11 ms·

I used to be surprised when I would read articles about this mythical legislative process which can and will protect lowly plebians like me. I'm not sure why so

by toolz 6y ago

I used to be surprised when I would read articles about this mythical legislative process which can and will protect lowly plebians like me. I'm not sure why so many people are under the impression legislation will be able to keep up with perversely motivated individuals or groups. Who are these legislators with motives so pure that they will never be bribed to only look out for my interests? Let's never forget there is only one person in jail for the 2008 crash this article is trying to convince us was the result of too little regulation. There was never enough incentive to protect us from the people who created that market crash.

harwoodleon 6y ago
Financial regulation is and always has been two sided. To protect you from losses and to protect you from profit.
conception 6y ago
I think the problem with 2008 was that no one was doing anything illegal, just a lot of poor judgement and lack of regulations.
- anthony_barker 6y ago
  Tell that to Madoff
  - arcticbull 6y ago
    Well not nobody obviously, crime still happened.
  - vmception 6y ago
    Madoff became a convict because of the crash, not because he was liquidating massive amounts or had a large portfolio of collateralized debt that would exacerbate a crash.
- roenxi 6y ago
  Bitcoin was created by people who were so peeved at the regulator's interventions in the '08 crisis that they decided that bypassing the entire financial system was the best option. Forever immortalising "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks" just as a reminder of why they were doing what they did [0]. We don't need better regulation. We need, when financial firms muck up on a global scale, to replace the people who run those firms with different people. There is an easy way to do that, let them go broke. The biggest problem in the room is that the regulators have bought in to the idea that some companies are "too big to fail". That is a stupid idea, fundamentally unfair, completely throwing out the best part of capitalism which is that recognised idiots aren't allowed to be in charge. That problem will certainly not be solved by giving the regulators more power. [0] https://en.bitcoin.it/wiki/Genesis_block https://en.bitcoin.it/wiki/Genesis_block
  - arcticbull 6y ago
    Bitcoin was most likely created by Paul Le Roux to launder money for his questionable business empire. The rest was just a flag to wrap around.
    - ogogmad 6y ago
      WTF? Do you actually understand Bitcoin? BTC solved the problem of having concensus in a decentralised, distributed system without deferring to a dictator... Finding a way to do that was an open problem for decades. I used to think you had something intelligent to say about Bitcoin, but you've opened my eyes now.
      - arcticbull 6y ago
        Right, yeah, just very incredibly super duper inefficiently. I don't disagree that wasting an entire country's worth of electricity is a novel and unique way of solving the byzantine generals problem up to 7 transactions per second. I just don't think it should be used in the real world, certainly not as a currency. I think it's worth separating my appreciation for Bitcoin in the strictest, most technical sense. I get it, it's neat, it's got that allure of being challenging and having many perceived potential use cases. It solved a legitimate hard problem. I think the tool is fascinating. I think the use cases though, just aren't. Apologies to have disappointed, though!
- jokethrowaway 6y ago
  The problem is the creation of the wrong incentives by Keynesian governments
  - FabHK 6y ago
    In the run-up to 2008, financial regulations in the US were shredded by Republican governments (literally [1]), hardly Keynesian. [1] https://www.propublica.org/article/banks-favorite-toothless-regulator-1125 https://www.propublica.org/article/banks-favorite-toothless-...
    - seaourfreed 6y ago
      Republicans like to say they aren't Keynesian, but that is wrong. Keynes says deficit spending should occur when a bubble (business cycle) bursts, in order to force full employment when mass unemployment would happen. But in the USA in the last 50 years, politicians deficit spend every year. They deficit spend in all stages of bubbles. They deficit spend when there is already full employment. "Politician macroeconomics" is far more deficit spending than Keynes. This includes Republicans. They just do it with tax cuts and increased defense spending to create deficit spending.
      - FabHK 6y ago
        You’re completely correct that Republicans fret and complain about the deficit when a Democrat president is in office and social spending and aid for the poor is concerned, and then turn around and institute huge gratuitous tax cuts when they’re in power (the deficit be damned), and empirically increase the deficit more than Democrat presidents. I’d call that hypocrisy though, not principled and appropriate Keynesianism. Remember for example the opposition to the Obama stimulus after the financial crisis, which promptly resulted in a stimulus package that was too small and needlessly slowed recovery, followed by Trump’s tax cut for corporations and the wealthy. Keynes calls for anti cyclical spending, not indiscriminate one.
    - CryptoPunk 6y ago
      In the decade before the financial crisis, regulatory pressure was used to force banks to issue more subprime mortgages. This article from 2000 warns of the consequences: https://www.city-journal.org/html/trillion-dollar-bank-shakedown-bodes-ill-cities-12096.html https://www.city-journal.org/html/trillion-dollar-bank-shake... Government sponsored enteprises, which underwrite 50% of the entire US mortgage market, started massively increasing their subprime loan guarantees at the same time. And then you have Federal Reserve mouthpiece, New York Times columnist Paul Krugman, advocating in this 2002 article that the Federal Reserve create a housing bubble: https://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html https://www.nytimes.com/2002/08/02/opinion/dubya-s-double-di... "To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble." This revisionist account of the causes of the financial crisis is just these same powerful forces, who are receiving billions in kickbacks from all of this corruption, pinning the blame for the financial crisis on the mythical deregulation-bogeyman.
- lakecresva 6y ago
  There was widespread fraud (of the criminal variety) in the run-up to 2008. A number of journalists, particularly Matt Taibbi, have written extensively about this.
- fortran77 6y ago
  Many, many people filled out fraudulent loan applications. Many, many people took "first time home buyers tax credits" they weren't entitled to. But the Government decided it would look bad to prosecuted hundreds of thousands of small-time tax cheats and fraudsters. According to this story, 50% of people getting the first-time home buyers tax credit in 2008 weren't entitled to it. The IRS itself estimates that over 50 percent of the individuals claiming the first-time credit will not be complying with that requirement to supply proof that they actually purchased a home. https://www.npr.org/templates/story/story.php?storyId=126010317?storyId=126010317 https://www.npr.org/templates/story/story.php?storyId=126010... Of course, NPR simply says these people were "confused."
tw04 6y ago
>There was never enough incentive to protect us from the people who created that market crash. There absolutely was, it's just been a LONG time since actual progressive policy had any traction in the US, and quite frankly it's sad how many people are eager to throw away their own best interests. https://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_legislation https://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_legisla...
- toolz 6y ago
  In 2010 95% of incumbents were re-elected. What is this incentive you're referring to?
  - sudosysgen 6y ago
    I'm guessing you didn't click the link, because they were talking about way further back than 2010. Not that I fully agree with them.
- jl2718 6y ago
  Stop calling it progressive if you want it to get traction. It’s a meaningless word in this context that prevents further consideration for many people.
arcticbull 6y ago
> I'm not sure why so many people are under the impression legislation will be able to keep up with perversely motivated individuals or groups. Because overwhelmingly it does each and every day. [edit] This bias comes down to the same issue as folks in infrastructure roles have in the tech world demonstrating their impact. How do you demonstrate impact avoiding SEVs when, if you're successful, the SEV never happened? It's very hard to count the number of things that don't happen.
- faissaloo 6y ago
  I think it's very much dependant on where you live, I don't think someone in Detroit for example is likely to hold the same view
- ta1234567890 6y ago
  > It's very hard to count things that don't happen Interesting problem. Just thinking about this particular issue, maybe some options are: 1) counting time and then expressing success as the longest period of time during which the bad events didn't happen, 2) letting it happen initially to have a base "bad rate", then taking action to bring that rate down, and continuously make an effort to keep the occurring rate down People preventing accidents at industrial sites have good experience doing this.
  - jimz 6y ago
    Although the incentives are a bit different when it comes to law enforcement, as in the US it's quite common for those who hold all of the discretionary authority in invoking the criminal justice system - prosecutors and sheriffs and Attorneys General - to be elected positions, and at the same time, the continued existence of their bailiwick in the same size and with the same funding requires a show of at least some evident criminal behavior that they're preventing, whether that actually corresponds to actual crimes or not is sometimes entirely incidental. Innocence Projects around the country have found a significant percentage of those freed by their efforts to not only have not committed a crime, but also no crime had taken place in the first place. Coercive plea bargaining makes actually going to trial to hold the state to its burden of proof an exceedingly rare practice. On some level it is a performative exchange and has always been. Criminal statutes are also written in ways that don't necessarily fit what we generally imagine a word means. A burglary in many states simply mean the commission of a felony while trespassing. A conspiracy requires usually no more than two participants, a meeting of minds, and a substantial step in preparation. Accidents in industrial sites are, in comparison, far more objective and far harder to game for various interests. Crime, on the other hand, really represents much more abstract sets of guidelines applied to alleged conduct and state of mind, and much easier to game in terms of numbers.

by toolz 6y ago

harwoodleon 6y ago

Financial regulation is and always has been two sided. To protect you from losses and to protect you from profit.

conception 6y ago

I think the problem with 2008 was that no one was doing anything illegal, just a lot of poor judgement and lack of regulations.

anthony_barker 6y ago
Tell that to Madoff
- arcticbull 6y ago
  Well not nobody obviously, crime still happened.
- vmception 6y ago
  Madoff became a convict because of the crash, not because he was liquidating massive amounts or had a large portfolio of collateralized debt that would exacerbate a crash.
roenxi 6y ago
Bitcoin was created by people who were so peeved at the regulator's interventions in the '08 crisis that they decided that bypassing the entire financial system was the best option. Forever immortalising "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks" just as a reminder of why they were doing what they did [0]. We don't need better regulation. We need, when financial firms muck up on a global scale, to replace the people who run those firms with different people. There is an easy way to do that, let them go broke. The biggest problem in the room is that the regulators have bought in to the idea that some companies are "too big to fail". That is a stupid idea, fundamentally unfair, completely throwing out the best part of capitalism which is that recognised idiots aren't allowed to be in charge. That problem will certainly not be solved by giving the regulators more power. [0] https://en.bitcoin.it/wiki/Genesis_block https://en.bitcoin.it/wiki/Genesis_block
- arcticbull 6y ago
  Bitcoin was most likely created by Paul Le Roux to launder money for his questionable business empire. The rest was just a flag to wrap around.
  - ogogmad 6y ago
    WTF? Do you actually understand Bitcoin? BTC solved the problem of having concensus in a decentralised, distributed system without deferring to a dictator... Finding a way to do that was an open problem for decades. I used to think you had something intelligent to say about Bitcoin, but you've opened my eyes now.
    - arcticbull 6y ago
      Right, yeah, just very incredibly super duper inefficiently. I don't disagree that wasting an entire country's worth of electricity is a novel and unique way of solving the byzantine generals problem up to 7 transactions per second. I just don't think it should be used in the real world, certainly not as a currency. I think it's worth separating my appreciation for Bitcoin in the strictest, most technical sense. I get it, it's neat, it's got that allure of being challenging and having many perceived potential use cases. It solved a legitimate hard problem. I think the tool is fascinating. I think the use cases though, just aren't. Apologies to have disappointed, though!
jokethrowaway 6y ago
The problem is the creation of the wrong incentives by Keynesian governments
- FabHK 6y ago
  In the run-up to 2008, financial regulations in the US were shredded by Republican governments (literally [1]), hardly Keynesian. [1] https://www.propublica.org/article/banks-favorite-toothless-regulator-1125 https://www.propublica.org/article/banks-favorite-toothless-...
  - seaourfreed 6y ago
    Republicans like to say they aren't Keynesian, but that is wrong. Keynes says deficit spending should occur when a bubble (business cycle) bursts, in order to force full employment when mass unemployment would happen. But in the USA in the last 50 years, politicians deficit spend every year. They deficit spend in all stages of bubbles. They deficit spend when there is already full employment. "Politician macroeconomics" is far more deficit spending than Keynes. This includes Republicans. They just do it with tax cuts and increased defense spending to create deficit spending.
    - FabHK 6y ago
      You’re completely correct that Republicans fret and complain about the deficit when a Democrat president is in office and social spending and aid for the poor is concerned, and then turn around and institute huge gratuitous tax cuts when they’re in power (the deficit be damned), and empirically increase the deficit more than Democrat presidents. I’d call that hypocrisy though, not principled and appropriate Keynesianism. Remember for example the opposition to the Obama stimulus after the financial crisis, which promptly resulted in a stimulus package that was too small and needlessly slowed recovery, followed by Trump’s tax cut for corporations and the wealthy. Keynes calls for anti cyclical spending, not indiscriminate one.
  - CryptoPunk 6y ago
    In the decade before the financial crisis, regulatory pressure was used to force banks to issue more subprime mortgages. This article from 2000 warns of the consequences: https://www.city-journal.org/html/trillion-dollar-bank-shakedown-bodes-ill-cities-12096.html https://www.city-journal.org/html/trillion-dollar-bank-shake... Government sponsored enteprises, which underwrite 50% of the entire US mortgage market, started massively increasing their subprime loan guarantees at the same time. And then you have Federal Reserve mouthpiece, New York Times columnist Paul Krugman, advocating in this 2002 article that the Federal Reserve create a housing bubble: https://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html https://www.nytimes.com/2002/08/02/opinion/dubya-s-double-di... "To fight this recession the Fed needs more than a snapback; it needs soaring household spending to offset moribund business investment. And to do that, as Paul McCulley of Pimco put it, Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble." This revisionist account of the causes of the financial crisis is just these same powerful forces, who are receiving billions in kickbacks from all of this corruption, pinning the blame for the financial crisis on the mythical deregulation-bogeyman.
lakecresva 6y ago
There was widespread fraud (of the criminal variety) in the run-up to 2008. A number of journalists, particularly Matt Taibbi, have written extensively about this.
fortran77 6y ago
Many, many people filled out fraudulent loan applications. Many, many people took "first time home buyers tax credits" they weren't entitled to. But the Government decided it would look bad to prosecuted hundreds of thousands of small-time tax cheats and fraudsters. According to this story, 50% of people getting the first-time home buyers tax credit in 2008 weren't entitled to it. The IRS itself estimates that over 50 percent of the individuals claiming the first-time credit will not be complying with that requirement to supply proof that they actually purchased a home. https://www.npr.org/templates/story/story.php?storyId=126010317?storyId=126010317 https://www.npr.org/templates/story/story.php?storyId=126010... Of course, NPR simply says these people were "confused."

tw04 6y ago

>There was never enough incentive to protect us from the people who created that market crash. There absolutely was, it's just been a LONG time since actual progressive policy had any traction in the US, and quite frankly it's sad how many people are eager to throw away their own best interests. https://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_legislation https://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_legisla...

toolz 6y ago
In 2010 95% of incumbents were re-elected. What is this incentive you're referring to?
- sudosysgen 6y ago
  I'm guessing you didn't click the link, because they were talking about way further back than 2010. Not that I fully agree with them.
jl2718 6y ago
Stop calling it progressive if you want it to get traction. It’s a meaningless word in this context that prevents further consideration for many people.

arcticbull 6y ago

> I'm not sure why so many people are under the impression legislation will be able to keep up with perversely motivated individuals or groups. Because overwhelmingly it does each and every day. [edit] This bias comes down to the same issue as folks in infrastructure roles have in the tech world demonstrating their impact. How do you demonstrate impact avoiding SEVs when, if you're successful, the SEV never happened? It's very hard to count the number of things that don't happen.

faissaloo 6y ago
I think it's very much dependant on where you live, I don't think someone in Detroit for example is likely to hold the same view
ta1234567890 6y ago
> It's very hard to count things that don't happen Interesting problem. Just thinking about this particular issue, maybe some options are: 1) counting time and then expressing success as the longest period of time during which the bad events didn't happen, 2) letting it happen initially to have a base "bad rate", then taking action to bring that rate down, and continuously make an effort to keep the occurring rate down People preventing accidents at industrial sites have good experience doing this.
- jimz 6y ago
  Although the incentives are a bit different when it comes to law enforcement, as in the US it's quite common for those who hold all of the discretionary authority in invoking the criminal justice system - prosecutors and sheriffs and Attorneys General - to be elected positions, and at the same time, the continued existence of their bailiwick in the same size and with the same funding requires a show of at least some evident criminal behavior that they're preventing, whether that actually corresponds to actual crimes or not is sometimes entirely incidental. Innocence Projects around the country have found a significant percentage of those freed by their efforts to not only have not committed a crime, but also no crime had taken place in the first place. Coercive plea bargaining makes actually going to trial to hold the state to its burden of proof an exceedingly rare practice. On some level it is a performative exchange and has always been. Criminal statutes are also written in ways that don't necessarily fit what we generally imagine a word means. A burglary in many states simply mean the commission of a felony while trespassing. A conspiracy requires usually no more than two participants, a meeting of minds, and a substantial step in preparation. Accidents in industrial sites are, in comparison, far more objective and far harder to game for various interests. Crime, on the other hand, really represents much more abstract sets of guidelines applied to alleged conduct and state of mind, and much easier to game in terms of numbers.