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UNDERSTANDING HUMAN NATURE
Did we really ever believe that when the Markets started to Regulate the Financial Services Industry, that they would simply sit back and allow themselves to be regulated ?
Sadly, Yes. Those who mattered, believed.
"The markets will regulate themselves,' Wall Street promised. The markets did! And what did the market individuals who said they could regulate themselves do? They Ran in mass to our Congress and demanded and lobbied for the Monies of the US Tax Payer, the same hand-outs they decried for average citizens. "Don't expand consumer protection" they cried, "that is anti-market." " Don't limit us', they said, 'we are grown men able to guide ourselves and the financial future of a nation.' We should have responded, 'Yes, able to guide yourselves straight to Congress to grab our Public Monies backed by lobbying, market theories, and 'prognostications of doom.'
What were their battle cries? "We are Too Big to fail! It's a Market Meltdown! THE ENTIRE FINANCIAL SYSTEM WILL COLLAPSE !! "
What did the American people yell back in 10s of thousands of emails and communications to Congress? "NO BAIL-OUTS !! LET THE MARKETS REGULATE THEMSELVES !! "
So who really believes the tale about Free Markets ?
We are Not Angels, who will refuse our own immediate profit in favor of a possible future benefit to all the markets, especially not when our Neighbor Financiers are making ever larger fortunes from securitization, even if it is securitization of extremely overpriced assets (in this case homes), even at extreme Risks. So much for foresight and market forces that prevent Unreasonable Risk-taking, or should I say Unreasonable Catastrophic Risk-taking.
But let's look again, Big Business is NOT really running any extreme Risks. Corporate America is fully aware that they can Tap the Public Funds of the People of the United States of America, direct access to the wealth of a Nation, and as we have seen, to the wealth of our future and our children's future, $1 Trillion+ to be paid back from OUR Future earnings!
In Any Imaginable Future, what Congress will withstand the cries of "THE COLLAPSE OF THE ENTIRE FINANCIAL SYSTEM AS WE KNOW IT'?
I Salute the 110th Congress of the United States of America, for shocking the Entire Financial World by refusing to cow-tow to the simplistic Ransom demands for a Blank Check!
I can only humbly thank the men and women of 110th Congress who had the Strength of Character and seadfastness to again VOTE NO on the 2nd Bail-Out Bill, recognizing that the Bill had No Teeth, the Oversight Board No power, that Homeowners would not be aided, and that Treasury Secretary Paulson would not regulate his own interests. Only Exceptional Individuals stand in the face of raging opposition and say 'NO, these actions must be taken with calm thought based on accurate unbiased information in the interests of an Entire Nation.' Thank you.
When we, as the ultimate Capitalists, look at those countries who have espoused Communism, we laugh at their blindness to Human Nature. We say to ourselves, silly them , if they had any vision, they would realize that Communism can never work because it does NOT take into account Human Nature. Silly Us! How blind we also have chosen to be about Human Nature. The markets will NEVER regulate themselves!! Because Wall Street and Corporate America won't allow it !! They will reach out their powerful fists for the Tax Monies of a Nation.
We who do believe in Free Markets must Recognize and Accept this!
"The ideology of a perfectly self-correcting free market has given way to what might be described as a raid by America’s biggest banks and corporations on the public purse, supposedly justified by benefits to the broader public which seem never to materialize. What happened to the ideology? On closer inspection, it turned out to be something of a cover all along." ROBERT REICH, Dec 18,2008, http://robertreich.blogspot.com/
Recently I heard some words on Public Radio by Parker Palmer in reference to the Productive power of Love to produce Real results in the Real world, even where there are only scarce financial resources, that really rang true for me in reference to many issues:
"SECRETS HIDDEN IN PLAIN SIGHT; SECRETS WE HIDE FROM OURSELVES"
The secret is that only Small Business and the Working Class that really believes the tale about Free Enterprise, possibly because we know nobody is going to come and hand us a Bail-Out, we only have to look at the free fall of homes going into foreclosure. We must rise and fall by our own efforts. BIG BUSINESS DOES NOT ESPOUSE FREE-MARKETS! They talk a good talk, but it IS only talk.
We who do believe in Free Markets must accept that (1) on the verge of Failure, even because of their own ineptness and lack of foresight, nobody just lays down and dies, hardly anyone. (2) Big Business has not Only the Power and Money but the Credibility to move our government, and often us, in the direction they choose. Especially as we and our Government consciously and unconsciously believe that those who have succeeded know better! - even though already in our recent past, the Great Depression proved that the Financial Markets could NOT regulate themselves nor foresee the results of their errors and required Laws to prevent Cataclysmic Market Collapse!
THERE ARE NO FREE MARKETS !
Always someone has more influence in Government. Men and Women Successful at seeking their own financial success have done so by their ability to manipulate not only resources and innovations but people and ideas. Why would they stop at government's door? They wouldn't! It really is an unreasonable expectation.
Telsa might have been the greater inventor, but Edison was the better marketer. Galileo may have developed the telescope, but other men developed the shipping fleets that took advantage of the navigational information his invention fomented. Einstein may have developed that atomic theory, but ..... and on and on.... BUT what were those other men's names?
So we must, as thinking individuals, start with the premise that when the market regulates as it is doing now, business will NOT allow itself to be regulated by the market but rather will resist market self-regulation with all its might and by all means possible, including running to Congress with every imaginable authority and prominent successful businessman and demand and beg for market intervention.
Why doesn't the theory of Cutting the Tax Rate of the Wealthiest Americans Work?
1. It presuposes that Market interferance is BAD for the market, yet Business will NOT accept the market regulating them when a harsh slowdown develops. As we saw in October, they will have their tax cut and then still demand government intervention in the form of handouts in the name of not letting the market fail, which will then be coming in ever greater amounts form the pockets of the middle class. The markets working free of government is a Beautiful idea, but NOT one likely to happen in today's real world. ....
2. It's proponents are not seriously considering Human Nature, and therefore propose their theory in the VOID of minimum government regulation, which means that these harsh market failures caused by extreme risk taking will continue to develop. And Extreme risk taking without much internal oversight will resume eventually because serious short-term profit incentivizes risk-taking and Extreme profits disincentivizes business from taking a closer look at the activities that produce that profit.
3. By Mr. Envin's own examples, during FORD's presidency the Tax Rate on the wealthiest Americans was cut from 79% to 65% and then Carter cut it again to 25% and Reagan lowered long term capital gains tax to 15%, and in 2003 Bush passed comprehensive tax cuts for capital, and STILL TODAY WE ARE HERE IN THE MIDST OF FINANCIAL CRISIS... so all these tax cuts to the wealthiest Americans have had NO effect on PREVENTING a harsh slowdown and possible market collapse.
4. Some might infer that temporary tax cuts in the face of a slow down is the way, but Mr. Envin has made the case, strongly, that Temporary Tax cuts have NO effect because (A) Business interprets them as a windfall and does NOT apply them as true capital and (B) Historical Data shows that Individuals who received rebate checks in 1971 and 2001 and 2008 used them NOT as purchasing stimulus but rather to pay off debt (like credit card debt) or to shore up their savings. No perceivable stimulus to the economy was felt, and HERE WE ARE TODAY, less than a year later, in the middle of a strong recession.
5. There is only 15 - 25% in taxes left to cut for the wealthiest Americans. What happens when we reach 5% or 0%. What do we cut then? Who builds the roads, bridges, and schools? Business? sure, maybe and maybe not...
Nuclear.... we need what we already have in order to test new theories and possibly develop better methods in the area of nuclear. But we cannot proliferate nuclear plants because we cannot foresee or make accurate predictions about the efficiency of nuclear storage, or on anything else, 100years into the future, let alone 500 o 5000 years from now.
We can't even predict or prevent a Cataclysmic Market Crisis 3years before it happens, even though it was clearly preventable and gave plenty of warning signs, not least of which was the Asian Credit Crisis of 1998 and the Clear Numbers that showed that in many cities, including Miami, Median house prices had doubled between 2003 and 2005, and then almost doubled again by the end of 2006. Did the Federal Reserve, the Treasury, and the SEC really believe Median Income families had received 400% increases in salaries in those years? What math is being taught in our schools of economics? It's NOT Applied math. Unfortunately I believe it must be philosophical math, the type you think about but don't actually use on real world numbers.
Median Income, Median House prices, # of homes bought and Refinanced in those years, and a little math and the answer is 'It's an asset Bubble of Enormous proportions and it involves so many individuals that a Financial Crisis is imminent."
Maybe it's was a failure of Empathy. Did these agencies simply fail to grasp that these Numbers do Not exist in a Vacuum but represent Real people with Real families and Real responsibilities.
The Markets, in many ways, resemble all Natural systems, in that they are composed of natural animals called humans filled with natural instincts and urges (like greed and fear) honed by thousands of years of evolution in a natural environment on how to obtain and retain resources.
Nature does NOT regulate with soft blows but rather with vicious Killing Blows. If you apply heat to metal, nothing happens for a long time other than the metal gets hot, until the melting-point is reached, and then it all starts to break down. The Financial Markets work in the same way. It gives signs and warnings and then when it reaches the Market Boiling Point, it goes into free fall, regulating the market participants with Giant Free Falls in stock prices and dealing out swathes of pain and poverty in every direction. When the market corrects Huge Missteps, it does it with Huge Consequences! And business runs for cover, Bail-Outs, Bridge Loans, and any other monies that Belong the the PEOPLE of the UNITED STATES OF AMERICA.
Basically, WALL STREET screamed with one voice, "WE DEMAND GOVERNMENT INTERVENTION!"
(If you needed proof of their short-sightedness, You heard it loud and clear... They ditched self-determination first.... really not smart at all.)
And then when Congress Voted down the First Bailout plan, the Banking System went to small and medium businesses and told them how their businesses would have no credit lines, their credit cards would be frozen, and the whole system was on the verge of collapse. Then, once they had them fired up, Finance and Banking sent out the ARMIES of small and medium businesses to our Congress, to fight with the Sword of their WORDS and tell the Narrative of their concerns.
For those of us who believe in Free Markets, we MUST Accept reality, for the welfare of Future Generations, that the markets will NEVER regulate themselves because Big Business will never allow it !! We MUST recognize and Accept that our FINANCIAL MARKETS can and do Act in ways that pose Unreasonable Catastrophic Risk to the Entire Economic System of the Nation.
If we wish to avoid the Cataclysmic failures of the Future, we can no longer afford to put into Practice Economic Theories, no matter how beautiful and dear to our hearts, without taking into account the Realities of Human Nature.
Free Markets are still possible and should be espoused in every REASONABLE situation that does Not pose Cataclysmic Risk of Failure, but they Must be espoused with the full understanding of Human Nature.
One day, Cataclysmic Failure will come at a time of National Weakness, and put our entire system of Government and way of Life at imminent Risk. No Individual or Corporation can be allowed to risk and gamble the gains of 2500 years of human advance toward Enlightenment and Individual Freedom.
It is sad, that only 70 years after the Great Depression, we forgot the dangers that Financial and Banking system could pose to the entire Economic Structure of the Nation.
Act to prevent Cataclysmic Failure !
What is the ROLE of government ? I think it's clear: "to provide for the COMMON DEFENSE, to promote the GENERAL WELFARE and secure the BLESSINGS OF LIBERTY to ourselves and our posterity".. Does it say Welfare and Liberty ONLY for the wealthy? I live comfortably and happily everyday with regulation: regulation to prevent throwing trash out your car window, regulation that you don't lie or MISREPRESENT your financial position in order to entice investors, regulation that we don't walk naked in the middle of the street (even though this harms no one - except est), on and on and I don't notice any of it, not if it is PRACTICAL AND REASONABLE.
MONOCOLUTURES
copy from my gmail + Irish Potatoe Famine..000
Monocultures have hardly any and mostly NO chances of survival..
letting someone else Dictate is a monocolture
trying to control others is a monoculture
i think this is understandable.... or i hope so
TO THE FINANCIAL SERVICES INDUSTRY:
I urge and exhort you, write your own regulations, Legislations, Clearinghouses, etc.. ! Who better understands your Risk Models, Algorithms, and Fractals ? Write the details, to the extreme of your ability, knowledge, and foresight. Sit down today and pretend that you are Thomas Jefferson, Benjamin Franklin, or John Adams, and write it, write the SIMPLE, Flexible but Powerfully effective regulation that they would have written in your place to prevent the Systematic Market Collapses of the next 200 years..... and beyond.
TRANSPARENCY! TRANSPARENCY! TRANSPARENCY!
What SIMPLE CommonSense regulation would these men have written to protects the Nation from the Systemic Collapse of our Financial Systems while ensuring the Flexibility the system needs.
Today, it is we who stand at the precipice, the precipice of a new age. Look out and see, look out 200 years into the future. Your direct descendant is standing at the flowering of a new age in a new world you cannot see and can barely comprehend. The Financial capital built up over generations of unprecedented growth and prosperity, protected by the Regulations YOU envisioned and espoused today, has given him and his generation the ability to innovate and reach for humanity's greatest heights at the moment of its greatest peril. Today, you work and write that future in the Actions and Ethics of the moment.
YOu who brought forth forces and fears that threaten the very ideals on which our way of life is built... With the work of a few years, you brought us AGAIN to the brink of Economic Ruin, for the sake of ephimeral monetary gains that are now lost, wiped out along with the doggedly accumulated wealth of some 20 years.
YOU must right this wrong... Correct from within ... Stand up and individually and collectively correct the system from within.... Bring forth the solutions, write them, that they come from within the industry itself. You must now truly self-regulate by Writing Yourselves the legislation that protects the Financial Markets and the Economic system, and the wealth of generations from EVENTS SYSTEMIC COLLAPSE.
YOu have somehow threatened (Risked) the very ideals on which our way of life is built. Please, Stand up for the ideals of self-government that our nation was built on. Write the laws yourself! I challenge you to rise to the challenge of a Millenium, by the example of your independent, stubborn, cranky untamable self-determination.
QUOTE THE HedGE Fund guys, Clearinghouse.
I think i reeled when all this happened: It scared me, Maybe I'm a little afraid. This happened so easily ... it had been so easy... for all of us to act like cattle, or maybe spawning....salmons?... following each other off the cliff. I want to believe that we can guide our own destiny. I know we are our own only salvation. I know there is no one out there smarter than anybody else, not really, not enough, to guide an entire system. We must guide as a group of a million brains each working independently and interdependently. We must somehow do it for ourselves. I want to KNOW that it is true,. I NEED to know that it's true. I have3 to believe that we can write the legislation for ourselves.
Kudos to the 3 Wise of the People who came to Congress on January 6th and spoke for the LAW.
The Joyous WORDS of Two Inspired PEOPLES
whose Voice is Bright... enough... to create rather than destroy
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