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Class Warfare! Elites v the poor

mattrodstrom
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11/5/2009 7:49:46 PM
Posted: 7 years ago
In my introduction to anthropology class today my teacher introduced the topic of how a society is structured by its economic classes. How the "elites" dominate the others, and essentially bleed them dry.

In passing she mentioned the recession of today, which was of course a prime example of how the greedy rich make money gambling with the livelihoods of the poor.

After class I asked her about how G. Bush attempted in 2003 to regulate fannie mae and freddie mac, such that they wouldn't make such terrible, unsustainable guarantee's of bad loans, but was rejected from congress being that, in the words of Barney Frank: 'These two entities are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.'

And reminding her that such bad loans were only made after the govt. encouraged them and put the gaurantees in place such that the banks would pick them up, chop em up, repackage'em and sell them as high finance explosives.

So in this light it would seem that it is the causes of the poor which caused the financial crisis.

Then again maybe a Marxist, social warfare, perspective isn't the most realistic way of looking at such things.
"He who does not know how to put his will into things at least puts a meaning into them: that is, he believes there is a will in them already."

Metaphysics:
"The science.. which deals with the fundamental errors of mankind - but as if they were the fundamental truths."
Volkov
Posts: 9,765
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11/5/2009 8:21:30 PM
Posted: 7 years ago
So, you're blaming the poor for causing a financial crisis.....

Alright, lets clear up the first misconception here. The poor didn't actively or passively seek to bring down the economy; the businesses that decided to open up their mortgages and what not to those that couldn't afford it are the ones who, with full knowledge of what they were doing, made that decision. You cannot blame the poor for being poor when they took up the mortgage company's offer; you can, however, blame the mortgage company for being stupid enough to do what amounts to exploitation of such a situation.

The second misconception is where exactly the government failed in this regard. You almost hit it on the nail when you noted that Congress' failure to enact the proper regulation to keep these unsustainable mortgages were a huge cause. Where you went off track was when you said that the government's guarantees for these loans was the issue. The government guaranteed these loans, yes, but they had backing behind it; what failed was the element of that control over allowing businesses to exploit the dreams of those that simply couldn't afford it. Had it not gotten so out-of-control, then the situation would have been different, but unfortunately it did.

And, really, saying that the "causes of the poor" caused the recession is like saying "the rottenness of the cheese in my sandwich caused me to be sick."

It might have an element of truth, but its why you don't put the cheese on the sandwich - use your sense of sight and smell to prevent it.
Xer
Posts: 7,776
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11/5/2009 8:24:39 PM
Posted: 7 years ago
Volkov, the mortgage companies were forced to give out loans to those in poverty by decree of Barney Frank and Chris Dodd. Bush tried to stop it, but Barney wouldn't let it happen. A person on welfare could feasibly get a $300,000 mortgage, all they have to do is apply - the mortgage company would be forced to comply - due to gov't.
mattrodstrom
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11/5/2009 8:35:40 PM
Posted: 7 years ago
volkov
lol, absolutely. I don't think that a Marxist class warfare point of view, is the right way of thinking about the economy.
People make decisions to benefit themselves. If a person takes a job, it's b/c they think it's better than not taking it. An "elite" is not coercing or dominating them by offering it.

I just wanted to point out that viewing the housing meltdown as a the greedy rich gambling with the lives of the poor is a silly way of looking at it.

Sure there are problems with the way pay is incentivized, and perhaps problems with the accountability to shareholders,
But there is also problems with the government skewing markets to the point of unsustainability in trying to graft social programs into them, instead of keeping them separate.

I am frustrated with the fact that in every social studies class, other than economics, the predominating point of view is a Marxist one.
"He who does not know how to put his will into things at least puts a meaning into them: that is, he believes there is a will in them already."

Metaphysics:
"The science.. which deals with the fundamental errors of mankind - but as if they were the fundamental truths."
Volkov
Posts: 9,765
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11/5/2009 8:40:21 PM
Posted: 7 years ago
At 11/5/2009 8:24:39 PM, Nags wrote:
Volkov, the mortgage companies were forced to give out loans to those in poverty by decree of Barney Frank and Chris Dodd. Bush tried to stop it, but Barney wouldn't let it happen. A person on welfare could feasibly get a $300,000 mortgage, all they have to do is apply - the mortgage company would be forced to comply - due to gov't.

I know, I commend Bush for doing as such; he knew the proper regulations in place could have stopped this egregious thing from occurring.

What the difference is between Frank's idea of "regulation" and Bush's idea of regulation was that Frank was pushing a social agenda on the mortgage companies when he shouldn't have been. I disagree with that immensely; it isn't the place of the government to set the standards for companies, but to make sure those companies don't abuse or exploit their customers, and to make sure individuals that cannot meet the standards of the company at least have the opportunity to in due course.

Bush's idea was sound; regulate companies so that they couldn't do this, and make us all end up in this nightmare.
mattrodstrom
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11/5/2009 8:43:32 PM
Posted: 7 years ago
I don't like the idea of "the rich" vs "the poor" because that's not the way economics works.
"He who does not know how to put his will into things at least puts a meaning into them: that is, he believes there is a will in them already."

Metaphysics:
"The science.. which deals with the fundamental errors of mankind - but as if they were the fundamental truths."
Volkov
Posts: 9,765
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11/5/2009 8:53:08 PM
Posted: 7 years ago
At 11/5/2009 8:43:32 PM, mattrodstrom wrote:
I don't like the idea of "the rich" vs "the poor" because that's not the way economics works.

It isn't but it doesn't matter; the divide exists, and Marxists play on that well.

What they don't realize though is that it is foolish to try and force a social agenda on the economy, because it simply won't maintain its productivity and capabilities once you do.

The best option is to create regulations to limit harm and abuse, and to have the government invest - not control, but invest - in the economy to help compliment the social issues of the day where it can. The creation of jobs, for instance.

But forcing a company to sell to consumers who cannot pay, or hire people who are not qualified, is a foolish endeavour on the part of the government. If the state really wants to help those that need such things, then they should create programs designed to give them the qualifications needed, or invest in products they can afford.
mattrodstrom
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11/5/2009 9:08:40 PM
Posted: 7 years ago
I agree in all except for this:
the govt. should "invest - in the economy to help compliment the social issues of the day where it can. The creation of jobs, for instance."

I think that the gov't makes a poor investor. For example it has a bad tendency of "investing" to prop up naturally dying, and inefficient areas of the economy, such as manufacturing. It also has the tendency to invest for it's own political agenda, such as "green tech" which may or may not be useful areas of expansion: for example hydrogen fuel cell, from all that I have heard, is a completely garbage idea, and yet the govt. still invests in it through subsidies.

Instead I should like to see social programs set up completely outside of the marketplace, like public housing.
"He who does not know how to put his will into things at least puts a meaning into them: that is, he believes there is a will in them already."

Metaphysics:
"The science.. which deals with the fundamental errors of mankind - but as if they were the fundamental truths."
mattrodstrom
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11/5/2009 9:12:37 PM
Posted: 7 years ago
plus anything that the govt. "invests" could be more efficiently invested, if it weren't taken from companies and consumers through taxes in the first place.
"He who does not know how to put his will into things at least puts a meaning into them: that is, he believes there is a will in them already."

Metaphysics:
"The science.. which deals with the fundamental errors of mankind - but as if they were the fundamental truths."
Volkov
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11/5/2009 9:14:40 PM
Posted: 7 years ago
At 11/5/2009 9:08:40 PM, mattrodstrom wrote:
I agree in all except for this:
the govt. should "invest - in the economy to help compliment the social issues of the day where it can. The creation of jobs, for instance."

I think that the gov't makes a poor investor. For example it has a bad tendency of "investing" to prop up naturally dying, and inefficient areas of the economy, such as manufacturing. It also has the tendency to invest for it's own political agenda, such as "green tech" which may or may not be useful areas of expansion: for example hydrogen fuel cell, from all that I have heard, is a completely garbage idea, and yet the govt. still invests in it through subsidies.

Instead I should like to see social programs set up completely outside of the marketplace, like public housing.

The government only makes a poor investor when it has incompetence running its coffers; at which point, they get kicked out if they continue. That is democracy, my friend. The simple fact remains that a lot of times, without government investment, these ideas themselves simply won't get off the ground.

And yes, the government does invest in some dying industries. This is because of a lack of vision on their part, but it also isn't a necessarily bad idea either; the fact that GM and banks were bailed out is because they meant a lot to workers, consumers and the economy. Letting them die would be akin to simply allowing the economy to kill itself off and take consumers and workers down with it.

At least by bailing out companies, they give them the chance to restructure and become competitive again, while saving the economy and individuals from further pain, and ensuring continuous returns on their investments.
mattrodstrom
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11/5/2009 9:24:06 PM
Posted: 7 years ago
The reason that GM failed is that there is not going to be "continuous returns on the investment", I agree that in the current climate we should not have let GM just collapse, we should have forced them into a controlled bankruptcy, and large trimming, before it got quite as far as it did.

Now instead they aren't going to be trimmed so much as they should. And the gov't (a poor executive) is telling them what they should and should not do with their company, and their powerful union is likely to regain some of it's tumor-like potential. ( not that I'm against labor unions in general, just the ridiculous kind)
"He who does not know how to put his will into things at least puts a meaning into them: that is, he believes there is a will in them already."

Metaphysics:
"The science.. which deals with the fundamental errors of mankind - but as if they were the fundamental truths."
Volkov
Posts: 9,765
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11/5/2009 9:31:22 PM
Posted: 7 years ago
At 11/5/2009 9:24:06 PM, mattrodstrom wrote:
The reason that GM failed is that there is not going to be "continuous returns on the investment", I agree that in the current climate we should not have let GM just collapse, we should have forced them into a controlled bankruptcy, and large trimming, before it got quite as far as it did.

That would still have left the workers and the economy with a big hole. Now, granted, I can agree that maybe the investment in GM should have been thought over twice, but I can fully understand and back why they decided to go with the bail out and restructuring plans

Now instead they aren't going to be trimmed so much as they should. And the gov't (a poor executive) is telling them what they should and should not do with their company,

The government has that determined right because they're the financial backers. I have no issue with this, at least until GM is able to restructure itself and pays back the money given to it.

And as far as GM's restructuring plans have gone, they're appearently not doing bad. Considering that Opel has now been sold off along with other assets, and the company is getting its proper trimming and

and their powerful union is likely to regain some of it's tumor-like potential. ( not that I'm against labor unions in general, just the ridiculous kind)

I agree, and one of the conditions for the bailout that should have been imposed was the rollback of some union powers. But I don't know how well that would have worked out.
regebro
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11/6/2009 8:19:21 AM
Posted: 7 years ago
At 11/5/2009 7:49:46 PM, mattrodstrom wrote:
In my introduction to anthropology class today my teacher introduced the topic of how a society is structured by its economic classes. How the "elites" dominate the others, and essentially bleed them dry.

Sigh. One would think that teachers maybe would have the sense to keep to the subject they are supposed to teach and STFU about things they know nothing about. But, nope.

So in this light it would seem that it is the causes of the poor which caused the financial crisis.

One of the causes, yes.

Then again maybe a Marxist, social warfare, perspective isn't the most realistic way of looking at such things.

That is absolutely true.
So prove me wrong, then.
regebro
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11/6/2009 8:26:48 AM
Posted: 7 years ago
At 11/5/2009 9:14:40 PM, Volkov wrote:
The government only makes a poor investor when it has incompetence running its coffers;

Which tends to be always.

at which point, they get kicked out if they continue.

No they don't.

That is democracy, my friend.

No it isn't. Democracy has nothing to do with how well government investments are going or how well government companies go. Have you ever heard of any election in any country where it was a topic in the election how well the public companies was doing? I haven't, and I've been politically active and involved in politics for 30 years. Governments don't get kicked out because they put incompetent people to run the companies. Governments get kicked out for things like high unemployment, etc.

The simple fact remains that a lot of times, without government investment, these ideas themselves simply won't get off the ground.

Then perhaps they shouldn't.

And yes, the government does invest in some dying industries. This is because of a lack of vision on their part, but it also isn't a necessarily bad idea either; the fact that GM and banks were bailed out is because they meant a lot to workers, consumers and the economy.

Yeah, it meant a lot of wasted money, that's what it meant.

Letting them die would be akin to simply allowing the economy to kill itself off and take consumers and workers down with it.

Nope, economy doesn't work like that. It's not a zero sum game. And that's easy to say, but it has enormous effects. And one of these effects is that money can generate more money when used in trading. But when invested in a dying industry it's like burning wealth.

At least by bailing out companies, they give them the chance to restructure and become competitive again

Why not invest the money in competitive companies, so they can become even *more* competitive?
So prove me wrong, then.
regebro
Posts: 1,152
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11/6/2009 8:32:23 AM
Posted: 7 years ago
At 11/5/2009 9:31:22 PM, Volkov wrote:
That would still have left the workers and the economy with a big hole.

GM is the hole. If GM would have gone away, all the money that's drained down that hole would have gone somewhere else. It would in the end have created more jobs.

Now, granted, I can agree that maybe the investment in GM should have been thought over twice, but I can fully understand and back why they decided to go with the bail out and restructuring plans

Yes. Because it sounds like they are doing something. And of course they are, they are making it worse.

"You must do something. Bailout is something. Hence we must bailout."

Economically it's a bad idea. Politically it's a damn lot easier to just support the bailout than explain to hundreds of millions of Americans who doens't understand economy (including most of Congress) why it's a bad idea economically.
So prove me wrong, then.
threelittlebirds
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11/7/2009 11:42:36 AM
Posted: 7 years ago
At 11/5/2009 8:43:32 PM, mattrodstrom wrote:
I don't like the idea of "the rich" vs "the poor" because that's not the way economics works.

The focus is mostly on ones relationship to the means of production: control and ownership of it or simply being told what to produce for a wage, not so much the level of ones income. How much money you make is just the result of having one of those positions in society.

And what makes you think the poor control the government anyway?
I-am-a-panda
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11/7/2009 12:22:02 PM
Posted: 7 years ago
At 11/6/2009 8:26:48 AM, regebro wrote:

At least by bailing out companies, they give them the chance to restructure and become competitive again

Why not invest the money in competitive companies, so they can become even *more* competitive?

Because if all other companies are failing, a monopoly of a service ensues, and then a company doesn't have to be competitive, and should they fall, well the country is screwed.
Pizza. I have enormous respect for Pizza.
mattrodstrom
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11/7/2009 1:09:57 PM
Posted: 7 years ago
At 11/7/2009 11:42:36 AM, threelittlebirds wrote:
At 11/5/2009 8:43:32 PM, mattrodstrom wrote:
I don't like the idea of "the rich" vs "the poor" because that's not the way economics works.

The focus is mostly on ones relationship to the means of production: control and ownership of it or simply being told what to produce for a wage, not so much the level of ones income. How much money you make is just the result of having one of those positions in society.

And what makes you think the poor control the government anyway?

I don't. I think that the people do. I don't usually think in terms of "the poor" and "the rich" b/c they don't usually act as solid groups as those terms suggest. I was taking on the assumptions of Marxist class warfare though, which my professor based the discussion on.
"He who does not know how to put his will into things at least puts a meaning into them: that is, he believes there is a will in them already."

Metaphysics:
"The science.. which deals with the fundamental errors of mankind - but as if they were the fundamental truths."
USAPitBull63
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11/7/2009 2:11:29 PM
Posted: 7 years ago
At 11/5/2009 7:49:46 PM, mattrodstrom wrote:
In my introduction to anthropology class today my teacher introduced the topic of how a society is structured by its economic classes. How the "elites" dominate the others, and essentially bleed them dry.

In passing she mentioned the recession of today, which was of course a prime example of how the greedy rich make money gambling with the livelihoods of the poor.

Your teacher sucks.
Ragnar_Rahl
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11/7/2009 2:12:23 PM
Posted: 7 years ago
You cannot blame the poor for being poor when they took up the mortgage company's offer; you can, however, blame the mortgage company for being stupid enough to do what amounts to exploitation of such a situation.

If something successfully exploits it isn't stupid, if it's stupid, which it is, it isn't exploitation. And yes, you can blame poor for taking up offers that have terms they can't fulfill :p
It came to be at its height. It was commanded to command. It was a capital before its first stone was laid. It was a monument to the spirit of man.
USAPitBull63
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11/7/2009 2:12:48 PM
Posted: 7 years ago
At 11/5/2009 8:43:32 PM, mattrodstrom wrote:
I don't like the idea of "the rich" vs "the poor" because that's not the way economics works.

It's also how the Democratic Party works. It's one way to manipulate race-baiting, as well. Without this correlation, the DNC would struggle immensely to stay relevant.
USAPitBull63
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11/7/2009 2:14:09 PM
Posted: 7 years ago
At 11/6/2009 8:19:21 AM, regebro wrote:
At 11/5/2009 7:49:46 PM, mattrodstrom wrote:
In my introduction to anthropology class today my teacher introduced the topic of how a society is structured by its economic classes. How the "elites" dominate the others, and essentially bleed them dry.

Sigh. One would think that teachers maybe would have the sense to keep to the subject they are supposed to teach and STFU about things they know nothing about. But, nope.

Amen.
regebro
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11/9/2009 1:47:45 AM
Posted: 7 years ago
At 11/7/2009 12:22:02 PM, I-am-a-panda wrote:
Because if all other companies are failing

But that is not the case neither now or any other time, for that simple reason that you never have a situation where only one company makes a good product.

a monopoly of a service ensues, and then a company doesn't have to be competitive, and should they fall, well the country is screwed.

You just described a case where all companies in a branch went bust. That can happen only when the branch has been replaced. For example, there are no international horse-couches in Europe any more, for obvious reasons. And you just claimed that these companies should get state-support so they don't get bust.

That would not be a good idea.
So prove me wrong, then.
mongoose
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11/9/2009 3:45:30 PM
Posted: 7 years ago
My World History teacher blamed the crisis on capitalism, because it lets these things happen.
It is odd when one's capacity for compassion is measured not in what he is willing to do by his own time, effort, and property, but what he will force others to do with their own property instead.
regebro
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11/10/2009 2:16:36 AM
Posted: 7 years ago
At 11/9/2009 3:45:30 PM, mongoose wrote:
My World History teacher blamed the crisis on capitalism, because it lets these things happen.

I blame it on my neighbors flowerpot, because it let's these things happen.
So prove me wrong, then.
Rob1Billion
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11/10/2009 9:32:34 PM
Posted: 7 years ago
does your neighbor have a socialist flowerpot? god damnit those socialists are everwhere!
Master P is the end result of capitalism.