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The Spaghetti Test


By lephead - Posted on 07 March 2009

I've noticed the last few days there have been some 'frantic' postings concerning the current state of affairs, and I think I would like to add another plausible explanation that I think is a condensation of many viewpoints presented.

Many of us feel the extreme right has an agenda : perpetuating the myth of 'laissez faire capitalism' to create an economy that rewards the extremely wealthy at the expense of the middle and working class.  Many of us are willing to admit our economy is in shambles.  Those of us willing to admit that have a pretty good idea who the culprits are, but are a little fuzzy on where all the money that's disappeared has gone.   But that money's gone somewhere, and they have their spokesmen to cover up their dirty deeds (done down and dirt cheap!)

It's Obama's fault, it's Clinton's fault, it's Carter's fault, it's the people who bought the homes fault, it's the consumers who bought gas for the suv's that were pushed on them for years, it's the union's fault for making middle class wages for 'uneducated' people, yada yada yada.  It's everybody's fault except the people who benefited from their filthy lucre.

A good con artist is able to steal your money and get away with it.  A great con artist steals your money and then convinces you it's your fault!  The fact that they are paying people like Hannity, Coulter and others to do the Rushbo Limbo 'how low can you go?' proves they are masters of deceit.

So now you now the spaghetti test.  Keep throwing accusations out there until something sticks.  some of us know the greatest weapon against the deceivers is to uncover their charades, and from what I've seen, Obama and his staff are on top of this game. 

 

.

soak the rich?

Dear Nightwinger :  since you're part of the "Healthcare is a privilege" crowd, if it was your cartoon it would have one of your rightwing heroes saying, "this guy doesn't have an insurance card.  get a couple of busboys to carry his body out and dump it in the back alley.  Then call my attorney and have him sued for getting sick in my restaurant!  who does he think he is anyway !?!?!?"

Lep - I think perhaps you should do a little more research on what laissez faire capitalism actually is as it is definitely not a reverse robin hood scheme as you seem to purport it to be.  It is not a zero sum game.   It may be more Darwinistic than other types of economies but then again so is life in general.

 

Mary : I just don't believe for a second that what has gone on during "supplied side" economics under Reagan, Bush or others is laissez-faire.  The market place is not ruling at all.  And I don't beleive in supplied or laissez faire in the first place because it is a theory and it excludes the downside of human nature, which is what has been ruling lately.

Yes, I don't know as much about it as you.  And no, I'm not going to read about it either. 

Heh -- you sound like the worst parts of the GOP which we're trying to rail against: "I don't believe in it but I'm not gonna go and learn about it either."

See no evil, hear no evil, speak no evil. 

"For those who plan with audacity and execute with vigor,
progress is the magnificent by product." 

I learnfrom my peer fast (LOL)

That's exactly my point.  What is going on right now is not normal.  Sorry I didn't mean anything derogatory in post!

Just seems even if you do not agree with it, the more you understand it you would realize what is happening is greater than just economic theory as monetary policy and even globalization has a large impact on what has happened and is happening.

Source: Sold Out: How Wall Street and Washington Betrayed America; Released Weds., March 4, 2009

"The financial sector invested more than $5.1 billion in political influence purchasing over the last decade. The entire financial sector (finance, insurance, real estate) drowned political candidates in campaign contributions over the past decade, spending more than $1.7 billion in federal elections from 1998-2008. Primarily reflecting the balance of power over the decade, about 55 percent went to Republicans and 45 percent to Democrats. Democrats took just more than half of the financial sector’s 2008 election cycle contributions".

 In 1999, Congress repealed the Glass-Steagall Act, which had prohibited the merger of commercial banking and investment banking. Regulatory rules permitted off-balance sheet accounting -- tricks that enabled banks to hide their liabilities. The Clinton administration blocked the Commodity Futures Trading Commission from regulating financial derivatives -- which became the basis for massive speculation.

Let's hope Obama reverses all of this.

That was a very interesting and educational article.  It shows just how intertwined so many things are; so many things have contributed to this deep recession.

The "fix" must be just as intertwinded and complicated.  Thankfully, Obama realizes that, sees the big picture, and doesn't think a few hundred dollar check to each tax payer will fix the problem.  

Repealing Glass Steagall wouldn't have had any effect if were not for our fiat monetary system.

Derivatives on the other hand could very well be the next shoe to drop. 

I think the takeaway here is that even while you can't regulate everything - you have to be aware of what is developing so if it needs regulation to enact it and actually (in the case of Fannie & Freddie) enforce it.

I disagree Mary.  As these big entities combing, the more opportunities exist for mega institutions to hide what they are doing.  Deregulation makes it easier yet, and they get away with murder for profit.  Fannie and Freddie are only one slice of the pie. 

I agree that derivatives may well be the next shoe to drop, and the abilitiy to hide things will have been a huge contributing factor once again.

I agree, Suzi. I don't want to hear the phrase "too big to fail" ever again. 

TR had it right -- I'm all for "laissez faire" in general but I am against continuing consolidation and monopolization of industries.

"For those who plan with audacity and execute with vigor,
progress is the magnificent by product." 

I have long said that no company should ever be allowed to be so big that it's failure could bring the nation's economy down!!  Greed is too commonplace and human in nature to permit that.  If that hadn't been allowed to happen, the companies that are guilty would just collapse, the top guys would go broke, and have to face the wrath (and law suits) of their investors.  This way, greed and power are rewarded in order to save our financial system.  There is a lot wrong with this picture.

I see the drop we are facing right now as major surgery that is needed to save the patient.  The recovery will be painful, but worth it once the healing is underway.

Suzi - if we were under the gold standard or some other type of monetary policy where the institutions had to have on reserve the money they were lending out, you don't think we would be in a different situaiton? 

If they couldn't lend money that they didn't have, they wouldn't be able to be so, ummm, "creative" in their bookkeeping and schemes, now would they? ;-)

They wouldn't have been so hot under the collar to lend to anyone with a pulse - that's for sure! The major commercial banks have weathered the storm due to the diversification.  It seems that the large investment houses that primarily dealt in the mortgage securities have been the losers and the banks that subsequently bought them.

However, seems that the major accounting offenders were Fannie Mae and Freddie Mac.  Any coincedence that they are government sponsored entities :P ?   Waiting to see if there will ever be any fallout from that.

Just my opinion, but I think the diveersification had less to do with weathering the storm, and more to do with greed, but that's just me.

I'm in no way absolving Fannie and Freddie, or the government's role.  But as I said, it's only one slice of the pie.  I only know one person who has a Fannie backed loan, but I know a lot of people who have mortgage problems right now.  My point being, is there was a ton of bad lending practices that reach far beyond Fannie and Freddie.

Even under a gold or silver standard banks can and do lend out more money than they have in reserves. It's the whole idea behind banking.

Myself, however, I find that a gold or silver standard is even less useful and certainly more arbitrary than is fiat money.

I mean, the value of gold or silver is no less a matter of fiat than is faith in the value of little bits of paper. 

For a long time, the dollar itself was the "gold standard" for the rest of the world's currencies. Some countries have moved away from that however. 

"For those who plan with audacity and execute with vigor,
progress is the magnificent by product." 

You know, I grew up and spent most of my life believing in the gold standard.  I honestly don't know what to believe now on that subject now.  *sigh*

I was not advocating the gold standard per se just that under a different type of monetary policy as our current fiat system would give banks pause as how easily and to whom lending would be done.

If it had been tougher to get credit, then it would have been tougher to package and sell questionable mortgage securities was my basic point.  I didn't make very well sorry!

And all this time I had you pegged as Austrian school... back to the drawing board? ;)

These years of uber-cheap dollars definitely didn't help matters-- I'm sure that was a primary cause of the housing bubble.

----

It's sad that we've reached a point where 'government service' is a dirty word... If we're the greatest country on earth, maybe we can have the greatest government.

Lewis Black

Let's hope Obama reverses all of this.

I just can't stop thinking: what would McCain be doing if he were president? Would Gramm be helping him call the shots? Palin? It sends chills down my spine. At least now we finally have a chance at reform and true accountability. I really think Pres. Obama was serious about decreasing the influence of lobbyists in Washington...better late than never.

I really think Pres. Obama was serious about decreasing the influence of lobbyists in Washington...better late than never.

Yes, it's never too late to stop doing the wrong thing.

We'd hear about how the earmarks brought down the economy...
Whoa!
Not enough sugarcoating? :)
ROFLOL!
Me too.  Can you imagine?  He'd be pretending nothing was wrong and trying to stay the course.  Talk about the road to perdition.
Our government believes it's better to collapse the economy, than to admit it had it wrong.  This is why we are seeing no indictments on Fannie & Freddie, mortgage companies, or banks.
Amen GF!!!
Well stated.

Amazing isn't it?  When we don't buy the extreme tBS from either party, and no longer believe the "unfettered capitalism is the answer" or the "government is the answer", we can see how bipartisan the problem actually is!

Good post!

On a side note - I do want to thank both of you to help me keep the human perspective in all of this mess.  I am sure you have noticed that I tend to gravitate toward the analytical perhaps theorectical side of issues since that is how I tend to think.  I think in terms of everything is a big math problem or giant puzzle.

I do enjoy your posts as they help keep somewhat 'balanced' :)

Your posts are very thought provoking. What have I been doing? I look for a lesson in them.  I am giving gratitude as I type. 
I appreciate that Mary, and I want to thank you too.  Your posts make me think, then look things up!  I read the (simplified ;-) theory from both sides then decide.  I tend to think of all things in light of the human perspective, so I maybe we tend to balance each other.  I often lead with my heart instead of my head, but usually resort to common sense to make a decision.  I feel that theory, on either side, works great on paper as a theory, but is not always so cut and dried when human beings are entered into the equation.
When Clinton was President, the rightwing attacked him for something, anything every day for eight years.  Don't expect much less while Obama's President.  I just think they're aware of this, and don't factor it much into what they're doing.

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