Occupy Wall Street vs the Tea Party

[finehoe]

What caused the financial crisis? The Big Lie goes viral.

By Barry Ritholtz, Published: November 5

I have a fairly simple approach to investing: Start with data and objective evidence to determine the dominant elements driving the market action right now. Figure out what objective reality is beneath all of the noise. Use that information to try to make intelligent investing decisions.

But then, I’m an investor focused on preserving capital and managing risk. I’m not out to win the next election or drive the debate. For those who are, facts and data matter much less than a narrative that supports their interests.

One group has been especially vocal about shaping a new narrative of the credit crisis and economic collapse: those whose bad judgment and failed philosophy helped cause the crisis.

Rather than admit the error of their ways â€" Repent! â€" these people are engaged in an active campaign to rewrite history. They are not, of course, exonerated in doing so. And beyond that, they damage the process of repairing what was broken. They muddy the waters when it comes to holding guilty parties responsible. They prevent measures from being put into place to prevent another crisis.

Here is the surprising takeaway: They are winning. Thanks to the endless repetition of the Big Lie.

A Big Lie is so colossal that no one would believe that someone could have the impudence to distort the truth so infamously. There are many examples: Claims that Earth is not warming, or that evolution is not the best thesis we have for how humans developed. Those opposed to stimulus spending have gone so far as to claim that the infrastructure of the United States is just fine, Grade A (not D, as the we discussed last month), and needs little repair.

Wall Street has its own version: Its Big Lie is that banks and investment houses are merely victims of the crash. You see, the entire boom and bust was caused by misguided government policies. It was not irresponsible lending or derivative or excess leverage or misguided compensation packages, but rather long-standing housing policies that were at fault.Indeed, the arguments these folks make fail to withstand even casual scrutiny. But that has not stopped people who should know better from repeating them.

The Big Lie made a surprise appearance Tuesday when New York Mayor Michael Bloomberg, responding to a question about Occupy Wall Street, stunned observers by exonerating Wall Street: “It was not the banks that created the mortgage crisis. It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp.”

What made his comments so stunning is that he built Bloomberg Data Services on the notion that data are what matter most to investors. The terminals are found on nearly 400,000 trading desks around the world, at a cost of $1,500 a month. (Do the math â€" that’s over half a billion dollars a month.) Perhaps the fact that Wall Street was the source of his vast wealth biased him. But the key principle of the business that made the mayor a billionaire is that fund managers, economists, researchers and traders should ignore the squishy narrative and, instead, focus on facts. Yet he ignored his own principles to repeat statements he should have known were false.

Why are people trying to rewrite the history of the crisis? Some are simply trying to save face. Interest groups who advocate for deregulation of the finance sector would prefer that deregulation not receive any blame for the crisis.

Some stand to profit from the status quo: Banks present a systemic risk to the economy, and reducing that risk by lowering their leverage and increasing capital requirements also lowers profitability. Others are hired guns, doing the bidding of bosses on Wall Street.

They all suffer cognitive dissonance â€" the intellectual crisis that occurs when a failed belief system or philosophy is confronted with proof of its implausibility.

And what about those facts? To be clear, no single issue was the cause. Our economy is a complex and intricate system. What caused the crisis? Look:

●Fed Chair Alan Greenspan dropped rates to 1 percent â€" levels not seen for half a century â€" and kept them there for an unprecedentedly long period. This caused a spiral in anything priced in dollars (i.e., oil, gold) or credit (i.e., housing) or liquidity driven (i.e., stocks).

●Low rates meant asset managers could no longer get decent yields from municipal bonds or Treasurys. Instead, they turned to high-yield mortgage-backed securities. Nearly all of them failed to do adequate due diligence before buying them, did not understand these instruments or the risk involved. They violated one of the most important rules of investing: Know what you own.

●Fund managers made this error because they relied on the credit ratings agencies â€" Moody’s, S&P and Fitch. They had placed an AAA rating on these junk securities, claiming they were as safe as U.S. Treasurys.

4 Derivatives had become a uniquely unregulated financial instrument. They are exempt from all oversight, counter-party disclosure, exchange listing requirements, state insurance supervision and, most important, reserve requirements. This allowed AIG to write $3 trillion in derivatives while reserving precisely zero dollars against future claims.

5 The Securities and Exchange Commission changed the leverage rules for just five Wall Street banks in 2004. The “Bear Stearns exemption” replaced the 1977 net capitalization rule’s 12-to-1 leverage limit. In its place, it allowed unlimited leverage for Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers and Bear Stearns. These banks ramped leverage to 20-, 30-, even 40-to-1. Extreme leverage leaves very little room for error.

6Wall Street’s compensation system was skewed toward short-term performance. It gives traders lots of upside and none of the downside. This creates incentives to take excessive risks.

7 The demand for higher-yielding paper led Wall Street to begin bundling mortgages. The highest yielding were subprime mortgages. This market was dominated by non-bank originators exempt from most regulations. The Fed could have supervised them, but Greenspan did not.

8 These mortgage originators’ lend-to-sell-to-securitizers model had them holding mortgages for a very short period. This allowed them to get creative with underwriting standards, abdicating traditional lending metrics such as income, credit rating, debt-service history and loan-to-value.

9 “Innovative” mortgage products were developed to reach more subprime borrowers. These include 2/28 adjustable-rate mortgages, interest-only loans, piggy-bank mortgages (simultaneous underlying mortgage and home-equity lines) and the notorious negative amortization loans (borrower’s indebtedness goes up each month). These mortgages defaulted in vastly disproportionate numbers to traditional 30-year fixed mortgages.

●To keep up with these newfangled originators, traditional banks developed automated underwriting systems. The software was gamed by employees paid on loan volume, not quality.

●Glass-Steagall legislation, which kept Wall Street and Main Street banks walled off from each other, was repealed in 1998. This allowed FDIC-insured banks, whose deposits were guaranteed by the government, to engage in highly risky business. It also allowed the banks to bulk up, becoming bigger, more complex and unwieldy.

●Many states had anti-predatory lending laws on their books (along with lower defaults and foreclosure rates). In 2004, the Office of the Comptroller of the Currency federally preempted state laws regulating mortgage credit and national banks. Following this change, national lenders sold increasingly risky loan products in those states. Shortly after, their default and foreclosure rates skyrocketed.

Bloomberg was partially correct: Congress did radically deregulate the financial sector, doing away with many of the protections that had worked for decades. Congress allowed Wall Street to self-regulate, and the Fed the turned a blind eye to bank abuses.

The previous Big Lie â€" the discredited belief that free markets require no adult supervision â€" is the reason people have created a new false narrative.

Now it’s time for the Big Truth.

http://www.washingtonpost.com/business/what-caused-the-financial-crisis-the-big-lie-goes-viral/2011/10/31/gIQAXlSOqM_story.html

[second_pancake]

Re, Adam Smith:

I agree with the observations of the need for government intervention.  My beliefs are not a government-free society, but one where the government acts not to protect the people from ourselves (which would mean the government basing decisions on what they deem moral or just which could supercede the beliefs of the individual), but to protect the RIGHTS of the INDIVIDUAL.  Rights meaning those defined by nature...inherent rights such as freedom of religion, freedom of speech, freedom of choice in what we do with our lives so long as it does not impede on the rights of another.  Freedom FROM force, not "freedom" BY force.

I agree that taxes should be paid and are needed to pay for the services provided to us by our government whether at the state or federal level.  What those taxes go toward, however, is another story.  I also agree that the "rich" should pay more and they do.  If there were a flat tax dictating that every working person pay 50% of their income into the tax system, a 30k per year earner is paying far less than a 300k earner...the more wealthy person is paying more.

I also agree that corporations can influence politics, which is apparant today with the number of dollars spent in political campaigns paid for by major players in the country's financial sector.  I don't dispute that and I think it's wrong.  I think where you and I disagree is what came first, the chicken or the egg.  Who allowed the corruption to happen?  Was it the large financial firm offering the bribe to the political candidate, or the political candidate accepting and continuing to fund campaigns and give out earmarks based on the affiliation?

As soon as you make a decision, you set a precendence.  People know where you stand based on your decision and determine what your next actions may be.  Reminds me of a story/joke:  A guy walks up to a woman and asks her, "would you sleep with me for a dollar?"  She responds, "Hell no!", he asks, "Well, how about a million dollars?" , "Hell YES!" she says.  The guy then hands her a $100.  She says, "What is this?  I thought you said a million."  He says, "Well, now that we've established you're a prostitute, it's all about negotiation."

Seems this is what is going on with Wall Street and our government.  "Big business" has established what business the government is in, now it's all about price.  The government shouldn't be in it at all and based upon Smith's writing, he would agree.

[Dog Walker]

Fine, you just beat me to it.  I was going to post the exact same article in this thread.

BTW, Moderators, you haven't set your clock back yet!

[second_pancake]

What caused the financial crisis? The Big Lie goes viral.

By Barry Ritholtz, Published: November 5

I have a fairly simple approach to investing: Start with data and objective evidence to determine the dominant elements driving the market action right now. Figure out what objective reality is beneath all of the noise. Use that information to try to make intelligent investing decisions.

But then, I’m an investor focused on preserving capital and managing risk. I’m not out to win the next election or drive the debate. For those who are, facts and data matter much less than a narrative that supports their interests.

One group has been especially vocal about shaping a new narrative of the credit crisis and economic collapse: those whose bad judgment and failed philosophy helped cause the crisis.

Rather than admit the error of their ways — Repent! — these people are engaged in an active campaign to rewrite history. They are not, of course, exonerated in doing so. And beyond that, they damage the process of repairing what was broken. They muddy the waters when it comes to holding guilty parties responsible. They prevent measures from being put into place to prevent another crisis.

Here is the surprising takeaway: They are winning. Thanks to the endless repetition of the Big Lie.

A Big Lie is so colossal that no one would believe that someone could have the impudence to distort the truth so infamously. There are many examples: Claims that Earth is not warming, or that evolution is not the best thesis we have for how humans developed. Those opposed to stimulus spending have gone so far as to claim that the infrastructure of the United States is just fine, Grade A (not D, as the we discussed last month), and needs little repair.

Wall Street has its own version: Its Big Lie is that banks and investment houses are merely victims of the crash. You see, the entire boom and bust was caused by misguided government policies. It was not irresponsible lending or derivative or excess leverage or misguided compensation packages, but rather long-standing housing policies that were at fault.Indeed, the arguments these folks make fail to withstand even casual scrutiny. But that has not stopped people who should know better from repeating them.

The Big Lie made a surprise appearance Tuesday when New York Mayor Michael Bloomberg, responding to a question about Occupy Wall Street, stunned observers by exonerating Wall Street: “It was not the banks that created the mortgage crisis. It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp.”

What made his comments so stunning is that he built Bloomberg Data Services on the notion that data are what matter most to investors. The terminals are found on nearly 400,000 trading desks around the world, at a cost of $1,500 a month. (Do the math — that’s over half a billion dollars a month.) Perhaps the fact that Wall Street was the source of his vast wealth biased him. But the key principle of the business that made the mayor a billionaire is that fund managers, economists, researchers and traders should ignore the squishy narrative and, instead, focus on facts. Yet he ignored his own principles to repeat statements he should have known were false.

Why are people trying to rewrite the history of the crisis? Some are simply trying to save face. Interest groups who advocate for deregulation of the finance sector would prefer that deregulation not receive any blame for the crisis.

Some stand to profit from the status quo: Banks present a systemic risk to the economy, and reducing that risk by lowering their leverage and increasing capital requirements also lowers profitability. Others are hired guns, doing the bidding of bosses on Wall Street.

They all suffer cognitive dissonance — the intellectual crisis that occurs when a failed belief system or philosophy is confronted with proof of its implausibility.

And what about those facts? To be clear, no single issue was the cause. Our economy is a complex and intricate system. What caused the crisis? Look:

●Fed Chair Alan Greenspan dropped rates to 1 percent — levels not seen for half a century — and kept them there for an unprecedentedly long period. This caused a spiral in anything priced in dollars (i.e., oil, gold) or credit (i.e., housing) or liquidity driven (i.e., stocks).

●Low rates meant asset managers could no longer get decent yields from municipal bonds or Treasurys. Instead, they turned to high-yield mortgage-backed securities. Nearly all of them failed to do adequate due diligence before buying them, did not understand these instruments or the risk involved. They violated one of the most important rules of investing: Know what you own.

●Fund managers made this error because they relied on the credit ratings agencies — Moody’s, S&P and Fitch. They had placed an AAA rating on these junk securities, claiming they were as safe as U.S. Treasurys.

4 Derivatives had become a uniquely unregulated financial instrument. They are exempt from all oversight, counter-party disclosure, exchange listing requirements, state insurance supervision and, most important, reserve requirements. This allowed AIG to write $3 trillion in derivatives while reserving precisely zero dollars against future claims.

5 The Securities and Exchange Commission changed the leverage rules for just five Wall Street banks in 2004. The “Bear Stearns exemption” replaced the 1977 net capitalization rule’s 12-to-1 leverage limit. In its place, it allowed unlimited leverage for Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers and Bear Stearns. These banks ramped leverage to 20-, 30-, even 40-to-1. Extreme leverage leaves very little room for error.

6Wall Street’s compensation system was skewed toward short-term performance. It gives traders lots of upside and none of the downside. This creates incentives to take excessive risks.

7 The demand for higher-yielding paper led Wall Street to begin bundling mortgages. The highest yielding were subprime mortgages. This market was dominated by non-bank originators exempt from most regulations. The Fed could have supervised them, but Greenspan did not.

8 These mortgage originators’ lend-to-sell-to-securitizers model had them holding mortgages for a very short period. This allowed them to get creative with underwriting standards, abdicating traditional lending metrics such as income, credit rating, debt-service history and loan-to-value.

9 “Innovative” mortgage products were developed to reach more subprime borrowers. These include 2/28 adjustable-rate mortgages, interest-only loans, piggy-bank mortgages (simultaneous underlying mortgage and home-equity lines) and the notorious negative amortization loans (borrower’s indebtedness goes up each month). These mortgages defaulted in vastly disproportionate numbers to traditional 30-year fixed mortgages.

●To keep up with these newfangled originators, traditional banks developed automated underwriting systems. The software was gamed by employees paid on loan volume, not quality.

●Glass-Steagall legislation, which kept Wall Street and Main Street banks walled off from each other, was repealed in 1998. This allowed FDIC-insured banks, whose deposits were guaranteed by the government, to engage in highly risky business. It also allowed the banks to bulk up, becoming bigger, more complex and unwieldy.

●Many states had anti-predatory lending laws on their books (along with lower defaults and foreclosure rates). In 2004, the Office of the Comptroller of the Currency federally preempted state laws regulating mortgage credit and national banks. Following this change, national lenders sold increasingly risky loan products in those states. Shortly after, their default and foreclosure rates skyrocketed.

Bloomberg was partially correct: Congress did radically deregulate the financial sector, doing away with many of the protections that had worked for decades. Congress allowed Wall Street to self-regulate, and the Fed the turned a blind eye to bank abuses.

The previous Big Lie — the discredited belief that free markets require no adult supervision — is the reason people have created a new false narrative.

Now it’s time for the Big Truth.

http://www.washingtonpost.com/business/what-caused-the-financial-crisis-the-big-lie-goes-viral/2011/10/31/gIQAXlSOqM_story.html

All of the points listed here are 100% true.  What the author is leaving out our the Government Sponsored Entities which backed the subprime loans and offered incentives as well as the "innovative" lending mentioned, and are also the largest population of MBS pools in the country.  The government guarantees that its investors will receive timely payments and that the loan will perform.  They are 100% guaranteed by the full credit of the U.S. Government and therefore are considerd very low risk despite the fact that investors never really know what the cashflow will be.

With the GSEs jumping in with the Subprime loans (they've been allowed to back private loans not just government (VA/FHA) since the 70's), despite the fact the loans were already risky, investors viewed these pools as being low-risk because of the fact they were GSE-backed.

To me, this is what is scary and most disturbing and why I keep saying it's the White House that needs revamped.  The WH should not be gambling with tax-payer money and investing in loans that they knew full and well were risky.  Nor should they be lining the pockets of bankers with incentives to write bad loans and create and sell these MBS pools.

Oh, Stephen, my definition of Capitalism...the ECOMONIC definition, not Objectivist ;-) .....

A social system based on the rights of the individual. 

You can not have a system of Capitalism economically, if you do not first have individual rights, i.e. property rights.  From an Objectivist point of view, you would have to say that Capitalism is the only moral and just system because it is the only one dedicated to the protection of rights, whereas, Communism for instance, which deems that society be "classless" by nature would mean every person would lose their right to own property of any kind, or to own wealth, as it would be owned by the republic.  Socialism would be deemed immoral as it refers to the sacrifice of one man to another.  While you may still retain your right to own property, it is dictated that you must give away what you own to those deemed less fortunate.  Since this system uses force to distribute what is rightly yours, it is immoral.

[second_pancake]

Then you are wrong.  That is not a definition of capitalism in any sense of the word.

and once again, you are blaming the rule of law itself rather than the breakers of the law.

Uh, Stephen, yes it is.  It is literally a piece of the full economic definition of Capalisim which is states, "...system in which the means of production and distribution are privately or corporately owned and development is proportionate to the accumulation and reinvestment of profits gained in a free market"

LOL.  I think it's funny how you linked to something I specifically did NOT use because Wiki does not give a clear definition, but in fact clearly states, "There is no consensus on the precise definition nor on how the term should be used as a historical category."  You asked me for MY definition and I gave it to you.  I gave you the political definition and the economic definition.  I defined how it relates to Communissm and Socialism, which unlike Capitalism DO have very clear and distinct definitions.  I can't be wrong if there is "no consensus", my friend.

[second_pancake]

Adam Smith considered government crucial to the economy both as an investor as well as a regulator.  In fact he said to beware of laws that come out of the business communities that are helpful to business, as it they are almost always at odds with the good of the public and the market.

Thats not the opinion of a person who believes that government should be out of the business of regulation, is it?

Adam Smith would probably be out on the street with the Occupy Wall Street protestors, Second Pancake.  And considering how little affection Ayn Rand had for people who got rich without actually producing anything, I think she would probably be standing right next to him.

Why arent you out there with the OWS protesters?

Because of this:
http://owsworkingdocs.wordpress.com/economic-charter/

and this:
https://docs.google.com/document/d/1GB_9qNl1DnfgLXLQj05OPNX60qn1Jf6IwPISiD-q6kk/edit?hl=en_US&pli=1#

and this:
http://piratenpad.de/cyG2aD0YGO

and this:
https://sites.google.com/site/the99percentdeclaration/

and this:
http://tapnec.wikispaces.com/Alternative+TOC+-+Draft

I think this statement is one of my favorites, " Make failing impossible to assure that everyone has the same chance in the work place post-college."  Awwww, that's so sweet. 

Oh, wait, I almost forgot about this one: http://tapnec.wikispaces.com/Happiness

[FayeforCure]

Greed isn't what makes capitalism work, but nor is it typically the culprit when capitalism goes astray. The real problem isn't greed, but rather institutional structures that reward antisocial behaviour. Which structures? Well, that depends on which particular antisocial behaviour you're talking about. And that's precisely where the Occupy movement faces its greatest challenge. You can't plausibly take aim at a hundred different social ills and presume to find the cause of them all in the single word "greed."

http://www.canadianbusiness.com/blog/business_ethics/55773--greed-capitalism-and-the-occupy-movement

The problem is that so much is wrong, it's hard to know what to address first.

Lets restore Democracy first: Public Financing of Campaigns!
http://www.getmoneyout.com

[second_pancake]

FayeForCure, I was looking for the 'Like' button then realized I wasn't on FaceBook, ;-)

Here's yet another reason I'm not out there with the protestors, Stephen: http://www.washingtontimes.com/blog/robbins-report/2011/oct/12/occupy-wall-street-demands-cap-banker-salaries-200/print/

Btw, I did the math on this and this and using this structure, we could run our government for 15.5 days, based on 155mm workers.  If you use the total population of the U.S. (not excluding children, elderly, disabled, etc.), it would run our government for a little over a month :-)  Whoo hoo!

[FayeforCure]

The fundamental Meaning of Freedom is what differs most when comparing OWS with the Tea Party:

Even today, leading libertarians would rescind a host of government programs initiated over the last few generations, including Social Security and Medicare. Moreover, this view of freedom means that the Tea Partiers will not be particularly concerned about issues such as the widening income inequality in the United States. Such inequality is a product of markets, and should not be a source of worry.

On the other side -- personified by the Occupy protesters -- are those who have a more substantive and robust view of liberty than simply freedom from government.

Instead, freedom can mean
freedom from poverty and economic oppression.
It can mean freedom from discrimination.
It can mean freedom to breathe clean air or eat untainted food.
It can mean freedom to learn in decent schools and universities.
It can mean freedom from the fear that age, disease, or accident will cause you to lose your home or livelihood.

Franklin Roosevelt best articulated this positive notion of liberty when he argued that citizens had the right to "freedom from want" and "freedom from fear."

Notice that this view of freedom often requires government assistance and attention. To protect people from discrimination, you need government to penalize it. To ameliorate poverty, you need government to create educational systems, school lunch programs, and homeless shelters.

To address income inequality, the key issue of the Occupy movement, we cannot depend on the so-called "free market." (For more on how the "free" market is not so free, see my new book The Myth of Choice.) Rather, we need things that government can best provide -- oversight of executive compensation, protections for unions, a decent minimum wage, and a progressive tax system, for example.

Of course libertarians do not necessarily see all government activity as the Great Satan, and the Occupiers do not necessarily see government as the Great Savior. But the conflicting views on what freedom means will create an inevitable and deep-seated rift over the proper role of government.

No matter how similar the Tea Partiers and the Occupiers appear, they will never agree about most of the political questions that matter.

Kent Greenfield

Kent Greenfield, a professor at Boston College Law School, is the author of The Myth of Choice: Personal Responsibility in World of Limits, forthcoming October 2011 from Yale University Press. At Boston College, he teaches and writes in the areas of constitutional law, business law, and legal theory. He is also the author of The Failure of Corporate Law, published in 2007 by University of Chicago Press. Before joining the faculty at Boston College, he clerked for Justice David H. Souter of the United States Supreme Court.

http://www.huffingtonpost.com/kent-greenfield/tea-party-occupy-wall-street_b_1065717.html

BTW, thanks second_pancake........restoring real Democracy is the best way to start.

[second_pancake]

Why arent you out there with the OWS protesters?

Because of this:
http://owsworkingdocs.wordpress.com/economic-charter/

and this:
https://docs.google.com/document/d/1GB_9qNl1DnfgLXLQj05OPNX60qn1Jf6IwPISiD-q6kk/edit?hl=en_US&pli=1#

and this:
http://piratenpad.de/cyG2aD0YGO

and this:
https://sites.google.com/site/the99percentdeclaration/

and this:
http://tapnec.wikispaces.com/Alternative+TOC+-+Draft

I think this statement is one of my favorites, " Make failing impossible to assure that everyone has the same chance in the work place post-college."  Awwww, that's so sweet. 

Oh, wait, I almost forgot about this one: http://tapnec.wikispaces.com/Happiness

Ok.  Having read through all of the links you provided, I don't understand at all.  You just got through saying you agreed with every single one of the points raised in the list of greviances, and the rest of the links appear to be an ongoing conversation/debate about how to tackle the different issues.  None of them were a finished product and simply consisted of color highlighted debate points.

Your final link isnt even from Occupy Wall Street.

Im beginning to think that you literally do not know what you are talking about at all.

what gives?

Perhaps it would be clearer if you explained it in your own words rather that trying to let  everyone come to private conclusions after reading a chaotic collection of links.

Lol.  Stephen, all of the links provided are from the original Shared Working Documents link.  One link leads to another and so on.  Yes, the last link is from an Occupy Wall Street supported movement (do the back track).

In reading the list of grievances, I agree on some of the points, as I stated previously, however then you start to read on and everything just gets nuts...seriously nuts, as you can see by the last link which is from the OWS Economic Charter that is listed on the Shared Documents Site.  If you click on that from the page, it will give you the address tapnec.wikispaces.com and it tells you that they've moved it to the wikispaces site. 

I told you what I agree with and what I don't and you asked why I wasn't out there.  All of the content and dialouge in those links is why I'm not out there.  They're NUTS!  One person will come up with something that makes sense and another, of the same movement, will say something that is completely off the wall and then they put it in their documents for all to see as something they are considering?!?!  I don't support any movement that can't even agree among themselves what it is they stand for and what it is they are looking to change.  So far as the items they all seem to be in agreement on, such as "forgiveness of all student debt", I don't agree at all. 

You want to know what I agree with, I stated in the previous posts.  That list is not all encompassing of what the OWS movement believes, and it's those additional items that causes me and many others to lose all respect for them.

[second_pancake]

An 'occupy wall street' supported movement?

that sounds terribly disingenuous.

So you dislike conversation in which some of the participants sound a little nuts?

Well I hope no one reads this conversation with your definition of the economic meaning of capitalism....lol.

You're right, it's not an OWS "supported" movement, it IS OWS.  Here is the link path:

http://owsworkingdocs.wordpress.com/economic-charter/

Then click:  "The American People's Charter".  You should get a message saying, "The bulk of this text has now been moved to, tapnec.wikispaces.com"

Go to www.tapnec.wikispaces.com, click on, (on the left-hand side where all the chapters are listed) under "Additional Topics", "Happiness".  There you will see the content for which the original link was provided.  Stephen, this is OWS.  This is what they and the protestors are putting out there.

In regard to the Capitalism retort.  I already stated where the definition came from and how your "wiki" version supported my argument so I don't know why you're bringing it up again unless you just like to argue for the sake of arguing?

[second_pancake]

See my notes within the quote:

Second Pancake.

There are definitions for 'capitalism'.

They are well known, and well established.

Your definition, derived from the works of Ayn Rand, specifically from the speech by John Galt at the end of the book, is not among them. SP - You asked me MY definition and I gave it to you.  The economic definition is accurate.  Google it.  It's not from me, it's what I believe.

There isnt an argument to be supported here.  It either is, or isnt a definition of capitalism.  And it isnt. SP - It is.  Google it, Mr. Internet.

It would be like claiming that the definition of Christianity is a society where everyone is a vegetarian. SP - apples and oranges my friend.  Just because you don't like something doesn't mean you can claim it as false.  Your accusation is that my definition is wrong.  The burden of proof is on you.  Prove it.

Its just nonsense.  Absurd nonsense.

And how do you propose that a purely 'economic' definition of an economic system is actually a social system? SP - I defined how the economic definition ties into the definition I wrote.  Again, just because you don't like it and dont' agree with it, doesn't mean it's untrue.

On the subject of your 'happiness' link......are you seriously claiming that the occupy wall street movement is about legalizing psychadelic drugs?  SP - I am not claiming it, Stephen.  It is what it is.  This is on their website.  I am not making this up.  You can look at it just as anyone else can and if you want to question it, they also posted the weekly conference call number along with their passcode to listen in.  I plan on listening.  Why don't you join in and ask them why they posted this on their site?

Considering that it took you a while to explain the tenuous connection (at best) between the New Economic Charter content and the Occupy Wall Street content, I am going to just assume here that this isnt something that you actually researched yourself, but rather a set of links that you followed and copied from some other source.  SP - It took me a while because, oh, I have a JOB, and I wanted to be sure I was giving accurate information and not a bunch of B.S. for you to try and poke holes in.  Next time I'll just do like you do and make a bunch of opinionated statements as if they are fact and berate others when I don't like what they have to say, lol.

Sorry, SP, it just doesnt pass muster.  And you have to ask yourself, why was it removed from where ever you are claiming it was moved from to the new site in the first place? SP - Don't know why it was moved.  I don't run OWS.  I would suggest, as I did above to ask them on their weekly conference call.  Since I read everything I can get my hands on though, and read their meeting notes from October (posted on the same wiki link) in which they stated they were transitioning for more "server space".  i would imagine that's what it was for.

[Ajax]

I think you may be referring to that discredited old fraud, Milton Friedman, who had some basics correct, but his nearly mystical references to 'the invisible hand of the market' in my opinion have proven to be his oracle at delphi inasmuch as believing that 'government' is somehow 'outside' of the market.

I'm being petty here, but this has been bothering me.  I read your comment yesterday and haven't been able to respond until now.  Who has discredited Friedman?  And do you really need to call him an old fraud?  That's really over the line. 

[FayeforCure]

I think you may be referring to that discredited old fraud, Milton Friedman, who had some basics correct, but his nearly mystical references to 'the invisible hand of the market' in my opinion have proven to be his oracle at delphi inasmuch as believing that 'government' is somehow 'outside' of the market.

I'm being petty here, but this has been bothering me.  I read your comment yesterday and haven't been able to respond until now.  Who has discredited Friedman?  And do you really need to call him an old fraud?  That's really over the line.

Just google Milton Friedman and fraud:

Milton Friedman was a nobel winning economist and acclaimed in the corporate media as a genius and yet most if not all the countries in which his economic polices were put into practice experienced one degree or other of disaster economically. In Chile', after the dictator Pinochet (For someone who talked so much about "Freedom" his policies were surprisingly popular with authoritarian regimes) imposed Friedman's ideas the economy promptly went down the toilet, then revived in the early 1980's only to plummet again even further. Pinochet finally had to abandon many of The Chicago Boys (Friedman's deciples) policies and the economy recovered somewhat. When the former USSR collapsed Friedman's ideas were applied there in "free-market shock therapy" and the country went into severe economic depression. The U.S. lost 20% of its wealth during our great depression, the USSR under Friedman's policies lost 40% of it's wealth. The IMF forced Friedman's ideas on many countries by with holding loans needed by developing countries unless they enacted "structural adjustment" which were based on Friedman's ideas. They forced them on Argentina in the 1980s and '90's and a few years later Argentina's economy collapsed entirely. His policies couldn 't be forced on the U.S. itself to the extent that they were in so called third world countries but to the extent they have been they have caused a reduction in general prosperity, even the corporate media which were big boosters of Friedman's economic ideas carry stories today about the shrinking middle class, negative savings rates, and skyrocketing family debt. Friedman's ideas were basically recycled Laize Faire, the economic regime pushed by imperial Britain in the late 1800's, and associated with a lavishly wealthy aristocratic class, a relatively small middle class and the great mass of people in having a hard time financially or in abject poverty. With Friedman's policies still so powerful in the media and in the political establishment things are still going in that direction back from our peak GENERAL prosperity in the 1960's and early 1970's. Friedman did have one huge "success" though that explains his high stature in the corporate media and amoung politicians, he made very wealhy people MUCH wealthier. That's undeniable.

http://www.nysun.com/comments/35236

[NotNow]

Faye,

A reader comment from the Sun?  Really?  I'm not even a big Friedman fan but that is no justification of the words "discredited" or "fraud" in describing this man:

Milton FriedmanFrom Wikipedia, the free encyclopedia
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Milton Friedman Chicago School of Economics

Born July 31, 1912(1912-07-31)
Brooklyn, New York
Died November 16, 2006(2006-11-16) (aged 94)
San Francisco, California
Nationality American
Institution Hoover Institution (1977â€"2006)
University of Chicago (1946â€"77)
Columbia University (1937â€"41, 1943â€"45, 1964â€"65)
NBER (1937â€"40)
Field Economics
Alma mater Columbia University (Ph.D.), 1946, University of Chicago (M.A.), 1933
Rutgers University (B.A.), (1932)
Opposed John Maynard Keynes, John Kenneth Galbraith, Murray Rothbard
Influences Adam Smith, Irving Fisher, Frank Knight, Murray Rothbard, Jacob Viner, Harold Hotelling, Arthur Burns, Friedrich Hayek, Homer Jones, Ludwig von Mises, Henry Simons, George Stigler
Influenced David D. Friedman, Anna J. Schwartz, Ben Bernanke, Gary Becker, Thomas Sowell, Harry Markowitz, Chicago Boys, William F. Buckley, Jr., Cato Institute
Contributions Price theory, Monetarism, applied macroeconomics, floating exchange rates, volunteer military, Permanent income hypothesis, Friedman test
Awards John Bates Clark Medal (1951)
Nobel Memorial Prize in Economics (1976)
Presidential Medal of Freedom (1988)
National Medal of Science (1988)
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Milton Friedman (July 31, 1912 â€" November 16, 2006) was an American economist, statistician, academic, and author who taught at the University of Chicago for more than three decades. He was a recipient of the Nobel Memorial Prize in Economic Sciences. Among scholars, he is best known for his theoretical and empirical research, especially consumption analysis, monetary history and theory, and for his demonstration of the complexity of stabilization policy.[1]

Friedman was an economic advisor to conservative President Ronald Reagan. Over time, many governments practiced his restatement of a political philosophy that extolled the virtues of a free market economic system with little intervention by government. As a leader of the Chicago school of economics, based at the University of Chicago, he had great influence in determining the research agenda of the entire profession. Milton Friedman's works, which include many monographs, books, scholarly articles, papers, magazine columns, television programs, videos, and lectures, cover a broad range of topics of microeconomics, macroeconomics, economic history, and public policy issues. The Economist described him as "the most influential economist of the second half of the 20th century…possibly of all of it."[2]

Friedman was a Keynesian in the 1930s and 1940s, and always said he favored some aspects of the New Deal such as "providing relief for the unemployed, providing jobs for the unemployed, and motivating the economy to expand... an expansive monetary policy"; however, he never advocated wage and price controls. His challenges to what he later called "naive Keynesian" (as opposed to New Keynesian) theory[3] began with his 1950s reinterpretation of the consumption function. At the University of Chicago, Friedman became the main advocate opposing activist Keynesian government policies; he has been characterized as "the leader of the first recognized counterrevolution against Keynesianism",[4] although even in the late-1960s he described his own approach (along with all of mainstream economics) as still wedded to the "Keynesian language and apparatus" albeit rejecting its "initial" conclusions.[5] During the 1960s he promoted an alternative macroeconomic policy known as "monetarism". He theorized there existed a "natural" rate of unemployment, and argued that governments could increase employment above this rate (e.g., by increasing aggregate demand) only at the risk of causing inflation to accelerate.[6] He argued that the Phillips Curve was not stable and predicted what would come to be known as stagflation.[7] Though opposed to the existence of the Federal Reserve, Friedman argued that, given that it does exist, a steady, small expansion of the money supply was the only wise policy.[8]

Influenced by his close friend George Stigler, Friedman opposed government regulation of many types. He once stated that his role in eliminating U.S. conscription was his proudest accomplishment, and his support for school choice led him to found The Friedman Foundation for Educational Choice. Friedman's political philosophy, which he considered classically liberal and libertarian, emphasized the advantages of free market economics and the disadvantages of government intervention and regulation, strongly influencing the opinions of American conservatives and libertarians. In his 1962 book Capitalism and Freedom, Friedman advocated policies such as a volunteer military, freely floating exchange rates, abolition of medical licenses, a negative income tax, and education vouchers.[9] His books and essays were widely read, and his words had both underground and overt influence in Communist countries.[10][11][12][13] Friedman's economic theories had an international influence in era since 1970. Some of his laissez-faire ideas concerning monetary policy, taxation, privatization and deregulation were used by governments, especially during the 1980s. A combination of his monetary theory in regard to credit and Keynes's belief in deficit spending to stimulate growth has influenced economists such as Ben Bernanke and the Federal Reserve's response to the financial crisis of 2007â€"10.[14]


http://en.wikipedia.org/wiki/Milton_Friedman