GameTavern - Republican Brown wins Ted Kennedy's Senate Seat

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Originally Posted by manasecret (Post 262452)

I feel like you're going on tangents here, which is fine, but I'm a little slow and I'm not following your main point that followed mine, which I think has something to do with the "shepherding leaders" taking too much control/power. Care to elaborate?

I don't think leadership necessrily requires seizing control. My examples given where showing how confusing leadership and control can create oppression, and that relates directly to points I made in earlier posts. To me, it's all interrelated.

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As for the banks, do you not think the banks that were too big to fail should be regulated so that they're not too big to fail, and regulated so that they can't take enormous risky investments that cause the whole economy to implode because of it?

I never criticized regulation, I criticized verbally attacking the industry as a whole like a child would attack another on a school bus. Pres. Obama's speech regarding regulation wasn't about pragmatic realities of business and their potential pitfalls; it was about creating an enemy and punishing that enemy. On numerous occassions he has intoned "Fat Cats" to describe bankers. The regulations/taxes themselves are supposed to have loans paid back, but they tax all financial institutions, even those that paid back the loan with interest and those that never took money in the first place. The worst part was that he criticized the entire industry for becoming profitable again, and that was the whole point of the bailout in the first place. It's populist nonsense.

To top it off, other organizations who took massive bailouts will have to pay nothing, and it's very curious that it is the same businesses that the government now partially owns or runs, which takes me back to the point about the corrupting power of centralized control.

If this regulation/tax had been proposed with an even keel, I don't think the markets would have reacted the way that they did and politization needed never take place. Charles Krauthammer made the point that if this tax was levied to pay back what is currently owed, AND to save in the event of a future calamity so there is a large reserve of cash available for a bail-out with no or limited borrowing needed, then reason would have reigned and this would have been seen as a smart regulation.

Instead, he called them poop-heads and decided to take their lunch money. The truth is, Pres. Obama looks like a man looking for a fight with private industry (he even said as much), instead of a President wanting to work with them for future success and stability, and that is a huge character flaw and as the article points out, a tactic that may come to bite him in the ass come election time.

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It seems like the overall message to the huge banks from the recession and the bailouts is that it's okay for them to make very risky investments, because the government will back them up in the end. It seems to me that message needs to change.

Keep in mind, regulations also helped create risk that made the eventual fall take place. Google the history of the CRA (Community Reinvestment Act). Basically, in the 90's this Carter era act was expanded to encourage lending to lower income customers, and preferential treatment was given to lenders who gave out loans to this risky group, and this created many of the risky loan products that are now vilified today (like sub-prime mortgages, etc.). The nature of the market took over selling these unnatural products.

These risky loans where packaged and sold as high-risk but high-profit investments, demand grew as returns poured in and before you knew it no one was noticing these loans were coming due and no one could pay for them (as much a fault of the homeowner as the lender). There is plenty of blame to go around, but remember, it was government intervention that started this economic snowball rolling. Poor risk management by financial institutions was just the last phase of this disaster.

Personally, I think the best way to regulate and keep this happening ever again would be to limit the re-sale of mortgages as equities. Either declare that the originator of a loan must keep it for the life of the loan, or mandate a 5-10 year time span of ownership before that loan can then be re-sold. That way originators will have to be accountable for the loan product they sell. Will this eliminate the origination industry? Maybe. Will it mean a whole lot of people won't be able to get approved for loans to buy homes (because they can't afford them in the first place)? Certainly. In my opinion that wouldn't be a bad thing.