Biggest Moments of 2011 #10 Wall St is a campground

mick says:

06:45am | 14/12/11

“An oppressive little society of their own” indeed.

Given that greedy entrepreneurs and banks caused the GFC and that 1% of the population in the US owns 70% of the wealth I think that these protesters are the few amongst us to have the fortitude and conscience to stand up and say its not ok.  Whilst ordinary Australians find this all too difficult we are heading in the same direction here and yet we do nothing to stop the huge salary imbalances which occur in the US from happening here. 

So what is fair and reasonable pay for a CEO?  No limit according to this sector with their deceitful and unashamed rhetoric and their greed.

Go the protesters.

Sony B Goode says:

07:19am | 14/12/11

You have obviously not heard of redlining, forcing banks to loan to poor blacks because not doing so was racists.

Who was involved in suing banks and forcing them to write loans to people who couldn’t afford them?

Check out this report
http://mypetjawa.mu.nu/archives/194379.php

Yes that’s Barack H. Obama as a young litigator, suing citibank for not writing 50% of their loans to poor blacks.

Which government mandated that banks had to write more loans to people who couldn’t afford them?

http://www.openmarket.org/2008/09/16/clinton-pressure-to-promote-affordable-housing-led-to-mortgage-meltdown/

That would have been Bill Jefferson Clinton.

GFC = Bad government policy comes home to roost.

TimB says:

07:19am | 14/12/11

Exactly how does it take ‘fortitude and conscience’ to express an attitude that can be best expressed as ‘gimme’?

Tubesteak says:

07:59am | 14/12/11

mick
Greedy entrepreneurs and banks did NOT cause the GFC.

It didn’t take long in the article and then the comments for someone to trot out this little furphy.

The GFC was caused by the US government. They were the ones who forced banks, through the CRA, and their own institutions, to lend money to people for homes they couldn’t afford. This caused a housing bubble. The US government then didn’t regulate the market they were creating. They encouraged more and more sub-prime loans. When the balloon payments came due the house of cards started falling.

It was also the US government that stated all along that they would bail out the banks and back the loans. Essentially, they removed moral hazard from the bank’s activities and then tried to look dumbfounded when the inevitable happened.

Do some research, mick, or else you’ll look like a fool.

Salary imbalances are due to labour market forces. There is no concept of “fair” in the real world. People are paid what they’re willing to accept and what the employer is willing to pay. If you want those salaries then do what they’ve done to get them and stop whining.

Tony of Poorakistan says:

08:11am | 14/12/11

The fascinating thing about the movement was how long it took the press to catch on that it was newsworthy. I was reading the stuff on Twitter a good week prior to ANYTHING appearing in a News Corp rag.

SimonFromLakemba says:

09:33am | 14/12/11

@Sony

The glass steagall ACT was removed by a Republican sponsored bill in a Republican controlled senate, nothing much Bill Clinton could do.

The money that was meant for home loans never materialised as the lenders spent them on refinances, around 20% of new loans happened in the GFC, so if you look black home ownership never really increased.

Blind Freddy says:

10:43am | 14/12/11

@Sony B Goode

Your first link is about how Obama was a lawyer for “black” clients denied loans - and not necessarily those that couldn’t afford a loan. It was about race not income.

Your second link is to a site run by the vested inerests trying to blame everyone other than themselves for the mess they created. The comments under the article made more sense than the article itself- and they don’t reach your conclusion at all.

A link is not proof.

Sony B Goode says:

11:27am | 14/12/11

Blind Freddy stick to groupthink it will hurt your brain otherwise.

perhaps Santa will bring you some new blinkers for Christmas?

Blind Freddy says:

11:48am | 14/12/11

@Sony B Goode

“GFC = Bad government policy comes home to roost.”

So, Australia’s avoidance of much of the GFC’s impact is due to good government policy?

neo says:

11:54am | 14/12/11

Who cares about the motives of the protesters, they are bringing some great results, and that’s what matters. People are giving more thought to the distribution of wealth in the world, we have gotten a clear sign that governments around the world are ready to use police force to suppress those who disagree with them, among other things. Once our generation is in power, we are well equipped to deal with these problems and we know how NOT to run government.

Bertrand says:

11:56am | 14/12/11

@Sony B Good. It is dishonest to claim that this was the cause of the GFC. A flawed policy, certainly, but not the only thing that caused the GFC. The banks were lending with very little oversight by government regulators.

I have a fairly good understanding about the way debt can increase growth, and recognise the important role the financial industry plays in helping create wealth in our society. Nonetheless, it needs to be managed. The GFC was very much the result of the ‘market’ not being self regulating and destroying itself with unsustainable debt. More regulation and oversight of the finance industry is the solution, not the problem

Sony B Goode says:

12:39pm | 14/12/11

@Blind Freddy :“So, Australia’s avoidance of much of the GFC’s impact is due to good government policy? “

In as much as it didn’t mandate low income loans, or more a case of not having bad policy, our banks where not loaded up on junk housing loans.

@Bertrand “The banks were lending with very little oversight by government regulators”

Revisionist waffle. Name 3 bits of regulation that would have stopped banks’ lending to low income households that would not have been in contradiction with the government mandatory low income loans policy.

Go!

Bertrand says:

01:03pm | 14/12/11

Sony B Goode:
Forcing banks to maintain more liquidity than they did, not allowing banks to bundle up bad mortgages and sell them as prime investments, forcing banks to be more transparent in their accounting methods.

The low incomes loan policy was poor policy. But it wasn’t the sole cause of the financial meltdown. It’s problem is that it relied too much on ‘markets’ providing poor people with a solution to poverty. Something along the line of the policy proposed in Australia to have a government backed savings scheme that gives low income earners a high interest return in they save for a particular period of time and use their saved money to purchase a house (if their home loan met proper lending standards).

The first home buyers grant in Australia is another example of government regulation that is causing more harm than good. It is artificially inflating the market. Once again,  one flawed regulation is not evidence that all regulation is the problem.

Sony B Goode says:

04:53pm | 14/12/11

“Forcing banks to maintain more liquidity than they did, not allowing banks to bundle up bad mortgages and sell them as prime investments, forcing banks to be more transparent in their accounting methods.
“

The problem wasn’t liquidity it was counterparty risk, which froze up the credit markets. Bundling mortgages is actually very smart thing to do to spread the risk and offload it. Banks don’t rate their own CDOs anyway. The problem was never because of collateralisation .

The banking sector is the most heavily regulated of any industry already.

Now I am not saying banks are without blame but the fact is undeniable, government policy was the catalyst.

Blind Freddy says:

09:32am | 14/12/11

@Sony B Goode

“It’s all a bit flat earth really”

Like the mythical meritocracy that justifies the idea that people only have and/or get what THEY deserve?

Trevor says:

10:08am | 14/12/11

Sony

“It’s all a bit flat earth really,”

Nice piece of rhetoric there, changing a right wing attribute to the left!

Or you don’t know what ‘flat earth’ means or who coined the term. Google the Lexus and the Olive Tree.

Sony B Goode says:

11:01am | 14/12/11

Already read it a long time ago. A bit dated now.

No. Flat earth because the socialist idea of being able to meaningfully alter material equality has been proven to be complete bunk. Research scale free networks and power law distributions.  Anyone who still buys into the “social justice” and “equity” has no understanding of the mechanism of these mathematical concepts. Socialists are like flat earthers who insist the world should be flat,  like material equality should be flat long after reality proves a network of buyers and sellers with small differences in needs and offerings yields power law distributions.

Socialism has nothing but a legal of ideological and practical failures. Time to learn and move.on

Sony B Goode says:

11:32am | 14/12/11

should be legacy

Bertrand says:

12:12pm | 14/12/11

And the Tea Party ‘small government’ movement is simply a front for captains of industry such as the Koch Brothers, who basically see the role of government as to support corporate interests - the market under this system is no more free than under a more left leaning regulated market such as in Australia, it’s just regulated to favour big business at the expense of large chunks of American society.

Robert Smissen Of rural SA says:

01:36pm | 14/12/11

Blind Freddy, you can divide the Haves & have nots between the Dids & did Nothings, as for Oz avoiding the GFC, aren’t you glad it hit after John Howard’s government with billions in the kitty than after Keating’s gov with 96 billion in the toilet

Blind Freddy says:

02:42pm | 14/12/11

@Robert Smissen Of rural SA

Yes- I am, but I am also happy that the Labor Party was in power when the GFC hit in 2008.

Our relatively healthy economy with 5% unemployment and moderate interest rates etc. is testimony to the correct judgement made by Swan et al concerning stimulus.

Cookie Monster says:

03:52pm | 14/12/11

Blind Freddy says:03:42pm | 14/12/11 - if you look at the Treasury reports you’ll see that the stimulus helped little with the economic recovery of G20 nations. The current account surplus had more of an impact.

Joan says:

07:02am | 14/12/11

We are stuffed - Gillard, Labor henchman ,  minority government have stuffed up Australia good and proper only the rescources keep Australia afloat. Loathsome sums up Gillard government,  just bring on an election tomorrow to prove it.

Fiddler says:

07:51am | 14/12/11

@ acotrel, please provide explanation as to the relevance of this part of your opinion to the story

baal says:

08:11am | 14/12/11

@joan, stop the doom and gloom, sheesh.
@acotrel, start proofing comments before you hit submit.
@Sonny B….. Please stop pretending you know what socialism is, you are erick pretending he knows what feminism is.
@ Erick, you have some good points but your cognitive bias is showing.

MarkS says:

08:32am | 14/12/11

The fact that Sophie thought they were silly made me rethink.. After all Sophie is almost always wrong. But no it just goes to prove to even an uber fool like Sophie can stumble onto being right once in a blue moon.

Chris L says:

08:40am | 14/12/11

Did you skip the article Fiddler? There was a link to Sophie’s article there.

Sniper says:

08:44am | 14/12/11

@baal

Stop making demands of everyone else

nossy says:

08:45am | 14/12/11

@Joan hahah thank you for this mornings “Joans Moan” Joaney!

Bertrand says:

07:56am | 14/12/11

Yes, except in America the financial and corporate are so close to government as to be a defacto part of it. America’s occupy movement is right to protest this.

Super D says:

09:39am | 14/12/11

@Bertrand - I agree, and this should be protested.  The protests however must be directed at government.  The finance sector is just another lobby group that has undue influence.  Perhaps it is the US lobbying culture that needs to change.

MarkS says:

10:38am | 14/12/11

Lobby groups have power because they provide campaign money to the pollies. This campaign money, lots & lots of it is required to get elected.

But the people providing the money are not doing it just for tax breaks. They expect their bought & paid for pollie to vote the way they wish.

The USA has the best pollies money can buy.

Bertrand says:

12:20pm | 14/12/11

@Super D - Perhaps they should be protesting outside the Supreme Court which has granted corporations personhood and believes that these ‘persons’ have the right to exercise free speech through the contribution of almost unlimited campaign contributions to politicians.How can the political system not be corrupted by this? The result is close to a corporate takeover off the government. A market that is skewed in such a one-way way is not ‘free’ and it is not ‘socialism’ to expect that an economic system should function in such a way that there are things such as a social safety net and a minimum standard of living for people in that society.

wakeuppls says:

06:34am | 14/12/11

Regulate the free market? Do you know what fraud is? Do you know what fractional reserve lending is? Realise these things first before you try to steer people down a road by that kind of deceptive question.

Super D says:

06:37am | 14/12/11

@acotrel - well of course I believe in democracy - It’s the progressive left elites that tend to avoid democratic accountability

As for recognising “the need for governments to regulate the free market to maintain balance” the answer is clearly and obviously NO.  Thats a capital N and a capital O. 

Is government regulation necessary - yes.  Can it ever “maintain balance”  NO.  No way, has never happened, never will, can’t work - indeed maintaining and defending the unsustainable under the guise of “maintaining balance” is exactly the sort of thing that gets us into bigger messes.

See if the market was free, the banks would have been allowed to collapse.  As a result of government actions they weren’t.  This isn’t to say a banking collapse wouldn’t be painful, it would.  The sovereign collapses we are heading towards will be even more painful - except for the bankers that is.

Super D says:

07:36am | 14/12/11

Spot on.

My onlyh caveat is that we’re not seeing stringent capitalism.  The key tenet of capitalism is that if your enterprise fails you lose your capital.  What we have evolved to is a perverted version of socialistic capitalism full of too big to fails and the associated moral hazards.

Sony B Goode says:

07:48am | 14/12/11

Really? That’s like saying we need a balance between sickness and health. No we don’t.

You are confusing socialism with protection of rights and liberties and ensuring fair trade, which are the keys to prosperity and progress.

Mahhrat says:

09:08am | 14/12/11

@SuperD, when I’m referring to capitalism I mean full on laissez-faire capitalism, like the U.S. in the early 20th.

When I refer to Socialism, I’m talking extreme-left, corrupted-government authoritarinism theft-of-produce by force, similar to Russia during the mid 20th.

@Sony B Goode, what on earth?  Protection of rights under laissez faire is nobody’s responsibility, since everything is a “user-pays” system.

As soon as you have any government interference, you’ve moved away from that model.  Similarly, as soon as you allow someone the fruits of their labours, you’re no longer socialist.

The balance is central, as in all things.  You have the right to succeed, and the culture will provide you the opportunities, but it also has rules that need to be equally followed by everyone.  Super D is right:  you should not get preferential treatment simply because you start with more money, or can afford better counsel.

Blind Freddy says:

09:37am | 14/12/11

Yep. Sometimes you need to turn right and sometimes you need to turn left- those who only travel in one direction travel in circles.

Chris L says:

10:46am | 14/12/11

Nice one Freddy. Did you come up with that?

Blind Freddy says:

11:17am | 14/12/11

@Chris L

Yep- and its copyright free. Cheers

Sony B Goode says:

11:25am | 14/12/11

Mahhrat you seem to be confused.

Taxes existed long before socialists came along. Socialist however turned taxes into a dark art specifically to prevent people from getting ahead due to some obsession with double speak of “social justice”  and “progressive” and a paranoia of power law wealth distribution bordering from maniacal to outright genocidal. These are all historical facts.

We need socialism like we need a hole in the head, in fact the planet has been lobotomised by socialist’s pareto-phobia.

Economist says:

12:54pm | 14/12/11

I certianly see history different to you Sony. I perceived it as tyranny. taxes were raised, against those who could least afford it to expand the wealth and power of the rich. Laws and rights were enforced in an adhoc manner.

The world you envision is simply a pipe dream. Free markets as you perceive them are simply not achievable because not all agents would play by the rules. If there is advantage in breaking the rules and the punishments applied inconsistently, or favour the less wealthy individual you will not have a cohesive society. You will then have demands to regulate which in itself will create further loop holes for people to corrupt. It simply ebbs and flows.

Ive read plenty of Ayn Rand, mainly her non-fiction work her fiction was so boring,  and while I admire her thinking like a lot of philosophy it has limited practicality. 

I prefer the work of John Raulston Saul,  and always remember a lecture here is Australia were he demonstrated that the distribution of wealth in today’s first world mixed economy socialist countries is shaped like a diamond, a few rich and few poor, most in the middle and compares it with the past of the triangle, most poor. Economies of the past were more vulnerable to fluctuations and instability.

The rich still get ahead even with today’s tax, spend distribution, because it’s all relative.

Trevor says:

10:12am | 14/12/11

Good answer Ant.

Forgive my cynisism, I wrote this before my morning ciggie! (Don’t tell Penbo)

TimB says:

12:36pm | 14/12/11

Let me guess Ant. Charlie Sheen?

Trevor says:

07:04am | 15/12/11

10 points TimB

TimB says:

09:51am | 14/12/11

You could try. But then the rich will just buy a gun and shoot you.

Disenfranchised says:

10:44am | 14/12/11

They can’t shoot us all.
Ask the Russian peasants that overthrew the Tsar.
Ask the French Aristocracy

Chris L says:

10:52am | 14/12/11

More likely they’d pay a bunch of 99%ers to shoot him. They need the work.

TimB says:

12:09pm | 14/12/11

I must have missed the part where the Russian and French nobility got eaten.

Robert Smissen Of rural SA says:

01:45pm | 14/12/11

Disenfrancised, the French revolution was started by tax dodging aristocrats, not peasants. The 2 worst GFC affected countries the peasants haven’t been paying taxes.

James1 says:

10:10am | 14/12/11

Its all relative.  Most of the Occupiers are actually in the top one percentile of income earners globally.  Indeed, there are single mums in Australia that are in the top one percent of global income earners.  But then, pretty much none of the Occupiers give a shit about anyone in any other country that might actually be poor, because they are hypocrites.

TimB says:

10:42am | 14/12/11

What James said. It’s why I cannot bring myself to give a damn about the Occupiers. They have it so good, and all they’re doing is bitching.

Self-entitled spoilt brats. That’s all they are.

Cookie Monster says:

10:43am | 14/12/11

James1 - good comment and finally someone pointed this out.

http://au.pfinance.yahoo.com/our-experts/michael-yardney/article/-/11512015/what-it-takes-to-join-the-rich-1-club/

Alf says:

12:51pm | 14/12/11

@james1. I would argue against your definition of money ‘earners’.

Blind Freddy says:

02:55pm | 14/12/11

@TimB

“What James said. It’s why I cannot bring myself to give a damn about the Occupiers. They have it so good, and all they’re doing is bitching.

Self-entitled spoilt brats. That’s all they are.”

Or,

What James said. Except, It’s why I cannot bring myself to give a damn about the Liberals. They have it so good, and all they’re doing is bitching.

Self-entitled spoilt brats. That’s all they are.

TimB says:

03:35pm | 14/12/11

Wow Freddy. That’s pretty sad. What’s sadder still is that you probably think you’re being clever.

Your inexorable descent into the category populated by the likes of Badger and Acotrel continues.

Outlander says:

05:16pm | 14/12/11

Yes,
Timmie
Acotrel and Badger live in the real world
You live in a virtual world with an avatar named dick for a head and no idea about the real world.
Clean of your game stick and dip into that bucket of KCF and fatten yourself up for the coming armeggedon.

TimB says:

06:10pm | 14/12/11

Badger. Slow down. Breathe. You’re even more incoherent than usual.

James1 says:

06:37pm | 14/12/11

Wow.  Point out how inconsistent the philosophical underpinnings of the Occupy movement are and people infer you are fat.

What a strange world we live in.  Well, what a strange world Outlander and Freddy occupy, more accurately.  Whatever you did to them, Tim, clearly it still burns.

Carine says:

10:40am | 14/12/11

The Occupy movement meant many things to many people.
When the masses rise because they aren’t going to take it any more, be worried, be very worried.
The Russians rose up and overthrew the czar because they had no bread.
This is where the world is heading again.
Tax the rich so we don’t have to eat them.

SimonFromLakemba says:

10:54am | 14/12/11

Agree there, could of been a left answer to the Tea Party, but it was wasted when the usual left wing radical fringe turned up.

Economist says:

11:37am | 14/12/11

IT amuses me that we focus on the differences. Personally the Occupy movement have a lot in common with the Tea Party movement, but niether group would give credit to the other. Both rallied against the corruption between government and business. Seeing as they have this in common why not put poilcy ideas forward that separate this out i.e. electoral reform, clearer lobbying registeries etc.

I know of no one in my group of friends (and I know you think I’m a lefty) who objects to excessive wealth where this wealth has been earned through hard work and good ideas. But plenty of people object to rent seeking and the Ron Medich’s, Ian McDonald’s of the world who collude and through corruption increase their personal wealth.

St. Michael says:

12:24pm | 14/12/11

“Seeing as they have this in common why not put poilcy ideas forward that separate this out i.e. electoral reform, clearer lobbying registeries etc.”

That would be because neither the Tea Party or OWS understands what’s actually wrong with the system other than a vague sense that something’s not right.  Consequently, neither of them will ever have a coherent or useable agenda to fix it.

More significantly, to make the required changes which would address the problems they vaguely sense would also smash a good chunk of their entitlements, which they will never agree to lay down.

AdamC says:

12:45pm | 14/12/11

Carine, the Occupy movement wasn’t an ‘uprising’. There is and was no prospect of it bringing down the political system, like the ‘Arab Spring’ has with varying degrees of success. What the Occupiers could have done, however, is influence the Democratic Party in the US by moving beyond their carnival act origins and actually getting involved in electoral politics. Ultimately, if all you do is sit around unsanitary public spaces and mouth trite slogans to passing journos, people will realise that your movement is little more than an exercise in political exhibitionism.

Simon, I agree that the Australian knock-off Occupation movement was little more than a rebranding of the usual suspects. The US model was more broadly-based and mainstream. They just missed their opportunity.

Economist, while there are similarities between the Occupy movement and the Tea Party, there are a lot of differences. In particular, the Tea Party blames big government for many of the problems in America. The Occupiers seem to blame much more vague enemies that include banks, rich people and the ever-available evil ‘corporations’. In other words, the Tea Party take a right-wing, libertarian view, and the Occupiers a postmodern leftist one.

The other big difference is that the Tea Party developed their grievances into a platform for change, the Occupiers have not.

Economist says:

01:02pm | 14/12/11

Agreed St Michael, AdamC I wasn’t passing judgement on either group. Just trying to highlight that if they got together, were clear in their objectives they may get some change. Nothing suits the corrupt elite like the derision and division among the masses targetting one another then actually targetting them. 

Also depending on your politics, either group can be perceived as ill informed extremists.

St. Michael says:

01:05pm | 14/12/11

AdamC, I differ with you on the idea that the Tea Party really set out to change anything fundamental to the US system other than the bend of the Republican Party.  And when it comes to the Tea Party, there are two key issues that reveal their true colours:
(a) They want tax cuts, but no decrease in government spending;
(b) When it came to the crunch, the Tea Party members in congress voted *for* the US debt ceiling to be raised.  Had they been really from a libertarian point of view, they would not have done that.

In other words, the Tea Party is very similar to OWS.  It wants changes to benefit itself, but refuses to do the things that would be required to make the changes possible or affordable.  They want to have their cake and eat it too.

You will only see real change out of third party platforms—not ones that associate with the Democrats or the Republicans.  The reason for that is because third parties steal votes away from both sides.  This is why, at least before he pulled out, Perot was leading both the Republican and Democrat candidates for the Federal election.  His platform really came down to one thing: balance the US budget.  And when Clinton was re-elected, that’s exactly what he did: because he was poop-scared of the huge numbers that Perot pulled thus demonstrating it was an issue.

When the US debt party ends, as it must, the party that will be in power afterwards will either be (a) whoever wasn’t in the White House at the time or (b) a third party that gets organised fast enough to catch public sentiment by rejecting both the Dems and the Pubs.

AdamC says:

03:19pm | 14/12/11

St Michael, I don’t believe the ‘debt ceiling’ matter can be used to determine whether Tea Party-aligned Congressmen and Senators were serious in their beliefs or not. The only reason to make an issue of that at all was to negotiate spending cuts with the Obama administration and House Dems. In reality, of course, you don’t cut spending through a blunt, archaic instrument like the debt ceiling. You do it via the federal budget. 

I don’t necessarily disagree that some Tea Party politicans are less than committed to small government when it comes to cutting popular programs. I do disagree, however, that change will be effected through a third party. That has never really worked in any Anglo-Saxonic democracy. That isn’t to say that newer, better parties couldn’t evolve from the existing Democrat and Republican Parties, just that a ‘third party’ force is unlikely to accomplish anything.

St. Michael says:

05:26pm | 14/12/11

“In reality, of course, you don’t cut spending through a blunt, archaic instrument like the debt ceiling. You do it via the federal budget.”

Only a minor cavil here, but in practical terms, in this case, a refusal to raise the debt ceiling necessarily would have cut spending—mostly because the US debt was *already above* the ceiling and only through creative accounting remained below it for the brief period of time until the ceiling was raised.

Remember, Obama himself was in near-histrionics over the “financial disaster” that would have been caused if it didn’t pass. So he sure as hell saw it as important—to his re-election chances, that is.

Had Congress refused to raise the debt ceiling, the US would have thereby defaulted on that portion of its debt above the ceiling.

That would have immediately forced the US to cut Federal spending to at least bring the numbers back down.  Maybe not to the point of a shutdown of the Federal government, as with refusing to pass the budget, but even better: it would have forced the government to make cuts so not only the debt goes no higher, but also sufficient cuts so the interest payments wouldn’t push the debt over the ceiling as well.

Bertrand says:

12:28pm | 14/12/11

And plenty of us have differentiated between the occupy movement in Australia and the occupy movement in America. Tens of millions of people in that country are living in a type of poverty we can’t even imagine in this country.

Sony B Goode says:

01:04pm | 14/12/11

@Bertrand “are living in a type of poverty we can’t even imagine in this country”

give it a chance! Komrades Gillards and Brown are working furiously on it