Gory Details of the Bailout:

Josh_Kablack · Post by **Josh_Kablack** » Mon Sep 29, 2008 1:59 pm

Treasury Conference Call Recording:

http://www.youtube.com/watch?v=uXmFADm61Rc
http://www.youtube.com/watch?v=1eqZoToIdfM
http://www.youtube.com/watch?v=8YwO3MkvjR0
http://www.youtube.com/watch?v=FnfyVGM-wfg
http://www.youtube.com/watch?v=mHTnqmJ_R3M

(youtube, sound recording only, I haven't had time to listen to it all yet)

Josh_Kablack · Post by **Josh_Kablack** » Mon Sep 29, 2008 6:59 pm

Simplified explanation of the credit crisis as explained by foul-mouthed stick figures

Josh_Kablack · Post by **Josh_Kablack** » Mon Sep 29, 2008 10:37 pm

Even Anti-Evolutionist and game-show host Ben Stein is kinda making sense now.

PhoneLobster · Post by **PhoneLobster** » Tue Sep 30, 2008 1:05 am

In addition to not getting the worm you guys also don't get Clarke and Daw.

It must be sad over there.

CatharzGodfoot · Post by **CatharzGodfoot** » Tue Sep 30, 2008 1:54 am

Josh_Kablack wrote:Even Anti-Evolutionist and game-show host Ben Stein is kinds making sense now.

Wow, that's amazing. I guess social conservatives aren't always total assholes when it comes to fiscal policy.

Koumei · Post by **Koumei** » Tue Sep 30, 2008 2:00 am

Josh_Kablack wrote:Simplified explanation of the credit crisis as explained by foul-mouthed stick figures

Wasn't that the problem the last time, with... what the fuck was it called? Enormous company, possibly telecom related, spent a lot of time hiding their losses in a special project company and the whole market went tits-up?

Or are you telling me that instead of learning from that crisis, the government did nothing about it, the exact same problem happened again and now they feel entitled to act surprised?

Josh_Kablack · Post by **Josh_Kablack** » Tue Sep 30, 2008 2:16 am

You mean Worldcom. Or maybe Enron. There was a fucking reason I had the Dubya quote about Arthur Anderson in my siggy.

Koumei · Post by **Koumei** » Tue Sep 30, 2008 2:53 am

Enron, that's the one!

So, is the current crisis caused by the exact same problems, or is this a different problem with greedy bastards in a free market Capitalist system?

Username17 · Post by **Username17** » Tue Sep 30, 2008 4:37 am

Koumei wrote:Enron, that's the one!

So, is the current crisis caused by the exact same problems, or is this a different problem with greedy bastards in a free market Capitalist system?

Yes and no. The specific loopholes are slightly different, but the core problem is exactly the same. That is that greed-driven economics is based on maximizing personal profits rather than actually producing anything. This means that if regulatory agencies take their eyes off of people who run companies for even a moment, those people will simply steal everything that isn't nailed down and run off with it.

We saw this with Enron, with the Asian Financial Crisis, with the Savings and Loan crisis, with Worldcom, with the Iraq war even. Companies can't be trusted to even make money because the people making the choices for the companies don't actually get anything for the corporation staying afloat - let alone "crazy" altruistic concerns such as people getting fed or having a roof over their heads.

The fact that the government is determined to socialize risk in order to keep the market afloat and is not determined to actually regulate the actions of the people making market choices, means that people are confident that they can make a lot of money by simply siphoning cash into their santa sacks and then relabeling the theft as "risk" and waiting to be paid a second time by the government handing out fat stacks of taxpayer money to keep the market moving forward. And so they'll do that, over and over again. Every time a chink appears in the regulatory system. Chinks which the very same people are constantly writing into the rules every time followers of the Chicago School of Economics get a chance to make policies of any kind.

And so like a junky they wander from bubble to bubble, ruthlessly extracting tremendous amounts of wealth from the public sector. Looking for the next fix, and ruining lives to get it.

The credit crisis isn't the same crisis as the Enron disaster, it's the next crisis after the Iraq War. And as long as the Chicago School has anything to say about it, there will be a next crisis. And another one after that.

-Username17

Crissa · Post by **Crissa** » Tue Sep 30, 2008 5:13 am

Technically page 33 hasn't happened yet.

What happened was that people got worried that might happen - because of all the failures - and started to pull their money out of banks.

Now, this isn't you and me, this is people who's money isn't insured. You and I can always get our money back through FDIC. So, these big monies take their money out of a bank...

...The bank fails. Boom. Insurance pays...

...The insurance company fails. Boom, and...

So there's billions of dollars that we don't have circulating because 'big money' people don't want to take any risk. They want us to take that risk.

But we didn't invest in any of these crappy loans. And the banks that own them didn't make them.

If you look, the loans made to the least among us - the Community Reinvestment Act loans - are actually doing better than average.

-Crissa

Koumei · Post by **Koumei** » Tue Sep 30, 2008 5:24 am

I did indeed notice that they wanted to socialise the risk/consequences but not the actual benefits reaped, as well as not regulating this shit.

But I see, it's basically the same thing, but with different loopholes and things, and they're just going to keep doing it until there's an awesome Socialist/Communist vodka-fuelled revolution.

Judging__Eagle · Post by **Judging__Eagle** » Tue Sep 30, 2008 5:49 am

How does this Chicago School of Economies think Frank?

Only if you've got the time though; I'm sure you're hella busy with school.

Lago PARANOIA · Post by **Lago PARANOIA** » Tue Sep 30, 2008 6:01 am

Let's save Frank some time.

Steve Kangas to the rescue yet again!

http://www.huppi.com/kangaroo/L-chimain.htm

Crissa · Post by **Crissa** » Tue Sep 30, 2008 6:44 am

I dunno, they were pretty right about the not-voting thing.

-Crissa

Orion · Post by **Orion** » Tue Sep 30, 2008 8:46 am

Oh man... Chicago Economists

I deal with those people on a daily basis. Since I actually go to Chicago and all.

I'll explain later if Frank doesn't get around to it. Right now I have to go to class. (I'm in the DE)

Judging__Eagle · Post by **Judging__Eagle** » Tue Sep 30, 2008 12:48 pm

So.... theorycrafting how a home-brew or WoTC released class both sucks balls, and can't compete at any level, based on math.

Except... worse, since the fact that in the real world you can't actually look at person's X's wisdom stat or know if a person actually has Proffession (Industrialist) or Proffession (Investment Banker).

Username17 · Post by **Username17** » Tue Sep 30, 2008 1:23 pm

The Chicago School of Economics is the 20th century's revision of Astrology. That is, it is a pseudo science whose sole purpose is to advise those in power to do what they wanted to do anyway in order to gratify the powerful and hopefully have rewards showered upon the prognosticator. It shrouds itself with the jargon of the intelligentsia of our time, which means that it uses math and charts and pretenses of science to claim to know the future rather than math and charts and pretenses of magic like the astrologers of old. But the effect is much the same: the Chicago Economist sits on the side of the wicked king and assures him daily that his actions are rational and for the best in the long run. They are Wyrmtongues all.

But as to what they actually claim to believe? It's rather simple: they say that all problems are caused by wealth distribution measures and that all good flows from people with money being allowed to do literally anything they want to in order to make more of it. This core postulate is to them above question and they are impervious to data demonstrating the ineffectiveness of their policies, always willing to massage that data or bring in additional theories to save their original contention. It is like dealing with the ICR - they are so certain that their fundamentalist beliefs are beyond reproach that they are willing to entertain any set of claims no matter how convoluted or preposterous in order to save their original religious convictions.

Their answers to all problems are to cut taxes and social services, and remove restrictions on where and what the wealthy can do with their money. When these plans invariably lead to massive unemployment, catastrophic environmental degradation, falling productivity, and legendary corruption, their diagnosis is laughably easy to predict: more tax cuts, more cuts to social services, more leniency on corporate financial shenanigans. No exceptions. The answer to why things go south when they try their plans is never because their plans are shit, it is always because their plans weren't implemented enough.

And of course, when these plans invariably cause unrest, the response is to crack down on the populace. Democratic institutions are abrogated, demonstrating citizens are shot, and dissidents dissappear. And this is all OK, because magically if you crush freedom long enough, the free market will bring it back better than ever. You just have to turn the screws even tighter.

And how is this justified? Through math! The Chicago School has devastatingly simple models to demonstrate how allowing foreign corporations to buy up national industries for a song, hire outside labor forces to run them, and then take all the profits out of the country will magically help the national economy. While on the face of it laughable, the numbers do add up. It's just that the assumptions made to create those numbers have no basis whatsoever in reality. Dangerously incorrect ground assumptions include the idea that markets "clear" (that is that everything produced is sold for whatever price is required to sell all of it), the idea that markets are "efficient" (that is that an unregulated price is always one that reflects the products "intrinsic value"), that all savings are loaned out and invested, and that everyone who makes a dollar of profit is just as likely to spend that dollar as the people who make a dollar of wages. These assumptions are wrong, and of course the model generates disastrous advice.

Economics isn't simple. The solutions to economic problems are not simple. When you make falsifiable claims and perform controlled experiments in economics you find answers that are complex. You find that the optimum solutions to problems vary depending upon the inputs. But the Chicago School will hear none of that. They will not entertain the notion that their are industries that make no sense in private hands or that their are goods whose prices must be supported or suppressed. They are as adamant and impervious to reason as any Imam. Their solution to all problems is always the same, and the problems they create with their solutions are problems that they demand be fixed with more of the same bitter medicine that caused them in the first place.

Their track record is abysmal. From Thatcher to Pinochet, their flag bearers have brought ruin without exception to everything they touch. But because they make Rupert Murdoch and friends extremely wealthy the business reports on major news stations just mindlessly babble their same fundamentalist solutions for every difficult problem they touch and see.

If someone comes out and tells you that open markets make peace, punch them in the face. Tony Blair had the gall to go on the Daily Show and say that it was a fact of history that no two "democracies" had ever gone to war - despite the fact that the Kargil War had happened during his actual Ministership.

-Username17

Orion · Post by **Orion** » Tue Sep 30, 2008 2:49 pm

What Trollman said; I can confirm from personal experience that he is prettz much exactlz right.

Their followers also like to whine about wanting to be left alone, while generallz opting to live in metropolitan areas... thez reallz seem to have no appreciation whatsoever for the work involved in running a citz, or understanding of whz it would cost monez.

Thez also insist that thez can predict anzthing with math, generallz insisting that thez can do the job of sociologz, poli sci, ,and international studies departments as a hobbz. Thez are roundlz despised bz everzone with sense, and make up at least 15% of the undergrad population.

Lago PARANOIA · Post by **Lago PARANOIA** » Tue Sep 30, 2008 5:23 pm

Their answers to all problems are to cut taxes and social services, and remove restrictions on where and what the wealthy can do with their money. When these plans invariably lead to massive unemployment, catastrophic environmental degradation, falling productivity, and legendary corruption, their diagnosis is laughably easy to predict: more tax cuts, more cuts to social services, more leniency on corporate financial shenanigans. No exceptions. The answer to why things go south when they try their plans is never because their plans are shit, it is always because their plans weren't implemented enough.

And of course, when these plans invariably cause unrest, the response is to crack down on the populace. Democratic institutions are abrogated, demonstrating citizens are shot, and dissidents dissappear. And this is all OK, because magically if you crush freedom long enough, the free market will bring it back better than ever. You just have to turn the screws even tighter.

By the way, this is exactly what happened in Chile. The US intentionally tried to turn a profit off of making darkies poorer. This isn't some old phenonemon, either, this was 30 years ago.

You know, one of the things I really hate about the white overclass in the US is that they turn into butthurt crybabies if you suggest that the US isn't as shiny and pristine and blameless as the propaganda suggests and start putting plugs in their ears. If anyone ever brings up legitimate grievances or give an honest answer to 'why do they hate us', you might get cow-eyed staring and crying at best.

Fucking willfully ignorant douchebags. Who cares how much wealth and prestige we as Americans actually have as long as the illusion of having a lot of it remains intact! Choke on horsecock, America.

Choke on oozing, infected horsecock.

Sigh.

Neeeek · Post by **Neeeek** » Tue Sep 30, 2008 6:55 pm

FrankTrollman wrote: Economics isn't simple.

Oh, I don't know. I can sum up the general principles of my economic views in about two sentences. 1. People spending money is good, because it creates more money. 2. It's easier for 2,000 people to spend $2 billion than 2 people, so concentration of wealth is actively detrimental to the economy.

Surgo · Post by **Surgo** » Tue Sep 30, 2008 7:55 pm

Lago PARANOIA wrote:Let's save Frank some time.

Steve Kangas to the rescue yet again!

http://www.huppi.com/kangaroo/L-chimain.htm

Hey, this is a really amazing website. Thanks.

TarkisFlux · Post by **TarkisFlux** » Tue Sep 30, 2008 8:38 pm

Surgo wrote:
Lago PARANOIA wrote:Let's save Frank some time.

Steve Kangas to the rescue yet again!

http://www.huppi.com/kangaroo/L-chimain.htm
Hey, this is a really amazing website. Thanks.

Yup, amazing, and significantly more interesting than any econ lecture I ever heard. It's also a seriously depressing read at the end, because these asshats are still going. I don't know if it's sadder if they actually believe it or if they just don't care.

Lago PARANOIA · Post by **Lago PARANOIA** » Tue Sep 30, 2008 9:01 pm

Well, I mean obviously it needs to be updated; that website is almost ten years out of date.

For example, Steve Kangas indirectly refers to the Bradley effect heavily skewing polls in this article: http://www.huppi.com/kangaroo/L-poll.html. For those of you not in the know, the Bradley effect is that basically voters when polled will overstate their preference for a minority candidate yet when they get into the actual polling booth will vote for the white guy. Sounds reasonable. But notably in the 2008 DEMONRAT primary Obama tended to overperform. In other words, Obama's performance during this primary put a huge knife in the gut of said Bradley effect.

A few conclusions can be drawn from these experiences:

1) The polling for Wilder back in 1990 was dead wrong for reasons other than race, which if you read the rest of the article is plausible but not conclusive.
2) Some candidates may/will exhibit the Bradley effect when they're using their race as their primary selling point. Wilder might not have, Obama definitely did not--he's been remarkably low key about it.
3) Wilder fucked the hell up in the space between the final polls and the actual election day. Which would be weird, since a gap of state polling of more than a week before election day is unheard of. He must've been caught licking cocaine off of a Filipino houseboy's asscrack.
3) Race is more heavily weighted in party vs. party elections than primary elections--which has the unfortunate effect of painting Virginia voters as either tokenists or racists depending on how cynical you are.

Crissa · Post by **Crissa** » Tue Sep 30, 2008 9:13 pm

There's also the weight of 'probable voters' which means the number you're seeing aren't the raw numbers. In the primaries this year, we had many first-time voters, or voters who didn't normally participate in primaries, which meant that they weren't counted in the phone poll results.

In the Bradley effect, it may just be the opposite of that - that it's hard to get first-time or infrequent voters to the polls to vote - which made the advantage sink.

Also, there have been many local polls and elections which showed that the bradley effect may not be based on race at all.

-Crissa

Surgo · Post by **Surgo** » Tue Sep 30, 2008 10:16 pm

Lago wrote:Well, I mean obviously it needs to be updated; that website is almost ten years out of date.

It won't ever be updated; the guy has been dead for almost 10 years.