Economic crisises are the function of our approach to life

[eMTe]

Just some random thoughts. Hypothesis of sort.

We all know pretty much about recent economic crisises: credit bubbles, hedging funds etc. The enemy is well recognized - so-called financial instruments which create profits from nothing or simply promises of future profits became the crucial tools of making big money.

Now, dont we all really want this? Let's face it, the modern human is more and more, how to say it, cushy. Wants comfort for himself, for the family, wants better designed kitchen, better car, comfortable vacations and in the end - a huge pension when gets old. But he doesnt want to work to get this, because hard work is no longer a value. Modern human (modern white human belonging to the so-called European-American culture) works (still), but even the work must be comfortable. Everything must be comfortable and must come easy, rules must be clear, law should be obeyed, politicians should be nice, there should be no racism, no xenophobia and our children must be happy and receive nice presents for Christmas. Brave New World in its glorious entirety.

Here come the deliverers of these goods. Banks. Economists. Politicians. Real-estate developers. Where's the demand there must be a supply. They invent the clever way of increasing our happiness. Let's persuade people that not only what they really DO and what they FIGHT FOR brings them money, it's also what they DREAM OF brings money.

Well, this mechanism is very well-known. There's a spirit of marxism floating over this, but Marx wasnt a human rights abuser, he was a scholar.

To the point. First lesson is - you can earn money doing physical job. True? True. W=F*s. Second one - you can earn money doing a white-collar job. True? True. Third one - physical job can be easily rewarded, white-collar not, because many whitecollars workers operate in a grey sector, Id call it semi-religious. You know nothing and you do nothing, you can just give your money to the magician and he doubles it in a month. Or he can double the value of your house. Well, the problem is that for people on Earth, taking things globally, this sudden increase of value changes nothing - no work which would increase the value of your house has been done, not a single nail has been hit by a hammer.

Isnt it our dream? Being wealthy and doing nothing?

[Scythe]

I can live with not being wealthy if it means I can still do nothing. (Didn't read the rest, sorry)

[Chroelle]

I see your point on this one eMTe, but aren't there a lot of actual work out there that is no really "hammer-hitting nail-" work (lets call that labor for now). IS the only actual work labor? What about psychologists? Practising family doctors? Consultants? All people that work with guidance throug listening and telling how thing could be done better for you.
If that is not work that helps society then I am not sure waht is? I can live without a carpentr building me a bigger kitchen, but not without the doctor telling me that my kid needs medicin, the psychologist telling my wife that its ok to be depressed during pregnancy, and thus avoiding an abortion, and I would love to fulfill my dream and practise as a consultant in my line of work, so I can tell people how they can make their work better, save money and avoid stress even more.
Of course there is no doubt that it is easier to see the work done by a carpenter as it leaves a physical object to see and touch, but I work with kids, and do alot of wrok everyday that cannot be seen or touched and as such I also stumble into the issue time and again.

Is it my dream to be rich and do nothing. NO - I would rather not be rich and do what I love. If I could be at home with my kids 24/7 then that would of course be nice, but it would also mean that I would have to skip my dream of doing the work I love.
So I think that most people would love to not HAVE TO do something, but instead CHOOSE TO do something.

[eMTe]

That were just random thoughts. Besides, I watched Wall Street - Money Never Sleeps right before writing this post.

I wasnt attacking the so-called white-collar jobs in general, and even if, rather the jobs involving manipulation and harm to others. My point is that while the societies grow wealthier and happier they also become less productive in terms of physical job done and I think it's not good ((I THINK so, but it doesnt mean I am right). It's a process developing from decades - the so-called by me "true job" is now done usually in developing or poor countries. Worker is simply cheaper there and if the work cant be done abroad there's always an inflow of immigrants. Physical work is CHEAPER than white-collar job, sometimes thousands of times cheaper if we compare a banker with a small farmer for example, but it's still more important. Nobody would make a computer game today if some Chinese wouldnt produce a computer processor in the first place.

Dont understand me wrong, I am perfectly lazy and comfortable person, but my reasoning is dictated more by heart than by mind. I simply feel guilty at times.

[Chroelle]

But I think you are VERY right about some things. We have DREAMS of wht we CHOOSE to do. A poor chinese farer does not have options - we do, and we still complain when the options are not easily reached. So I believe there is something to your rant.

My very last line in the previous post pretty much summed up a discussion I had with some friends about what you would do if you won a huge lottery jackpot. Would you stop working, change line of work, keep working? I think it says a lot about a person what they would do in this situation. There was a program about a woman some time ago, who had won a HUGE prize, but she still had her work as an underpaid cafeterialady. She simply loved her job, and though it was hard and she didn't HAVE TO do it, she still DECIDED TO.

[eMTe]

There was a program about a woman some time ago, who had won a HUGE prize, but she still had her work as an underpaid cafeterialady. She simply loved her job, and though it was hard and she didn't HAVE TO do it, she still DECIDED TO.

No, it works not quite like that. People fear change, so when you put huge money on one scale and life routine on the other, the latter usually weighs more, especially if you're older. But you can put money on your bank account and feel safer, of course.

[eMTe]

There was a program about a woman some time ago, who had won a HUGE prize, but she still had her work as an underpaid cafeterialady. She simply loved her job, and though it was hard and she didn't HAVE TO do it, she still DECIDED TO.

No, it works not quite like that. People fear change, so when you put huge money on one scale and life routine on the other, the latter usually weighs more, especially if you're older. But you can put money on your bank account and feel safer, of course, so now you feel twice as comfortable.

[eMTe]

I watched Inside Job recently and came to an interesting conclusion (not present in the movie, movie is very leftist and tries [sometimes too hard and too visibly] to appeal to the same audience which loves Michael Moore, but makes some strong points anyway) which might be right or might be not. There exist an explanation about stalinism (among some scholars) being the natural consequence of the communist/marxist ideology, maybe greediness of bankers and economists, crisises, bubbles etc. are the natural consequences of capitalist ideology?

Just a thought.

[Zyx]

I didn't find Inside Job leftist, nor trying to appeal to Moore's audience even though Matt Damon's narration is very down to earth. Anyway, I believe it was Adam Smith who warned that letting capitalism run its course without any oversight will end up in tears. The asymmetry of information and other market failures make sure of that and only the most hard-headed laissez-faire capitalists pretend they do not exist. Too bad there are many such creatures, in positions of power no less.

[eMTe]

I think it was leftist, because the Wall Street guys were shown only as bad ones and people who warned them about dangers only as good warm guys. Watch my post above, in fact, long before watching this movie I expressed the idea similar to some interviewed by the director - that people who do "real" jobs are now losing to the people who promise miracles and dreams fulfilled without actually doing anything in terms of old-fashioned approach to work. But Id love to see the movie where there's a balance - ten guys speak: bankers are greedy and regulations are needed and ten others say: yep, but what's bad in it, WE ALL want to make money, and all these derivatives and swaps which you dont understand are just another tools of making money.

Remember that none of the figures criticized in this movie was ever charged with fraud or anything, so the basic accusation of the movie is that "we" are right and "they" are wrong. Since there's in fact nothing the director can accuse them of on the legal ground he uses nifty tricks and tells us (just like Moore) that they are simply bad greedy guys and something must be done about that. Doesnt it sound leftist or revolutionary? To "do something" with "those on top", because common people are oppressed?

I am leftist by heart, but I just need a more objective movie to watch, because this one is just the outright propaganda.

[Zyx]

I didn't really see it that way. The people on the "left" are not "left", they were for most part believers in free markets. And the argument actually is that "We know that bankers are greedy and regulations are needed so that their greed doesn't go against the interest of the society as a whole." and on the other side "We don't need no regulation."

Of course they were not charged with fraud because for most part what they did was not illegal, but it was pretty clearly "wrong" by any moral system. I would not say it was one-sided because it truly was a scam. There's nothing the bankers can say to justify their actions other than that they were allowed to do all that. Their only defense is that no-one was stopping them from making a killing on an unsustainable market.

Of course the movie tried to make people act so that the broken system could get fixed, because as it is none of the actors have any reason to change the status quo. There obviously is a problem, and it seems like the people responsible for keeping common people from being screwed are not doing their job.

[eMTe]

it was pretty clearly "wrong" by any moral system.

I dont think it's the question of morality (which is disputable). People who are primarily white male jews (there's a hidden - for me open and deep - antisemitism in this movie, but probably not everybody sees it) are not immoral just like that, they also have their feelings, thoughts about life, they have families. I mean, movie is a movie, you have to dramatise some things, but when you deal with real people you have to be careful. It's not like, bankers decided that they are above the law, because they live in US, the most powerful country and they can earn millions on common man incompetence and nobody will see it. For example, the movie shows Greenspan and Bernanke in bad light, but cant accuse them of any wrongdoing. Ferguson, just like Moore simply takes two and two and makes four of it. History teaches us that things are usually a bit more complex and from time to time you have to make five from four.

I would not say it was one-sided because it truly was a scam. There's nothing the bankers can say to justify their actions other than that they were allowed to do all that. Their only defense is that no-one was stopping them from making a killing on an unsustainable market.

So, what's illegal in this? Why they havent been stopped? Because bankers corrupted politicians?

Sums? Documents? E-mails exchanged? Cell phone billings? Are there proofs in the movie?

Of course the movie tried to make people act so that the broken system could get fixed, because as it is none of the actors have any reason to change the status quo. There obviously is a problem, and it seems like the people responsible for keeping common people from being screwed are not doing their job.

I dont fully agree. I mean, being more clever, being born in a place more suitable to live doesnt make you a bad person. I feel sorry for dying kids in Ethiopia, but, let's face it, we both (you and me) do nothing for them and prefer to play computer games in our comfy chairs. And so the bankers in US do, they just want to be safe and feel comfortable. When Gordon Gekko says "greed is good" he says "we are all one shitty greed".

[Zyx]

It's not like, bankers decided that they are above the law, because they live in US, the most powerful country and they can earn millions on common man incompetence and nobody will see it.

There are accounts of exactly this. Sure, it does not apply to all and such cases are exceptions but it was a scam. Whether or not all the bankers realized that is entirely different thing. The whole operation was rotten. There is no reason why it was allowed to happen unless you count a blind belief in the invisible hand of free markets as a reason.

For example, the movie shows Greenspan and Bernanke in bad light, but cant accuse them of any wrongdoing.

That's the point, what they and the bankers and others did was not illegal or wrong in the sense of the law. Being wrong or making bad investments is not a crime. Giving out mortgages to people who don't know what they are doing and that they can't pay it back is not illegal. Gaming the rating agencies to give investment-level grades to bundles of CDOs and CDSs ins't illegal. AIG for some reason or other buying buying massive amounts of them was not illegal, just insanely stupid. Investment bankers selling these supposedly safest instruments on Earth to Norwegian pension funds was not illegal (unless they knew what they sold was junk).

History teaches us that things are usually a bit more complex and from time to time you have to make five from four.

Of course things are complex. You have to remember that this is a movie meant for general public. It can't go to any depth. This isn't even the best documentary about the crisis, it's merely the most popular.

So, what's illegal in this? Why they havent been stopped? Because bankers corrupted politicians?

Nothing was illegal. They were not stopped because the safeguards were not there, and one of the reasons was the revolving door between the toothless SEC and Wall Street.

Sums? Documents? E-mails exchanged? Cell phone billings? Are there proofs in the movie?

There's not much in the movie, but there are many good accounts of this readily available. Articles such as in the Rolling Stone, books such All the Devils are Here, The Big Short and Freefall. I very much prefer The Flaw over Inside Job, even though the Inside Job does a very good job compared to other documentaries, like for example Moore's own Capitalism: A Love Story.

I dont fully agree. I mean, being more clever, being born in a place more suitable to live doesnt make you a bad person. I feel sorry for dying kids in Ethiopia, but, let's face it, we both (you and me) do nothing for them and prefer to play computer games in our comfy chairs. And so the bankers in US do, they just want to be safe and feel comfortable. When Gordon Gekko says "greed is good" he says "we are all one shitty greed".

Yes, the bankers are not bad per se, they should be a productive part of a well-functioning economy. The whole point is that we know that they are greedy - that's their function, they're supposed to make sure capital goes to good use - and we know there has to be regulation to stop them destroying the economy in the pursuit of greed. However, it is in the interest of Wall Street to not have that much regulation so that they can make more money. However, that goes against the interest of the society.

The mortgage crisis has many parallels to the S&L crisis just over a decade ago in the US and there was no reason it should have happened except that it was let to happen. Safeguards were removed, the incentives were wrong and everyone just turned a blind eye while the bankers were making a killing exploiting American home-owners and Norwegian pensioners.

[eMTe]

Whether or not all the bankers realized that is entirely different thing. The whole operation was rotten. There is no reason why it was allowed to happen unless you count a blind belief in the invisible hand of free markets as a reason.

Maybe not rotten, but risky?

That's the point, what they and the bankers and others did was not illegal or wrong in the sense of the law. Being wrong or making bad investments is not a crime. Giving out mortgages to people who don't know what they are doing and that they can't pay it back is not illegal. Gaming the rating agencies to give investment-level grades to bundles of CDOs and CDSs ins't illegal. AIG for some reason or other buying buying massive amounts of them was not illegal, just insanely stupid. Investment bankers selling these supposedly safest instruments on Earth to Norwegian pension funds was not illegal (unless they knew what they sold was junk).

Cunning vs Stupid - 1:0.

Yes, the bankers are not bad per se, they should be a productive part of a well-functioning economy. The whole point is that we know that they are greedy - that's their function, they're supposed to make sure capital goes to good use - and we know there has to be regulation to stop them destroying the economy in the pursuit of greed. However, it is in the interest of Wall Street to not have that much regulation so that they can make more money. However, that goes against the interest of the society.

Bankers, if we take them as a whole - FED chairmans, various CEOs etc. and if we prove (unlikely) that they were doing this all intentionally should receive the Nobel Prize. Creating the bubble which brings so much money (to its creators) whose results were so widespread and incited the societies worldwide to discuss about politics is a work of genius minds. Read my post above - I think it was natural consequence and also the great lesson. If there were frauds or any other crimes in the process - let the proper forces to find out the truth.

What Im afraid though, is that the recent economic crisis will be used by some forces, lets call them ochlocratic and paidocratic to revolt against everything what's old and traditional. For the lack of better explanation - Id rather have a greedy dishonest banker as the ruler of the world than anyone else, because his greediness and dishonesty is the manifestation of freedom and inner (but hidden) truth about all of us. If somebody talks about equality, sincerity and similar rubbish I simply dont believe him. Socialism is nice in theory, but scares me as hell.

[eMTe]

Interesting:

http://news.sciencemag.org/sciencenow/2 ... -rich.html