Saturday, December 20, 2008

The Financial Industry Sucks

Yea, I know, that is abundantly clear to everyone now. But it really isn't. Krugman has a little article that scratches the surface. It still doesn't go far enough. Capitalism has some serious upside for innovation, job creation (low unemployment), and development. The benefits of capitalism and the free market begin to disappear as companies get larger. Mega banks being able to spread across the whole of the financial industry and gobbling up smaller banks/investment banks/anything else that makes money producing nothing is a bad trend, and while that should be obvious now, that has been accelerated by this economic crisis rather than reversed.

Large companies can more easily exploit workers, squeeze out competition and engage in behavior that serves their and not their customers' needs. The horrible working conditions in factories around the turn of the (last) century, and the conditions in third world manufacturing plants today are among the results of this. In banking it is not as obvious because their "production" comes not from workers actually producing anything but from people--nominally customers--giving (lending) them money. Bank customers are the equivalent of the manufacturers in productive industries. In return the bank gives very modest service (you can withdraw some of it--though seldom all--you may receive a pittance in interest payments, etc.).

Banks have never been particularly noble institutions (and for you Christian types out there the Bible does not have nice things to say regarding their practices). Insurance companies are even worse. Investment banks, which are a strange hybrid of casino and banking, are right out. All of these institutions, however, have become necessary to our country and lifestyle. In the case of Insurance, their lobbying has been so effective that it is illegal to drive without contributing to the profit of a private industry.

I have a similar knee-jerk reaction against the notion of government getting bigger and providing more services as many others have, but if the government is going to mandate that we have insurance, then they should also mandate, or charter, a not for profit institution that provides such. In banking we actually do have those--credit unions, which are wonderful things that more people should use--but they are being drowned out of the market by the mega banks. Investment banking will never have such due to their nature, but should also never be even remotely considered for a bailout.

The financial industry provides the grease for the wheels of capitalism, and so it cannot be allowed to fail. There are only two ways to ensure that happens: government control, or government breakup. As it is, we have privatized profit while placing the burden from loss on the taxpayers, if we don't reap the rewards, we cannot afford to foot the bill for the losses.

Friday, December 19, 2008

Voting and Intellectualism

First, for all the talk of intellectualism that exists on the left, most people clearly do not know what it is. Barack Obama is thoughtful, intelligent, capable, educated, open mined, but NOT, in the purest sense, an intellectual. He is concerned with getting elected, and affecting change. Neither of those are intellectual pursuits, and in fact both--particularly the former--are more often counter-intellectual.

Many people in the progressive movement believe that there is a logical/rational "correct" side on many given issues and that they occupy it, as is evidenced by the abundance of highly educated and intellectual types on their side.

There isn't. There is no such thing as a purely rational/logical position. None. There is always an emotional underpinning.

It is overly simple, but the emotional underpinnings for the generic left and right in this country can be boiled down to: "People have inherent dignity and worth which supersedes their actions," and "People have no value that their actions do not make real," respectively.

If you think that people have great inherent worth, then you probably vote Democrat. If you believe that people make their own worth you likely vote Republican. If you believe that life is more complicated than that, you probably vote for the most competent candidate, you are also in a tiny minority and likely very frustrated by both sides. If you don't even begin to concern yourself with such thoughts then you are one of the group of idiots who are actually swayed by campaign advertisements.

Policy and Practice

I gave up on Republicans a while ago. Simply because of their policies. But Republicans do not apologize for who they are, what they want/believe in, and they are willing to go to the mattresses to accomplish their stated goals. Regardless of policy/platform/issues, every political party should behave like this. There are different points of view in this country. All of those views are, to the extent possible, represented by two political parties. If one of those parties fights tooth and nail for its issues and the other acquiesces and tries to play nice and get along with everyone, only one party's set of views gets well represented.

My real dislike of Democrats in Washington is not with policy but practice, their unique ability to cave to any Republican pressure, despite overwhelming public opinion against Republicans, is laughable, lamentable, and downright depressing. I voted for Obama, but he gets very little slack from me. If he doesn't get this country out of the rabbit hole--and fast--I'll be ready for some new leadership. I won't vote Republican because their views are just too often wrong, but if voting for Democrats doesn't actually mean anything, then I will "throw my vote away" on third party candidates and write-ins in future elections.

(I'm glad I'm not the only one who feels this way. From kos at Daily Kos:

  1. Republicans ask for the absurd, threaten nuclear/economic armageddon if there's no action.
  1. Democrats cower in fear.
  1. We try to talk some sense into them.
  1. We get scolded for being unserious, and wanting the terrorists to win/people to lose their jobs.
  1. Democrats promise oversight!
  1. We roll our eyes.
  1. Democrats cave on every single point, but pretend to win anyway.
  1. We wonder what we ever did to deserve this sorry bunch of representatives.
  1. Republicans do whatever the hell they want.
  1. Democrats pretend that no one could've ever predicted Republican outrages and express "outrage". Sometimes, they even write a sternly worded letter!
  1. We make "no one could have foreseen" jokes and wonder what we ever did to deserve this sorry bunch of representatives.
  1. Rinse, lather, repeat.

Both parties suck, but one does it with their stated ideology and the other does it by being too damn weak to stand up.

Friday, December 12, 2008

Deserve's got nothing to do with it

I love the questions and polling about whether this group or that "deserves" a bailout. The answer is so simple: Not a single one of 'em does. None. Of course that hasn't a damn thing to do with whether it is necessary or not. It is. For reasons which should be abundantly clear to anyone paying attention. That doesn't make it good, or right or fair or any of a number of other adjectives you can throw at it. More job losses in a recession won't make things better. More financial meltdowns and mergers won't make banking safer. More foreclosures won't make markets adjust in a sane way (though, this one really makes me less than happy).

I too have entertained fantasies about the end of the world as we know it, and doing nothing would lead to at least one of those (the "as we know it" is very important there). I'm fairly sure I would be fine, but I know how to create fire and won't die if I have to go through winter without power. Seriously, though, it is not fair or justified, but necessary. For my Christmas list, let's forget the not gonna happen "peace on earth" and "goodwill toward all" (or men, if you aren't crazy PC).

Dear Santa,

I would like to limit total compensation for execs on bailout money receiving groups to <$100k...not gonna happen.

I would like for financial institutions to be broken up into smaller entities to produce better competition and an eye toward sanity...not gonna happen.

I would like for the big 3 bailout to be accompanied by the government telling them that 27 mpg is a required minimum for any vehicle produced, and that the fleet average must be >40 mpg...not gonna happen.

I would like for people who got mortgages they can afford to have their student loan debt forgiven (as education apparently worked for them, and this does not include me, as I couldn't afford to buy w/o some dumb ass exotic mortgage)...not gonna happen.

I would like for insurance companies (AIG) that receive bailout aid to be restructured as non-profit entities...not gonna happen.

I would like for the execs at companies that lead us down this road to be imprisoned--starting with our very own (thankfully for not much longer) POTUS, his veep, and all their cronies...not gonna happen.

Goodwill toward others is a whole lot easier when "others" doesn't include "them."