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Thread: Torture versus collateral damage; the bigger evil?

  1. #61
    Council Member Dayuhan's Avatar
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    Quote Originally Posted by carl View Post
    It may have everything to do with it. Our elites seem to have come not only to the conclusion that in order to gain and retain power they have to tell people that they can have their cake and eat it too; they seem to believe it themselves.
    I don't see what that has to do with "moral courage". It's not as if there's some clear "right path" that leaders refuse to walk because they haven't the courage. There is in fact nearly infinite debate, even among the qualified and the knowledgeable, over what the right path is. It would be appealingly simple to reduce it all to a lack of courage among the elite, but that explanation doesn't take us very far.

    And yes, the electorate does expect to be told what it wants to hear, and gets into a terrible snit when it's told anything else.
    “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary”

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  2. #62
    Council Member carl's Avatar
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    Quote Originally Posted by Dayuhan View Post
    You have to add in the perception that if you pool enough dubious loans together they somehow cease to be dubious. Add that to a huge supply of free money (interest rate below inflation rate = free money), and the incentive to take risks on loans becomes overwhelming. If you set up a situation where people can borrow at 1.5% and lend at 7% with zero perceived risk, no amount of regulation or oversight is going to keep speculators from riding that out of control.
    Yep. I'll go with all of that as contributing factors. Fannie and Freddie were mixed up in all of this and they were widely believed to be no risk because no matter how bad they screwed up, the gov would step in.
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  3. #63
    Council Member carl's Avatar
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    Quote Originally Posted by Dayuhan View Post
    I don't see what that has to do with "moral courage".
    I think it does because I think it is clear that there is a right path. We have to cut the expenditure on entitlements. There is no way around that. That may be discussed, but it isn't acted upon. In my view it isn't acted upon because of a lack of moral courage.

    That is related to the suits using torture and then using their fine educations to rationalize it. Lack of moral foundation and lack of moral courage...maybe the same animal viewed in different parts of the spectrum.
    "We fight, get beat, rise, and fight again." Gen. Nathanael Greene

  4. #64
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    Quote Originally Posted by carl View Post
    Nope not false, true. Regardless of the things that were done, those loans were bad and the would not have been made if the gov hadn't forced them to be made. So that is it. Bad loans made under duress that eventually went bad. Some surprise that that led to trouble.
    It is a necessary part of the financial system that some people win and some people lose. In this case, the bad results of those bad loans would be passed back to the government itself and, for the most part, harmlessly absorbed. No, it wouldn't be indefinitely sustainable, but the damage it could do on its own was pretty sharply limited.

    What caused it to snowball into an economy-wrecker was actual, intentional fraud. Do you understand that? If you lend me a nickel and I don't pay it back, you're out a nickel, regardless of whether someone forced you to lend me that nickel or not (and the fact that Fannie and Freddie will pay your nickel if I fail to takes a lot of the sting out of it). If you lend me a nickel, and then bet someone else a hundred million dollars that I'll pay you back, and show them fraudulent documents indicating that I'll probably pay you back, you can't blame me when you lose that hundred million. That was all you.

    Quote Originally Posted by carl View Post
    Yep. I'll go with all of that as contributing factors. Fannie and Freddie were mixed up in all of this and they were widely believed to be no risk because no matter how bad they screwed up, the gov would step in.
    Uh, Fannie and Freddie weren't the ones who propagated the idea that securitizing risky loans made them less risky. That was... private investment.

    Dayuhan, bubbling and nosediving are what I see indicated--I'll admit we're not there yet. As for what we need, re: government oversight and private investment, what we need is for fraudsters and enemies of the state to be thrown in jail for their crimes. We can't function as a society when some groups are above the law, and the group that most flagrantly and exorbitantly flaunts the law in the US these days is investment bankers. It's useless to talk about more or less oversight when that oversight is utterly toothless.
    Last edited by motorfirebox; 01-03-2013 at 02:23 AM.

  5. #65
    Council Member Fuchs's Avatar
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    Quote Originally Posted by carl View Post
    Fuchs:

    Like I said, the whole thing boils down to bad home loans. Everybody piled in but if those loans had been repaid at the rates good home loans were, the problems would not have happened.
    No, that was just the weak spot where the construct broke.
    The basic problem was resource misallocation.

    The banking sector is supposed to serve the national economy as a mediator for efficient resource allocation. It failed grossly, and that's how the problems and vulnerabilities were set up in the first place. The exact point where the fracture began which lead to the break is of little interest.

    Of much greater interest is whether and how the banking incompetence in credit allocation and risk management can be tackled and what exogenous factors amplified the problems (loose money by Fed, useless SEC and Fed oversight, mandated loans, ...).


    You cannot prevent a repeat of the crisis by tackling the subprime mortgage issue only. The roots of the problem would simply manifest themselves elsewhere, maybe in towns going bankrupt or another dotcom bubble or a raw materials speculation bubble etc.).

  6. #66
    Council Member carl's Avatar
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    I understand that if all those loans had not been forced to be made the whole thing would not have happened. I understand to that one reason all the various shenanigans went on was because the gov wasn't doing things like watching what was going on. I understand that the banking sector is too bigger to fail than it was before. I understand that much. What I don't understand is the infield fly rule, or why the Indians don't seem likely to win a pennant in my lifetime. Come on, 1948 was a long time ago, we only live so long.

    Uh, Fannie and Freddie were/are monstrous entities that pretend to be private institutions while taking advantage of the perception that any failures they had would ultimately be paid for by the taxpayer so that made them less risky...taxpayer money you see.

    One thing I see is investment bankers gave an awful lot of money to the campaign of Mr. Obama and that many of the high up guys dealing with investment banking issues in the gov were formerly investment bankers.
    Last edited by carl; 01-03-2013 at 02:54 AM.
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  7. #67
    Council Member carl's Avatar
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    Quote Originally Posted by Fuchs View Post
    The banking sector is supposed to serve the national economy as a mediator for efficient resource allocation. It failed grossly, and that's how the problems and vulnerabilities were set up in the first place. The exact point where the fracture began which lead to the break is of little interest.
    Next time an airplane breaks up in flight and people are investigating to find out where the exact point the fracture began was, I am going to write them and tell them the important thing is that the airplane broke up, not where the exact point of where fracture began was.

    The banking sector can't do and efficient job of allocating resources if an important part of its business is mandated by gov fiat. That distorts the thing.

    Quote Originally Posted by Fuchs View Post
    Of much greater interest is whether and how the banking incompetence in credit allocation and risk management can be tackled and what exogenous factors amplified the problems (loose money by Fed, useless SEC and Fed oversight, mandated loans, ...).


    You cannot prevent a repeat of the crisis by tackling the subprime mortgage issue only. The roots of the problem would simply manifest themselves elsewhere, maybe in towns going bankrupt or another dotcom bubble or a raw materials speculation bubble etc.).
    The problem wasn't banking incompetence. The problem was the gov forcing them to be incompetent to further a political goal.

    Not towns going bankrupt, states going bankrupt. And again, that is caused by political decisions.
    Last edited by carl; 01-03-2013 at 02:50 AM.
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  8. #68
    Council Member Fuchs's Avatar
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    Quote Originally Posted by carl View Post
    I understand that if all those loans had not been forced to be made the whole thing would not have happened.
    The banking sector would likely have blown up either way.
    Too many problems and inadequacies worked together to push for a crash. The U.S. economy produces a crash on the astonishing rate of about every decade. It's simply not stable or well-managed.
    The special role of the USD may be a hidden enabler for this, but I'm not sure. Maybe it's just plain old poor regulation and oversight, especially since the 80's.

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    Quote Originally Posted by carl View Post
    I understand that if all those loans had not been forced to be made the whole thing would not have happened. I understand to that one reason all the various shenanigans went on was because the gov wasn't doing things like watching what was going on. I understand that the banking sector is too bigger to fail than it was before. I understand that much.
    Then you understand nothing. Silver Thursday happened just fine without the government forcing anyone to buy anything. As for the government not watching what was going on--the government, at the behest of the finance industry, passed that responsibility down to private enterprise. Oops.

    Quote Originally Posted by carl View Post
    Uh, Fannie and Freddie were/are monstrous entities that pretend to be private institutions while taking advantage of the perception that any failures they had would ultimately be paid for by the taxpayer so that made them less risky...taxpayer money you see.
    That's not what was being discussed, and not what you agreed with Dayuhan over. Dayuhan specifically mentioned securitizing bad debt as a factor in the crash. Securitizing bad debt is a completely separate concept from taxpayer backing of bad debt.

    Quote Originally Posted by carl View Post
    One thing I see is investment bankers gave an awful lot of money to the campaign of Mr. Obama and that many of the high up guys dealing with investment banking issues in the gov were formerly investment bankers.
    Yes. It's unfortunate. Obama has shown slightly more willingness to restrict the finance industry than the GOP, but won't go so far as to throw people in jail for fraud on a scale that makes Bernie Madoff look like a three card monty hustler. So, because the Tea Party is even worse for the markets than Obama--seriously, trying to cancel the debt limit? Do you want to kickstart the zombie apocalypse? Wait, don't answer that--they've thrown their weight behind the Democrats. For the banks, it's a choice between total disaster and a slap on the wrist. For the lower and middle class, it's a choice between total disaster now and total disaster over the next few decades.

  10. #70
    Council Member carl's Avatar
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    Fuchs:

    There is something in what you say about poor regulation and oversight since the 80s. We gave up a lot of the rules that we established during the Depression in the interest of what ultimately turned out the be the interest of the big money men. We also have been developing a culture of impunity for the elites and the institutions dominated by them. That is going to get us in big trouble.

    The banking sector may or may not have blown up either way but it wouldn't have blown up in the way it did without gov action.

    The last real crash we had was the Depression. These things have been uncomfortable and disconcerting but not crashes on that scale. I don't know if the economy is stable or well managed. That sort of depends on what the definition of stable and well managed is, and that can vary depending on the men making it. That concerns me. It was free more or less. In the long run free is better even with the ups and downs. Creative destruction and all that.
    Last edited by carl; 01-03-2013 at 03:29 AM.
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    Council Member carl's Avatar
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    Quote Originally Posted by motorfirebox View Post
    Then you understand nothing. Silver Thursday happened just fine without the government forcing anyone to buy anything. As for the government not watching what was going on--the government, at the behest of the finance industry, passed that responsibility down to private enterprise. Oops.
    I do too understand stuff. Honest. I understand the offsides rule in soccer/football and I understand why when the Kuwaiti team long ago tried to depend on that they ended up failures. So that is something.

    The gov was watching what was going on. They were watching very closely to see that what they figured were enough of what the lending institutions had formerly figured were bad loans were being made to people who were poor credit risks. Then when those people couldn't pay, a predictable event, things fell apart.

    Quote Originally Posted by motorfirebox View Post
    That's not what was being discussed, and not what you agreed with Dayuhan over. Dayuhan specifically mentioned securitizing bad debt as a factor in the crash. Securitizing bad debt is a completely separate concept from taxpayer backing of bad debt.
    No, what I understood Dayuhan's main point to be was the gov establishing perverse incentives. In my view that sort of institutionalized moral hazard.
    "We fight, get beat, rise, and fight again." Gen. Nathanael Greene

  12. #72
    Council Member carl's Avatar
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    Quote Originally Posted by motorfirebox View Post
    (and the fact that Fannie and Freddie will pay your nickel if I fail to takes a lot of the sting out of it).
    Oh I forgot to comment on this. Fannie and Freddie may have their name on the check, but it is my money they are spending. That makes that check much easier to write.

    As far as that hundred million dollar bet about the nickel, it is a bet that the nickel will be paid, not that a particular person will pay it. Much easier to make that bet when Fannie and Freddie are going to back it with my money.

    I already said something about moral hazard didn't I.
    "We fight, get beat, rise, and fight again." Gen. Nathanael Greene

  13. #73
    Council Member Dayuhan's Avatar
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    Quote Originally Posted by motorfirebox View Post
    Dayuhan, bubbling and nosediving are what I see indicated--I'll admit we're not there yet. As for what we need, re: government oversight and private investment, what we need is for fraudsters and enemies of the state to be thrown in jail for their crimes. We can't function as a society when some groups are above the law, and the group that most flagrantly and exorbitantly flaunts the law in the US these days is investment bankers. It's useless to talk about more or less oversight when that oversight is utterly toothless.
    That seems to me a bit like leaving a kilo of ground beef in front of your dog, telling the dog not to eat it, then coming back the next day and whacking the stuffing out of the dog for having eaten the meat. I've no objection to punishing those who committed fraud, but throwing some or a lot of investment bankers in jail is going to provide little more than emotional satisfaction if we don't recognize and stop repeating the perverse incentives that encouraged and rewarded their behaviour. Again, the illusion that regulation or oversight can somehow compensate for bad management of incentives needs to be perforated and dismissed.
    “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary”

    H.L. Mencken

  14. #74
    Council Member Backwards Observer's Avatar
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    Default what a piece of work is man

    Enjoy.


    U.S. Public Opinion on Torture, 2001–2009

    Many journalists and politicians believe that during the Bush administration, a majority of Americans supported torture if they were assured that it would prevent a terrorist attack. As Mark Danner wrote in the April 2009 New York Review of Books, “Polls tend to show that a majority of Americans are willing to support torture only when they are assured that it will ‘thwart a terrorist attack.’” This view was repeated frequently in both left and right leaning articles and blogs, as well as in European papers (Sharrock 2008; Judd 2008;Koppelman 2009; Liberation 2008).There was a consensus, in other words, that throughout the years of the Bush administration, public opinion surveys tended to show a pro-torture American majority.

    But this view was a misperception. Using a new survey dataset on torture collected duringthe 2008 election, combined with a comprehensive archive of public opinion on torture, we show here that a majority of Americans were opposed to torture throughout the Bush presidency. This stance was true even when respondents were asked about an imminent terrorist attack, even when enhanced interrogation techniques were not called torture, and even when Americans were assured that torture would work to get crucial information. Opposition to torture remained stable and consistent during the entire Bush presidency. Even soldiers serving in Iraq opposed the use of torture in these conditions. As we show in the following, a public majority in favor of torture did not appear until, interestingly, six months into the Obama administration. (Reed College Symposium)
    Public Opinion on US Torture, 2001-2009 - Reed College Symposium Paper

    +++

    Elizabethan Crime and Punishment - www.william-shakespeare.info

    What we can learn from the torture scene in Shakespeare's King Lear - firedoglake - 3.14.2010

    +++

    Lingchi - wikipedia

    +++

    Medieval Torture - medievality.com

    +++

    The Water Cure - new yorker - 2.25.2008

    +++

    Torture Practices of the Ancient World - spiegel - 5.15.2009

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    Council Member jcustis's Avatar
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    What do Fannie and Freddie have to do with waterboarding and collateral damage?

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    Council Member Dayuhan's Avatar
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    Quote Originally Posted by carl View Post
    I think it does because I think it is clear that there is a right path. We have to cut the expenditure on entitlements. There is no way around that. That may be discussed, but it isn't acted upon. In my view it isn't acted upon because of a lack of moral courage.

    That is related to the suits using torture and then using their fine educations to rationalize it. Lack of moral foundation and lack of moral courage...maybe the same animal viewed in different parts of the spectrum.
    Do you suggest that those who hold opinions other than yours lack moral courage? There's a considerable spectrum of opinion out there on where and how to cut spending and where and how to increase revenue, and I don't see any clear indication of an objectively "right" path within that spectrum of opinion. The common folk, top to bottom, have their own inconsistencies: the prevailing opinion seems to be that somebody else should pay more tax and less should be spent on entitlements that benefit somebody else.
    “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary”

    H.L. Mencken

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    Quote Originally Posted by carl View Post
    No, what I understood Dayuhan's main point to be was the gov establishing perverse incentives. In my view that sort of institutionalized moral hazard.
    Really? You understood "the perception that if you pool enough dubious loans together they somehow cease to be dubious" to be about government establishing perverse incentives? Because, wow. That's not at all what that phrase means.

    Quote Originally Posted by carl View Post
    I do too understand stuff. Honest. I understand the offsides rule in soccer/football and I understand why when the Kuwaiti team long ago tried to depend on that they ended up failures. So that is something.

    The gov was watching what was going on. They were watching very closely to see that what they figured were enough of what the lending institutions had formerly figured were bad loans were being made to people who were poor credit risks. Then when those people couldn't pay, a predictable event, things fell apart.
    Yeah, see, you can say you understand "stuff", but when you're flatly ignorant of the role the ratings companies played? That indicates that you actually don't understand stuff.

    Regardless, that's twice you've shifted goalposts in a single page, which is more crap than I'm willing to deal with.

  18. #78
    Council Member Dayuhan's Avatar
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    Quote Originally Posted by jcustis View Post
    What do Fannie and Freddie have to do with waterboarding and collateral damage?
    The link seems to be the proposition that torture, financial crises, and presumably much of the range of unpleasantness between trace back to a lack of some construct called "moral courage". Make of that what you will. I'm still not sure I understand what it's meant to be, beyond vigorous agreement with whoever is making the argument based on "moral courage".
    “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary”

    H.L. Mencken

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    Council Member carl's Avatar
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    Quote Originally Posted by Backwards Observer View Post
    Public Opinion on US Torture, 2001-2009 - Reed College Symposium Paper
    That was a great paper. It is filled with all kinds of insight. It gives me hope that what a Sergeant said to a fearful Iraqi in Brandon Friedman's "The War I Always Wanted" is still somewhat true. The Sergeant said "We're Americans. We don't do that ####."

    The paper also brings up the question of why segments of the elite in gov, Cheney, Woo etc and the media, Jack Bauer and his ilk, why have they lost their moral foundation?
    "We fight, get beat, rise, and fight again." Gen. Nathanael Greene

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    Council Member carl's Avatar
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    Quote Originally Posted by Dayuhan View Post
    Do you suggest that those who hold opinions other than yours lack moral courage? There's a considerable spectrum of opinion out there on where and how to cut spending and where and how to increase revenue, and I don't see any clear indication of an objectively "right" path within that spectrum of opinion. The common folk, top to bottom, have their own inconsistencies: the prevailing opinion seems to be that somebody else should pay more tax and less should be spent on entitlements that benefit somebody else.
    Hell yea. Sometimes when people act upon opinions that differ from mine, damn right they lack moral courage or moral foundation. If an officer messes with a prisoner and another officer doesn't say anything because he want to get along, he lacks moral courage. When somebody says torture is ok if, if, if...he lack moral foundation altogether. So yea, at times.

    That is a good encapsulation of perhaps the prevailing attitude your last sentence is. And not to point out that that is childish and will lead to disaster regardless of the consequences is moral cowardice.
    "We fight, get beat, rise, and fight again." Gen. Nathanael Greene

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