Why Wall Street Matters, why socialists are wrong

[Ripoll]

I read the edit of the OP and I'm convinced this is just an attempt to start an argument with progressive boogeymen that want to break up banks with sledgehammers and give all their money to homeless and illegal immigrants. There is no way the last bit is an informed opinion.

That has nothing to do with the last bit at all, it's just debunking "progressive" claims that somehow demonizing wall street, reinstating glass steagall, and Breaking up big banks (the biggest reason for the United State's financial success.) Will do nothing for the middle class in keep them trapped in vicious poverty cycles.

[Arkotania]

I'd like to argue the schooling aspect. How does making education for profit benefit?
I mean, European citizens get free quality college educations...

I'm distrustful of Wall Street. Then again I'm not exactly fond of the capitalism pracitced in the "Dog eat Dog" manner, which I believe fosters a destructive society that prioritizes self-gain rather than the betterment of all of society. A focus on cashing in on vulnerabilities rather than fixing them, for the purpose of profit. Capitalist thinkers can argue why capitalism actually makes the world a better place, but communism on paper does the same.

[Ripoll]

I'd like to argue the schooling aspect. How does making education for profit benefit?
I mean, European citizens get free quality college educations...

I'm distrustful of Wall Street. Then again I'm not exactly fond of the capitalism pracitced in the "Dog eat Dog" manner, which I believe fosters a destructive society that prioritizes self-gain rather than the betterment of all of society. A focus on cashing in on vulnerabilities rather than fixing them, for the purpose of profit. Capitalist thinkers can argue why capitalism actually makes the world a better place, but communism on paper does the same.

Capital Markets allow for more scholarships which increases the accessability to education, say what you will about for profit education and I agree that the costs are wayyy to high atm, but the US has the best college level education in the world for a reason. 16 out of 20 of the best Universities are located in the US.

Only interrupted by oxford and Cambridge, not in number 1 but within the top 10.

Wall Street connects buyers and sellers all over the world to create new markets satisfy demand and increase living standards so people can do more with less.

[Ripoll]

I doubt you even read it, considering it agrees with me on the following accounts:

With half a decade’s hindsight, it is clear the crisis had multiple causes. The most obvious is the financiers themselves—especially the irrationally exuberant Anglo-Saxon sort, who claimed to have found a way to banish risk when in fact they had simply lost track of it. Central bankers and other regulators also bear blame, for it was they who tolerated this folly. The macroeconomic backdrop was important, too. The “Great Moderation”—years of low inflation and stable growth—fostered complacency and risk-taking. A “savings glut” in Asia pushed down global interest rates. Some research also implicates European banks, which borrowed greedily in American money markets before the crisis and used the funds to buy dodgy securities. All these factors came together to foster a surge of debt in what seemed to have become a less risky world.

Start with the folly of the financiers. The years before the crisis saw a flood of irresponsible mortgage lending in America. Loans were doled out to “subprime” borrowers with poor credit histories who struggled to repay them. These risky mortgages were passed on to financial engineers at the big banks, who turned them into supposedly low-risk securities by putting large numbers of them together in pools. Pooling works when the risks of each loan are uncorrelated. The big banks argued that the property markets in different American cities would rise and fall independently of one another. But this proved wrong. Starting in 2006, America suffered a nationwide house-price slump.

The pooled mortgages were used to back securities known as collateralised debt obligations (CDOs), which were sliced into tranches by degree of exposure to default. Investors bought the safer tranches because they trusted the triple-A credit ratings assigned by agencies such as Moody’s and Standard & Poor’s. This was another mistake. The agencies were paid by, and so beholden to, the banks that created the CDOs. They were far too generous in their assessments of them.

I direct you as well to my original post - nowhere did I say that the government was completely innocent in having set the conditions for the financial collapse. What I did say was that they were convinced to change the regulations by the financial sector, and that however that process occurred the government also failed in its duty to properly regulate the financial sector and prevent collapses like what happened in 2008.

That's not what you suggested at all

[Kelinfort]

Wall Street requires firm, reasonable regulation. It is time to rid the financial sector of crony capatialism with the government.

[Islamic State of UKIP]

Wall Street is important, however, it needs to be watched and people need a better education as to how the economy works. There have been too many crashes because people let greed blind them and forgot that even in a perfectly free market you will have a boom and bust. These people thought they could gain forever and that will never be the case.

[SaintB]

I read the edit of the OP and I'm convinced this is just an attempt to start an argument with progressive boogeymen that want to break up banks with sledgehammers and give all their money to homeless and illegal immigrants. There is no way the last bit is an informed opinion.

That has nothing to do with the last bit at all, it's just debunking "progressive" claims that somehow demonizing wall street, reinstating glass steagall, and Breaking up big banks (the biggest reason for the United State's financial success.) Will do nothing for the middle class in keep them trapped in vicious poverty cycles.

No, you just assume that all progressive leaning individuals are in lock-step with Elizabeth Warren and that is not an informed opinion. Its at best a straw man representation of progressive ideology and at worst a boogeyman created by your lack of understanding (willful or otherwise) of progressive ideals.

[Pope Joan]

Let's abolish autotrading. It is too volatile and hard to control. Mechanically, you could call it irrational.

[The Transcaucasian Democratic Republic]

Precisely because of its importance ''progressives'' call for legislation to regulate it.

[Ripoll]

That has nothing to do with the last bit at all, it's just debunking "progressive" claims that somehow demonizing wall street, reinstating glass steagall, and Breaking up big banks (the biggest reason for the United State's financial success.) Will do nothing for the middle class in keep them trapped in vicious poverty cycles.

No, you just assume that all progressive leaning individuals are in lock-step with Elizabeth Warren and that is not an informed opinion. Its at best a straw man representation of progressive ideology and at worst a boogeyman created by your lack of understanding (willful or otherwise) of progressive ideals.

Warren is a leader of the progressive faction in the senate. I don't care about your ideology I care abojt the politics going on right now and who the labels are associated with

[Ripoll]

Let's abolish autotrading. It is too volatile and hard to control. Mechanically, you could call it irrational.

..............

[Atlanticatia]

It'd be silly to condemn all of wall street, investment, and financial services in general. they're not naturally bad things, and can add value to the economy. however, an unregulated financial sector is what's bad. obviously there needs to be oversight and protection for consumers and small businesses. like any other industry, there has to be certain standards and such. that's what I as a progressive am opposed to - an unregulated financial sector that has its investments backed by state bailouts. i support a financial services sector that adds value and capital, and provides investment. wall street is an important part of the economy but we can't just leave it to do whatever it wants, with a promise of a state bailout.

[Ripoll]

It'd be silly to condemn all of wall street, investment, and financial services in general. they're not naturally bad things, and can add value to the economy. however, an unregulated financial sector is what's bad. obviously there needs to be oversight and protection for consumers and small businesses. like any other industry, there has to be certain standards and such. that's what I as a progressive am opposed to - an unregulated financial sector that has its investments backed by state bailouts. i support a financial services sector that adds value and capital, and provides investment. wall street is an important part of the economy but we can't just leave it to do whatever it wants, with a promise of a state bailout.

It's not unregulated, it's actually one of the most regulated financial markets in the world right now.

All progressive suggestions just make iliquidity more prevalent and harm the process.

Banks go under and bailouts for too big to fail is certainly not entirely efficient. It is however the most efficient we have, and we very VERY rarely ever face bank collapses.

Individual audits and oversight is needed, not idiotic and ineffective blanket regulations that enforce the poverty cycle and damage our economy.

[Nazi Flower Power]

I'm not seeing how progressive policies would trap people into relying on payday loans. Most progressives do not want to eliminate Wall Street or banks. And what's your beef with Elizabeth Warren?

[Geilinor]

Yes, banks are necessary, nobody disputes that. However, banks can be subject to regulation.

[Ripoll]

Yes, banks are necessary, nobody disputes that. However, banks can be subject to regulation.

To what extent though? My suggestion is that Warren's policies go way to far and undermine middle America much more than any attempts made to help it.

[The Serbian Empire]

I read the edit of the OP and I'm convinced this is just an attempt to start an argument with progressive boogeymen that want to break up banks with sledgehammers and give all their money to homeless and illegal immigrants. There is no way the last bit is an informed opinion.

Trust me, some of them have a Wall Street boogeyman issue to the point they want to shrink the size of banks.

[New Stinkonia]

What a silly drive-by strawman attack on Elizabeth Warren. She must really have the banksters worried.

Yes, Wall Street as it operates today matters, to the banksters. In the last 30 years, the government has done nothing but appease large corporations, and what did it lead to? Deficits, record national debt and the #1 wage gap in the world. Banksters and their toadies like to babble a ton of excuses to maintain their current fraudulent schemes, but the numbers don't lie.

Now we're supposed to be worried about Wall Street and their making record profits? Give me a bloody break. Attacking strawmen, such as the imaginary idea that someone wants to abolish the investment market, is nothing but hubris.

Here's the bottom line: The government is supposed to work for all people, not just for Wall Street. It doesn't matter how well Wall Street is doing with the current system if that system rewards practices that lead to economic collapse, like they did in 2007. That is what Elizabeth Warren is advocating. Rules to prevent the economy from collapsing. Or should we allow banks that are "too big to fail" to exist as untouched as they were the day their fraud collapsed them?

The only argument from Ripoll I see here is that we should take his word for it that the sky would fall if we even look at the banks funny.

[The Black Forrest]

The OP is fundamentally misunderstanding the criticisms that 'progressives' (and a lot of other people) have about Wall Street. The problem isn't that it exists, the problem is that the banks making up Wall Street got greedy and decided to gamble vast quantities of other peoples' money through esoteric financial instruments that they had to finagle the government into making legal (hence the repeal of Glass-Steagall). And once they inevitably lost that money and very nearly tanked the economy in the process, they got the mother of all bailouts with practically zero accountability, all because they had extended so many putrid tentacles into the wider economic landscape that allowing them to go belly up would make things even worse.

You know the esoteric financial instruments you mention were invented by government affiliated fannie mae and freddie mac, some 20 years before Glass-Steagall was repealed. Also worth noting Glass-Steagall never blocked mortgage backed securities and most of the world never had such a restriction on banking, indeed most of the world is less regulated in that regard and allows commercial banks to be merged with insurance companies as well as investment banks.

Also noting Senator glass called for Glass-Steagall's repeal a few years after it became law calling it an emotional over reaction.

Didn't Glass-Steagall's removal open the door to subprime MBSs?

Glass-Steagall had good intentions. But as with anything the great defenders of the free market look for new ways to cheat the system.

[Arkolon]

banksters

That's immature, honestly.

In the last 30 years, the government has done nothing but appease large corporations

Crony capitalism to GM and GE, plus tech firms that still find themselves in your borders. I don't see what this has to do with the 2007 crisis.

and what did it lead to? Deficits

Wow, where did you get that from? Do you want to point to the part of the pie chart which says "crony capitalism" and which is supposedly big enough as to plunge the country into deficits? Stimulus programs, otherwise known as (literally) deficit spending, caused deficit, as well as an eroding tax base and the lacking willpower on behalf of the legislature to cut down on spending or increase taxes.

record national debt

Yeah, I don't really see where you're coming from with this. To me it sounds like you listed three random issues on the top of your head and assumed it had to do with the ebul bankerz. National debt stems from the deficits that have been running in the past, and only stands at around 80% of US GDP. It's not that big of a problem unless your credit rating falls and you guys don't mind paying back China a chunk of the budget for the next few years as you pay off interest.

and the #1 wage gap in the world

That's not even true. Before taxes and transfers, the US's Gini stands at 48.6, while, say, Italy is at 53.4, Germany at 50.4, and Israel at 49.8. And that's just OECD countries. Elsewhere the US comes off as even more fair. Again, I don't know where you're coming from with this.

Banksters and their toadies like to babble a ton of excuses to maintain their current fraudulent schemes

What is this? How old are you?

but the numbers don't lie.

What numbers? You didn't give any numbers that supported anything you were saying.

Now we're supposed to be worried about Wall Street and their making record profits?

Yes, because Wall St. is probably the most important financial centre in the world, and connects money from one place to another. Its role as a financial hub is undisputed and crucial: if it is tightened too tight, you will freeze the banking sector and could potentially damage your economy permanently. This is why banking regulations are so hard to implement. It's comparable to a pin-the-tail-on-the-donkey approach to heart surgery. We aren't supposed to be worried about their "making record profits [sic]", but their capacities to act as banks. The Americans have regulated their banks much further than the Europeans have, and this is one clause of TTIP.

Attacking strawmen, such as the imaginary idea that someone wants to abolish the investment market

From what I can tell, your idea of "banking regulation" is not too far from functionally abolishing the investment market. Tell me, how would you regulate banks?

It doesn't matter how well Wall Street is doing with the current system if that system rewards practices that lead to economic collapse

Wow, WHAT? How did economic collapse "reward" the bankers in 2007? You must think of the financial services industry as run by masochists in that case. Where the hell did you get the idea that the current system rewards failure?

That is what Elizabeth Warren is advocating. Rules to prevent the economy from collapsing.

Again, you really have to fathom the underlying complexities and flexibilities of the banking sector before trying to tie them down to something.

Or should we allow banks that are "too big to fail" to exist as untouched as they were the day their fraud collapsed them?

Toxic loans aren't fraud. Banking isn't fraud. I understand you have some beef with the people you pay your mortgage to, but, for your own sake, quit acting like this about it.

[Ripoll]

What a silly drive-by strawman attack on Elizabeth Warren. She must really have the banksters worried.

Yes, Wall Street as it operates today matters, to the banksters. In the last 30 years, the government has done nothing but appease large corporations, and what did it lead to? Deficits, record national debt and the #1 wage gap in the world. Banksters and their toadies like to babble a ton of excuses to maintain their current fraudulent schemes, but the numbers don't lie.

Now we're supposed to be worried about Wall Street and their making record profits? Give me a bloody break. Attacking strawmen, such as the imaginary idea that someone wants to abolish the investment market, is nothing but hubris.

Here's the bottom line: The government is supposed to work for all people, not just for Wall Street. It doesn't matter how well Wall Street is doing with the current system if that system rewards practices that lead to economic collapse, like they did in 2007. That is what Elizabeth Warren is advocating. Rules to prevent the economy from collapsing. Or should we allow banks that are "too big to fail" to exist as untouched as they were the day their fraud collapsed them?

The only argument from Ripoll I see here is that we should take his word for it that the sky would fall if we even look at the banks funny.

All progressive criticisms have not one beneficial byproduct for the economy of the US. They're all criticisms about fairness and equality, but isn't a cheaper mortgage, a lasting mortgage, and a college level scholarship paving the road equality and fairness? What about insurance? Our military? Progressives do nothing but talk but fail to recognize all the side effects that would soon follow over regulation progressives would put in place.

Also Warren is somewhat of a radical when she talks about banks, and many progressives who follow suit are as well.

She said she would "smash them up" on countless occasions and jail all the top CEO's for what happened in the 2008 financial crisis.

[Chestaan]

Yes, banks are necessary, nobody disputes that. However, banks can be subject to regulation.

To what extent though? My suggestion is that Warren's policies go way to far and undermine middle America much more than any attempts made to help it.

Well, judging by the actions of Goldman Sachs, a much greater extent.

[Zottistan]

Forgive me if I'm wrong, but doesn't progressivism generally refer to a spectra of social views as opposed to economic ones?

[Fortschritte]

Forgive me if I'm wrong, but doesn't progressivism generally refer to a spectra of social views as opposed to economic ones?

Eh, sort of...

[The New Sea Territory]

Whether progressives are wrong or not is irrelevant to the question "is Wall Street necessary", which the answer is obviously no. The economy could be managed in a democratic, decentralized way by workers rather than hierarchical power structures like megacorporations.