4 ms·

regulation of financial services, regulation of financial markets This isn't going to be rehashing the Glass-Steagall myth, is it? See, e.g., [1] regulation o

regulation of financial services, regulation of financial markets This isn't going to be rehashing the Glass-Steagall myth, is it? See, e.g., [1] regulation of campaign contributions Isn't this in itself a repudiation of democracy? We're not talking here about Blagojevich-style corruption in the election process. If you're worrying about campaign contributions, that boils down to how much advertising a campaign can buy. If you're worried about a candidate advertising a lot, that's pretty much a vote of no-confidence in your fellow Americans' ability to weigh options and vote rationally. Also, if you're one of those people horrified that corporations can now contribute to campaigns, can you tell me where the line should be drawn? I'm sure you don't object to my right to contribute to a campaign, nor my right to pool money with a friend to do so. If two of us can do so, why not, say, my whole club (e.g., my hypothetical flying club wants to have elected the guy who promises to grant a permit to expand the airport in town)? As this scales up, at some point we need a formal structure to organize things, which is legally recognized by a corporation; why can't my incorporated flying club make a contribution? [1] http://blog.heritage.org/2008/09/22/the-glass-steagall-myth/ http://blog.heritage.org/2008/09/22/the-glass-steagall-myth/

rhizome 15y ago
Heritage Foundation...really?
- civilian 15y ago
  Attack their argument, not the source.
  - onemoreact 15y ago
    Ok, corporate donations are not linked to what everyone inside a corporation decides but rather a small set of people whose interest don't necessarily align with the shareholders or the workers at large. Handing disproportionate power to middlemen breeds corruption without the counterbalance of risking large personal fortunes or publicity. This same argument also disproves the idea of giving personal tax breaks on large incomes as apposed to corporate tax breaks for small businesses. AKA middle management don't create jobs so tax breaks targeting 'job creators' that include them are misnamed. Edit: The above is a position piece just like those people at the Heritage Foundation are paid to create. There is nothing wrong with suggesting you find credible sources that are not simply spouting propaganda.
  - rhizome 15y ago
    "Consider the source" is a perfectly valid heuristic for credibility, which is necessary when counterarguing major political topics like those surrounding Glass-Steagall/Graham-Leach-Bliley. Is HF the most credible source for GP's argument? If so, then that is part of the story.
- CWuestefeld 15y ago
  If ad hominem is the best you can do... I didn't provide anything deeper because this has been rehashed many times, and those claiming that G-S is what allowed the crisis have never offered anything of substance in those previous discussions. But if you insist on more meat, consider (from the original citation [1]): the evidence so far shows that Gramm-Leach-Bliley has helped soften the blow to taxpayers by allowing commercial banks to take over trouble investment firms. Just look at which organization’s have failed: Bear Stearns was an investment bank before it was sold to JP Morgan Chase (which includes a commercial bank). Fannie Mae were Freddie Mac were government sponsored entities before the government bought them. Lehman Brothers was an investment bank before it want bankrupt. Merrill Lynch was an investment bank befor it was sold to Bank of America (which is a commercial bank). AIG is an insurance company with no commercial banking division. Remember, Glass-Steagal was passed to protect commercial banks from failure by forbidding them from investment bank practices like trading in securities and underwriting stocks and bonds. As you can see above non of the failed institutions are commercial banks that got in trouble through risky investment banking. Instead, it is the commercial banks that are providing some stability to the system by purchasing troubled investment banks. Without Gramm-Leach-Bliley they would not even be allowed to technically do this. Or from a respected economist: Many wise people are now recognizing that the repeal of Glass-Steagall was one of the few saving graces of the current crisis. [2] Most of all, the Act enabled financial diversification and thus it paved the way for a number of mergers. Citigroup became what it is today, for instance, because of the Act. Add Shearson and Primerica to the list. So far in the crisis times the diversification has done considerably more good than harm. Most importantly, GLB made it possible for JP Morgan to buy Bear Stearns and for Bank of America to buy Merrill Lynch. It’s why Wachovia can consider a bid for Morgan Stanley. Wince all you want, but the reality is that we all owe a big thanks to Phil Gramm and others for pushing this legislation. Brad DeLong recognizes this and hail to him. Megan McArdle also exonerates the repeal of Glass-Steagall. [3] [1] http://blog.heritage.org/2008/09/22/the-glass-steagall-myth/ http://blog.heritage.org/2008/09/22/the-glass-steagall-myth/ [2] http://marginalrevolution.com/marginalrevolution/2008/09/glass-steagall.html http://marginalrevolution.com/marginalrevolution/2008/09/gla... [3] http://marginalrevolution.com/marginalrevolution/2008/09/did-the-gramm-l.html http://marginalrevolution.com/marginalrevolution/2008/09/did...
subsection1h 15y ago
I'm sure you don't object to my right to contribute to a campaign Why are you sure of this? How do you know wpietri doesn't support publicly-funded campaigns? Your short post sure does contain a lot of assumptions. And what's with the link to a citation-free Heritage blog post that, not surprisingly, begins with, "It has become an article of faith on the left [...]"? Next time, please link to an informative paper published by an organization like the AEA. Thanks.
wonderzombie 15y ago
"If you're worried about a candidate advertising a lot, that's pretty much a vote of no-confidence in your fellow Americans' ability to weigh options and vote rationally." One's ability to weigh options is predicated on the fact that people have awareness of the options and their implications in the first place. People don't have perfect knowledge even before millions of advertising dollars flood the market with misinformation about the options themselves, let alone the implications for same. If you're truly interested in maintaining the integrity of our democracy and our discourse, it's hard to imagine why you'd be in favor of more unrestricted money. The fact is that vanishingly few people are wealthy enough to participate in this flavor of democracy, let alone make any sense of it. "Isn't this in itself a repudiation of democracy?" It's a strange sort of democracy you have here, where some voices are obviously more equal than others. "This isn't going to be rehashing the Glass-Steagall myth, is it? See, e.g., [1]" Wow. The future more than a little pwned this guy. What about the billions of dollars BoA and JP Morgan took from the gov't? How about WaMu? And in what universe CDOs, et al, not risky investments? My understanding about Glass-Steagall isn't so much that it directly led to the crisis, although for all I know maybe there's some intricacy there that I'm missing. Rather it allowed banks to use depositors' money to play Wall Street, and during the financial/housing bubble over the last decade or so, this meant you could become fantastically rich. So you make money, you buy up other banks, and you become progressively closer to "too big to fail." AIUI, more and smaller banks -> more resilience, more diffuse risk rather than big, big chunks of concentrated risk in a few, critical places.
- CWuestefeld 15y ago
  It's a strange sort of democracy you have here, where some voices are obviously more equal than others. My definition of democracy is that everyone gets an equal vote. I don't see where it relates to who can advocate with how loud a voice. You haven't addressed my question about where, in the spectrum of single speaker to small groups up through corporations, the right to invest money in political speech ought to be curtailed. So you make money, you buy up other banks, and you become progressively closer to "too big to fail." ... more and smaller banks -> more resilience, more diffuse risk rather than big, big chunks of concentrated risk I appreciate your reply here. It's thoughtful, and you're the first one I've encountered that has actually tried to put some meat behind the standard talking point. So in my book, you've got an upvote for engaging in a principled debate, even if I disagree with you. The thing is, G-S did not prevent banks from becoming too big to fail. It prevented them from diversifying. So if G-S were still in place, there's no reason to believe that the banks would have been any smaller. It just would have ensured that the banks didn't have sufficient diversifying to ride out any problems. If you look at my citation above, you'll see that this is exactly what happened. There were giant non-diversified banks that were failing, while those that did diversify, thanks to Gramm-Leach-Bliley, were able to weather the storm.
jbooth 15y ago
Are you saying that you think advertising doesn't affect your opinions?
- CWuestefeld 15y ago
  Are you saying that we should not be able to affect other voters' opinions? I thought that a major reason for the 1st Amendment was to allow for us to stand up on soap boxes and pontificate to anyone willing to listen.
  - jbooth 15y ago
    So having more money in the bank means I'm more entitled to that than someone else? What if I have a vested interest in the outcome? You don't see this going down a black hole of game theory?
    - uiri 15y ago
      If you have more money in the bank than you have more freedom than someone else because you may be able to stay on your soap box for days on end while said someone else would have to go to work everyday or do other things in order to earn enough money to survive. Merely having more money will buy you more freedom. What solution to you propose to this people-with-more-money-can-influence-others-more problem? Does it matter whether a corporation's internal marketing designs an ad to support their candidate of choice instead of making a donation to their candidate's campaign?
      - wpietri 15y ago
        The problem isn't with individuals doing more because they have money. It's with individuals paying others to shill for them.
wpietri 15y ago
Glass-Steagall myth Your apparent theory that too-big-to-fail corporations should be allowed to play heads-I-win-tails-you-lose with taxpayer money (and then buy politicians with the winnings) is comical. Isn't this in itself a repudiation of democracy? No, it's honoring the practical core and the historical roots of it. If you're worried about a candidate advertising a lot, that's pretty much a vote of no-confidence in your fellow Americans' ability to weigh options and vote rationally. If you actually believe that advertisements are about delivering information to inform a rational decision-making process, I can't help you. tell me where the line should be drawn? Personally, I'm for public funding of elections based on achieved milestones. With pretty modest amounts of funding. Forcing information on people made sense when information was scarce and difficult to get. Any voter with an internet connection can be as informed as they want to be today. Anybody who has an opinion can publish it with worldwide reach. why can't my incorporated flying club make a contribution? Maybe because the end of your slippery slope is oligarchy and/or crony capitalism masquerading as representative government?
- CWuestefeld 15y ago
  Your apparent theory that too-big-to-fail corporations should be allowed to play heads-I-win-tails-you-lose with taxpayer money I don't recall advocating that those corporations should have been bailed out. Indeed, I believe just the opposite. The market was malfunctioning back in '07, but the way to solve that problem isn't by rewarding those doing it. The correct fix, painful as it might be, is to allow it fail. Maybe because the end of your slippery slope is oligarchy and/or crony capitalism masquerading as representative government? Perhaps my previous statement clarifies that I'm not a supporter of corporatism at all. I'm opposed to the government grabbing additional powers. That's it.

rhizome 15y ago

Heritage Foundation...really?

civilian 15y ago
Attack their argument, not the source.
- onemoreact 15y ago
  Ok, corporate donations are not linked to what everyone inside a corporation decides but rather a small set of people whose interest don't necessarily align with the shareholders or the workers at large. Handing disproportionate power to middlemen breeds corruption without the counterbalance of risking large personal fortunes or publicity. This same argument also disproves the idea of giving personal tax breaks on large incomes as apposed to corporate tax breaks for small businesses. AKA middle management don't create jobs so tax breaks targeting 'job creators' that include them are misnamed. Edit: The above is a position piece just like those people at the Heritage Foundation are paid to create. There is nothing wrong with suggesting you find credible sources that are not simply spouting propaganda.
- rhizome 15y ago
  "Consider the source" is a perfectly valid heuristic for credibility, which is necessary when counterarguing major political topics like those surrounding Glass-Steagall/Graham-Leach-Bliley. Is HF the most credible source for GP's argument? If so, then that is part of the story.
CWuestefeld 15y ago
If ad hominem is the best you can do... I didn't provide anything deeper because this has been rehashed many times, and those claiming that G-S is what allowed the crisis have never offered anything of substance in those previous discussions. But if you insist on more meat, consider (from the original citation [1]): the evidence so far shows that Gramm-Leach-Bliley has helped soften the blow to taxpayers by allowing commercial banks to take over trouble investment firms. Just look at which organization’s have failed: Bear Stearns was an investment bank before it was sold to JP Morgan Chase (which includes a commercial bank). Fannie Mae were Freddie Mac were government sponsored entities before the government bought them. Lehman Brothers was an investment bank before it want bankrupt. Merrill Lynch was an investment bank befor it was sold to Bank of America (which is a commercial bank). AIG is an insurance company with no commercial banking division. Remember, Glass-Steagal was passed to protect commercial banks from failure by forbidding them from investment bank practices like trading in securities and underwriting stocks and bonds. As you can see above non of the failed institutions are commercial banks that got in trouble through risky investment banking. Instead, it is the commercial banks that are providing some stability to the system by purchasing troubled investment banks. Without Gramm-Leach-Bliley they would not even be allowed to technically do this. Or from a respected economist: Many wise people are now recognizing that the repeal of Glass-Steagall was one of the few saving graces of the current crisis. [2] Most of all, the Act enabled financial diversification and thus it paved the way for a number of mergers. Citigroup became what it is today, for instance, because of the Act. Add Shearson and Primerica to the list. So far in the crisis times the diversification has done considerably more good than harm. Most importantly, GLB made it possible for JP Morgan to buy Bear Stearns and for Bank of America to buy Merrill Lynch. It’s why Wachovia can consider a bid for Morgan Stanley. Wince all you want, but the reality is that we all owe a big thanks to Phil Gramm and others for pushing this legislation. Brad DeLong recognizes this and hail to him. Megan McArdle also exonerates the repeal of Glass-Steagall. [3] [1] http://blog.heritage.org/2008/09/22/the-glass-steagall-myth/ http://blog.heritage.org/2008/09/22/the-glass-steagall-myth/ [2] http://marginalrevolution.com/marginalrevolution/2008/09/glass-steagall.html http://marginalrevolution.com/marginalrevolution/2008/09/gla... [3] http://marginalrevolution.com/marginalrevolution/2008/09/did-the-gramm-l.html http://marginalrevolution.com/marginalrevolution/2008/09/did...

subsection1h 15y ago

I'm sure you don't object to my right to contribute to a campaign Why are you sure of this? How do you know wpietri doesn't support publicly-funded campaigns? Your short post sure does contain a lot of assumptions. And what's with the link to a citation-free Heritage blog post that, not surprisingly, begins with, "It has become an article of faith on the left [...]"? Next time, please link to an informative paper published by an organization like the AEA. Thanks.

wonderzombie 15y ago

"If you're worried about a candidate advertising a lot, that's pretty much a vote of no-confidence in your fellow Americans' ability to weigh options and vote rationally." One's ability to weigh options is predicated on the fact that people have awareness of the options and their implications in the first place. People don't have perfect knowledge even before millions of advertising dollars flood the market with misinformation about the options themselves, let alone the implications for same. If you're truly interested in maintaining the integrity of our democracy and our discourse, it's hard to imagine why you'd be in favor of more unrestricted money. The fact is that vanishingly few people are wealthy enough to participate in this flavor of democracy, let alone make any sense of it. "Isn't this in itself a repudiation of democracy?" It's a strange sort of democracy you have here, where some voices are obviously more equal than others. "This isn't going to be rehashing the Glass-Steagall myth, is it? See, e.g., [1]" Wow. The future more than a little pwned this guy. What about the billions of dollars BoA and JP Morgan took from the gov't? How about WaMu? And in what universe CDOs, et al, not risky investments? My understanding about Glass-Steagall isn't so much that it directly led to the crisis, although for all I know maybe there's some intricacy there that I'm missing. Rather it allowed banks to use depositors' money to play Wall Street, and during the financial/housing bubble over the last decade or so, this meant you could become fantastically rich. So you make money, you buy up other banks, and you become progressively closer to "too big to fail." AIUI, more and smaller banks -> more resilience, more diffuse risk rather than big, big chunks of concentrated risk in a few, critical places.

CWuestefeld 15y ago
It's a strange sort of democracy you have here, where some voices are obviously more equal than others. My definition of democracy is that everyone gets an equal vote. I don't see where it relates to who can advocate with how loud a voice. You haven't addressed my question about where, in the spectrum of single speaker to small groups up through corporations, the right to invest money in political speech ought to be curtailed. So you make money, you buy up other banks, and you become progressively closer to "too big to fail." ... more and smaller banks -> more resilience, more diffuse risk rather than big, big chunks of concentrated risk I appreciate your reply here. It's thoughtful, and you're the first one I've encountered that has actually tried to put some meat behind the standard talking point. So in my book, you've got an upvote for engaging in a principled debate, even if I disagree with you. The thing is, G-S did not prevent banks from becoming too big to fail. It prevented them from diversifying. So if G-S were still in place, there's no reason to believe that the banks would have been any smaller. It just would have ensured that the banks didn't have sufficient diversifying to ride out any problems. If you look at my citation above, you'll see that this is exactly what happened. There were giant non-diversified banks that were failing, while those that did diversify, thanks to Gramm-Leach-Bliley, were able to weather the storm.

jbooth 15y ago

Are you saying that you think advertising doesn't affect your opinions?

CWuestefeld 15y ago
Are you saying that we should not be able to affect other voters' opinions? I thought that a major reason for the 1st Amendment was to allow for us to stand up on soap boxes and pontificate to anyone willing to listen.
- jbooth 15y ago
  So having more money in the bank means I'm more entitled to that than someone else? What if I have a vested interest in the outcome? You don't see this going down a black hole of game theory?
  - uiri 15y ago
    If you have more money in the bank than you have more freedom than someone else because you may be able to stay on your soap box for days on end while said someone else would have to go to work everyday or do other things in order to earn enough money to survive. Merely having more money will buy you more freedom. What solution to you propose to this people-with-more-money-can-influence-others-more problem? Does it matter whether a corporation's internal marketing designs an ad to support their candidate of choice instead of making a donation to their candidate's campaign?
    - wpietri 15y ago
      The problem isn't with individuals doing more because they have money. It's with individuals paying others to shill for them.

wpietri 15y ago

Glass-Steagall myth Your apparent theory that too-big-to-fail corporations should be allowed to play heads-I-win-tails-you-lose with taxpayer money (and then buy politicians with the winnings) is comical. Isn't this in itself a repudiation of democracy? No, it's honoring the practical core and the historical roots of it. If you're worried about a candidate advertising a lot, that's pretty much a vote of no-confidence in your fellow Americans' ability to weigh options and vote rationally. If you actually believe that advertisements are about delivering information to inform a rational decision-making process, I can't help you. tell me where the line should be drawn? Personally, I'm for public funding of elections based on achieved milestones. With pretty modest amounts of funding. Forcing information on people made sense when information was scarce and difficult to get. Any voter with an internet connection can be as informed as they want to be today. Anybody who has an opinion can publish it with worldwide reach. why can't my incorporated flying club make a contribution? Maybe because the end of your slippery slope is oligarchy and/or crony capitalism masquerading as representative government?

CWuestefeld 15y ago
Your apparent theory that too-big-to-fail corporations should be allowed to play heads-I-win-tails-you-lose with taxpayer money I don't recall advocating that those corporations should have been bailed out. Indeed, I believe just the opposite. The market was malfunctioning back in '07, but the way to solve that problem isn't by rewarding those doing it. The correct fix, painful as it might be, is to allow it fail. Maybe because the end of your slippery slope is oligarchy and/or crony capitalism masquerading as representative government? Perhaps my previous statement clarifies that I'm not a supporter of corporatism at all. I'm opposed to the government grabbing additional powers. That's it.