This is what my tax dollars buy?????

A number of companies apparently used the same system: Create securities designed to fail by including the riskiest debt, sell these securities to unsuspecting investors, and bet against the securities through so-called credit-default swaps.

But when talking about how much money is lost in a market collapse, it's important to distinguish between money actually transferred from one person or institution to another, and the fall in value of securities based on current market price. The total "value" of a company's stock is its price times the number of outstanding shares. That number can rise or fall based on a few trades, but the only people making or losing money are those who bought or sold their shares. That's very different from the recent housing market collapse, where criminals and unethical bankers and brokers extracted (stole) wealth from investors.

If a company is solid, its real value does not change as its stock moves up or down with the vagaries of the stock market, and those fluctuations only matter at the point where you buy and the point where you sell.

 

Capitalism is a wealth transfer system. Wealth is neither created nor destroyed.

 

I beg to differ. Wealth is created by labor. In a capitalist system, the owners of capital then steal this wealth from the laborers, leaving the laborers with a small portion of the wealth they created. In modern industrial capitalism, labor unions enable the laborers to retain a little bit more of the wealth they have created, and once they have a little more than they need to live on, they save some of it. Entrepreneurs then come up with both legal and illegal, ethical and unethical ways to get that wealth away from the laborers, from selling them useful things, to selling them useless things, to stealing their savings by the sort of criminal activities described in the OP.

 

i didn't understand much of what i read in the article, but it definately sounded evil, if not illegal.

 

"Time is money", don't forget. Labour is merely a trade.

 

The worst part was that these SIV responsibilities, taken up by (I can only hope unsuspecting) AIG, were taken up in full by the US taxpayer. $1 on the dollar, as opposed to cents on the dollar like typical investors whose investments fail. There wasn't even a negotiation.

 

What they did was crooked. But the actual illegal part was done in secret so they could deny it. ProPublica documented they broke the law, but whether a court will rule against Magnetar, or whether a prosecutor will even file charges, is unlikely.

What you have to remember, though many people refuse to believe it, is that the "free market" economic system is designed and intended to be a method for the rich to steal from the poor. Most of the time, they operate within the law, because they write the laws. Occasionally, rogue entrepreneurs step over the line and actually break the law, and there may or may not be a stink about it. And occasionally big corporations have to use the government overtly to save them.

But the government exists to protect the rich from the poor, and to create an environment where the rich can steal (legally, for the most part) from the poor. So when you get your knickers in a knot over something like this, you are complaining about the tip of the iceberg (illegal financial shenanigans) and ignoring the 9/10 of the iceberg which is below the water (legal, but far more costly)!

As long as we live in a capitalist system, the only thing that's going to change are the details of the scams.

 

well said, thanks!:rockon:

 

is there a better system? (in practise, not theory)

 

We've never seen socialism tried in a fully industrialized country, but in Cuba, if you compare it to equally-poor countries, e.g. Honduras, El Salvador, Guatemala, Dominican Republic, socialism provides a much more equal distribution of the available resources. Cuba looks poor compared to America, but compared to nations with similar resources, there is none of the destitution of those countries. And poor as it is, it manages to provide housing, education, and health care to everyone; three things even America cannot do.

The Sandinista government of Nicaragua implemented a mixed economy: In spite of the lies of R. Reagan (who called the Sandinistas "communist") they ran a mixed economy: There were worker-owned Cuban-style socialist enterprises alongside capitalist enterprises. There were strong worker-protection laws and minimum wage laws, but capitalists who remained in the country were permitted to retain ownership of their businesses and operate them in a free-market environment. We'll never know if this would have succeeded because the U.S. conducted an illegal terrorist war against the people of Nicaragua, which eventually brought down the Sandinistas.

So, yes, there are real alternatives.

 

you may be right about resources, but i find these examples frightening to say the least. i think cuba could do a lot better if they opened the country to tourism. hard to know the real facts about what life is like in these places without an extensive visit and freedom to go anywhere, speak to anyone.

 

I thought it was open now. Many of my Canadian friends have been there and had a great time. I heard they're even encouraging foreign investment for things like golf courses, to actively promote tourism.

Isn't it the US government enforcing a trade embargo and restricting the travel of its citizens? Kinda ironic, eh?

 

i think you're right, not sure about the irony?

 

What strikes me as ironic is that it's the US - 'land of the free' and all that - that restricts the travel of its citizens to Cuba, which, as we all know, is one of them Communist countries that prevents its citizens from travelling.

 

cuban's are not allowed to leave their country, why would that be?

 

Cuba is indeed open to tourism. I've been there three times. The U.S. government restricts the right of U.S. citizens and residents to travel there, but even so it makes exceptions and it's actually easy for a U.S. citizen to go legally, as long as you follow the rules, which for most of us means going with an organization licensed to take educational groups.

Our days were highly structured, but there was no obligation to stay with the group and the structure, and on numerous occasions over the course of my three trips there I skipped one or another of our activities and went walking around Havana or Santiago de Cuba, talking to locals. I was invited into homes and I talked to people of all ages on the streets.

One person I talked to criticized Fidel Castro, but his complaint was that he was poor. He lived in a large, solid house with virtually no furniture. He appeared healthy and was not malnourished, though he complained about the dullness of his diet. I didn't have a lot of sympathy because in Mexico I saw numerous families living on the street, and children listless from malnutrition.

I talked to a lot of people who wanted more political freedom, and I feel their complaints were valid. But I talked to an equal or greater number who said that the government was responsive to the needs of the people and attributed the difficulties to the poverty of the country, and the U.S. embargo which prevents Cuba from selling its agricultural produce (mainly sugar and tobacco) to the U.S. Castro was the ONLY leader in Latin America who did not have bank accounts in foreign countries; and the difference in lifestyle between the richest and the poorest is far less than anywhere else in the world. I became friends with a family who pays the equivalent of 35 cents a month rent, for a large, solid, and somewhat run-down house.

There is much room for improvement there. But Cuba is a paradise compared to any of the Central American countries in the U.S. sphere of influence. And if Cuban principles were applied here, the rich would be much worse off, but the poor would be much better off.

A bit of trivia: When they have elections, the ballot boxes are guarded by uniformed school children! That's right. Cubans have such love for their children, that nobody would dare molest them. On the other hand, the government gets an exceptionally high turn-out for elections by the "underhanded" method of sending school children around the neighborhood, knocking on doors, reminding people to vote.

 

A woman I met in Cuba moved to the U.S. She was not prevented, and did not have to sneak out or take a boat or a raft. She stayed for a couple of years, but then moved back to Cuba because she could not get good work here.

Mostly, when Cubans come here, or want to, it's because they think they'll have more money here. They do have more money here, but it buys less. They cannot afford a decent place to live, or health care here, and unemployment here is high.

During the Carter administration, Carter told Castro he should let Cubans leave. Castro decided to do just that, and the result was the Mariel Boat Lift (named, I think, for the place most of them departed from). The Cubans arriving in the U.S. were picked up by INS and put in camps for processing. Those who had sponsors here were released. (A sponsor is someone who can prove that he has a certain amount of income and will guarantee that the immigrant will not be a "burden" on the country.) A large number had no sponsors, or had criminal records in Cuba. These people never had a trial in the U.S., and had no legal recourse: The decision of the INS was final, and the only appeal was to the INS itself.

Eventually, the U.S. courts ruled that these Cubans could not be kept in the camps, so they were farmed out by the U.S. government to county jails all around the country. At the time that I was going to jail on various occasions, for civil disobedience against nuclear weapons, these Cubans had been in U.S. jails for about a decade, without ever having had a court hearing. And the prospect was that they'd spend the rest of their lives in jail. A bunch of them were in the jail in Grand Forks, North Dakota, when I was in that jail. As far as I know, they're still in jail.

 

sounds like the same type of response you'd get if you talked to a cross section of americans. although we may be deficient in some areas such as access to health care, it is more complicated than that in as much as quality of health care is also an issue in our country and probably many others as well.
uniformed children? not an image i take comfort in.