There is no such thing as "American Capitalism", even though you seem to think there is. Just like there is no meaning to "American Freedom".

Nogames...

The hollowness of your argument reflects something...

There is no such thing as pure capitalism dude! American-style capitalism - which has at it's very roots 'socialistic' measures - is what founded our markets to begin with, and it was founded upon the concepts of self-sufficiency of American-based manufacturing and the country on a whole. Your statement was empty. Learn something about what you are discussing, will you?



Do you have a point? I do!

Alexander Hamilton.

Do your own homework, eat your Wheaties, then come back with some substance, if not I will shred your words to the point that they no longer have the weight to support their own meaning.

Learn my argument, because I know yours!

XOXO

Driven...



Before I can make an assessment on the above, I would need to know what you mean by 'let the free market work'. The relative cost between median income and average home value has more determining factors than just 'fixing' the prices. I am not even sure what that means to you.

Could you clarify?

Alexander Hamilton was a proponent of a communism, as he supported the central bank. It is, therefore, of no consequence, whatever he did or said. His whole deal is tarnished by him advocating socialism, and even communism through central bank (as we are now being proved that the existence of central bank leads to economic crisis, and then to socialist measures), and to me, it is the question of what did he REALLY wanted to achieve. Certainly, he did not seek freedom, not independence, although he may have held a position that could have been interpreted that way. But his true intentions speak loudly by his advocacy of central bank and federal power.

He was the worst of all founding fathers, and should probably be removed from the list, and mentioned only as a contemporary or an ally of founding fathers.

An analogy: You may have a father who was documented advocating your conception in order to sell your organs. While he is your biological father, it is not in your benefit to promote his ideas.

Nogames wrote...



Was he now? Just because one says it is so, does not make it so.

Take someone who really was communist... Stalin. According to your claim, because he was a communist, whatever he did is of no consequence either? That is a ridiculous statement to even think, let alone make. The consequences of Hamilton's ideas were far-reaching and very successful, as I will show. I would rather have a successful idea put into practice that you label as communism, rather than an unsuccessful one that you label as something else.

Throw in the rest of them as well... It worked, no matter what one chooses to think about it... It worked! The very fact that it fostered a self-sufficient economy with private business ownership that employed American citizens who lived freely and comfortably by the fruits of their own labor contradicts your assessment completely. It was designed to phase itself out, and transfer the responsibility to privately owned entities... which did not work!



Drivel.

What those measures acheived speak for themselves. The crisis that you are falsely attributing to the existence of that idea did not happen at that time.

Your ideology is based upon what the importance of the terms socialism and communism represent in your knowledge base. While this understanding of the term itself may be accurate, the application of those words to the subject matter at hand shows blatent ignorance... It is to deny reality in lieu of your imagination. For one to willfully ignore the huge success of those measures by ignoring their positive affect on this country simply because they 'fit' into what you deem as a communist or socialist action is to be ignorant by sheer will alone. His 'whole deal' kick-started the extremely successful American market, which led to our independence from other nations, financially apeaking.



His actions are/were at the heart of our tremendously successful economic system prior ro the civil war Nogames.

According to your claim, any nationally owned banking system equates to communism? Do you realize that the purpose of this bank was an intentionally temporary way to invest capital into the system(our system) and to streamline the nation's ability to repay debt? It offered the ability to make loans to businesses so that individual business owners could begin a business adventure which would - and did - become financially self-sufficient afterwards. That was investing in American business with the intent to become free from the dependency on other nations. It worked!

The opponents of the measure had only the possibility of region specific favoritism to use as leverage against the implementation of it. Those opponents - all but a few - changed their stances after the profound success of the economy prior to the war of 1812, and actually reimplemented the same measures afterwards because of the effects of that war upon our economy and national debt.

The bank itself was not a problem. To disregard the responsibility of the elements which were the problem(later on) and attribute it to the idea itself is preposterous. It is like blaming the idea of business for the existence of corruption. It makes no sense.



Deny history in lieu of imagination...

Look, creativesoul, I am losing my interest here. It is not an engaging discussion when an opponent just keeps denying the existent knowledge and the reality itself, in favor of unproved (actually disproved) ideas.

More then that, I find your method to be fallacious.
You say that because the crisis did not happen at the time of the FED creation, it therefore does not follow from the FED presence. Hmmm... Except that this is of course, a fallacy. For instance, if you start smoking, you will eventually destroy your body, but it will not happen at the time you smoke your first cigarette. If I use your logic, then I must proclaim that no one died as a consequence of picking up smoking, since it did not happen at that time.

Do you realize the fallacy in your judgment?

Further, you disregard that we have had several serious economic crashes, all due to the existence of the central bank, spread all over the time period from the very creation of the bank to current time. Do you not know about those? If you do not, then why are you discussing this? If you do, then why are you pretending that FED did not ruin the American economy?

But, obviously, this isn't going to change your mind.

Why should I continue? You won't learn anything anyway, because you do not want to.

Then do not respond!

History shows that the idea worked at that time... quite well. The existent knowledge shows that there were changes in the idea's implementation which caused the issues that you are attributing to the idea itself.



Apples and oranges!

Do you realize the difference between the two concepts which you are trying to equate? Smoking has inherent dangers involved in all cases and those dangers are not affected whatsoever by human judgement. The idea which Hamilton proposed and the nation implemented and subsequently prospered from, had dangers as well, if it was not done responsibly. What we have now is not the same thing!

Hamilton did not advocate a permanent fixture!



Apples and oranges!!!

The Federal Reserve Bank is not what Hamilton implemented!!!

The economy's success or failure does not wholly depend upon the existence of any bank whether it be public, private, or federally owned! The implementation of Hamilton's ideas did not ruin the economy! The straying from it's intended purpose did! That purpose was investing into American business and people in order to attain a self-sufficient nation... which we once had but do not have now...

That is the problem!

Show me otherwise, share your knowledge.

This still applies!

Domino - quesiton for you:

Fit class systems into your description. Explain what happens to the "classes" in the class system of a mixed economy when a representitive "democracy" (don't mean to be ambiguous)becomes a socialist dictatorship?

Thanks!

Just to clarify - The United States actually includes a "class" called 'capitalist', and you guessed it, they are the wealthies of those in our "free enterprise" system. Those with the greatest influence on politics and the "free" press.

What i meant, was a free market, left unregulated, would determine the value of labor, as well as the cost of a set item, correct?

A business selling homes for a cetain amount would take a small hit in profits as the values of these homes decreased. But as a result, more homes would be sold theoretically making up for this difference. If the business didn't lose income, niether would it's workers. This would keep the income, more or less the same, while decreasing the cost of housing, thus making them more affordable to the salesmen wanting to purchase one for him/herself.

There are many more factors, i do understand. And the relation of more products being sold doesn't necessarily make up for the loss in profit-per-product. But, when fixing the values of certain items, keeping them artificially high, we now have houses no longer being sold, instead of being sold for a lesser value, because their artificial value does not equal that of the market value....

Not sure if i clarified anything, but i think this is a big part of what caused the housing bubble to burst. "Bubbles" in the economy, from how i understand it, are created by regulations we place on the market.

Competition regulates prices...

The 'market' itself is the interactions between buyer and seller, owner and worker, and the merchants who are the middlemen between the two. Merchants themselves do not add value to a product, they do however add convenience and lessen the responsibility of the owners/makers which they work with/for... with this comes increased cost at the buyer end.



The real estate market has the most merchants...



I am not understanding what is being meant by 'fixing' the prices of real estate... 'keeping them artificially high'. The housing market has crashed because of defaulted loans... no other reason. Poor lending practices allowed for people to obtain loans which were very risky and depended purely on bad speculation(s) in order to even be able to be satisfied. People quit 'buying' when they could no longer afford to refinance again.



The housing 'bubble' was caused by artificially inflating the presumed value of a home and land in order to sell loans to individuals. Merchants who sold loans for and to lending institutions overpriced the home's value to the consumers. The fair market value is whatever they sell it for at the time no matter whether this is accurate or not. As loans became larger in neighborhoods, the supposed value of pre-existing homes went up as well. The problem is that the comparables(new homes and loans) were artifical, therefore, the pre-existing homes were reflecting these fake values as well.

Too many people bought and/or refinanced their homes based upon these inflated numbers, which were put into place in order to sell homes... in order to sell homes.

That is the way that I see it.

It was unregulated...

Very insteresting perspective...

I have one question... Didn;t the Community Reinvestment Act pressure banks to give out riskier loans? If so, wouldn't that be regulation?

And BTW what i meant by "fixing" prices, was making them artificially high. Like you mentioned earlier...

Driven...



You asked...



This question involves some complexity and actually has many different aspects which relate to the market crash. A careful examination though clearly shows that the CRA itself played an insignificant role. It is a scapegoat alone. Bear with me as I clarify as much as possible by highlighting the points which are usually left out by those who choose to blame the act itself for the real estate crisis. In order to effectively assess the role that the CRA actually had we should ask ourselves the following...

Regarding the current housing crisis, did lenders approve bad loans in order to comply with CRA, or to make a profit?

First, consider the fact that the timing is all wrong to blame the act itself. The CRA was put into place in 1977. The sub-prime lending explosion which lies at the heart of the crash came about 25 years afterwards in 2003, 2004. The only benefit coming from a high CRA rating(which was given for making riskier loans to community members) was one of the possibility of merging commercial and investment banking institutions... that is a huge part of the problem right there... the mergers themselves were a breeding ground for corruption and constitutes the very motive for artificially inflating housing values and market investments simultaneously.... BUT... Add to this, the fact that a very large majority of the loans in question have nothing to do with CRA.

In 2004, the Bush administration drastically changed the earlier regulations. At this point in time, CRA based lending had already slowed way down - yet the subprime lending began to exponentially increase... without CRA involvement. About half of all sub-prime loans came from those mortgage companies beyond the scope of CRA. A further 25 to 30 percent came from bank subsidiaries and affiliates, which come under CRA regs to varying degrees, but not like the banks themselves do. Only a quarter of the subprime loans were made under the CRA scope of influencial measures.

It is the independent mortgage companies(merchants), which are not covered by CRA, that made the artificially inflated loans at more than twice the rate of other lenders.

Why is it that the lending institutions themselves do not blame CRA for the current mortgage situation? Most of the CRA covered loans have a low default rate as of now...

It is clearly because CRA itself didn't bring about the greedy and careless lending that constitutes the real issue at hand. There was not enough regulation. Just as Alan Greenspan was overzealously praising sub-prime lending, CRA involvement itself was fading in the distance.

Again... the vast majority of the bad loans were made by the independent mortgage companies, and were never subject to CRA -- or any federal regulator.

There was no law that made them lend the way that they did.

What is left for motive?

Profit my friend, as I said earlier.

Many homeowners were so happy to be able to buy a house, that they did not realize that they could be paying an artificially inflated price. They trusted the merchants and the banks...

They trusted the market...

What we have is a country too large and diverse to oversee it's own best interest. There needs to be an increase in individual state power... a union of 'city-states'...

you domestic terrorist you. questioning the ultimate authority of the federal government!


welcome to the club. This was the way the forefathers intended this nation to be run and while I do not fully support what I believe it would become (as in still having all the social programs and the like), it is a far better allocation of resources than our current situation. After all, who is going to be more liable to the people, someone that represents half a state or someone that represents 10 cities? just like in a corporation, is the VP really going to care about your problem nearly as much as your direct superior?

Very interesting my friend....

What about bigger companies, such as AIG. Did they not take up the majority of the bailout money? Do you think that knowing they were too large for the government to "allow" to fail may have influenced their decision making at all?

I very much agree with this statement.

I am not in a position to determine this. In my humble opinion, I believe that some of AIG's financial problems involved PMI regs, which are kinda tied into CRA... at least originally.

In order to approve a mortgage which falls below the standard 20% invested/down/equity, the lenders required a borrower to obtain and carry this Private Mortgage Insurance which garuanteed the satisfaction of the principle should the borrower default on the mortgage. These payments were invested poorly... I believe... perhaps hedged???

It is all quite spread out, as it were.

To blame the measures which were put into place that allowed more people to realize the American Dream, is to grossly misdiagnose the culprits... It is like blaming the original 'inventor' which came up with the idea for existence of a convenient store for creating the potential of armed robbery.

No matter what measures are put into place, someone will try to use them for their own personal financial gain, often at the expense of whomever so happens to be a perfect victim.

I do not agree with the commercial and investing mergers, and I highly question the motives of the Federal Reserve Bank, which just in case it is not known is not a part of the federal government. There was explicit language within Hamilton's papers which forbid the printing of more paper bills than we actually had backing for.

The current overall picture goes against the intentions of a representative government. It goes against our very foundation.

Essentially, you are asking for the decentralization of power. Meaning WashingtonDC and the 1 government are inadequate to fill in all requests and grant all wishes and govern in a way that would satisfy most people.

Is that what you are saying?