The Warning

The U.S. House of Representatives' Agriculture Committee on Wednesday gave its approval to legislation proposing new clearing, margin and reporting requirements for over-the-counter derivative swaps, clearing the bill to be combined with competing proposals before a final vote by the full House.Committee markup to the Over-the-Counter Derivatives Market Act of 2009, which received unanimous approval from Agriculture Committee members, must now be reconciled with a similar version passed by the House...

Pretty good documentary. Time frame is in the latter years of the Clinton Administration. Clintons economic brain trust was Alan Greenspan(The Wizard), Robert Rubin and Larry Sommers. Seems as though there was a little incident between Bankers Trust,,and Proctor and Gamble. Something about the selling of over the counter derivatives. In short,,Bankers trust put it to Proctor and Gamble pretty good.

Moves on to talk about an obscure little department in the federal government called the CFTC. Commodities Futures Trade
Commission. The director of that department was a lady by the name of Brookley Born. I guess MS Born became aware of the fraud going on in the derivitives market and wanted to do something about it. I guess she must have overstepped her boundaries because the three amigos didn't much care for her interference.

To make a long story short,,Greenspan and his buddies forsaw that Ms. Borns exposure of the problem and her desire to impose some sort of regulations upon those who were involved,,would create worldwide economic chaos. I guess Greenspan and his cohorts subscribed to the Ayn Rand ideology that the markets were capable and should regulate themselves. Ms. Born was stepping on that ideology.Interesting stuff. Well,,they had some senate hearings and Ms. Born was shut down. Isn't that a shocker. Things went back to the way they were and Ms. Born eventually resigned.

History records the subsequent economic downturn. Greenspan retired in 2006 with a sort of renewed thinking in regards to the market regulating itself. Seems that he now finds flaws in his ideology. Maybe,,breaking the law should be,,,against the law.

Interesting sidenote,,Larry Sommers,,once a hardline opponant of regulated markets,,now is in the Obama Administration and advocates it. My how things change.

As for Ms. Brooksley Born,,I don't know what she is doing now. Hopefully one day there will be room for people like her who want to protect us from ourselves.

I'm not a fan of government interference in the private sector. But,,,people should not be allowed to screw each other over. If ya don't want others butting into your business,,stop abusing the system. To quote Jim Carey in the movie Liar,,Liar,, "Stop breaking the law *******".

I thought that the one bright spot in this depressing documentary was Brooksley Born.Someone who saw something wrong,,,and tryed to right it,,regardless of the consequences. If we had more people in government like this lady,,maybe some trust might be restored.

I thought that the one bright spot in this depressing documentary was Brooksley Born.Someone who saw something wrong,,,and tryed to right it,,regardless of the consequences. If we had more people in government like this lady,,maybe some trust might be restored.

I think it's a pervasive part of human life. They say Alexander Hamilton couldn't really see any point to having a bill of rights attached to the Constitution: he was assuming that reasonable people will realize that they shouldn't crap where they eat. The alternate view was: no, we have to protect ourselves from ourselves.

Just as folks institute mechanisms for policing this forum: I think: oh, those rules are going to squash creativity... ideas are always given dimension by emotion... ideas often stray afield before we discover how everything is connected...

But then I resign to the old realization: we have to protect ourselves from ourselves. Regulation tends to spike when our inhibition has already spoiled the fun. Then the drive to regulate fades... until the next time.

In an intelligent organization of society, the few are protected from the many,, and the many are protected from the few... As we have this society we must have majority rule to get something done... When most that needs to get done languishes, and much which should never be conceived of is brought to life, then clearly, bill of rights or not, the thing does not work...Everyone should be brought in...People should consent without duress to the law by which they are governed... I have no doubt that the majority would limit bonuses, and pay packages... Many have sense enough to realize that those people squeeze profit out of companies at the price of higher exploitation, cut wages, or layoffs...The fact is that wealth was to support this land...Even the income tax was aimed at the rich, but as soon as it could be applied to working people it began to change the whole social and economic dynamic in this country... The value of property could be inflated, wages which were essentially cut by taxes could be slashed further... To have anything of value, property, one had to endure credit, paying money to have money for property of inflated value... This is a game we cannot win and can only lose... The gambling of the bankers was on a quick unsustainable profit... You can take to much, -cooking the meat of the calf in the milk of the mother...

Yea... capitalism was originally conceived in confidence in the rule of nature, which was understood to be Reason. Adam Smith's "invisible hand" was supposed to be the basic reasoning of a capitalist: that if his actions threaten society, then he's working against
himself...because his wealth depends on a healthy society. Our experience has demonstrated that Adam Smith was wrong. A capitalist will turn his world into a cess pool... enslave everyone... bring his culture down below the sophistication of the stone age... in short, he'll sell his own grandmother down the river for a buck. He's got dollar signs in his eyes, and he can't see anything else. What capitalists were recently doing was selling insurance that the housing market bubble would never pop. Every speculative bubble that's ever existed popped eventually. These capitalists appear to have been completely insane. The only explanation is the blinding effect of money.

Step by step, we've realized the truth... what the European Aristocracy told us before they faded away: Capitalism will fail... Democracy will fail. But we notice that as long as the underlying commitment to the vision of the free society endures, the phoenix will come back out of the flames. The danger, as demonstrated by the USSR is this: thinking that because our system led to a breakdown, the system itself must be completely flawed and worthy of the trash heap. Let's just start over and force utopia on ourselves. It turns out it doesn't work that way. Forcing an artificial mold on humanity doesn't create anything. In the end, it only destroys... and leaves the next generation to try to pick up the pieces of their natural identity.

So maybe it's like this: Democracy and Capitalism aren't the goals. They're just mechanisms for reaching the goal: the free society. If those mechanisms aren't working, we can tweak them.. we can abandon them. But the conservative side of us warns: don't throw the baby out with the bath water: see what part of the tradition that's been passed down does work. And then just remember the abiding commitment.. and have a little faith.

Fido,

I think that when we blame capitalism for greed, we are looking in the wrong direction, and possibly wearing blinders as well. History should be our teacher.

We should be IMO studying human nature, and the swings into the extremes that it is prone to. Then we could make an attempt at regulation of this pendulum's swinging into one of two opposite extremes. We could stop any drastic displays of uncontrolled greed (The feeding frenzies of big business, much like the sharks) and also the death of our economy, through lack of incentives (see communisms defeat. Q: "I pretend to go to work and they pretend to pay me.")

When thinking about changing the whole system, think of this song.

Song Lyric: "Meet the new boss, just like the old boss."

Hasn't this been done before?

S9

Fido,

Shared wealth seems like a good idea, on the face of it, and that is exactly why the communists thought this b/4 you. But even this must be done with moderation.

I think that what people don't always understand about money and finance is that it requires accumulation of money in order to accomplish anything big or far-reaching.

How many times have we heard about some genius coming up with a great idea, and not being able to carry it forward without funding? He has to go to someone, hat in hand, who has an accumulation of money in order to get started.

Or, how many of us are willing to work, really need to work, but we cannot find a job (say at a factory or a mall)? But think about this if you will. A factory is a place that was made possible because someone has had enough foresight to accumulate the wealth/money that it takes, in order to even build that factory or open a mall.

Or, what about a simple thing like this. What if you wanted to retire, wouldn't you need an accumulation of money to do so (or the government to do this for you by accumulating your social security money over time)?

So here we are "between the devil and the deep blue sea," or "dammed if we do, and damned if we don't." We have to wonder at this point, "How much is too much, when it comes to greed?" Or we might further ask our selves, "When does motivation morph into greed?"

In dealing with problems this subtle, the solution can never be, to "slash and burn," but rather to finesse things a bit and to find some kind of harmony within what presently exists.

When we come right down to it, greed is a loss of "Enlightened Self Interest."

With a little thought on this issue, we might begin to realize that we are a tapestry made up of ourselves, and our fellow man. When we hurt those directly around us, we are in fact hurting our selves. This would be, for want of better words, 'Financial Ecology.'

Perhaps this is why the middle class was first created, not because we suddenly became selfless, ("Don't hold your breath"), but because that middle class created a big new market and everyone benefited from it. The big cats, after all, needed to sell their manufactured goods to someone. (After everyone had one of everything actually needed, or close down).

So these fat cats paid people more, advertised about how much more they needed and deserved to have in order to be happy, and even gave them some time off in order to go to the mall and buy it. Then these someone's (the worker bees) worked harder and longer in order to share in the good life. It's circular and self-perpetuating.

So what, in the end, will stop greed from getting out of hand. It will not be morals, the church tried that and failed, but intelligence.

S9

Fido,

What are you saying here, Fido? Are you saying that it is hopeless to seek reforms and only revolution can fix these financial problems?

Are you saying that we, the people are being kept in the dark, are being given information that is not practically usable, and that this lack of information is a ticking bomb long past the possibility to be defused in time to do any good?

Why is sharing wealth not a good idea? Why must we abandon our present financial reality? Do you have any idea what devastation such a drastic change will cause?

You must understand that demanding perfection is poor foolishness. It is unworkable. Maybe this is because human nature is in its infancy, I don't know, but it certainly cannot live up to perfection's demands.

Humanity doesn't resist unity or even some perfect form. Humanity simply isn't up to such demands, such uniformity. And maybe, who knows, that is a good thing in disguise, as we need a little slop in the works in order to develop or evolve, if that is what we are doing, into something higher than a mere cog in a machine (the Borg) that never deviates nor makes any mistakes.

If I am misunderstanding your purport, please correct me, and forgive me, because this is not my intention.

S9