RedCelt69 wrote:Frank wrote:Socialism has become a byword for not thinking about things and jumping on a super-idealistic, divorced-from-reality viewpoint. The ideals and 'high level motivations' of so-called socialists are generally pretty respectable ("We just wanna help everyone..."), but what folks actually talk about still seems incredibly far from any sense of reality, practicality or even discourse.
The mess the world is currently in isn't the fault of socialism. One day, everything was (apparently) fine... the next day, the world went into meltdown. Why? Because a bunch of immensely wealthy people fucked up whilst trying to make themselves a bit more wealthy. End result? The wealthy people are relatively unaffected by hardship right now. The ones suffering are all the non-wealthy people who didn't have a flying clue what was happening with these irresponsible gamblers.
It's like, some guys in a bookmakers make some stupid decisions and back some very lame horses. When they leave their gambling den, they have the same amount of money as when they first went in (and pay each other fat bonuses)... whilst everyone who wasn't in the bookmakers are faced with a life of misery involving job-losses, pay-cuts, interrupted community services... depression, money-concerns (which often lead to) divorce and suicides.
People have been suffering (and will continue to suffer). All because of Capitalism.
You remember Capitalism? I'll use Frank's words again, slightly modified:-
"Capitalism has become a byword for not thinking about things and jumping on a super-idealistic, divorced-from-reality viewpoint."
The ideal world-system balances both Socialism and Capitalism - with both needing to be kept in check, as a move too far towards either of them will fuck us up. The here and now is a case-study that proves that point. If anyone needed a case-study.
You're an idiot.
You're also using words far too broad to contribute anything useful to this discussion, and you prove that you (probably) lack the political education to be entitled to vote. First, you misunderstand the banking crisis. Second, you pin the blame on the banks for a world economic crisis for which no blame should properly be attributed to anyone, except perhaps to government. Third, you use broad, and incorrect, meanings for "Socialism" and "Capitalism." The only thing you prove is that you're totally unqualified to talk about anything economic and don't deserve the right to vote.
1) The banking crisis
You say "a bunch of wealthy people fucked up while trying to make themselves a bit more wealthy." No, wrong. It was caused because there was a lot of cheap credit around which fuelled the bubble in the housing market. Bankers ingeniously figured out a way to recover their capital that they were giving to their customers who took out mortgages, by selling their mortgages to investors. They did this by "securitising" mortgage pools, i.e. aggregating the mortgages into a single pool and creating a series of bonds which were related to the underlying performance of the mortgages. These bonds were regarded as very safe for a very long time-- from 1994 to 2007 they had a failure rate of .01%-- so it's understandable why people felt safe making them.
Governments, particularly the American government, encouraged this activity. The flow of cheap credit allowed households to go spend money in the economy, which created jobs. The increase in household wealth was politically popular, and millions of people were able to buy their own homes for the first time. The percentage of the UK's GDP comprised by the housing sector increased from 6% to 16% in ten years (and this accounts for much of the country's economic growth in the last ten years and the commensurate increase in household wealth). Everyone benefited.
Unfortunately, after a time, the capital value of homes became divorced from their real value as income-generating assets (rent). People bought homes in the hopes that the capital value would increase, not on the basis of what they were actually worth. They would sell their homes to people who thought the same thing. They would then go buy another house with the same expectation. At that point, which probably began in 2000, the housing market then became gambling for everyone involved- although very people probably knew it. To paraphrase Warren Buffett, it was like Cinderella's Ball- everyone is trying to have as much fun as possible, staying till the last possible minute, but they were dancing in a room where the clocks had no hands.
Eventually, investor confidence collapsed. When this happened, these securities failed. Banks held a lot of these securities on their balance sheets, and there was a significant danger that any given bank would go bust if enough securities went bad. This is what happened to Lehman Bros. When Lehman failed, banks stopped lending to each other and customers, because they were afraid of what would happen to THEIR money in the hands of other people. It was a confidence problem, a completely justified act of self-defence, and totally reasonable response in a time of panic.
Money is only a confidence trick, anyway, so quit bitching about how much of it other people have.
2) The Blame Game
Blaming the banks is a popular thing to do. It's also basically a government propaganda ploy to divert the blame away from themselves.
All of the household wealth, employment, and consumer demand created during the boom years was not real; it was based on inflationary economic expectations that were linked to a big gambling game played by
everyone. If people do not have jobs now, it is because their skills are not in demand on the basis of current expectations. This is a fact of life in free society: people are free not to employ people who are not essential for their businesses.
Nor does blame lie with capitalism, or, the idea that the means of production-- including capital but also a man's own labour-- should remain in private hands. Where the blame should properly lie is with governments who created a low interest rate environment with loose monetary policy because it created a politically popular boom economy, and facilitated the flow of credit that was based (and secured) on worthless assets.
The blame probably belongs with governments for failing to regulate market activity, which I'll talk about briefly below.
3) Capitalism and Socialism
Socialism, in the Marxist sense, is common ownership of the means of production. It is the ownership of the means in production in common hands- or the hands of the state, and central planners. When democratic states go socialist, the whole electoral process degenerates into a process where society cleaves into two parts-- the haves, and the have-nots-- or, rather, those who receive, and those who are forced to give. In this arrangement each side attempts to use the ballot box to either defend their position or exploit the other. Democrat and Republican, Labour and Tory, Left and Right- it's the same story played out again and again.
Capitalism is simply the private ownership of labour and capital-- ownership of labour by minimising taxation on labour (tax is, in effect, the taking of labour for common ownership) and ownership of capital by protecting property rights. It does NOT mean reckless lending. Reckless lending may take place in a capitalist society, because people and corporations are free to do what they will with their possessions, even if these things are really rather stupid. I support government intervention in the market that is short of taking control of it-- antitrust/competition law, for example, or financial services regulation. However, saying "socialism is the answer" is, in my view, crossing the line. Capitalism didn't cause the problem-- stupid people exercising freedoms that come with a capitalist system caused the problem. Cure the stupid activity by regulating the market, not by socialising it. Don't socialise it by increasing taxes on the wealthy and taxes on the banks. If you tax the banks and the bankers, they will pass the cost on to their consumers- i.e. you- in the form of increased fees and rates. You're really only screwing yourself.
In closing, I will take Capitalism over socialism every day. You call that "not thinking about things?"