NationStates Jolt Archive

So the government is bailing out Fannie Mae and Freddie Mac (http://money.cnn.com/2008/09/08/news/companies/bond_insurers.ap/index.htm).

They already bailed out Bear Stearns.

The argument that supports the government paying billions to save destitute companies, made by people who oppose spending millions to save destitute families, is always that the economic harm caused by the collapse of these companies would be even worse than the economic burden placed on the taxpayers whose money is funding the bailout.

What I never hear anyone asking is, why the hell were these companies allowed to get that big? For generations one of the bedrock principles of capitalism was a level playing field. Even Adam Smith said that the function of government in the economy was to break up monied interests when they become so powerful that they can control the field of competition. And when a company becomes so much of a giant that the government fears being crushed by its corpse, that company has been allowed to get too big and should have been broken up years ago.

Could Freddy and Fanny not have functioned if they were broken up into territories? i.e. Freddie of New England, Freddy of the Mid-west, Freddie of the Mid-Atlantic, and so on.

I've just come back from spending two weeks in Ireland and when I read about the economic harm Ireland was to suffer from the failure of Lehman Brothers bank I again had to wonder, why is a single company allowed to be so big that when it falls over it creates an economic tidal wave?

The anti-monopoly law is not just for cases where one business is having trouble competing with another. It's also for the government to protect the people. We invaded Iraq because there was a snowball's chance in hell that Saddam had, (but no chance that he planned to use) chemical weapons. We're trying to get the world to back us in an invasion of Iran because they have domestic energy program that could, in 20-30 years enable them to make nuclear bombs if they really tried.

Why are we not making company break-ups necessary conditions of these buy outs? Why aren't we just breaking them up period. We've gotten so used to the idea of watching out heads while scampering around a world full of Goliaths that we're being scammed into the idea that we can grow up to be Goliath. It's madness.

Monopoly laws need their teeth back.

If you give poor people money it discourages them from making money on their own. If you give rich people money it encourages them to make money on their own.

If you give poor people money it discourages them from making money on their own. If you give rich people money it encourages them to make money on their own.

How do you explain millionaire heirs spending money like it was going out of style and ending up broke?

How do you explain millionaire heirs spending money like it was going out of style and ending up broke?

Richness is a recessive gene

We've gotten so used to the idea of watching out heads while scampering around a world full of Goliaths that we're being scammed into the idea that we can grow up to be Goliath.How do you figure that's a scam?? The very fact that there are Goliaths existing now proves that it's possible.

If you give poor people money it discourages them from making money on their own. If you give rich people money it encourages them to make money on their own.

Thats a rather large generlisation isn't it?

Fergi America;14012715']How do you figure that's a scam?? The very fact that there are Goliaths existing now proves that it's possible.
Just like the fact that some people have won the MegaMillions lottery is proof that it's possible to win and that's why you should spend every dollar you get on lottery tickets. << Gambler's thinking. ^^ Also gambler's thinking.

However, unlike the lottery, the big business game is fixed. As in, it ain't open to you. You don't get to play that game as anything other than the sucker the big players are going to fleece. EDIT: Ever heard of a Ponzi scheme? http://www.sec.gov/answers/ponzi.htm

Thats a rather large generlisation isn't it?

Yes yes it is. It's a paraphrasing of the Reaganomic's principle. Wish I could remember where I heard it.

"I don't know how those Parker Brothers can live with themselves."

Yes yes it is. It's a paraphrasing of the Reaganomic's principle. Wish I could remember where I heard it.

Ahhh that old loon huh!:D

Just like the fact that some people have won the MegaMillions lottery is proof that it's possible to win and that's why you should spend every dollar you get on lottery tickets. << Gambler's thinking. ^^ Also gambler's thinking.

However, unlike the lottery, the big business game is fixed. As in, it ain't open to you. You don't get to play that game as anything other than the sucker the big players are going to fleece. EDIT: Ever heard of a Ponzi scheme? http://www.sec.gov/answers/ponzi.htm
Yes business is a gamble, but unlike you, I find it a lot less of one than the MegaMillions. With the lottery, skill (or lack of it) does not have any say in the outcome. But with business, I see my competitors F up all the time, to my bank account's pleasure. It's my hope that I have not provided any of them with similar lulz, but y'never know.

I know what a Ponzi scheme is, and I've seen some suspicious setups--but I fail to see evidence (or reasonable hints thereof) of them in the normal course of standard buying/selling of hardgoods. I buy a case of stuff for $X, break it down and sell it at retail for $XX...the biggest difference I see between me and Wal-Mart is the amount of digits in the earnings figure, and of course, they have the ability to buy literal shiploads of stuff dirt cheap, whereas I get *a* case via UPS.

If some guy is saying, "Invest $10k with me and I'll turn it into $20k for you!!!11one!!" then yeah, watch out. But a legit setup doesn't say that. A real wholesaler basically says "if you have a sales-tax license and the money, sure we'll sell to you wholesale. You may be able to resell it. Or you may end up using it as garage-filler. We really don't care what you do with it. Sign here please." Then you either can sell it, or you end up looking for some worthy group to donate your backstock to. If you do well, you'll do most of the first (actually selling it) and not much of the second.

I don't think Sam Walton used some kind of magic to get the company from being a little 1-store business to an over-1000 store conglomerate, and I don't believe I will need magic either. Nor do I think Walton had any big political or other mystery advantage when starting out--Wal-Mart was just another little store, so the "power" people wouldn't have cared less about the guy one way or the other. Same with all the other currently-big conglomerates. Microsoft, Dell, Starbucks...they were all tiny "gnat" companies when they started.

So I think the big business game is not only open to me...I'm playing it. I'm on Stage 1 of the 100-stage game, but I see zero logical reason that it would be impossible for me to get to Stage 100, provided I have the skills to do so.

Fergi America;14012779']Yes business is a gamble, but unlike you, I find it a lot less of one than the MegaMillions. With the lottery, skill (or lack of it) does not have any say in the outcome. But with business, I see my competitors F up all the time, to my bank account's pleasure. It's my hope that I have not provided any of them with similar lulz, but y'never know.

I know what a Ponzi scheme is, and I've seen some suspicious setups--but I fail to see evidence (or reasonable hints thereof) of them in the normal course of standard buying/selling of hardgoods. I buy a case of stuff for $X, break it down and sell it at retail for $XX...the biggest difference I see between me and Wal-Mart is the amount of digits in the earnings figure, and of course, they have the ability to buy literal shiploads of stuff dirt cheap, whereas I get *a* case via UPS.

If some guy is saying, "Invest $10k with me and I'll turn it into $20k for you!!!11one!!" then yeah, watch out. But a legit setup doesn't say that. A real wholesaler basically says "if you have a sales-tax license and the money, sure we'll sell to you wholesale. You may be able to resell it. Or you may end up using it as garage-filler. We really don't care what you do with it. Sign here please." Then you either can sell it, or you end up looking for some worthy group to donate your backstock to. If you do well, you'll do most of the first (actually selling it) and not much of the second.

I don't think Sam Walton used some kind of magic to get the company from being a little 1-store business to an over-1000 store conglomerate, and I don't believe I will need magic either. Nor do I think Walton had any big political or other mystery advantage when starting out--Wal-Mart was just another little store, so the "power" people wouldn't have cared less about the guy one way or the other. Same with all the other currently-big conglomerates. Microsoft, Dell, Starbucks...they were all tiny "gnat" companies when they started.

So I think the big business game is not only open to me...I'm playing it. I'm on Stage 1 of the 100-stage game, but I see zero logical reason that it would be impossible for me to get to Stage 100, provided I have the skills to do so.
Good luck to you. Do me a favor, though, don't paint your house purple. It will be a bitch for me to paint over when I buy it at the foreclosure auction.

I propose the idea of capital capitalism: the government should seize the assets of Fannie Mae and Freddie Mac; then it should execute the fat cats at the top for their miserable failure of an attempt to run a business; then the company should be broken up into smaller constituent parts; and finally, when the economy has recovered the banks should be sold off and the profits used to reduce national debt.

So not only do you have a private-profit motive to stimulate the economy, but also a private-life motive too!

Also, the TV rights could be a sold to create an awesome reality TV show.

I propose the idea of capital capitalism: the government should seize the assets of Fannie Mae and Freddie Mac; then it should execute the fat cats at the top for their miserable failure of an attempt to run a business; then the company should be broken up into smaller constituent parts; and finally, when the economy has recovered the banks should be sold off and the profits used to reduce national debt.

So not only do you have a private-profit motive to stimulate the economy, but also a private-life motive too!

Also, the TV rights could be a sold to create an awesome reality TV show.
I like this idea. :D It gives new meaning to "incentives" and would go a ways towards making sure CEOs actually earn those compensation packages.

As for the size of companies, I've always had my goal as "to get big enough that the FTC (US, Federal Trade Commission) cares."

I think it would be quite a disincentive if general businesspeople thought that they would have their company's assets seized (ie, stolen) if they succeeded in growing it to its full potential! Just the thought of that happening burns with its unfairness.

On the other hand, there are some sectors (like finance) where too much concentration of power causes *actual* risk to the nation and/or economy--rather than the apparently-empty, jealousy-fueled complaints that places like MS get. But even in these "mission-critical" cases, there needs to be proper compensation for any breaking-up. And, care would need to be taken that the broken-up parts don't end up being worse than the original (whenever the government itself wants to run things, I expect a morass of incompetence, or at least 10x more bureaucracy and red tape to result...this happens all too often for me to be comfortable with them ending up in charge).

Good luck to you. Do me a favor, though, don't paint your house purple. It will be a bitch for me to paint over when I buy it at the foreclosure auction.That's a chance I'm willing to take...if I end up as well-off overall as Donald Trump (who has had quite a few things foreclosed on over the years), or Domino's Pizza (similar) I'm not going to worry too much about the possibility.

And, it's no riskier than employment when you really think about it. If you fail at business, you can go broke and lose your stuff. With employment, if someone else fails (causing the company to close and your precious job to disappear), you can still go broke and lose your stuff.

Speaking of employment, if it wasn't for people like me starting companies, there wouldn't be jobs for people like you :tongue:

then it should execute the fat cats at the top for their miserable failure of an attempt to run a business;

(Snip)
So not only do you have a private-profit motive to stimulate the economy, but also a private-life motive too!Errr...THAT much of a gamble I don't want. I'd be motivated all right...motivated to emigrate!

The original point of the GSEs was to broaden credit availability to the poor. They've done a pretty good job of that, but it didn't stop there.

Unfortunately, over time they've effectively grown to become gigantic corporations with all the risk taking of the private sector with the guaranteed backing of the federal government. I don't know about you, but I'd be pretty leery about any company that has all of its potential risks offset by a guaranteed bailout; sounds like the kind of place that would, you know, pursue some less-than-optimal investments that might never fly in the private sector.

It also doesn't help that these companies used some...gray area...methods of accounting for these, setting up all kinds of special-purpose entities and other subsidiaries (a la Enron) that allowed them to hide huge amounts of risky investments while still benefiting from the cash flows from selling CDOs and the profits generated from investments made through those subsidiaries. So, when times were good they were able to make money and attract investors by hiding risks, but when things went down the drain they were suddenly left with huge amounts of debt and devalued investments that needed to be repaid.

I also don't think any two companies with the same ultimate owners and backers would be permitted to control 50% of any major market sector, let alone housing. However, Fannie and Freddie did and we're paying the consequences.

If you give poor people money it discourages them from making money on their own. If you give rich people money it encourages them to make money on their own.Well, I know poor people who literally make their own money.

Fergi America;14013898']
That's a chance I'm willing to take...if I end up as well-off overall as Donald Trump (who has had quite a few things foreclosed on over the years), or Domino's Pizza (similar) I'm not going to worry too much about the possibility.
I wonder how many people who are going into bankruptcy now, whose cars are being repo'd and whose foreclosed houses are being auctioned off for less than $30K, thought they were on the same track as you.

And, it's no riskier than employment when you really think about it. If you fail at business, you can go broke and lose your stuff. With employment, if someone else fails (causing the company to close and your precious job to disappear), you can still go broke and lose your stuff.

Speaking of employment, if it wasn't for people like me starting companies, there wouldn't be jobs for people like you :tongue:
Not for people like me. I work independently in the arts.

Errr...THAT much of a gamble I don't want. I'd be motivated all right...motivated to emigrate!
Coward. :tongue:

Fergi America;14013898']Errr...THAT much of a gamble I don't want. I'd be motivated all right...motivated to emigrate!

Oh dude, going by the rest of your post I'm going to make a leap of faith and guess you missed my sillyosity.

I think I agree with Muyravets, you're just too chicken. Too worried that you can't actually pull yourself up by your bootstraps and be the next Donald Trump. But who wants to be Donald Trump? Alan Sugar is where it's at. Less money, more attitude -- I'd take that trade always.

But also, if you think of my plan this way then it adds not just extra risk, but extra payouts too, because you get to buy up cheaply all the assets of the chumps who had no idea of how to run a business. Ka-ching!

Oh dude, going by the rest of your post I'm going to make a leap of faith and guess you missed my sillyosity.

Actually I did get that you were being silly. I guess my tongue-in-cheek response (to you) was too "straight" considering the rest of my post...I should have added a :tongue: to it.

But also, if you think of my plan this way then it adds not just extra risk, but extra payouts too, because you get to buy up cheaply all the assets of the chumps who had no idea of how to run a business. Ka-ching!*Capitalist part of me whirls around, drooling*
Well, uh...

Hey waittaminnit. I can do that already with things the way they are! :tongue:

I wonder how many people who are going into bankruptcy now, whose cars are being repo'd and whose foreclosed houses are being auctioned off for less than $30K, thought they were on the same track as you.
Less than there are of people who end up that way after "working independently in the arts," I'm sure! Usually not exactly paved with gold, that :p

Fergi America;14014230']Actually I did get that you were being silly. I guess my tongue-in-cheek response (to you) was too "straight"...I should have added a :tongue: to it.

*Capitalist part of me whirls around, drooling*
Well, uh...

Hey waittaminnit. I can do that already with things the way they are! :tongue:


Less than there are of people who end up that way after "working independently in the arts," I'm sure! Not exactly paved with gold, that :p

But you're right, the jobs I'm thinking of aren't for people like you. I don't need any waiters :tongue:
Ah, a false notion based on an unquestioned stereotype. Remind me not to take any investment tips from you.

Actually, people who work independently in the arts are no more likely to end up as statistics in the current mortgage meltdown and other financial crises than anyone else, because we are all either Stephen King/Jeff Koons rich, or we're so poor we rent, use zip-car, and have only one credit card. There's no middle ground in the arts, and it's in the middle ground that they get you. In fact, I have no credit cards -- I pay cash for everything -- and I never even bothered to learn to drive. I'm completely debt free and have not needed a full time day job (or any day job, really) for nearly two years.* :D

(*I do that periodically -- quit working day jobs for 2 - 3 years to concentrate soley on creative work as a fine artist. This is the third economic crisis I've been able to keep that up through.)

Ah, a false notion based on an unquestioned stereotype. Remind me not to take any investment tips from you.This from the one who has such a negative, self-defeating, stereotype of business that he(?) assumes he'll be buying my house for cheap at a bankruptcy auction? Remind me not to take any investment tips from *you* either...

As for the 99%-of-arts-people-are-broke-as-hell idea, it's not because of the stereotype that I say that, it's from experience, based on being part of a family of musicians (and an oil painter) who ended up teaching piano (yargh!!) to avoid living in cardboard boxes! Yeah, technically they haven't become a statistic, since they weren't foreclosed on and didn't declare bankruptcy, but it's not the way I want to live.

Granted, one family is not a statistically-valid sample. But it definitely made an impression. A negative one! I'll stick to selling the kind of stuff everyone (thinks they) need, as a means of making money.

But, if so many of you are as poor as your own post describes, I'd say that the basic stereotype ("Starving Artist") is indeed correct, and avoiding foreclosure by not having anything to foreclose ON is a "technicality" way to not be affected.

we are all either Stephen King/Jeff Koons rich, or we're so poor

It seems that you're actually quite fine with gambling, then, provided you aren't planning on being broke forever *for sure!* I've never known or heard of anyone in any of the arts who didn't really want to hit the Big Time, whatever form that Big Time takes for their particular field.

So you gamble in a different arena. But gambling, you are. And, as far as I know, you do so without claiming that the publishing industry is "closed to you."

Stephen King/Jeff KoonsAha! A writer! (Or an author, if you're snooty about it.)

I like to write, too. As a kid, I figured that's what I'd go into. But I also like a higher chance at the Good Life(TM), not being stone broke before I get the Good Life, and not having whether I get any traction determined by whether one guy (or a few) liked my manuscript. And, I had the aforementioned experience of growing up around not-Carnegie-Hall-playing, non-MOMA-exhibited (for the painter) starving artists. So, I gave the nod to business instead.

I do that periodically -- quit working day jobs for 2 - 3 yearsI dumped my last job in 2000, and haven't been back to one since.

Fergi America;14014514']This from the one who has such a negative, self-defeating, stereotype of business that he(?) assumes he'll be buying my house for cheap at a bankruptcy auction? Remind me not to take any investment tips from *you* either...
I wouldn't offer you any. And I don't think my view of business is negative at all. I look forward to buying your house for less than a quarter of its worth. For me that would be very positive indeed. :D

As for the 99%-of-arts-people-are-broke-as-hell idea, it's not because of the stereotype that I say that, it's from experience, based on being part of a family of musicians who ended up teaching piano (yargh!!) to avoid living in cardboard boxes!

Granted, one family is not a statistically-valid sample. But it definitely made an impression. A negative one! I'll stick to selling the kind of stuff everyone (thinks they) need, as a means of making money.
Oh, well... musicians... we all know about them...

But, if so many of you are as poor as your own post describes, I'd say that the basic stereotype ("Starving Artist") is indeed correct, and avoiding foreclosure by not having anything to foreclose ON is kind of a weasel, "technicality" way to not be affected.
Ha! Bullshit, friend. Staying out of a game you know you can't afford is sound financial management. Not a weasel technicality at all. Kind of scary that you don't know that. (Not scary for me, of course; I'm getting in line for your house.)

It seems that you're actually quite fine with gambling, then, provided you aren't satisfied with being broke forever *for sure!* I've never known or heard of anyone in any of the arts who didn't really want to hit the Big Time, whatever form that Big Time takes for their particular field.

So you gamble in a different arena. But gamble, you do! And, as far as I know, you do so without thinking that the publishing industry is "closed to you."
It's not a gamble at all -- at least no more than daily life itself is -- you know, crossing the street and all that. Or even holding down a regular "at-will" job.

Aha! A writer! (Or an author, if you're snooty about it.)

I like to write, too. As a kid, I figured that's what I'd go into. But I also like a higher chance at the Good Life(TM), not being stone broke, and not having whether I get any traction determined by whether one guy (or a few) liked my manuscript. So, I gave the nod to business instead.

I dumped my last job in 2000, and haven't been back to one since.
No, not a writer. An artist. I only write as an amateur.

And seriously, I do wish you luck, but I also do seriously think you are foolishly trusting of the system.