SOBERING

[driveby]

Without this interference, you get things like the Wall Street meltdown as business seeks to take profit, regardless of the collateral damage. This is what I mean by it being proved time and again that business exists to serve its own ends. The people that actually do the work for a business are completely expendable objects that only exist to further the business' goals. People are abstract concepts that are no different than a cog or widget.

The Wall Street meltown was caused by a lot more that just "greedy businesses" And how many sucessful business owners view their employees as just a cog or a widget? That's just silly.

[wiegie]

The Wall Street meltown was caused by a lot more that just "greedy businesses" And how many sucessful business owners view their employees as just a cog or a widget? That's just silly.

I would guess that the large majority of successful business owners do not view their employees as cogs or widgets--either because they know the employees personally or because they don't know the employees at all and don't even "view" them period (of the latter I am thinking of corporate stockholders).

[Perchoutofwater]

Without this interference, you get things like the Wall Street meltdown as business seeks to take profit, regardless of the collateral damage. This is what I mean by it being proved time and again that business exists to serve its own ends. The people that actually do the work for a business are completely expendable objects that only exist to further the business' goals. People are abstract concepts that are no different than a cog or widget.

 

Government interference is in large part the cause of the meltdown. The meltdown was due to the housing bubble bursting. This was caused by the federal government encouraging and strong arming lending institutions to reduce loan qualifications. Some of the biggest bail outs were the bailout of Fannie and Freddie, it could be said that Fannie and Freddie had as large a part to play in this mess as anyone as they are the whole reason behind the mortgage swaps. If they had been forced to play on an even playing field with rest of the banks, a large part of this mess could have been avoided. If the government wasn't strong arming institutions with threats of higher fed rates in order to take on questionable loans. If the government (Bush included) weren't trying to make home owners of us all we wouldn't have seen an unsustainable growth in the home building industry.

 

Also isn't the SEC and FDIC charged with regulating these institutions? Maybe if it wasn't for the false sense of security that these government agencies provided, individuals would spend more time researching the institutions they do business with?

[Ursa Majoris]

Government interference is in large part the cause of the meltdown. The meltdown was due to the housing bubble bursting. This was caused by the federal government encouraging and strong arming lending institutions to reduce loan qualifications.

Great God in Heaven, you still believe this claptrap and want us to believe it too?

 

Please give us an example of this strong arming of which you speak. I've seen some righties claim there was actually a law forcing banks into lending to people they didn't want to lend to. I'd love to know what law that is. While you're at it, please also explain why thousands of banks stuck to traditional lending rules, pretty difficult to do with a gubment agent with a gun to your head mandating lending to anyone who wanders in off the street.

 

Demand for more and more mortgage-based securities drove investment banks to increase leverage beyond all hope of being able to support what they were buying and the ability to sell mortgages on meant the risk was immediately transferable.

 

This was a problem entirely generated by business greed and stupidity, as many of that same business community have already said.

[WaterMan]

Maybe if corporate taxes and regulation in the US weren't among the highest in the world, and if wages hadn't been artificially inflated for the last 70 years companies wouldn't be force to outsource in order to compete with their global competitors.

 

Maybe you can agree that the past 40 years economically have been a lie. And any policies by our dead presidents which helped us artificially boom was just a lie. So the big businesses that care about the consumers in America knew that outsourcing was the only way to survive in a country that is failing. We can't really fault them for staying afloat.

 

Aren't regulations so high in some areas to keep competition to a bare minimal and to ensure a few businesses success? I'm just guessing here.

[Azazello1313]

Great God in Heaven, you still believe this claptrap and want us to believe it too?

 

Please give us an example of this strong arming of which you speak.

 

read this

 

edit to add: and the point, at least as far as I'm concerned, isn't that somehow it was all government's fault. but it is foolish to assert that the government wasn't right there helping blow up the bubble. fannie and freddie assumed more and more risk over the years in the name of "affordable housing" and bush's "ownership society", the regulators were whistling past the graveyard, people who pointed out this risk and tried to reform the GSEs were ignored as worry-wort fools, the fed kept interest rates low seeing no cause for worry. and then it all fell apart.

 

the point isn't that the government was the only actor or the only party with any blame. the point is, they WERE an actor who absolutely DOES share blame, and they had no frigging clue what was about to happen, they were cheerleading the bubble the whole friggin time. therefore, it seems awfully foolish to conclude that the way to prevent this stuff in the future is by giving the government more control and oversight power.

Edited September 16, 2010 by Azazello1313

[Perchoutofwater]

Great God in Heaven, you still believe this claptrap and want us to believe it too?

 

Please give us an example of this strong arming of which you speak. I've seen some righties claim there was actually a law forcing banks into lending to people they didn't want to lend to. I'd love to know what law that is. While you're at it, please also explain why thousands of banks stuck to traditional lending rules, pretty difficult to do with a gubment agent with a gun to your head mandating lending to anyone who wanders in off the street.

 

Demand for more and more mortgage-based securities drove investment banks to increase leverage beyond all hope of being able to support what they were buying and the ability to sell mortgages on meant the risk was immediately transferable.

 

This was a problem entirely generated by business greed and stupidity, as many of that same business community have already said.

 

Read these two pieces. The first one is long but very informative, and it will tell you why I believe what I do.

 

How Washington Failed to Rein in Fannie and Freddie.

 

Kling's testimony before congress.

[driveby]

Great God in Heaven, you still believe this claptrap and want us to believe it too?

 

Please give us an example of this strong arming of which you speak. I've seen some righties claim there was actually a law forcing banks into lending to people they didn't want to lend to. I'd love to know what law that is. While you're at it, please also explain why thousands of banks stuck to traditional lending rules, pretty difficult to do with a gubment agent with a gun to your head mandating lending to anyone who wanders in off the street.

 

Demand for more and more mortgage-based securities drove investment banks to increase leverage beyond all hope of being able to support what they were buying and the ability to sell mortgages on meant the risk was immediately transferable.

 

This was a problem entirely generated by business greed and stupidity, as many of that same business community have already said.

It's worse than I thought.

 

Cleary some sort of intervention is warranted here.

[Perchoutofwater]

read this

 

edit to add: and the point, at least as far as I'm concerned, isn't that somehow it was all government's fault. but it is foolish to assert that the government wasn't right there helping blow up the bubble. fannie and freddie assumed more and more risk over the years in the name of "affordable housing" and bush's "ownership society", the regulators were whistling past the graveyard, people who pointed out this risk and tried to reform the GSEs were ignored as worry-wort fools, the fed kept interest rates low seeing no cause for worry. and then it all fell apart.

 

the point isn't that the government was the only actor or the only party with any blame. the point is, they WERE an actor who absolutely DOES share blame, and they had no frigging clue what was about to happen, they were cheerleading the bubble the whole friggin time. therefore, it seems awfully foolish to conclude that the way to prevent this stuff in the future is by giving the government more control and oversight power.

 

I completely agree with you on all of that. I've never said government was the only one to blame, but they do share a large portion of the blame. The stupid consumer and greedy bankers are also to blame.

[westvirginia]

Without this interference, you get things like the Wall Street meltdown as business seeks to take profit, regardless of the collateral damage. This is what I mean by it being proved time and again that business exists to serve its own ends. The people that actually do the work for a business are completely expendable objects that only exist to further the business' goals. People are abstract concepts that are no different than a cog or widget.

 

See, that completely ignores that, without interference of things like IRS rules and Sarbanes-Oxley you can get smaller business units because they don't have so many compliance costs that they MUST be large so they can spread those costs out.

 

You're also ignoring businesses like Ford and UPS at the beginning of the century that paid folks more than the going rate so they could have their choice of the best people, and they wanted (in the case of Ford anyway) those people to innovate. So I challenge the hyperbole that it's all one way or all the other. Yes, there probably are some government regulations that have helped. Glass Steagal being killed by the Clinton admin probably would have kept the financial sector from such dire straights. But the government isn't the only reason anyone is ever treated well at a job. Yes, business exists to serve its own ends but it's also been proven time and time again that those businesses who take care of their employees have higher levels of customer satisfaction also. Only short sighted idiots would ignore data like that and most people with that kind of money didn't get it by being a short-sighted idiot.

[Ursa Majoris]

interference of things like IRS rules and Sarbanes-Oxley

Sarbanes-Oxley is THE classic example of how business is it's own worst enemy. By it's own piss poor behavior, business gave the interfering nellies in Congress precisely what the excuse they needed. The result - a badly written law that costs business money. Happens every time without fail.

[Azazello1313]

See, that completely ignores that, without interference of things like IRS rules and Sarbanes-Oxley you can get smaller business units because they don't have so many compliance costs that they MUST be large so they can spread those costs out.

 

You're also ignoring businesses like Ford and UPS at the beginning of the century that paid folks more than the going rate so they could have their choice of the best people, and they wanted (in the case of Ford anyway) those people to innovate. So I challenge the hyperbole that it's all one way or all the other. Yes, there probably are some government regulations that have helped. Glass Steagal being killed by the Clinton admin probably would have kept the financial sector from such dire straights. But the government isn't the only reason anyone is ever treated well at a job. Yes, business exists to serve its own ends but it's also been proven time and time again that those businesses who take care of their employees have higher levels of customer satisfaction also. Only short sighted idiots would ignore data like that and most people with that kind of money didn't get it by being a short-sighted idiot.

 

the other thing to remember about these fairy tales about the bad old days before unions, labor laws and minimum wages is that we're talking about only a few decades removed from the industrial revolution. before the indisutrial revolution radically improved productivity, there was no real middle class and 90% of everyone everywhere lived at the subsistance level. it takes time for those productivity gains to become widespread and dependable and result in higher wages. so when kid or ursa talks about the poor schmuck in 1910 working in a factory for a pittance (or a schmuck in the developing world today), it's important to remember that the schmuck was probably working a farm for even less real income a few years before that.

[Ursa Majoris]

so when kid or ursa talks about the poor schmuck in 1910 working in a factory for a pittance (or a schmuck in the developing world today), it's important to remember that the schmuck was probably working a farm for even less real income a few years before that.

True but my point is that the likes of Perch would have us return to 1910.

[Kid Cid]

See, that completely ignores that, without interference of things like IRS rules and Sarbanes-Oxley you can get smaller business units because they don't have so many compliance costs that they MUST be large so they can spread those costs out.

 

You're also ignoring businesses like Ford and UPS at the beginning of the century that paid folks more than the going rate so they could have their choice of the best people, and they wanted (in the case of Ford anyway) those people to innovate. So I challenge the hyperbole that it's all one way or all the other. Yes, there probably are some government regulations that have helped. Glass Steagal being killed by the Clinton admin probably would have kept the financial sector from such dire straights. But the government isn't the only reason anyone is ever treated well at a job. Yes, business exists to serve its own ends but it's also been proven time and time again that those businesses who take care of their employees have higher levels of customer satisfaction also. Only short sighted idiots would ignore data like that and most people with that kind of money didn't get it by being a short-sighted idiot.

Now you know that I'm not a big proponent of gov't intervention. I'm far more Libertarian than I am left. However, I don't see the the average schmoe is being taken care of by the business he works for. What I do see is the average schmoe being taken advantage of by business. This is the entire reason for workers uniting in unions in the first place. For every Ford and UPS there's a company town out in coal mining country where unchecked greed was the order of the day. Do not try to sell me on the fact that the labor of the individual will not be taken by business without adequate recompense given the opportunity. That is the reason for minimum wage, not perch's BS about a starting negotiating point for unions. Businesses exist solely to make money and if they can get their labor cheap or even free, they most certainly will. As Exhibit A I give you illegal aliens being paid below minimum wage as migrant labor in the farming industry.

[Perchoutofwater]

True but my point is that the likes of Perch would have us return to 1910.

 

Keep telling yourself that and I'm sure you'll believe it.

[Perchoutofwater]

Now you know that I'm not a big proponent of gov't intervention. I'm far more Libertarian than I am left. However, I don't see the the average schmoe is being taken care of by the business he works for. What I do see is the average schmoe being taken advantage of by business. This is the entire reason for workers uniting in unions in the first place. For every Ford and UPS there's a company town out in coal mining country where unchecked greed was the order of the day. Do not try to sell me on the fact that the labor of the individual will not be taken by business without adequate recompense given the opportunity. That is the reason for minimum wage, not perch's BS about a starting negotiating point for unions. Businesses exist solely to make money and if they can get their labor cheap or even free, they most certainly will. As Exhibit A I give you illegal aliens being paid below minimum wage as migrant labor in the farming industry.

 

Seriously how many people do you know working for minimum wage beside high school kids and retirees doing part-time gigs? The market corrects itself. If I don't offer enough in wages, people will not work for me. If I offer just enough, they will work for me right up until they find a job paying more, and I've spent a bunch of time and money training them to do what I need them to do. Your understanding of business is lacking here. In order to be a successful business you have to pay a decent wage otherwise about the time you train your employees and have them actually doing the job you hired them to do, they go to the guy offering the a nickel more an hour. I can honestly say that the only people that have ever made minimum wage at my company are family members when they were still young in school on summer break. Let the market determine the wage.

[westvirginia]

Now you know that I'm not a big proponent of gov't intervention. I'm far more Libertarian than I am left. However, I don't see the the average schmoe is being taken care of by the business he works for. What I do see is the average schmoe being taken advantage of by business. This is the entire reason for workers uniting in unions in the first place. For every Ford and UPS there's a company town out in coal mining country where unchecked greed was the order of the day. Do not try to sell me on the fact that the labor of the individual will not be taken by business without adequate recompense given the opportunity. That is the reason for minimum wage, not perch's BS about a starting negotiating point for unions. Businesses exist solely to make money and if they can get their labor cheap or even free, they most certainly will. As Exhibit A I give you illegal aliens being paid below minimum wage as migrant labor in the farming industry.

 

In jobs that illegals can do that is true. In professional positions, I doubt it. I think things have changed over the last 100+ years, so that unskilled labor is the only class of worker that still really fits in your paradigm. And they probably should, because more can be found just like them with a 10-minute search. Once you get further up the chain than that, you start to teach people specifics of your company and business, and turnover hurts. It hurts customers, production and the bottom line. I just don't think things will be the same as they were 100 years ago.

[wiegie]

Glass Steagal being killed by the Clinton admin probably would have kept the financial sector from such dire straights.

It's not clear at all that Glass-Steagall would have saved the financial sector. What is truly misleading about your comment, though, is that you place the responsibility for repealing Glass-Steagall pretty much solely on the Clinton administration when, in fact, the act that repealed Glass-Steagall (the Gramm–Leach–Bliley Act) was co-sponsored by three republicans and obtained 98% of GOP support in both the House and the Senate and would have been a law anyway even if Clinton had tried to veto it since it had over 2/3 majority support in Congress when it passed in each chamber.

[wiegie]

True but my point is that the likes of Perch would have us return to 1910.

Keep telling yourself that and I'm sure you'll believe it.

I am definitely in agreement with Perch here. There is no way that I believe he would want to return to 1910. He would like to go back at least 50 years earlier than that.

[Yukon Cornelius]

I am definitely in agreement with Perch here. There is no way that I believe he would want to return to 1910. He would like to go back at least 50 years earlier than that.

1861?

[SEC=UGA]

What I do find somewhat interesting, and it is covered briefly in the article, is that there are a number of high paying manufacturing jobs out there, actually there are a number of high paying medical and IT jobs also, but the populous who are unemployed do not have the skill sets required to assume the responsibilities that these jobs entail.

 

If one looks into this article you will see that the union practices and policies, in many cases, rewarded cronyism and didn't place a high value on technical ability or merit. Anyone with a high school degree, who knew someone in the union or had a friend that worked at these plants, could get on the line and begin working. Yes over the course of many years they would evolve into almost a quasi-efficient automaton and be able to stick gear X into portal W, but in manufacturing now days the skill set required goes beyond simply placing gear X into portal W. Couple that with the fact that if simply putting gear X into portal W is all that is required, low skill labor, then it is much more efficient to go to a country with lower wages to have this unskilled process completed.

 

People in manufacturing areas (in many cases) knew, or believed, that educational achievement wasn't necessarily the most important aspect to attaining a better life. They chose to forgo rigorous educational advancement and instead decided to go into an industry, that while high paying and would afford a relatively comfortable lifestyle, was easily outsourceable. Many of these people believed, even with the contempt in which they held management of the respective compnaies for which they worked, that the union would be strong enough to prohibit the manufacturing jobs being shipped over seas or to lower wage, non-union organized, southern states. They were wrong and their short sightedness and lack of ambition has led to their financial undoing.

 

When you begin to couple high manufacturing costs, with high corporate tax burdens and the lack of technically skilled labor the picture for US manufacturing sector becomes even more ominous. Even if you cure one of the ills above you, you still do not set up the US as a good place to locate facilities. Lower the corporate tax rate, skilled manufacturing jobs will still go to Korea, Eastern Europe, India, China, where the skill of the labor is dramatically lower and in many industrial applications more highly trained and technically inclined. If you push technical training to the manufacturing sector employees, you still have the high manufacturing costs brought on by union groups. And, even if you dissolved unions you still would not have a well trained workforce and would have high corporate taxes.

 

In order to address the situation the US most remedy all three of these issues. Push more "college prepared" students (I find this quite hughmorous as from what I've seen a vast number of those going to college would not have been allowed into college as recently as 20 years ago) technical and manufacturing tracks, provide the the skills to run automated assembly lines, write manufacturing programs, teach them the ups and downs of systems and operations management. Lower the corporate tax rate, we have one of the highest in the industrialized world and it is causing companies to set up shop elsewhere. Decrease the reach of unions, thereby developing a competitive work environment/cost structure for companies coming into the US.

 

I firmly believe that US citizens have the ability to do these jobs, we have simply failed them, the next generation, by not providing them with the tools and motivation to work in these sectors.

[Kid Cid]

In jobs that illegals can do that is true. In professional positions, I doubt it. I think things have changed over the last 100+ years, so that unskilled labor is the only class of worker that still really fits in your paradigm. And they probably should, because more can be found just like them with a 10-minute search. Once you get further up the chain than that, you start to teach people specifics of your company and business, and turnover hurts. It hurts customers, production and the bottom line. I just don't think things will be the same as they were 100 years ago.

I guess what it boils down to is that I have lost faith that the free market can overcome human greed and avarice. Up to this point in human history, unchecked business has not resulted in the fair and balanced life for the workers that has been promised, no matter what the model (slavery, serfdom, capitalism, etc.) under pinning that particular economy. I have come to believe that a truly free market works wonders as a purely theoretical teaching tool but falls flat in the face of man's inability to make objective choices that work for the betterment of society as a whole rather than the betterment of him (or her) personally. While not mutually exclusive goals they are not always compatible either.

[Jimmy Neutron]

What I do find somewhat interesting, and it is covered briefly in the article, is that there are a number of high paying manufacturing jobs out there, actually there are a number of high paying medical and IT jobs also, but the populous who are unemployed do not have the skill sets required to assume the responsibilities that these jobs entail.

 

If one looks into this article you will see that the union practices and policies, in many cases, rewarded cronyism and didn't place a high value on technical ability or merit. Anyone with a high school degree, who knew someone in the union or had a friend that worked at these plants, could get on the line and begin working. Yes over the course of many years they would evolve into almost a quasi-efficient automaton and be able to stick gear X into portal W, but in manufacturing now days the skill set required goes beyond simply placing gear X into portal W. Couple that with the fact that if simply putting gear X into portal W is all that is required, low skill labor, then it is much more efficient to go to a country with lower wages to have this unskilled process completed.

 

People in manufacturing areas (in many cases) knew, or believed, that educational achievement wasn't necessarily the most important aspect to attaining a better life. They chose to forgo rigorous educational advancement and instead decided to go into an industry, that while high paying and would afford a relatively comfortable lifestyle, was easily outsourceable. Many of these people believed, even with the contempt in which they held management of the respective compnaies for which they worked, that the union would be strong enough to prohibit the manufacturing jobs being shipped over seas or to lower wage, non-union organized, southern states. They were wrong and their short sightedness and lack of ambition has led to their financial undoing.

 

When you begin to couple high manufacturing costs, with high corporate tax burdens and the lack of technically skilled labor the picture for US manufacturing sector becomes even more ominous. Even if you cure one of the ills above you, you still do not set up the US as a good place to locate facilities. Lower the corporate tax rate, skilled manufacturing jobs will still go to Korea, Eastern Europe, India, China, where the skill of the labor is dramatically lower and in many industrial applications more highly trained and technically inclined. If you push technical training to the manufacturing sector employees, you still have the high manufacturing costs brought on by union groups. And, even if you dissolved unions you still would not have a well trained workforce and would have high corporate taxes.

 

In order to address the situation the US most remedy all three of these issues. Push more "college prepared" students (I find this quite hughmorous as from what I've seen a vast number of those going to college would not have been allowed into college as recently as 20 years ago) technical and manufacturing tracks, provide the the skills to run automated assembly lines, write manufacturing programs, teach them the ups and downs of systems and operations management. Lower the corporate tax rate, we have one of the highest in the industrialized world and it is causing companies to set up shop elsewhere. Decrease the reach of unions, thereby developing a competitive work environment/cost structure for companies coming into the US.

 

I firmly believe that US citizens have the ability to do these jobs, we have simply failed them, the next generation, by not providing them with the tools and motivation to work in these sectors.

 

There is a lot of uncertainty in the manufacturing sector right now.

 

My dad is losising his job next month and has neen looking - actually has 5 different headhunters looking for him too. He's a skilled manufacturing operations and QS executive. I talked to him this week about his search and he said he's been surprised how often he hears "Obama and taxes" mentioned by manufacturing company reps. Justified or not, there seems to be some real fear about higher business taxes and how that may affect future business operations.

 

On a related note, my brother is headed to Brazil next week to look at a business expansion opportunity for Nestle. This expansion could be built in any number of places, including the US.

 

If we want decent paying jobs for Americans, the US must become more business friendly. I still believe that the ingenuity and blue collar work ethic of Americans can contribute to a successful business model and can compensate for higher than average wages. I don't think our advantages can compensate for higher wages and high taxe rates.

[Ursa Majoris]

I guess what it boils down to is that I have lost faith that the free market can overcome human greed and avarice. Up to this point in human history, unchecked business has not resulted in the fair and balanced life for the workers that has been promised, no matter what the model (slavery, serfdom, capitalism, etc.) under pinning that particular economy. I have come to believe that a truly free market works wonders as a purely theoretical teaching tool but falls flat in the face of man's inability to make objective choices that work for the betterment of society as a whole rather than the betterment of him (or her) personally. While not mutually exclusive goals they are not always compatible either.

Unchecked anything is always bad. This is why capitalism with a small C is overall the best solution for the most people. Unbridled capitalism would be as bad as communism.

[westvirginia]

It's not clear at all that Glass-Steagall would have saved the financial sector. What is truly misleading about your comment, though, is that you place the responsibility for repealing Glass-Steagall pretty much solely on the Clinton administration when, in fact, the act that repealed Glass-Steagall (the Gramm–Leach–Bliley Act) was co-sponsored by three republicans and obtained 98% of GOP support in both the House and the Senate and would have been a law anyway even if Clinton had tried to veto it since it had over 2/3 majority support in Congress when it passed in each chamber.

1) You're right, I should've said during the Clinton admin, not "by"

 

2) Do you REALLY think the financial sector would have been on the verge of collapse if banks and investment houses were still separate? I just can't see it.