AIG Bailout Has Saved America

#76
#76
I was wondering how this whole thing fit into fundamentalist Islam's conquest of America. Thanks for sharing.
 
#77
#77
utgibbs said:
Thanks for this. I had to break it down Barney-style about six months ago that this was dogma for over 30 years.

YouTube - ‪Gordon Gekko "Greed is Good" Speech‬‏

Greed is not good, btw. It is a vice. It does not work, as we have seen in glorious technicolor during the same 30 years when it was dogma: stagnant earnings, low growth, (taking out communist China) increased global poverty.
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The point is everyone is greedy. Would you rather voluntarily "suffer" the greed of the guy trying to sell you a product that will make you better off? Or be forced suffer the greed of croney capitalists?
 
#78
#78
milohimself said:
First, Greenspan goes back to the Ford administration, and had pull almost immediately. He pulls his economic ideas directly from Rand, has been both the pinnacle of libertarian economics and I don't think I'm reaching too far in saying he's one of the most influential individuals in American economic history.

His appointment to the Fed chair by Ronald Reagan was an opportunity he used to promote de-regulation as an insider. This continued all the way through Clinton and both Bushs.

Ruben's views were, in fact, very similar to Greenspan's. So was Geithner, so was Summers, so was O'Neil, so was Snow, so was Paulson, so was Leavitt... The fact is that all the key free-market thinkers have had lofty positions in the WH and in the fed for twenty some odd years.

Ruben had a committee under Clinton called "the presidents' working committee" who is widely accepted as the

When Brooksly Born was appointed head of the CFTC under Clinton and had her first meeting with Greenspan, he apparently said "... We're never going to agree on fraud." "What do you mean?" she replied. "You probably think there should be rules against it." "Well, yes I do." "Well, I think the market will figure it out and take care of the fraudsters."

The bottom line is the 2008 collapse, the Madoff scheme, etc. were essentially the result of "Put the money in a black box and make a profit."

LTCM in the late 90's was a good first case study, and could have wound up worse than the '08 situation if major Wall St firms didn't pony up a few billion to buy that fund.

Things got even more deregulated over the next decade, the CFTC was basically muzzled.

The housing market just happened to be the bubble the OTC derivative market was riding at the time. The hands-off approach to the financial markets will cause the same thing again.

It culminated in one thing: Greenspan, a former absolute champion of the free-market, who said markets can regulate themselves, was forced to reconsider his position, and that the government not only needs to be a referee, it needs to be an effective referee.

I don't blame the financial institutions for doing what they're doing. The problem was systemic. Saying the subprime mortgage crisis was solely because of lenders issuing loans without making sure they could get paid back is like saying the sole reason WWI happened was because Archduke Ferdinand was assassinated. It was a key turning point, but far from being they sole large influence.

The fight still goes on. The response to the most recent crisis, the Dodd-Frank act, and particularly the creation of the CFPB, is still being fought tooth and nail by the financial lobby. And it seems to be a fact of life: regulation and economic booms are opposite forces.

Re: The EPA, they end up in check anyhow as they have more lobbyists and watchdogs on their doorstep than any other government agency.
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Milton Friedman was advisor to like 5 presidents. Doesn't mean they listened to him. I think maybe Chile and China were better about listening to him.
 
#79
#79
nbakerld said:
Milton Friedman was advisor to like 5 presidents. Doesn't mean they listened to him. I think maybe Chile and China were better about listening to him.
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Chile "listened" to him and promptly had a fascist coup and two economic collapses. The "Chicago Boys" were run out on a rail after a decade of failure - even when Pinochet was still in charge. Pinochet, and this probably kept him in power an extra decade, never privatized Codelco.

Yeltsin listened to Milty, and promptly had a Great Depression that impoverished 70 million people.

China never listened to him. They flouted monetarist / IMF policy to their credit.
 
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#80
#80
Gibbs, Gibbs, Gibbs....

Chilean government didn't "listen" to Friedman, they did almost exactly as he thought should be done, and the one area they didn't take his advice (free floating international exchange rates) is universally cited as a major contributor to at least one of their collapses under Pinochet.

Secondly, as we saw after the collapse of the USSR, meteoric rises in poverty and unemployment coupled with negative GDP is a natural short term attribute for any country who shifts significant portions of business to the private sector, and is absolutely not in and of itself indicative of any flaw in free market systems.

The distortions of success under Allende are apparent as the US played an active role in undermining the UP, and economic help from the soviets didn't come through, but I will give that the lot of most chileans were better under Allende than Pinochet. But the economic performance was undeniable.
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#81
#81
milohimself said:
Gibbs, Gibbs, Gibbs....

Chilean government didn't "listen" to Friedman, they did almost exactly as he thought should be done, and the one area they didn't take his advice (free floating international exchange rates) is universally cited as a major contributor to at least one of their collapses under Pinochet.

Secondly, as we saw after the collapse of the USSR, meteoric rises in poverty and unemployment coupled with negative GDP is a natural short term attribute for any country who shifts significant portions of business to the private sector, and is absolutely not in and of itself indicative of any flaw in free market systems.

The distortions of success under Allende are apparent as the US played an active role in undermining the UP, and economic help from the soviets didn't come through, but I will give that the lot of most chileans were better under Allende than Pinochet. But the economic performance was undeniable.
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Not correct, Milo.

The fiat currency is the excuse Milty provided, but it had almost nothing to do with either economic collapse. In fact, it protected Chile from the Volcker Shock, which did collapse the other Southern Cone economies with fiat currencies, and caused "The Lost Decade." Milty even went to Chile and lectured.

Russia endured, not short term failure, but a Great Depression far longer and stronger than the original. It destroyed the middle class and impoverished over 70 million people. Life expectancy dropped to under 60. Murder rate was the highest in the developed world. Privatization did not make the country more productive (they still have not reached output as high as the end of the Communist era, although they are finally closing in on it - off the back of record high energy prices). In fact, it took Putin renationalizing the energy sector, incorporating government back into the business cycle (see Bank of Finland 2008 report stating the government proved far more efficient than the private sector) to stabilize the economy. Again, over 20 years on, they haven't achieved Communist production levels. Absolutely tepid communist growth over that time, and they would still be light years away, despite energy prices.

You are absolutely right about the Allende to Pinochet comparison, although glossing over the fascist genocide which permeated the entire Southern Cone at the time. People were much better off under Allende (voted, by the way, as the Greatest Chilean recently). You are not correct about the economic performance. I believe it took until 1986 to reach the Allende productivity again - long after the Chicago Boys had been run off, and "pragmatism" as Alexasandro Fox et al describe the new economic policies. This despite all the advantages of high copper prices and the inexhaustible lines of credit Allende did not enjoy. Their private pension scheme had to be renationalized recently I believe (or, at least, dramatically overhauled). They have never privatized Codelco.

Bourgeois economics will not win this one, Milo.
 
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#83
#83
MikeHamiltonFan said:
Why are arguments being made in this thread that link Rand and Keynesians? Hayek anyone?
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Greenspan is / was an Rand acolyte. Not sure why she would be linked to Keynes.

Hayek provided the philosophy + Friedman created the monetarist policy implemented after Keynesian revolution.
 
#85
#85
If you bought the AIG secondary offering last night, Congrats, you are down 4% this morning
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#86
#86
utgibbs said:
Chile "listened" to him and promptly had a fascist coup and two economic collapses. The "Chicago Boys" were run out on a rail after a decade of failure - even when Pinochet was still in charge. Pinochet, and this probably kept him in power an extra decade, never privatized Codelco.

Yeltsin listened to Milty, and promptly had a Great Depression that impoverished 70 million people.

China never listened to him. They flouted monetarist / IMF policy to their credit.
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He told the countries to stop printing money (700% inflation). They did. This will always create unavoidable growing pains, but both China and Chile got through those growing pains and did a lot better in the long run, as you can see.

Table 1: GDP and GDP per capita growth, 1810-2003
Per capita Total
1811-1878 0.8 2.7
1879-1929 1.5 2.6
1930-1950 0.3* 2.1
1950-1971 2.0 4.2
1972-1983 -1.1 0.4
1984-1997 5.3 7.1
1998-2003 1.3 2.6
1900-1999 1.5 3.2
1900-1984 0.9 4.1
1985-2003 4.1 5.7

They call it the "Miracle of Chile"

In 1973, Chile had experienced hyperinflation that had hit 700 percent, at a time when the country, under high protectionist barriers, had no foreign reserves, and GDP was falling.[2] The economic reforms were originally drafted by Chilean economists known as the "Chicago Boys" because many of them had studied at the University of Chicago. The plan had three main objectives: economic liberalization, privatization of state owned companies, and stabilization of inflation. The first reforms were implemented in three rounds - 1974-1983, 1985, and 1990 [2] The reforms were continued and strengthened after 1990
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http://en.wikipedia.org/wiki/Miracle_of_Chile
 
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#87
#87
nbakerld said:
He told the countries to stop printing money (700% inflation). They did. This will always create unavoidable growing pains, but both China and Chile got through those growing pains and did a lot better in the long run, as you can see.

Table 1: GDP and GDP per capita growth, 1810-2003
Per capita Total
1811-1878 0.8 2.7
1879-1929 1.5 2.6
1930-1950 0.3* 2.1
1950-1971 2.0 4.2
1972-1983 -1.1 0.4
1984-1997 5.3 7.1
1998-2003 1.3 2.6
1900-1999 1.5 3.2
1900-1984 0.9 4.1
1985-2003 4.1 5.7

They call it the "Miracle of Chile"



Miracle of Chile - Wikipedia, the free encyclopedia
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And it's all bourgeois hogwash. The Chicago Boys were run out of town after the SECOND economic collapse in 1982. Afterwards, Chile tunred to a mixed economy, WAY off the Chicago model, and slowly began to recover. The Chilean economists who took over, like Alessandro Fox, call this the "pragmatic" period.

Growth was slower than under Allende, DESPITE high copper prices and the lines of credit denied Allende (despite being more solvent, as the collapses indicated).

Chile didn't recover to Allende productivity until 1986. It wasn't until the restoration of democracy they overtook the Allende period. Had Allende's Chile grown at an anaemic rate over the Pinochet years, they would only now be level.

The "Miracle of Chile" is bourgeois hogwash - a feeble attempt to apologize for the fascist dictatorship that committed genocide not only in Chile, but across the Southern Cone. It is, in fact, completely unsupported by the facts from the real world as well.

To support it, is to really, really debase oneself.

And it is clear why your numbers reflect the years they do.
 
#88
#88
Somewhat off topic...

When I said that it was wrong for the CIA to support murdering dictators during the Cold War, I was ostracized by some friends from the right. Those on the left who I disagreed with on almost every issue economic and social were shocked. The truth and right and wrong do not change depending on which political group supported the evil.
 
#90
#90
TrueOrange said:
Anyone end up watching "Too Big to Fail" on HBO?
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I saw it. It's a nice story. But you
can't fit the entire story into a two hour show because its so complex. No blame is placed on government policies, or hair dressers from Cali with 3 homes and dreams of getting rich quick, or high yield investors who pushed for more and more AAA rated junk
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