclusion as I was taught to do in research. You cannot become a billionaire being a public official. You have to have private assets to privatize the income. All the money is in the private sector. It drives the system. To first become a politician will not make you wealthy at all without some link to the private sector. First have a private entity that will receive funds from law to make you very wealthy. The private operation always precedes it. If you plan to say demonetize silver, first you sell silver , then you make the law. When Kennedy knew they are going to repeal prohibition, first he got the boat load of boose, then they made the law. The private money operations make the laws.

Anytime a politician works for it campaign contributors, its the contributors that gain far more than the politician. Since wealth in reality is nothing but a debt instrument then the old bible verse says that the borrower is the servant to the lender. The politician has borrowed the campaign funds and then must repay their debt.

[gwynedd1]

Re: It's the Government! No, it's the Corporations! No, it's the Government!

No,its the people.

2. Of the Corruption of the Principles of Democracy. The principle of democracy is corrupted not only when the spirit of equality is extinct, but likewise when they fall into a spirit of extreme equality, and when each citizen would fain be upon a level with those whom he has chosen to command him. Then the people, incapable of bearing the very power they have delegated, want to manage everything themselves, to debate for the senate, to execute for the magistrate, and to decide for the judges. When this is the case, virtue can no longer subsist in the republic. The people are desirous of exercising the functions of the magistrates, who cease to be revered. The deliberations of the senate are slighted; all respect is then laid aside for the senators, and consequently for old age. If there is no more respect for old age, there will be none presently for parents; deference to husbands will be likewise thrown off, and submission to masters. This licence will soon become general, and the trouble of command be as fatiguing as that of obedience. Wives, children, slaves will shake off all subjection. No longer will there be any such thing as manners, order, or virtue.

Montesquieu

Sounds like deregulation to me.

So what virtue is there ? Is gaining wealth by housing appreciation a virtue? Did no one suspect that this free wealth was tainted?

Most members of the rentier class are very rich. One might like to join
that class. And so our paradox (seemingly) is resolved. With the real estate
boom, the great mass of Americans can take on colossal debt today and realize
colossal capital gains—and the concomitant rentier life of leisure—tomorrow.
If you have the wherewithal to fill out a mortgage application,
then you need never work again. What could be more inviting—or, for that
matter, more egalitarian?
That’s the pitch, anyway. The reality

Michael Hudson

The big rentier eats the little. Americans wanted to play the life of leisure game at another's expense.


We have abandoned the virtues that protected the republic.

²³ ‘The land shall not be sold permanently, for the land is Mine; for you are strangers and sojourners with Me. ²⁴ And in all the land of your possession you shall grant redemption of the land.

...

‘If a man sells a house in a walled city, then he may redeem it within a whole year after it is sold; within a full year he may redeem it. ³⁰ But if it is not redeemed within the space of a full year, then the house in the walled city shall belong permanently to him who bought it, throughout his generations. It shall not be released in the Jubilee. ³¹ However the houses of villages which have no wall around them shall be counted as the fields of the country. They may be redeemed, and they shall be released in the Jubilee.

-Leviticus

Looks like Henry George did nothing but plagiarize Leviticus. The house in a walled city was implied to be a product of labor while the country was a natural inheritance.

Would the virtuous fall for usury and free wealth?

[lektrode]

Re: It's the Government! No, it's the Corporations! No, it's the Government!

No,its the people.
...
Would the virtuous fall for usury and free wealth?

no, but the political would and have.

why i still say - will go to my grave saying - that its the political aristocracy, aka the beltway bozos that have brought all of this upon us - led by their lackeys in the 4th estate, aka the lamestream media - who continues to feed us BS that will enable their team, the party in power, to continue to impoverish The Rest of US, while they bailout their masters in lower manhattan.

the results of the previous 6 years (since congress changed hands in 2007) is the confirmation.

got this one the other day - any comments?

Remember the day...
January 3rd, 2007 was the day that Barney Frank took over the House
Financial Services Committee and Chris Dodd took over the Senate
Banking Committee.. The economic meltdown that happened 15 months
later was in what part of the economy? BANKING AND FINANCIAL
SERVICES!

Unemployment... to this CRISIS by (among MANY other things) dumping
5-6 TRILLION Dollars of toxic loans on the economy from YOUR Fannie
Mae and Freddie Mac FIASCOES!

Bush asked Congress 17 TIMES to stop Fannie & Freddie - starting in
2001 because it was financially risky for the US economy.

And who took the THIRD highest pay-off from Fannie Mae AND Freddie
Mac? OBAMA And who fought against reform of Fannie and Freddie? OBAMA
and the Democrat Congress.

So when someone tries to blame Bush. REMEMBER JANUARY 3rd, 2007....
THE DAY THE DEMOCRATS TOOK OVER!"

Budgets do not come from the White House. They come from Congress and
the party that controlled Congress since January 2007 is the Democrat Party.

Furthermore, the Democrats controlled the budget process for 2008 &
2009 as well as 2010 & 2011.

In that first year, they had to contend with George Bush, which caused
them to compromise on spending, when Bush somewhat belatedly got tough
on spending increases.

For 2009 though, Nancy Pelosi & Harry Reid bypassed George Bush
entirely, passing continuing resolutions to keep government running
until Barack Obama could take office. At that time, they passed a
massive omnibus spending bill to complete the 2009 budgets.

And where was Barack Obama during this time? He was a member of that
very Congress that passed all of these massive spending bills, and he
signed the omnibus bill as President to complete 2009.

If the Democrats inherited any deficit, it was the 2007 deficit, the
last of the Republican budgets. That deficit was the lowest in five
years, and the fourth straight decline in deficit spending. After
that, Democrats in Congress took control of spending, and that
includes Barack Obama, who voted for the budgets.

If Obama inherited anything, he inherited it from himself. In a
nutshell, what Obama is saying is I inherited a deficit that I voted
for and then I voted to expand that deficit four-fold since
January 20th.

There is no way this will be widely publicized, unless each of us sends it on!

PLEASE DO YOUR PART !!!

and tho i dont consider myself a 'partisan' i do identify as a 'small r' type
who believes that the more powerful the .gov becomes, the poorer The Rest Of US get.

this also has been confirmed by events since 2007.

[FRED]

Re: It's the Government! No, it's the Corporations! No, it's the Government!

in a nutshell . . .

The iTulip version.

[aaron]

Re: It's the Government! No, it's the Corporations! No, it's the Government!

http://www.theatlantic.com/business/...crisis/250121/

In his article for The Atlantic, Peter Wallison claims that Rep. Barney Frank played a major role in causing the financial crisis, by pushing for affordable housing goals in 1992 on the mortgage market entities Fannie Mae and Freddie Mac, which enjoyed government backing. This line of attack is consistent with the argument that Wallison has pushed in a multitude of other venues, most notably in his Financial Crisis Inquiry Commission dissent, in which Wallison claims that federal affordable housing policies were the primary cause of the financial crisis. To understand why Wallison's argument has been rejected by many analysts, including by all nine of his fellow commissioners on the FCIC, it is helpful to recall a few facts that he conspicuously omits from his interview with the Atlantic.
1. A SUBPRIME DEFINITION OF 'SUBPRIME'

First, central to Wallison's argument that affordable housing policies (including those advocated by Rep. Frank in 1992) caused the mortgage crisis is his claim that the federal government is responsible for 19.2 million "subprime" mortgages (with Fannie Mae and Freddie Mac being responsible for 12 million of those). But what Wallison fails to tell the Atlantic's readers is that he is using his own made-up definition of "subprime," a definition that no one outside of his think tank, the American Enterprise Institute, uses. By way of comparison, the non-partisan Government Accountability Office has estimated that there were only 4.58 million subprime and other high risk loans outstanding, with very few of these attributable to the federal government.
Importantly, as I've argued elsewhere, Wallison's vastly expanded definition of "subprime" does not stand up to serious scrutiny. In fact, the overwhelming majority of the "subprime" loans Wallison attributes to the federal government have defaulted at about the same rate as the national average. This delinquency rate is about one-third the rate of actual subprime mortgages.
Wallison also omits the fact that most of the "subprime" mortgages he attributes to federal affordable housing policies could not have been motivated by these policies, either because the loans were ineligible (typically because they were made to higher-income borrowers) or because the lenders were not subject to these policies (such as in the case of the non-bank lenders, which did not have any applicable federal affordable housing requirements; non-bank lenders made up 24 of the top 25 subprime lenders in 2006).
2. TIMING IS EVERYTHING

Second, Wallison fails to inform his readers that Wall Street's "private-label securitization" of mortgages, which objective analysts identify as the primary source of most subprime and other high-risk loans, experienced a dramatic increase in market share that was exactly contemporaneous with the housing bubble, rising from about 10 percent market share in 2003 to nearly 40 percent by 2006. Overall, loans originated for private-label securitization have defaulted at about six times the rate of Fannie and Freddie loans. Indeed, Wallison does not explain--cannot convincingly explain--why the housing bubble occurred during a period when Fannie and Freddie's market share dropped precipitously. Wallison's answer to this central problem with his thesis is simply to claim that the housing bubble began in the early 1990s (Gretchen Morgenson and Joshua Rosner, who advance a similar argument about the central role of Fannie and Freddie's affordable housing goals in the housing bubble in their book Reckless Endangerment, deal with this problem in a different, but equally anemic way--claiming that Fannie and Freddie created a "cultural" shift in mortgage banking, teaching Wall Street that lobbying and increased risk-taking could lead to greater profits).
3. WHAT CAUSED THE COMMERCIAL BUBBLE?

Third, Wallison ignores the parallel bubble-bust cycle we experienced in commercial real estate, which does not have affordable housing policies of the sort he criticizes for Fannie and Freddie. Commercial real estate values experienced a peak-to-trough price decline of 45 percent, which was considerably worse than the 33 percent peak-to-trough price decline we saw in residential real estate. If, as Wallison contends, it was affordable housing policies that caused the residential real estate bubble, then what caused the bubbles in commercial real estate? Moreover, why did we have similar surges in credit liquidity in student loans, auto loans, and credit cards? The mainstream narrative advanced by Rep. Frank and most others--that it was unregulated securitization on Wall Street that drove the financial crisis--explains these parallel bubbles fairly well; the argument advanced by Wallison does not.
Moreover, as Wallison's fellow Republican-appointed commissioners on the FCIC noted, many other countries, including the United Kingdom, Australia, Ireland, and the United Kingdom, all had contemporaneous housing bubbles. Again, the mainstream narrative--that poorly regulated new forms of financing drove asset bubbles--explains this fact rather well; Wallison's argument does not.
In short, there are many reasons, of which I've provided just a few, why Peter Wallison's argument has been rejected by his fellow Republican-appointed FCIC commissioners.
Unfortunately, some people will, for ideological and other reasons, always believe that any market failures must necessarily be the fault of government intervention, no matter how convincing and overwhelming the evidence is against this proposition. I believe we should join with the more nuanced view taken by Rep. Frank, who has rejected the proposition that U.S. housing policies caused the financial crisis, while at the same time acknowledging that these policies were flawed and need major revisions.
_________________________________________

Editor's Update: Peter Wallison responds via email.
"Now that the SEC has sued Fannie Mae and Freddie Mac for failure to disclose the subprime and other low quality loans they held and securitized, this really is the last time we'll hear from David Min and others who have been trying to protect the government from blame for the financial crisis.
"The SEC's suit is based on the failure of Fannie and Freddie to disclose the poor quality of the mortgages that they were buying, holding and securitizing. As the SEC said in its press release on the suit: "Fannie Mae and Freddie Mac executives told the world that their subprime exposure was substantially smaller than it really was." This explains why Min and others--despite the insolvency of Fannie and Freddie-- have continue to argue that the two companies did not hold substantial amounts of subprime and other low quality loans. Fannie and Freddie simply failed to disclose this information.
"The Financial Crisis Inquiry Commission failed completely in its mission because it refused to inquire seriously into what Fannie and Freddie had done. My dissent however, based on the research of my AEI colleague Edward Pinto, contains all this data, and even points out that Fannie and Freddie had failed to disclose it to the market. Although the FCIC had subpoena power and could have put Fannie and Freddie executives under oath, the FCIC did not want to know the facts that the SEC has now discovered. It was a travesty and a whitewash, and a waste of taxpayer funds. It has also misled people like David Min and others into believing that Fannie and Freddie were--as the FCIC said in its majority report--only "marginal" players in the financial crisis. It's lucky for the FCIC that the SEC doesn't have jurisdiction over false government reports.
"When all the facts come out at trial, the roles of Fannie and Freddie, and the government housing policies they were implementing, will become painfully clear."

[lektrode]

Re: It's the Government! No, it's the Corporations! No, it's the Government!

+1
and the main reason why we need T E R M L I M I T S for congress now

The iTulip version.

[lektrode]

Re: It's the Government! No, it's the Corporations! No, it's the Government!

http://www.theatlantic.com/business/...crisis/250121/

Editor's Update: Peter Wallison responds via email.
"Now that the SEC has sued Fannie Mae and Freddie Mac for failure to disclose the subprime and other low quality loans they held and securitized, this really is the last time we'll hear from David Min and others who have been trying to protect the government from blame for the financial crisis.
"The SEC's suit is based on the failure of Fannie and Freddie to disclose the poor quality of the mortgages that they were buying, holding and securitizing. As the SEC said in its press release on the suit: "Fannie Mae and Freddie Mac executives told the world that their subprime exposure was substantially smaller than it really was." This explains why Min and others--despite the insolvency of Fannie and Freddie-- have continue to argue that the two companies did not hold substantial amounts of subprime and other low quality loans. Fannie and Freddie simply failed to disclose this information.
"The Financial Crisis Inquiry Commission failed completely in its mission because it refused to inquire seriously into what Fannie and Freddie had done. My dissent however, based on the research of my AEI colleague Edward Pinto, contains all this data, and even points out that Fannie and Freddie had failed to disclose it to the market. Although the FCIC had subpoena power and could have put Fannie and Freddie executives under oath, the FCIC did not want to know the facts that the SEC has now discovered. It was a travesty and a whitewash, and a waste of taxpayer funds. It has also misled people like David Min and others into believing that Fannie and Freddie were--as the FCIC said in its majority report--only "marginal" players in the financial crisis. It's lucky for the FCIC that the SEC doesn't have jurisdiction over false government reports.
"When all the facts come out at trial, the roles of Fannie and Freddie, and the government housing policies they were implementing, will become painfully clear."

right - and... "from 40000feet, nuthin looks illegal...."

and since it was lower manhattans money that put the current team in power, does anybody actually believe that any of the players will EVER be meaningfully prosecuted?

HAHAHAHAHAHAHAHA!!!!!!

and the band plays on...

[gwynedd1]

Re: It's the Government! No, it's the Corporations! No, it's the Government!

no, but the political would and have.

why i still say - will go to my grave saying - that its the political aristocracy, aka the beltway bozos that have brought all of this upon us - led by their lackeys in the 4th estate, aka the lamestream media - who continues to feed us BS that will enable their team, the party in power, to continue to impoverish The Rest of US, while they bailout their masters in lower manhattan.

the results of the previous 6 years (since congress changed hands in 2007) is the confirmation.

got this one the other day - any comments?



and tho i dont consider myself a 'partisan' i do identify as a 'small r' type
who believes that the more powerful the .gov becomes, the poorer The Rest Of US get.

this also has been confirmed by events since 2007.

I still don't get it. How does a politician benefit from his office other than salary and social prestige? You just can't make billions doing it. Its the private appropriation of the national wealth that drives it.

[flintlock]

Re: It's the Government! No, it's the Corporations! No, it's the Government!

I still don't get it. How does a politician benefit from his office other than salary and social prestige? You just can't make billions doing it. Its the private appropriation of the national wealth that drives it.

Some people value power and control over others far more than just money. In fact, many seek out wealth for the same end. It gives them power and prestige. Most billionaires are not in it for the cars, jewelry, homes, and yachts. If that were the case most would retire early and start enjoying themselves. Instead you see people like warren buffet working on until they drop. Its the game politicians and power seekers are both interested in. They just receive payment in different forms. Obama would probably choose 4 more years over a billion dollars. Not everyone is motivated by the same rewards.

But political office can still become very lucrative. Post-office a politician can get a choice job or a seat on a board of directors as repayment for their deeds.