A lot of these problems now occuring with the global financial and economic system is in part due to too many (affluent) people placing greed and the never ending thirst for fatter profits over prudent investing and regulated and steady asset and profit building. The worst now is that us, as in the humbled taxpayers are now going to pay not just with money in order to bail out these scum but many may also indirectly lose their job/life savings and what happens, how do we fix it? Just pump more money into these areas...and what do you think will happen?

Not sure if anyone heard about how much money Richard Fuld (head of the firm) took home from the now failed Lehman Brothers investment firm over the last 8 years? $300m USD since 2000!!! Believe it or not he admitted that during the time he was pleading with congress and the federal treasury for a bail out he also requested another multi-million bonus!

Not sure about you guys but to be honest this stuff makes me incredibly angry and sick...these pr(cks take home more money in one bonus than the majority of the world's workers take home in a lifetime of hard work and yet the state generally on the whole leaves them alone, if not encourages them to speculate more investments, etc.

Capitalism hey, what a disgusting, disgraceful part of human history...oh how I would love for real socialism/communism to take a firm hold in Australia and around the world. You never know, we might actually then start addressing some real issues such as climate change, global poverty and hunger, gender inbalance in the workforce (and pay), universal healthcare and education.

One can dream during this fast turning financial nightmare.

FO

 

 

 

  If your upset about what has happened in the past few years in multiple western economies then you're not alone.  I don't even want to look at my stock portfolio.  And I'm also upset at the lack of regulation - particularly in New York and London.  I'm more upset at the United States government and the manipulation of markets as witnessed by the state sponsored credit bubble.  I'm even more upset at my wife for wanting to wait another twelve months when I told her last October that I expected things to go belly up soon. 

 

Fall Out, I have a couple of degrees in economics so you can take this for what it's worth. 

 

The truth is though that your problem isn't with capitalism.  Karl Marx was an enemy of capitalism but the truth is he never really understood it.  He defined capitalism as a system whereby the means of production were privately owned.  So if you decided to become a baker and buy an oven and a bread making machine you would become a capitalist.  Karl Marx propagated the labour theory of value whereby the value of a product should reflect the input of labour needed to make them.  In other words Marx believed that labour was the only deserving productive factor despite the capital used to make it.  

When I went to university I was taught that there were three factors of production: labour, land, and capital.  If I were to teach at university again, I would argue that the entrepreneur was also a factor of production because clearly if you give the three other resources to two different people you'd get different results  i.e. if you were to give me a couple of Harvard dropouts, a garage and some computers, I wouldn't have been able to give you a Microsoft. 

 

 So the problem with communism is not only does it fail in practise for which is it's commonly criticized it is fatally flawed also in theory. 

 

Now even if you accepted the above, isn't communism then just a utopian ideal and Marx was just a little off?  Well no actually.  Marx called for a dictatorship, the seizure of power through force, a totalitarian regime for the good of the proletariat.  Marx has blood on his hands and not a little bit.  

 

Now if we return to our current calamitous situation how do we tame capitalism?  Well, there are two powerful counterweights that we have at our disposal.  The first is democracy and the second is a free market.  The capitalist hates free markets because the freedom to enter a market and set your own price enables competition which drives down the profits of the capitalist.  So our governments should see their main economic purpose to promote free markets and prevent monopolies.  Instead what we have seen is governments creating distortions in the market for p

I agree with FO that it is ridiculous to see Fuld receive $300 mil as head of what is now a failed company. And I would be interested to see how much the US government allowed him to keep, how much he had to pay in tax.   But no, communism is not the way to go.

I am having trouble accepting the greed of the oil companies here.  We used to pay about a $1 a litre when the oil was about the level it is now.  Then we paid over $1.70 when oil was $170 a barrel.  Now it is below a $100 again.  In the last 3 weeks the price of oil has dropped markedly.  The price at our local bowsers has dropped .5 of 1c.  And the government says it cant do anything about it!  Dont they know that is their job, to look after the interests of the people?   Yeh, I know, they are more interested in looking after the interests of the international oil companies, because of the huge amount in taxes they are getting.

BINGO!!  Took a while but somebody at least had the decency to respond to the disgraceful corporate ethics that are allowed not just in America but around the developed market based world.

 

 As far as taxes, in 2007 fiscal year individual income receipts accounted 45% of all federal receipts, corporate/company taxes 14% and excise taxes 3% so it's unfortunately a lot more than just the taxes the govt are getting.

 

 

Very typical responses on here; communism for me is but a dream, I don't expect it to be implemented in Australia apart from if we were in the utmost dire circumstances (which I wouldn't want anyway).  However to have a socialist market based economy whereby more governement spending/taxing and regulation is something we can have, others do have and when you let the Wall Street suits and co go relatively unregulated we are presented with the current situation we are in now.

 

Of course I am over simplyfying to say that unregulated greed is the root cause of these problems, however I do firmly believe that it is nonetheless a core problem of this current situation and the main response by Western Governments so far is to throw more money at the money suits...I wonder what the profit margin's will be for Australia's big 4 banks next fiscal year?  Loss or a big profit?

 

 

This is what happens in a deregulated market based economy, the bottom tier are the very people who not only put these people into power, but also provide the bulk of income receipts and economic activity and yet they are either ignored or given a payout around budget time or particularly election time to shut us up.  Possibly our single biggest challenge in our history; climate change I fear will not solved in time due to corporate and governement over emphasising on profits over the right thing to do (oil companies AT THE MOMENT obvioulsy make a much bigger profit than any renewable energy company...).

 

 

But hey, I know almost all you won't even bother to even contemplate a different change in our political/economic system so I'm basically talking to thin air atm...if this was about increasing military spending then...

 

FO

 

Don't know about international stockmarkets, but when you see weekly rental prices for pretty ordinary houses 30 odd km outta Brissy and they want $400/week you certainly get a sense that greed is good.

 

My take on the American situation is that they need to allow their Government (shock horror!!! you are taking away our freedoms and liberties...aaaarrrggghh!!!!) to place tighter controls on their markets.

 

Why doesn't the USA have a prudential financially regulated market with systems in place of the likes of APRA?

 

Curious.

 

If you'd defined your core issues perhaps the responses would reflect accordingly.  You started off by slamming the evils of capitalism (and conveniently ignored all the phuque ups done by communists and socialist governments), then progressed to slamming the US, then the suits and now the WA government.  BTW, which capitalist countries have subjected their citizens to govt induced famine because they couldn't produce food for their own people due to internal corruption issues (eg china in the 60's, north korea in the 21st century, albania in the 90's etc.....
This is what happens in a deregulated market based economy, the bottom tier are the very people who not only put these people into power, but also provide the bulk of income receipts and economic activity and yet they are either ignored or given a payout around budget time or particularly election time to shut us up.  Possibly our single biggest challenge in our history; climate change I fear will not solved in time due to corporate and governement over emphasising on profits over the right thing to do (oil companies AT THE MOMENT obvioulsy make a much bigger profit than any renewable energy company...).
where are the successful regulated economies where its moved beyond orwellian dreams?

The reason there is,

too many people think that government intervention of any sort equates to excessive bureaucrary stuffing up the system even worse,

those same too many people think that a free market will get us out of this mess better than any government help,

yet they seem to be forgetting that it was free market practices (even if "encouraged" by government deregulation)

that got us into this rut in the first place.

 

Initially, the 2 mortgage giants were set up and run by the government, then handed off to public, non-governmental ownership leadership. It was that very non-governmental leadership that got us into this mess in the first place, as there was insufficient regulation to keep the top executives in order, no accountability for the bad direction mistakes their leadership took those companies in.

No matter that Clintonian era deregulation encouraged those mortgage giants to relax their basic credit requirements.

It was still those exces that signed off on the paperwork saying, "yeah, we'll sign these people, even if they lack sufficient credit and sound financial responsibility."

 

Sad thing is, even those CEO types lack sufficient sound financial responsibility

(and I wonder, if that's what is being taught in colleges and universities when it comes to business leadership,

maybe we need to rewrite those requirements?),

because you don't solve your company's financial hard times by laying off your actual workers and giving yourself an equivalent bonus in the process for all the money you supposedly saved the company.

 

I look at this mess as,

since it was those CEOs' and execs' leadership that led their companies down the road to bankruptcy, solvency, or whatever other financial mess they signed off on

(accepting risky clients was their own damn fault, the government never forced or threatened them into it),

then they don't deserve a single cent of severance pay from any government or taxpayer bail-outs.

 

But then again, that rings of common sense.

And if this mess has taught us anything, it's that common sense isn't a requirement

to be amongst the world's financially-leading corporations.

 

(Feh! Were this an era of a World War, we could just shoot them for treason,

solve that problem real quick-like: a 50-cent bullet and a $500 pine box is cheaper than a 7-digit severance package,

and the public wouldn't be as outraged over it!)

 

It was Klinton-era **regulation** that encouraged it, not "deregulation"--which by definition means it was encouraged by intervention into an already-heavily regulated market, and hence not by "free market practices."  You can read all about it on the United States board.  Just look in several of the recent threads, and read everything posted by Softwar and Rocky.

 

That's all I hear about the subprime crisis.

 

- There's your ex commies that wanna use this to sell me the idea that capitalism is a faillure.

- There's your libertarians that wanna use this to sell me the idea that any regulation of capitalism's excesses is a failure.

- There's your leftwing politicians that wanna use this as a stick to beat the rightwing politician, conveniently

   ignoring the leftwing role in this.

   ignoring the rightwing role in this.

- And then there's the media who are in a class all of their own in this:

    -1 They are doing everything to scare the living bejeesus out of the general public for easy ratings.

    -2 They are willfully misrepresenting the bail out plan. The bailouts are loans nothing is given away the banks have to pay all

        this back (That's what a loan is).

    -3 They are doing everything to create a needless panic among the general public causing people to get needlessly hurt.

 

I work in engineering. When we have a problem after swearing and cursing a bit, we look at it soberly and start to fix it. What else are you gonna do? Hyperbole and panic does not fixes things. After the thing is fixed we move on and try to never make that stupid mistake again.

 

With the attitude I described the " problems" we are having would not be half as bad.

 

I don't wanna make more statements about this, because I'm busy. I'm compiling a list of useless fear mongering reporters that need to be beaten up. If asked politely I might be persuaded to include some aviation journalists on that list.

 

 

 

 

 

 

Regardless of whether it was regulations, de-regulation, re-regulation, or whatever other word of choice needed to justify playing more favorably to people who just didn't have the sound financial judgment to take on loans the magnitude of a home mortgage,

it's the fault not solely of Presidential administrations for signing off on said legislation,

but also of both principal parties of the US Legislative branch (plenty of dems and Reps have dirt/blood on their hands from filthy money), after all, that's what they do: legislate laws that keep the country functioning,

and it's also the fault as well of the very financial institutions and their leadership who took part in this.

 

Yes, the US Federal Government, with backing/support by both the Executive and Legislative branches of government,

dictated down that it would be beneficial to the US economy to allow people of unfavorable economic capabilities to have acceess to the same home loan opportunities as the people who were actually financially sound enough and responsible enough to take on such debt.

But in the end, no one put a gun to the heads of those financial institutions and said "you will consent to taking on the loans of umpteen hundred thousand (umpteen million?) people who won't necessarily be able to hold up their end of the deal."

Perhaps, in hindsight, they should've only committed to the bare minimum number of people the Government suggested they shoud allow...?

 

In the end, the US government never forced those major financial players to put their faith in mortgage-based securities over things that may (or then again may not) have proven as stable investments.

What made mortgages attractive was that, foolishly, the Wall Streeters and their financial ilk believed that people would fully commit to and honor 15+ year loans on their very homes. After all, who would risk defaulting on a mortgage if it meant you'd be out of your dream home and living off either generous and patient friends and relatives, renting a dive of an apartment that's barely enough room for you, your children, and all your possessions, or even out in the street?

 

It didn't help this past year that the price of oil went thru the roof, making it very difficult for already financially-stressed people to continue keeping commitments they probably could have honored if it suddenly wasn't starting to cost them so much extra just to go to work and put food on the table.

We leave in a market-based greed-based economy where everyday we are pelted with advertisers going about their subtle business of telling us all that we're nobodies and don't amount to anything if we don't buy the products they're adverstising. So naturally, people will go into debt just to prove "hey, I'm as good as anyone else", and we keep going further into debt in our efforts to "keep up with the Joneses" just like everyone else, clinging to the ill notion that we're only somebody based on how much stuff we accumulate, even if it means losing our peace of mind as we go further into debt...

 

(perhaps this is proof-positive our (US) education system is failing?: we no longer teach young adults the importance of sound financial decisions, fiscal responsibility (but then again, look at the example our elected governments show us there), and the importance of honoring our committed-to debts, as well as not taking on new ones we can't afford in the long run,

 in a world where credit is measured as so important a commodity.

Other than some fictitious Second Coming that's supposed to fix all the world's ills, I just don't ever see humanity stemming away from being a materialistic species: we let our accumulations of stuff determine our sense of self-worth and who we are in the world.)

 

Politicians are as much to blame for this US-mortgage-mess-turned-worldwide-financial-crisis as the corporate and financial execs who all agreed with each other that this was the course of action to follow (accepting so many loans from people most likely not to honor them to full term, and even worse when it's decided to put a large portion of financial faith in those risky loans).

And as I can't voice my anger to those corporate types, other than trying to avoid doing business with their companies,

my only recourse in any of this is to tell all the political shills representing every politician this election day why I won't vote for incumbents anymore.

Maybe the change we really need is to get all the old stale hot air out of office and get new blood in there that hasn't been bought off or isn't on the take yet (not to mention we need the adequate legislation that keeps the bribing, manipulative&nbs