The Deep Divide

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Dave

Dave is a part-time blogger that writes about whatever suits him at the time.

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13 Responses

  1. Avatar Chris Dierkes
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    says:

    D,

    This is a very helpful emendation (correction?) to my post. Thanks.Report

  2. Avatar dexter45
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    says:

    Would somebody on this site explain to me why these firms are necessary? From my viewpoint all they do is cause grief and make a bizarre amount of money taken from the people who actually produce things. All they do is push paper.Report

    • Avatar North in reply to dexter45
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      says:

      @dexter45,
      Dexter, they provide credit, financial tools, leverage, hedging and myriad other services that allow the firms that produce “things” to produce things more effectively.Report

    • Nob Akimoto Nob Akimoto in reply to dexter45
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      says:

      @dexter45,
      Essentially the main point of capital markets is that it lets the rest of the economy acquire money easily to do xyz.
      (Everything from meet payroll to acquire competitors to invest in new machinery)

      Of course some of this IS just shuffling money around for the sake of it which is to say the least problematic, but pushing paper is vital.Report

    • Avatar Barry in reply to dexter45
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      says:

      @dexter45, Frankly, a large chunk of the financial sector should be destroyed. It’s clear now that the old regulated system, despite its many flaws, was vastly better than the current system.Report

      • Avatar Dave in reply to Barry
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        says:

        @Barry,

        Destroyed how? Sold off into smaller parts? Banning certain trading activities and structured financial products?

        I know that Progressives like Paul Krugman yearn for the days of old, boring banking (and to some extent there are fair points to be made), but modern finance is significantly more advanced today than it was 50 years ago (even in fields like basic risk management which don’t even go into the speculative nature that certain derivatives transactions are associated with).

        The trick is to find the balance.Report

        • Avatar Barry in reply to Dave
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          says:

          @Dave, That’s true, but we have pretty good evidence that we should move a lot away from where we are now. As to what, I’d love to break things up, and to hold the higher-ups responsible.

          Of course, this is mostly impossible; I fear that the financial sector runs too much of the country to be dislodged, unless (until) we have an actual depression.Report

  3. Avatar North
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    says:

    Awsome post Dave.Report

  4. Avatar Barry
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    says:

    Dave: “I always pity someone who has to negotiate with fools.”

    They’re not fools so much as liars, and in most cases lying to lower-ranking liars.

    Note that we don’t see massive tea party rallies pushing for the reining in of Wall St? Coincidence, or the fact that the astroturf organizations are not paying for such rallies?Report

    • Avatar Dave in reply to Barry
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      says:

      @Barry,

      I haven’t paid much attention to the tea parties other than reading what some of the League has written.

      Whether or not I have seen them, I am certain that the Tea Party crowd opposes the bailouts and opposes the comfy relationship that Wall Street has with government.

      I also happen to think that there are people within that movement who oppose bailouts and financial reform on the basis that they think they are opposing Wall Street. Sarah Palin’s attempt at discussing financial reform reads that way to me.

      There are liars spreading misinformation but I also think there are a lot of fools too. Maybe you’re right on that one but, as skeptical as I am, I’m not willing to dismiss the majority of people who misunderstand (IMO) the roots of the crisis as liars. I don’t think that’s fair.Report

    • Avatar North in reply to Barry
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      says:

      @Barry, Never attribute to malice, Barry, what can be explained by stupidity.Report

      • Avatar Barry in reply to North
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        says:

        @North, When there are a lot of people who are making good money telling things that they have to know are not true, malice looks more likely than stupidity.

        As for the standard Tea Baggers, I saw huge anti-HCR rallies, but squat for anti-Wall St rallies. For a bunch of alleged conservatives who’ve seen radical deregulation of Wall St trash the economy (and their house prices, jobs, savings, etc.) these guys seem suspiciously slow to anger when that anger would be displeasing to right-wing elites.Report

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