Hard News by Russell Brown

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Hard News: About Occupy Wall Street

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  • George Darroch,

    you didn't exactly have to be Ron Paul at his ding-battiest worse to ask whether eye-watering levels of low-quality-debt-fuelled consumption -- cheerfully enabled by banks who I can't believe didn't know better -- wasn't going to leave one hell of an bitter aftertaste

    It certainly helped. In the mid-2000s the only types I can remember talking seriously about these things were deep-greens, communists, and Cryptonomicon types.

    WLG • Since Nov 2006 • 2264 posts Report Reply

  • Richard Aston, in reply to Dylan Horrocks,

    I feel more compelled right now to dive into the chaos and engage than I have in years. It's a moment of openness and potential and possibility - in stark contrast to the rigid hopelessness of the last 20-30 years. And that's exciting and fills me with hope - for all the confusion and fear it also provokes.

    I am with you Dylan, quite aside from the right/wrong argument I get a great sense of hope when large numbers of ordinary people break out of their slumber to speak for and seek a better way. As you point out this can be chaotic but that is so often the case when social change happens.

    Auckland • Since Nov 2006 • 509 posts Report Reply

  • George Darroch,

    Cryptogon, rather. Although readers of Neal Stephenson novels were more than likely concerned about such matters...

    WLG • Since Nov 2006 • 2264 posts Report Reply

  • andin, in reply to George Darroch,

    Skilled people need challenging jobs,

    Those skills can become a tad overinflated & have a use by date.. And challenges litter the ground to those looking. Where's that damn cat....

    raglan • Since Mar 2007 • 1882 posts Report Reply

  • Sacha,

    Stream of #OWS pix from flickr.

    Ak • Since May 2008 • 19694 posts Report Reply

  • hamishm,

    I recommend Matt Taibbi's book "Griftopia" for a look at how weird the financial world got. If these guys had thought of it, they would have leveraged the smell of an onion.
    he blames Greenspan for it all.

    Since Nov 2006 • 357 posts Report Reply

  • Kumara Republic, in reply to George Darroch,

    Indeed. Friends in Labour are upset when I criticise their last Government as inflationary, reckless, and based in large part on a property bubble that was bound to collapse. Right until the end they were resisting slowing things down through direct and indirect measures. It wouldn't have been easy, but it would have been worth it (of course, you do such things before the bubble, not when it's ready to pop).

    Chances are it would have been shot down as 'nanny statist'. It's very difficult to legislate against materialism, to the point where the only jolt back to reality is to come horribly unstuck, like Iceland and Ireland. Cameron Bagrie of ANZ called it the Freddie Mercury Economy - "I want it all and I want it now!"

    Clive Mathew Wilson, in a review for a large and wasteful vehicle somewhere in the Dog & Lemon Guide, wrote something to the effect of, "Imagine you're a landless peasant in Ukraine many years back. You think to yourself, 'When I get to America, I'm going to buy myself a car that's bigger than a whale.'"

    The southernmost capital … • Since Nov 2006 • 5423 posts Report Reply

  • Bart Janssen, in reply to hamishm,

    he blames Greenspan for it all

    Which of course is silly as well.

    Auckland • Since Nov 2006 • 4451 posts Report Reply

  • Dylan Horrocks, in reply to Russell Brown,

    Huh. Well, having followed this rather obsessively for more than a week now, I have to say that's not the video I see posted and tweeted and shared over and over again. Maybe the views it's getting are partly *because* it's so out there? Honestly, of all the photos and videos and interviews and tweets I've encountered so far, this would be at the fringe of the messages I'm hearing from Occupy Wall Street. The Paulistas turn up all over the place - along with 9/11 Truthers - but I suspect as time goes on and things solidify, they'll probably end up feeling less comfortable at Occupy gatherings, rather than more.

    But, y'know, anything could happen, I guess.

    Auckland • Since Nov 2008 • 4 posts Report Reply

  • Bart Janssen, in reply to Lucy Stewart,

    Either that or we must figure out a way of teaching management to behave differently.

    To do that you'd need a way to make the consequences for management relative to the long-term, rather than the short-term, results of a company, because you're right - it's really hard to lay the finger on individuals for doing what made most sense for them (and their companies) *at the time*, but overall and over time was disastrous. And that's hard to regulate. Making corporations (and boards) liable for their failings in more serious ways than relatively small fines would be an excellent start.

    I don't think there is a way to make "consequences of actions" drive managers into good behaviour. It just encourages them to find lawyers to create loopholes.

    If solutions are to be found for the failures in the existing system they will have to be short and long term. I agree that short term it will have to be governments taking intelligent regulatory measures, but they will be evaded.

    Long term I think the only way to change the system is to either change the role of managers, from controlling to support, or to change the way managers think, by education. I personally think getting managers to step down from the controlling roles is unlikely but changing the way they are taught so that they become less selfish and short term in their thinking is possible. Essentially I'm suggesting making ethics a compulsory part of the MBA, not compliance with legal ethics but real human ethics.

    Of course you'd then have to license them. Wouldn't that be fun, require people to pass a test in order to control businesses that are important (say if you have more than 50 staff dependent on your decisions). I know some that would pass with flying colours and some that wouldn't even understand the questions.

    Auckland • Since Nov 2006 • 4451 posts Report Reply

  • hamishm,

    Which of course is silly as well.

    He makes a good case for Greenspan being aware of what was going on, having the power to stop it yet doing nothing. One person cannot usually make much difference on the world stage but I think Greenspan must shoulder the largest responsibility.
    He chose not to act and even encouraged the craziness.
    But it's not important, really.

    Since Nov 2006 • 357 posts Report Reply

  • Sacha, in reply to Bart Janssen,

    I don't think there is a way to make "consequences of actions" drive managers into good behaviour.

    Carbon taxes and ETS are one example. There must be others. Not systemically trusting a class of people who have proven themselves untrustworthy would be a start.

    Ak • Since May 2008 • 19694 posts Report Reply

  • Angus Robertson, in reply to Lucy Stewart,

    "Hang the bankers" isn't a useful response, but it's still absolutely true that the banking and financial systems screwed up bigtime, that most of it was predictable, and that some people actively profited off it. Conspirators they may not have been, but they're not exactly scapegoats, either.

    Let them jump?

    Bankers lost all their money on the bubble bursting.

    Some things didn't happen:

    Capitalism: your company lost money? Well that's sad, but there are a thousand more companies out there and we don't need you. Better luck next time.

    Socialism: you rippied off people and stole the profits? You're despicable, your company is now forfiet to the state and you can be sent to prison.

    What happened:

    Politicianism: your company lost $trillions? You're despicable, here is $trillions (plus a little bit more for your time), make sure it doesn't happen again.

    And here the Americans are 3 years later, $trillions in the hole and with a financial system run by the incompetent idiots. And on top of that they incompetent morons are actually being rewarded for their incompetence. There are protesters from both the right and the left, because in the case of banking they all offer superior solutions to what the centre did.

    But... since the USA is a democracy (and neither of the effective solutions would be quick or pleasent) the centrist parties could not have done any different*. If the right-wing solution had been implemented the left would have surged ahead in the polls effectively destroying the centre right, and vice-versa.


    * The only way either effective solution could have occured is if the centre-left implemented hard-right policy and the centre-right implemented hard-left policy - think Lange/Douglas v. Muldoon.

    Auckland • Since May 2007 • 984 posts Report Reply

  • Mandy S, in reply to Dylan Horrocks,

    Yeah, I agree. I think Russell that the youtube analytics things is rather a clumsy tool...you could make the case, hypothetically, that tea-partiers may be older, and less tech savy, so they will link to the same youtube video over and over again. Whereas OWS are probably younger and more tech savvy, instead of passively viewing the same youtube vid, they may be more likely to remix it, upload their own version etc etc. There are more versions of the Jesse what-his-face one, so you don't know which one to watch to up-vote it. Keith Olberman is still beating your Ayn-acolyte though...

    Auckland • Since Mar 2011 • 14 posts Report Reply

  • Andrew C, in reply to Bart Janssen,

    Which of course is silly as well.

    Greenspan himself now says he got it badly wrong. So it's not entirely silly.

    Auckland • Since May 2008 • 168 posts Report Reply

  • Alex Coleman, in reply to Craig Ranapia,

    No, but you didn't exactly have to be Ron Paul at his ding-battiest worse to ask whether eye-watering levels of low-quality-debt-fuelled consumption -- cheerfully enabled by banks who I can't believe didn't know better -- wasn't going to leave one hell of an bitter aftertaste. I don't think that's all on the Evil Trolls of Wall Street.

    I do think the nut of it is "should have known better". we live in a highly complex society with specialists right? People pay mortgage brokers, financial advisors and the rest for a reason. When the professionals are telling you that it's good, and that you'd be a mug not to be borrowing more, and can show you all sorts of charts that seem to demonstrate that, then I really do think that the culpibiity is nothing like 50/50.

    The 'borrowers are just as much to blame' meme, misses the crucial (to me ) point that the borrowers should not be expected to be responsible for the financial system.

    They are responsible for the loans they take out, even if they did so after relying on what they had a right to expect was good advice. Sure. But an individual bad loan is not a problem.

    The lenders not only made many many thousands of bad loans, but they leveraged those loans into even more concentrated forms of toxicity. That was what caused the problem. Add to that the fact that the banks could no longer seem to be able to legally know who held the mortgage on any given property, and the borrowers culpability, in my view, is simply an insignificant distraction.

    Wellington • Since Nov 2006 • 247 posts Report Reply

  • Bart Janssen, in reply to Sacha,

    Carbon taxes and ETS are one example.

    Yes and their response is to buy politicians that will change that law and where that isn't possible challenge every detail legally or simply ignore the law and dare the govt to do anything.

    Yes I think a demonstrably untrustworthy group should not be trusted. But I think the way to change that is to replace them with trustworthy people who have been taught what (long term) ethics really are and get tested before they are allowed to be in positions of responsibility.

    Auckland • Since Nov 2006 • 4451 posts Report Reply

  • Bart Janssen, in reply to Andrew C,

    Greenspan himself now says he got it badly wrong. So it’s not entirely silly.

    Yes but Greenspan is a political appointment. Had he known that he should have acted differently it is questionable as to whether he would have been allowed to act differently.

    Auckland • Since Nov 2006 • 4451 posts Report Reply

  • merc,

    There is no order than that we wish to place there.

    Since Dec 2006 • 2471 posts Report Reply

  • Thomas Johnson, in reply to Bart Janssen,

    I agree that short term it will have to be governments taking intelligent regulatory measures, but they will be evaded.

    It seems (perhaps superficially) that most of the regulatory responses have made things worse, and only pandered to a different group of special interests. I have a suspicion that the problem is beyond regulation in some ways.

    Wellington • Since Oct 2007 • 98 posts Report Reply

  • Russell Brown, in reply to BenWilson,

    One thing that I think that anti-banking sentiment fails to capture at the moment is that the problem is way bigger than just bad banking. A systematic decline in the value of Western economies through the outsourcing of everything that could possibly be outsourced is not just the fault of bankers, it's the entire globalization mentality, for which the blame is considerably more diffuse.

    But even globalisation looks different if you're in, say, China or Vietnam and you have a life your parents couldn't have dreamed of.

    And capitalism really did pretty well in the 20th Century. This Australian Treasury paper on poverty and inequality in that century is worth reading. On life expectancy:

    In 1870, the world's highest life expectancies at birth were in Norway (49.3 years) and Australia (48.0 years). Life expectancy in Japan was 37 years. In the 1880s, Indian life expectancy was 25 years, and it fell to only 20 years in the 1920s, when Spanish influenza swept the country [Crafts (2000) pp 7-8; Caldwell (1999) p 121].

    By the mid 1990s, the highest life expectancies in the rich countries of the 1870s had been exceeded by practically every country on earth. The average life expectancy in developing countries was 65 years; in India it was 61.6 years; and only in Angola, Malawi and Mozambique did life expectancies remain lower than the levels in Australia and Norway in the 1870s.

    Supporting indicators suggest that the quality of life is improving, as well as sheer longevity, for reasons that include economic gains in nutrition, not just public health gains (such as immunisation). For example, child malnutrition rates have declined by a quarter in the last 40 years, with associated improvements in stunting (low height for age -- an indicator of long-term malnutrition) and wasting (low weight for height-- an indicator of short-term malnutrition). [UNDP (1998) p 19]

    Life expectancy inequality between countries halved between 1962 and 1973. We are a more equal world in many respects.

    What the paper also shows is that we and our parents in the West grew up in a golden era of prosperity: 1950-1973.

    On the other hand, India was still amongst the poorest 20 countries in the world in the late 70s. That's hard to credit now.

    The financial clusterfuck we continue to witness is, indeed, predicated on the substantial improvement in per-capita income and, consequently, savings in the economies of the East. That's where the credit has come from.

    And, as Alan Bollard explained in his book, the mainstream view was that that was a fine arrangement. The increasingly prosperous East needed somewhere to invest, we needed access to finance.

    Nek minnit ...

    Auckland • Since Nov 2006 • 22758 posts Report Reply

  • Russell Brown, in reply to Dylan Horrocks,

    Huh. Well, having followed this rather obsessively for more than a week now, I have to say that’s not the video I see posted and tweeted and shared over and over again. Maybe the views it’s getting are partly *because* it’s so out there? Honestly, of all the photos and videos and interviews and tweets I’ve encountered so far, this would be at the fringe of the messages I’m hearing from Occupy Wall Street.

    Oh, seriously, I hope so. A coherent, democratic movement for reform would be a historic achievement.

    But America's such a weird place.

    Auckland • Since Nov 2006 • 22758 posts Report Reply

  • Paul Campbell,

    I think that OWS is less on people's minds in the US than people here think - I spent last week in Berkeley and while people in Berkeley were very aware it was going on mostly they were asking why the rest of the US wasn't paying attention - certainly Steve Jobs got ten times the media mind share last week

    Dunedin • Since Nov 2006 • 2609 posts Report Reply

  • Sacha, in reply to Thomas Johnson,

    a different group of special interests

    what's different about them?

    Ak • Since May 2008 • 19694 posts Report Reply

  • George Darroch,

    And capitalism really did pretty well in the 20th Century. This Australian Treasury paper on poverty and inequality in that century is worth reading. On life expectancy:

    I’m a little too busy to craft a response right now (I have a term-paper on Indonesia’s primary healthcare system to finish), but if the rest of that paper is in any way like the introduction, it is quite frankly rubbish. Rapid and sustained growth in life expectancy has almost always been driven by state investments in public health, on both the treatment and preventative sides. China is perhaps the most striking example, going from a life expectancy of 36 in 1949 to 73 in 1997, but there are plenty of others, such as Thailand or Indonesia. The worst health disasters in the last 30 years have all accompanied massive disinvestment in health. It was the weakness and lack of funding wreaked by the World Bank and IMF on the healthcare systems African nations that left them unable to respond to HIV/AIDS before it had reached epidemic proportions, with all the consequences that entailed.

    WLG • Since Nov 2006 • 2264 posts Report Reply

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