Shortsighted Morons

[marcus_sez_vote]

I've been worrying about this for a while but the Director of National Intelligence Blair at least is highlighting the problem. Putting aside the moral and ethical issues of fleecing Americans and the world for all their cash, the people involved in the financial crisis have made things a whole lot less safe. There were already projections of

Comments

Emperor's New Clothes

[darkwhimsy]

The thing you have to remember is that the people responsible for this particular crisis don't use resources from third-world countries, and they don't sell products. They never produced anything whatsoever... just contracts on financial products. Essentially they were creating profits and thus "money" from thin air.

It worked great (for them) while it lasted, but given the absence of anything behind it it couldn't last forever. It's really just the pinnacle of the Greater Fool theory.

Re: Emperor's New Clothes

[marcus_sez_vote]

Ok I can agree with that. Yet even solid companies, once darlings of Wall Street, are now cutting jobs and may be in risk of disappearing. The "invisible hand" of the marketplace seems to have slapped allies of capitalism around rather than actually aiding one another. It boggles my mind how politicians in league with these people can still remain committed to their positions.

What's really depressing is to contemplate the traders in these derivatives who somehow managed to get out of the market before it crashed and have their profits squirreled away.

Be well.

Re: Emperor's New Clothes

[darkwhimsy]

Even people who didn't pull out early may end up making a bundle (or rather, keeping much of the bundle they made). The government is - for understandable albeit I think misguided reasons - really trying NOT to wipe out the shareholders even as they shovel money into these companies. So the taxpayer, rather than the shareholder, is likely to end up paying most of the cost.

Re: Emperor's New Clothes

[evilmagnus]

So I was thinking about this last night.
I'm a firm believer in wiping out the shareholders and nationalizing the banks until they can be sold for a profit. But I know why the government really doesn't want to do that - because their shareholders were institutional investors, i.e. mutual funds and pension plans. The financial sector was a good, safe bet if you were a brokerage looking to stash a few billion of {some state}'s pension plan.

Wipe them out, and all of a sudden you've got even more losses (above and beyond regular market declines) taken by folks who were planning to retire in a few years time, who had invested their money with nice, conservative mutual funds who had in turn bought nice, safe financial stocks. Not to mention the further strain it'd put on State pension plans.

We think we have unemployment problems now - it'd be worse if we have more 50s and 60s and 70 year olds still trying to stay in the labor market.

[djcrowley]

Will you be able to pry natural resources out of third world countries? Not if a rabidly anti-American government is elected or wars have flared up in once stable regions.

well, that's why we have the CIA to knock over Marxist regimes and replace them with corporation-friendly dictators pro-Western rulers.

[marcus_sez_vote]

"It's the Circle...the CIIIIIRRRRCLE of POWER...I mean LIFE...I MEAN POWER!"

Be well.

[russiandude]

The thing is, the American entrepreneur "anyone can make it" culture encourages this kind of short sighted behavior. As long as what you are doing makes you well off, then you are living the American dream. We applaud aggressive risk taking when it results in high rewards. And it is good to encourage innovation.

However, it seems that when the burden of the risk of the risk falls on different people than the burden of the reward, there is an accountability issue. In the end, the majority of the people in charge who have caused the current situation to come about have not been all that hurt. Yes, their stock portfolio is in the gutter (though many of those stocks could be expected to regain value after this crisis is resolved). Yes, some of them have had to take a pay cut - but how much does that compare with what their salary for the previous decade.

If you gave me a choice to make a LOT of money for the next 5 years and then go back to making what I was making before, with little real risk to myself, I would certainly take it.

[dj_clawson]

So something I've never totally understood is why America has to be the global leader of the world's economy or the bestest country in the whole world or whatever. I mean yes, we have really great opportunities here, and we have a massive army and political power and financial power and all that, but I would really be okay if another country we were on good terms with was "#1" as long as things are going well here. America seems to have this insatiable need to be #1 at everything, which allows us to do a lot of things we wouldn't otherwise get away with (and some things it's good for us to do but we wouldn't otherwise get away with).

Most first-world (to use the outdated term) countries seem to be more along the lines of, "We're fine as long as everyone has like a job and money and health insurance and nobody invades us."

(And Israel is like, "We're doing well! We haven't had a suicide bombing or a rocket launched at us today. ...Wait, nope, take that back. But it was only one rocket and it didn't hit anything. So, a good day.")

[ornithoptercat]

The problem, I think, is that it's NOT countries we're on good terms with. Who else is going to be the leader of the world economy... China? Given all the recent recalls because of their crappy manufacturing practices (and God only knows what we haven't caught), the way workers are treated, their human rights abuses... if it's us or China being #1, it's WAY better for the world that it be us, and I'm not saying that out of patriotism.

Of course, all China has to do is call in our giant debt, and I still don't know why they don't. Or why we're lending/giving money to other countries when we owe so much - not that they don't need that money, but why aren't they getting it from someone who actually has it?

[tedshubris]

China could cause the US Economy to collapse even worse any time it wanted to. That they haven't done so is, I think for two reasons. 1) they enjoy having the threat handy to use any time they want to, it gives them a much better bargaining position. And 2) They don't know what the heck would happen. So they'd rather make a gradual and sure transition to power, rather than cause a catastrophic upset and then try to land on top.

Just a couple of guesses here.

[marcus_sez_vote]

I don't think America has to be a "global leader" but certainly America has a large population, economic output, domestic market, military power, and political sway to influence the course of events

[ornithoptercat]

The answer is that these guys DON'T CARE. As long as they're still getting paid millions to sit at a desk shoving bits of paper around, the world could end and they wouldn't give a crap.

These are the same people who begged the government for money at the same time they were buying a $50 million corporate jet.

These are the same people, who when they were bought ought by a midwestern bank, laughed at that bank's people in the elevator because they were dressed in ordinary suits instead of Armani.

These are the same people who see nothing wrong with getting $30 million bonuses for causing thier company massive losses.

These are the same people who see nothing wrong with getting these giant salaries while the bottom guys in their company (I'm talking the tellers, not the traders) struggle to make ends meet.