Your facts are wrong shermer. Not a single dollar was given to those banks as a handout. The fact is it was LENT to them with interest. In fact not only we didn't loose tax dollars on those banker bailots we actually GAINED a profit from the interests!
He's right. It is unfortunate that banks gave loans to people they knew could not afford them, but shouldn't the people who took out the loans have known that they couldn't afford them? I feel bad for people who lost their jobs or things like that, but house flippers may as well just take all of their money to Vegas and put it on red 32. Get-rich-quick schemes never work. I also don't feel for the people who were just living outside of their means. There is nothing wrong with renting.
1:10 to 1:20 he says that the bailout money has to come from taxpayers, but that's not true. Not true at all. The United States has borrowed trillions of dollars to fund the wars and bailouts, but it doesn't have to pay the money back at any time. America has run both an ongoing total debt and an annual deficit forever.
I actually suspect shermer of being a republican, or at least harboring conservative values.
The banks were approving people for they WANTED to default on the loan. They bought insurance on the loans bla bla. People were DUPED! Not everyone was being "risky"; rather, banks took advantage of people by allowing them to believe that they COULD afford these loans. The people taking the loans didn't think of it as a risk.
@TheTylerGiese what? I believe you that michael shermer HAS a 'fucking nutsack.' it would be impossible for him to BE a 'fucking nutsack.' Instead of acting like an idiot please fill us in on what Michael Shermer said that offended you and what your opinion is.
The Federal Reserve printing money out of thin air and causing all the inflation doesn't really help us either. How come nobody ever talks about monetary policy in this country? It's amazing. Some people think we are still on the gold standard, and some people don't know what a central bank is.
We MUST stop spending and our economy WILL contract as a result. We need a 180 mindset change here. Put Americans back to work in the construction and blue collar job market (less profit, but better quality with $ staying in the US), regain superiority in education, science, math, manufacturing and innovation, whilst drastically decreasing the bloated DOD budget and outsourcing to China and India. A shift in global economics is inevitable, but let's not accelerate it and present it on a plate!
I wish someone would acknowledge the reality. Michael Shermer makes sense, but when will we understand the oxymoron of our capitalist society? Take December. Retail sales were up. Sounds positive, right? Well...did consumers use leverage buying, or in other words, credit? Probably, so this means the consumer just accumulated more debt? Hang on, I thought that was bad...but every single advert and cultural custom told me to spend like a lunatic for Christmas as it would stimulate the economy?
Wow...he has a surprisingly narrow veiw of the financial organsim that is America. You can't cut off your foot because you tripped over it, and not expect it to effect the entire organism, any more than you can expect that not keeping a huge financial buisness from failing will not effect our greater economy. Im not saying that it was wise to let such organizations & banks, etc. get so large in the first place..but thats a different matter. This guys veiws are incredibly short sighted, and naive
@frankensteinmoneymac "Naive" implies you know more than Dr. Shermer. Maybe the simple answer is the right one. Maybe we would have been better off in the long run suffering a little hardship and allowing the demise of these corporations. Your answer is to reward people for making bad decisions. Now we have less money AND we still have to deal with the companies. Do you REALLY think they learned their lesson? The vast majority of us have nothing to lose, so I say fuck 'em.
@albinoman13bt Well apparently I know more than you too (if you will allow that bold a statement). I've seen first hand what happens to my automotive Industry fueled town when a Company suffers. Thousands, upon thousands go out of work. This is why we needed the bail-outs. Punishment & Reward are irrevelant here. Had we not bailed out anyone then the entire country would've felt the consequences. I don't like handing those greedy bastards money either. But think how many would've suffered.
@frankensteinmoneymac Frankly, I dont care about all your auto workers. Theyre way overpaid to begin with (UAW is a problem too). They can move and find other jobs like anyone else who loses one. It's a career they chose with the inept company they chose which failed. I don't buy the idea that a company can swell to such a size that it isn't expendable. If they government must help, then help those people pack up and move don't give a shitload of money to company that obviously can't handle it.
@frankensteinmoneymac "the entire country would've felt the consequences" We were gonna feel something either way. It sucks that those workers had to lower their standard of living, but it isn't the duty of a citizen to prop up everyone else's lifestyle. Wages and benefits for the average UAW from Ford, GM, and Chrysler were over $70/hr. 3x national average. If they couldn't save money making that much, if they made no plan contingent on their job, than that is their short sightedness.
@albinoman13bt But of course we would feel something either way. The difference is a matter of How Bad. I can't for the life of me understand how someone cannot understand that hurting a great mass of people, will not come back to hurt them. Perhaps if I explain it to you with this analogy. The Economy is like an Ecosystem. In order to prosper it needs to be in a state of balance. If you can't understand how much larger a blow to the Economy that failing banks and large businesses [CONTINUED]
@albinoman13bt [CONT] are then I am afraid you are the one being shortsighted. How can you not understand that, just like an ecosystem, even a small change can have a huge impact to the whole. Let me give you a real world example. I have a friend who was a Truck Driver who's job was to deliver Auto parts to the Plants in my Town. When they started to go under he found himself out of work, and remained that way for about half a year. Because they were saved he's actually working again now.
@frankensteinmoneymac So, under what circumstances would it be okay for one of the auto manufacturers to fail? Are they just a permanent American institution now? WE are not hurting a great mass of people, they are hurting themselves, and such are the only ones responsible. It's not like we would've let them starve. The UAW was unwilling to allow them to work for less. The more money is in circulation, and the faster it moves, the more inflation we get.
@frankensteinmoneymac You act as if we didn't bail them out the whole economy would have collapsed. Just today I saw an article about companies moving some operations to Detroit because costs have dropped. The void would be filled. I think government has no business getting involved with private industry and vice versa. The bailout banks and all was $700B. They took $2300 out of everyone's pocket, without choice and gave it to them, and that is wrong. Are you German? You capitalize randomly.
@albinoman13bt Um....Thats a horrible example. You do realize how long Detroit has suffered right? Even if the void is being filled now...(which I doubt, its probably just a drop in the bucket...but I will assume otherwise for the sake of the argument) ...Even if its being filled now, think of how long it has taken there. Think of how many have suffered. There was no void filling mechanism that suddenly jumped into place. Its taken years...Have You not seen the 'ghost town photos of Detroit?CONT
@albinoman13bt CONTINUATION As for your question "[when] would it be okay for one...auto manufacturer to fail?" I think you are either misunderstanding the problem, or misrepresenting it, if you do understand it. The question was never about ONE Auto Manufacturer......or ONE Bank...it was MULTIPLE that were threatened at going under at one time. You seem to be trying to moralize everything. Trying to lay blame, and suggesting we should let them suffer. Im not sure how U cannot understand [CONT]
@albinoman13bt [CONTINUATION 2] .......not sure how you cannot understand that hurting just one part of the Economy hurts all of us. Its stable enough to take on one or two hits now and then...but the reason for the Bail-outs were because MULTIPLE were failing at once. As I suggested before...you tend to moralize this too much. Thats an emotional reaction...when it comes to this you have to think with logic. 1 thing more you say I act as if the whole economy would've crashed. How do [CONT]
@albinoman13bt *note*I spent some time writing replies, but while adding the last of them it appears that one or more of them disapeared on their way through cyberspace LOL! Unfortunately I don't have time to re-write them at the moment, so I appologize if I seem to leave you hanging. I will try to get back to it later today...PS random capitalization is just a really bad habit that I have LOL! :) Im from the US, not Germany, why do you ask? Are they known to capitalize randomly?
The Fed spent $350 billion in taxpayer funds to save 35 foreign banks.
Of the 110-billion Euro Greece bailout, approx $40 billion will be paid for by the IMF. The US supplies almost 20% of the IMF's funding (per quotas). So that means US taxpayers are providing ~$8 billion of the $145 billion
States have pension liabilities of $5.17 trillion, which means that state pension plans are unfunded by $3.23 trillion. Local government pension plans are unfunded by $574 billion.
Michael Shermer is the most boring man in the world, with nothing of any interest to add to any subject. Why do people listen to such a pleb? Everything he comments on it's always the same, some jackass comment that Joe Blow down the front bar would say, every time I listen to him I wonder if he really has a mind or if he's a zombie.
@TheTrashytramp That comment was an exceptionally more boring and drawn out than the worst of Mr. Shermer's comments.
He's listened to because he dares to question and is a man willing to organize a much-needed forum for like-minded (admittedly sometimes more interesting) skeptics. Whilst I think he strives to be interesting to an extent (and in my opinion succeeds at least some of the time), he ultimately seems to be trying to (with success) inspire change.
@kossmikham No I´m not. I live in europe, am wealthy and generally well of. Funny enough there are people who care about others. I know it must be strange to you but it´s true.
@Seigu007 Slaughtered. They deserve to get slaughtered, not destroyed. As with sheep, we do, after all, want to put what remains to good use after the slaughter.
In USA capitalism works like this: If you fail you die. Tough luck, thats free market. But if a huge company fails they are "too big to fail". Then there is no free market.
Nothing like a Libertarian to rant on the lowest & the poorest guy on the totem pole of blame.
Sure, those sub-prime borrowers were fully responsible for their own stupidity but what they did, they did not do with malice...the bankers did. Yet who is still standing & who is left out in the cold?
More importantly Mr Shermer, by letting the sub-prime homes default ALL the home owners got screwed; especially those who bought in the last 4 years & need to sell in the next couple of years.
@Hopeful71 No, they didn't do it out of malice. They did it because they were stupid and/or greedy. That doesn't mean I or any other tax payer has to pay for their stupidity and greed.
And if you haven't noticed, it's no longer just about tax dollars going down a giant hole. It's now the very livelihood of those of us who all along have been prudent, honest and hard-working. Now we're just plain screwed.
If that "poorest guy" had made a killing, he wouldn't have given me or you a dime of it.
i agree with him in sentiment, the issue i have is that when he says halt the meltdown, that is what the bailout was suppose to do, and it did to an extent in that we didn't enter into a depression with our economy destroyed. granted the economy isn't great even today, but it could have been much worse.
i dislike the bailout tremendously, but i see it as a necessary evil.
The purpose of the bailout was to avert a collapse of the international financial system which might have led to worldwide panic, violence and war. The bailouts are justified only if followed up with proper banking regulations and responsible government spending.
@TheForwardGaze "Insert government propaganda here..." Wow, not a single original idea in that statement. I have one simple question... if this crisis happened because banks, and financial institutions made bad moves with easy credit... how is giving those same banks and financial institutions more easy credit going to actually fix the problems we had of easy credit and bad investments...if the same banks and financial institutions who made those bad moves are still in business...?
This is fairly obnoxious...it's not like the entirety of the US is a disaster free zone. A hurricane came through Brooklyn and destroyed half a block...
Also - bilking is a crime. Writing poor loans, giving them to people who would not qualify under normal conditions and then betting on tem failing through the derivatives markets - is basically theft...sophisticated Yaley/Harvardy kinda theft but theft non the less.
We don't all have 150 IQs either - preying on the weak is sick.
@CityzenJane the'weak' can be an excuse too, for they were more than willing to live beyond their means earlier, right? I think that's all he was pointing out..
@MindfulFuture theft is what were talking about here...there used to be laws that protected people from it - even if it were done through contracts and legalese...not any longer apparently.
@MindfulFuture Oh, as I understand it, the risk is all someone else's problem, sure. But all those that sweated blood to make the gain don't get to see any of that either
@ConradW that's the flip side consequence of their choice, at least to some degree. Those who took the larget risks and/or lived beyond their means should feel the heat the most is what I think Shermer is arguing..why should we all pay for it?
For those interested in seeing Shermer having his ass handed to him by the brilliant and far more "Bright" Stephen C. Meyer, check out my profile. Once you see the intellectual beatdown Meyer gives him you'll never look at Shermer the same again.
I think the problem here is that the corporations themselves are getting too big and too out of control. And people, stop saying the word socialist as if you were talking about Nazis. a completely capitalistic society would be doomed from the get go, as well as a completely socialist one. Our economic system is a bit of a mix of the two whether you like it or not. No company should be "too big to fail", and if things have gotten that way, then it means that we need smaller corporations
@grimwatcher The regulated always out-think the regulators. If company size is limited, expect to see many small companies all running off the same apparently successful model all failing together systemically. Shermer is right: the problem was that people took loans they couldn't afford offered by banks prodded by the govt to lend (at the behest of the public) then got upset because it bit them. A better educated public can make choices that represent the level of risk the public wants. Educate
I think you're right we need a better educated public that knows how to invest its money, but that doesn't necessarily contradict my point of smaller, corporations. This just seems like situation where we would benefit from both course of actions
@grimwatcher I agree with the first half of your statement, but not the last part..that doesn''t logically follow. We need smarter corporations. If there is a smart, responsible, honest corporation succeeding there should be no limit imposed on their 'size'.
The problem with any company as well as any human form of gov't is the problem of centralized power. In the perfect world, yes there would be one entity that is all good and honest, but in the real world, No company or even form of gov't can be given the benefit to always be thought of as good and honest. Add that to the danger of having a giant multinational corporation failing and bringing down with itself the other trees in the forest, that becomes a recipe for disaster.
@grimwatcher A private corporation is just that, private. It has nothing to do with 'centralized power' nor is there any reasonable cause to think it would get large enough to 'bring down the other trees in the forset'..that falls under 'not smart corporation'. And I didn't say 'given the benefit to always be thought of as good and honest.', they should be watched.
@MindfulFuture but a big corporation is highly more efficient than many smaller corporations taking on the same type of task of providing a service. In other words, one can recognize that that one giant is better at providing X service than many smaller corporations, on average. So it is a matter of regulating the size of company's, of judging the risks and benefits, the pros and cons of a giant's reach
@grimwatcher I disagree with 'a big corporation is highly more efficient than many smaller corporations'. And this goes against your previous statement about centralized power...you can't argue both sides.
don't really know where this is going, but I was throwing you a bone there. I said that a big corporation is highly more efficient than many smaller corporations, guess I should have said arguably so, but I never said anything to the contrary.
I did say that the bigger a corporation gets the higher the risks that it will monopolize the market, and that it's failure would be more disastrous without a significant competition to it. and Thus a need for regulation.
@grimwatcher@grimwatcher In truly capitalist society, no company is too big to fail. Also, there isn't a big "socialist" government, wich chooses to bail out failing companies, and therfore surpress "curing" effects of crisis on the free market and deform the market even more.
@kossmikham THANK YOU! I have the same feeling. At least one person on youtube is both pro market libertarian AND agnostic/atheist! We should start a commune or something.:)
@grimwatcher Its not the corporations it is the government. True capitalism can only fail if companies can use the government to help them out. This is where you get the corrupt politicians, bribes, favors, and lobbyists. Central planning and government intervention in our economy not needed. When the legislature sets the rules for buying and selling, the first things to be bought and sold are the legislatures. Government creates monopolies and does not destroy them. Gov't is the problem
@grimwatcher We are not living in a capitalistic society. We live under corporatism and corruption. We live under safety nets and handouts. Tax and spend bullshit. Regulation is the red tape that destroys an economy. We are privatizing profits while socializing losses in the current system. Corporations would HATE to see true capitalism because that means they now have to compete fairly. Many of them can't do well without the government this is why you and I suffer.
I thought that the purpose of the bailout was to stop the meltdown? The consequences of not bailing out the too big to fail would have been much worse for the taxpayer than putting up the money.
That was why the Bush administration, of all possible administrations was the one to flirt with nationalizing the financial industry.
In the future there should be a regulatory scheme to prevent major corporations' bad decisions from hurting the responsible people just trying to make an honest dollar
well your wrong. and this is because you have built such a ridiculous straw man.
actually you can be very individualistic and still be for the bailouts to some degree, and also forms of welfare and healthcare. this is because these things actually help everyone as a whole. fire departments, the military are also examples of this. acting for self interest only works if you do it rational. and rational means working together. he is wrong and so are you.
the bush admin wanted to privatize the military. what are you talking about. its called privatization. others take it further but the idea is the same.
you strike me a rather strange person, why are you trying to hard to prove you are smarter then me. why are you trying to start a fight with me. you can just talk, if you want. but i am ok with attack as well.
I usually agree with Michael Shermer, but not so much on this one. Most sub-prime home buyers were not house flippers who were looking to make a quick buck. They were people who wanted to buy a home and thought they were doing the financially responsible thing. The real house flippers were the so called "prime" home buyers who bought expensive houses as investments using exotic mortgages. And many of those mortgages are set to implode 2010-2012
Wrong? You're basically supporting my argument. If houses never lost their value, they would indeed be good, safe investments. Again, many subprime buyers though they were being financially responsible by investing in a house.
my mother works in the housing market as a real-estate law firm manager and she see what you are talking about all the time. Most people didnt know what they were getting into. The paper work was so much that most people couldnt understand it if they tried. One man did ask questions, and it took 3 hours before he gave up and signed anyways.
and what about predatory lending. he should be more of a skeptic about the easy stuff
Let them stand or fall on their own work product, and if they fail, let the board of directors and CEOs of the company be held liable; not the American people.
We have laws that are designed to insulate the public from a corporation that is failing; or several corporations becoming insolvent at the same time. Uphold those laws during an economic emergency, and do NOT abandon them just because a strong wind is blowing.
If an earthquake cracks the ground underneath your low risk located home, and you're hanging on the edge of the cliff, screaming for a helping hand, don't ask for help.
No one should help you. You're the one that bought a house that would fall through an earthquake crack. Too bad for you. Don't waste my time. Time is money...your weakness is interfering with the free market.
Hurry up and fall through the cracks! Die you socialist scum!
Socialist scum? Um... His reasoning is in antithesis od socialism... WTF?
He should hurry up and fall though...
In this case he is saying that we should not have to pay for people who do things where there is a far greater expectation of failure inherent in the system they choose to utilize. Risk should be paid for only by those who took the risk.
U misunderstood my sarcasm...I still disagree with Shermer however
I don't believe that all people who take high risks are doing it because they're daredevils out for an adrenaline rush by buying high risk housing. Had it ever occurred to anyone, that people who are high risk, are so because they're poor and have no other choice?!
And that the people who sold those mortgages to them were taking advantage of their misfortunes? But you see, if I mention this at all, I'm labeled as a socialist!
@MemeScythe you need to understand the difference between the two. I actually only partially disagree w/ Shermer here. I consider myself a bit generous as a libertarian, and actually most libertarians would say that in the case of Katrina or Haiti, people should be helped out by the government and some form of corporatism, should be permitted& courts, police, defense-but that's it for government. They should not be there to take transfats out of food and all these stupid special favors like now.
Helping africa is not like helping car accident victims.
Starvation is a self solving problem. If starvation is constant then the problem is births. Increasing food will be a temp solution, then you will have more starving. Unless you can increase food production faster then they reproduce.
A car accident is an accident, not a self caused problem. But still we have insurance for that. The gov doesnt bail you out, neither do your neighbours.
Similarly homes on the coast, its your own damn fault. Like driving a car bad things can happen, its your job to plan for them. How we generally do that is through insurance. If tornadoes happen regularly then get tornado insurance, no insurance then insurance should perhaps be sold by the government, or you should move someplace without tornadoes.
pure random acts of nature should be covered by the gov perhaps. But they are generally covered by insurance anyway. Like if a meteor hit your car
I agree in principle. But in practice it isn't realistic. Very much like libertarianism.
Btw, starvation is a result of natural disasters most of the time. It's not a constant.
If there was no bailout, there was the potential for a massive depression. If we don't help out natural disaster victims, there is a huge chance that we will have millions of hungry and homeless.
Considering that libertarians believe in gun rights, that is a dangerous thing!
'if there was no bailout, there was the potential for a massive depression'
That is true, but it is just postponed as long as the system remains the same. And the bailout was incorrectly handled. The bailout should have been to the consumer, not the companies.
The main issues are
Corporate based policies - corporate protectionism ie - GM. A healthy free market is consumer driven.
Debt based wealth creation. This system is inherently volatile, and potentially exploitable by foreign money.
Tax law is designed to give unfair treatment to certain companies, which is an anti-free market policy. Protectionism should be limiting the flow of profits to other countries, not manipulating flow of goods. In a totally free market everything will even out. Which is not what we want. As a Canadian my country has 1/10 the pop of the US, and ~ the same raw natural resources, and the US is not a high pop dense country. The fact that we get more resources then others seems fair to me.
The changes to tax law/free trade is kinda a different gripe with me. But the real problem is giving tax credits or breaks to certain companies, allowing them to participate in the free market but not competing fairly.
The debt based economy can be offset by printing off more money. Printing more money also hurts money hoarding rich (it loses value). It doesn't deal with the potential issue of foreign countries owning your debt (ie china) and thus 'leeching' prosperity through interest.
I completely agree with what you say. We pulled out of a potential depression but are sowing the seeds for another depression. Banks too big to fail are even bigger, a high deficit is even higher. Not a single developed nation is actively tackling the pensions problem.
I'm also worried about the rise in protectionism. Which can trigger isolation and the possibility of war. Everyone forgets history it seems...
lubermanl, I agree with you except for "then insurance should perhaps be sold by the government". I can't imagine the circumstance where it would be a good idea for the govt to sell insurance. If it's a good business, insurance companies would sell it. If insurance isn't available for the area you want to live, then you should choose between risking it all without insurance, or finding someplace else to live.
Emergency's are unavoidable most times, and can be nobodies fault in some cases. Plus, that's in place to save lives and uphold the law. There's a difference.
And I personally think we shouldn't be helping any other country. When has any other country helped us in any way? Ever?
But that said, the poor people in africa didn't choose to be born into poverty, they just were.
Basically what he's saying is; people can take risks and not have to pay the price when they fail. And we do.
I agree. But to some extent I think the banks are just as culpable, sometimes even more so. They made it very easy to get the money. So the banks that loaned the money, the home owners, who got the loans and the government that pushed the banks to make the loans for economic development reason, and the market capital money all 70 trillion of it, that made it all possible, all bear responsibility. It was not just the banks or just the dumb homeowners, or Acorn, or Fannie mae, and Freddie mac.
A bank interested in their own profit would never loan out money to people they knew could never pay it back. For that to occur, you need government intervention forcing banks to loan out money.
Its Libertarianism. One person's suffer should not be everyone's loss. If you spend spend spend and everybody else does they should suffer and the few that had nothing to do with it should not have to suffer
He's totally read Atlas SHrugged lol.......good for him :) A lot of non religious people fall into the socialist trap. To bad, cuz capitalism rocks. It's the thieves that suck.
*the UFO video shermer on Larry King Live, is systematically removing our pro ET-UFO posts" no he is not as you well know! because the thread owner has to be online and he hasn't for two weeks, look at his profile! dahur has a hidden agenda of some kind, because he has bought into the "UFO" myth lock, stock and barrel! Just look at his other posts elsewhere!
This comment has received too many negative votesshow
the UFO video shermer on Larry King Live, is systematically removing our pro ET-UFO posts, and within minutes 5-10 negative ratings. We are really putting it to the shermer machine, and somebody(guess who) doesn't like it.
Aww, we're picking on mikey....maybe he should call mommy, those mean boys are picking on me.
By your reasoning, a credit union is the equivalent of a bank because it can do many of the same functions. But it's not a bank. And neither is a mortgage service company.
With that said, I don't see how this excuses the people who bought more house than they could afford. Again, no one had a gun to their heads and forced them to sign.
That also holds true for the corporations. When they were making money, they wanted less government interference. When they crashed and burned, they all lined up to get their handout from the government. Convenient, isn't it? No one wants to take responsibility for their actions. And people who took sensible risks and bought what they could afford (like myself) now have to watch their tax dollars go to help people who bad decisions.
This video has some suspicious reasoning in it. The question is: Why should Michael Shermer pay for those people who took high risk loans and failed? The answer is that because Michael Shermer voted in the elections that chose the leaders who forced the banks to give high risk loans. Banks in the free market without statist interventions would never make high risk loans, because they might not get their money back. Shermer conveniently fails to mention this.
And you failed to mention how many people took those high risk loans to buy homes they couldn't afford. No one had a gun to their head and forced them to buy. And if they didn't understand then they shouldn't have signed the mortgage. While you are correct that the government started this years ago by forcing banks to lower their lending standards, the people who bought more home than they could afford bear some responsibility. I believe that was Shermer's point.
This is of course completely irrelevant. If the government did not force banks to make high risk loans, people would not have been able to take high risk loans to buy homes they could not afford in the first place. If left to themselves, the banks would never ever agree to give high-risk loans to people who they knew could not pay back.
The Community Reinvestment Act and/or any subsequent legislation did not require banks to not verify income of mortgage applicants. Nor did it require banks to provide no money down mortgages or mortgages with 120% loan-to-value ratios. Also, half of the subprime mortgages were made by mortgage service companies, not banks. While CRA did compel lenders to adjust their lending practices, it did not force banks to make the high risk loans that caused the downturn.
No one is arguing that they did not require banks to not verify the income of mortgage applications. That is the precise point, The state forced banks to knowingly make a bad deal that would never happen in a free society.
Mortgage service companies fall under the umbrella term of "banks".
That would be The Community Reinvestment Act (CRA) together with Home Mortgage Disclosure Act of 1989. Not to mention that this made political activist groups able to basically blackmail banks to give out high-risk loans to people they knew could not pay back.
Yes, mortgage service companies have all the distinctive features that would qualify then as being equivalent to banks.
Neither the CRA or HMDA compelled banks to make no money down, 120% LTV, or no doc loans. These Alt-A loans were the bad loans. I agree that both started the ball rolling and you are correct that activist groups did abuse them. However, both were implemented in the 1970s. The Alt-A loans were grouped together, packaged as securities and sold. Fannie and others loaded their balance sheets with these securities because of the high yields. That is why they got into trouble.
We bought up the companies to keep them from declaring bankruptcy, what did they do, they did it anyways, because they always were going to, it gave them a legal easy way to fire all the people they needed to clear things up. Ok so why did we bail them out, and the moment they said were fucked, other people stepped up, and someone bought saturn, someone bought viper and someone bought hummer, I mean that's the free market, and we have to let that happen, if we want things to ever improve.
In the midst of all this nonsensical / empty points, including character bashing only because somebody disagrees with a few of you on how to think about fiscal issues there is a rewarding discussion that occurred earlier (8 months) on this comment page: check out the comments amcnea made. He single handedly stopped at least three people in their tracks using historical perspective, clarity, and reason alone. (to be continued)
BTW, a CIA chartered plane that was used to "rendtition" "detainees" recently crashed in Yucatan peninsula with ~3.2 tonnes of cocaine on board. But, Mr. shermer is right their ARE no conspiracies.
FOOOOOLS
This neo-skepticism is part of every neo movement in the last 50 years. It is all Orwellian in language and thought.
After listening to his comment on this video, I have come to the further conclusion that this man is a idiot. The whole "flipping this house and making money" was the charade. After the repeal of the Glass Steagle Act, banks were allowed into the real estate game. Subsequently they convinced people who did not have the money for a house that it was fine, even profitable. Then they would take those poor rated loans and re-sell than with a high value status.
NO, if you read my statement correctly you would understand that I am implicating banks. Wall street has hijack state and federal government. This country was secretively fascist. Now, it is progressing out in the open.
So disagree with the bank bailouts? Sorry if I read too much into what you wrote. It's just that most people who implicate banks and deregulation agree with the bailout.
Nothing that you said was wrong per se, but it was like saying that fever causes the flu. Nobody asks where all this money was coming from. Every piece of property had nearly doubled in value, yet there was somehow money in the system to pay for it all plus pay to leverage the investments by giant ratios. cont'd:
None of this would've been possible without the Fed's easy money policy. If interest rates are lowered below the market value it causes unsustainable business activity, or malinvestment. Businesses think that there is more value in the system than there really is. That's the primary cause.
There are secondary causes, like the implicit government backing of Fannie and Freddie which allowed them to buy assets they knew were worthless as long as it mad them money in the short term. cont'd
But you focus on the tertiary cause, deregulation, because that's what fits your world-view. Yeah, if you set up a system where losses are socialized and an endless supply of cheap credit is waiting at the Federal Reserve, it'll cause harm to deregulate. But deregulation is not the problem by itself. Without the rest of the intervention, deregulation may have done some good.
We can safely state that the FED is by all intents and purposes an illegal institution. Deregulation IS to a degree a major problem. Banks were not, and should have never been, in "speculating" business, buying properties, becoming involved in the credit industry, Monopolizing smaller banks on and on. Its not a "world view." it is what it is. To state otherwise is disingenuous.
You can't just ignore the underlying problems and point to the trigger and say "that's the cause." Especially since without those underlying problems deregulation would never have has this effect. There would not have been enough credit in the system; the returns would not have been nearly as great, and there would be nobody to pass the toxic assets on to when things go wrong.
I've lost respect for Michael Shermer. His latest column in SciAm dismisses all power systems with cute words like "agency" & "patternicity." According to shermer one should not listen to their intellect & reason; or ignore history when it comes to things such as the bank bailouts/FED, Valery Plame, the overthrow of Salvador Allende by the CIA, 9/11 report inconsistencies, etc.
This comment has received too many negative votesshow
BTW, a CIA chartered plane that was used to "rendtition" "detainees" recently crashed in Yucatan peninsula with ~3.2 tonnes of cocaine on board. But, Mr. shermer is right their ARE no conspiracies.
FOOOOOLS
This neo-skepticism is part of every neo movement in the last 50 years. It is all Orwellian in language and thought.
Pick any period in history that did not have powerful people with common interests, culture & history, collaborating at the expense of other less privileged.
For shermer his skepticism had become his religion.
I highly doubt more than a small minority of people with sp mortgages were house flippers or investors. They were mostly ignorant people who were told they would be able to own a home and the fact that they couldn't afford it didn't matter. They were duped. I don't think that it would be going too far to say that some were even victims of outright fraud.
Shermer is right. We have to take the people responsible who are risking too much. And thats the only way to get other people in the future not to risk so much. If we always help, other guys will risk much again.
I think there are two different arguments for this problem. The moral argument and the economical argument, Shermer seems to be giving the moral argument. The economical argument is that these assets are poisonous to our economy and will hurt our economy in less something is done. In a way by helping the sub prime mess we are helping us.
All you guys are right, we should let big companies take huge risks and if they profit and get richer great, and if they don't we should give them their money back and say try again.
I totaly agree with u and Shermer on letting the major corporations go under for their risky behavior. However, as far as the people at the bottom who accepted these bad loans, at least some of them need to be rescued as the banks realy took advantage of them in predatory lending.
Your facts are wrong shermer. Not a single dollar was given to those banks as a handout. The fact is it was LENT to them with interest. In fact not only we didn't loose tax dollars on those banker bailots we actually GAINED a profit from the interests!
wisebbq1 2 months ago
you have to bail them out because it affects everyone badly if they fail (do you really wan't a second great depression?)
wisebbq1 2 months ago
I disagree with Shermer on some very important issues...and this is not one of them.
Lpettro 6 months ago
He's right. It is unfortunate that banks gave loans to people they knew could not afford them, but shouldn't the people who took out the loans have known that they couldn't afford them? I feel bad for people who lost their jobs or things like that, but house flippers may as well just take all of their money to Vegas and put it on red 32. Get-rich-quick schemes never work. I also don't feel for the people who were just living outside of their means. There is nothing wrong with renting.
STRANGEJAMES85 6 months ago
1:10 to 1:20 he says that the bailout money has to come from taxpayers, but that's not true. Not true at all. The United States has borrowed trillions of dollars to fund the wars and bailouts, but it doesn't have to pay the money back at any time. America has run both an ongoing total debt and an annual deficit forever.
matt605 6 months ago
EXACTLY!!! Shermer is using clear thinking yet again!!!
drstrangelove09 8 months ago 2
where's your humanity shermer?
I actually suspect shermer of being a republican, or at least harboring conservative values.
The banks were approving people for they WANTED to default on the loan. They bought insurance on the loans bla bla. People were DUPED! Not everyone was being "risky"; rather, banks took advantage of people by allowing them to believe that they COULD afford these loans. The people taking the loans didn't think of it as a risk.
Besides, nobody bailed those people out
Wittgensteinism 9 months ago
shermer is a fucking nutsack
TheTylerGiese 10 months ago
@TheTylerGiese what? I believe you that michael shermer HAS a 'fucking nutsack.' it would be impossible for him to BE a 'fucking nutsack.' Instead of acting like an idiot please fill us in on what Michael Shermer said that offended you and what your opinion is.
Tabla461 8 months ago
@Tabla461 trust me, this used car salesman definitely IS a nutsack. he's a closed minded, blatantly ignorant, cocky son of a bitch with witch tits.
TheTylerGiese 8 months ago
The Federal Reserve printing money out of thin air and causing all the inflation doesn't really help us either. How come nobody ever talks about monetary policy in this country? It's amazing. Some people think we are still on the gold standard, and some people don't know what a central bank is.
AroundSun 11 months ago
That "hair". lol
impalax327 1 year ago
I find it interesting that people will sing capitalism and the free market to high heavens, and then quickly shut the hell up when they fail.
dookiecheez 1 year ago
We MUST stop spending and our economy WILL contract as a result. We need a 180 mindset change here. Put Americans back to work in the construction and blue collar job market (less profit, but better quality with $ staying in the US), regain superiority in education, science, math, manufacturing and innovation, whilst drastically decreasing the bloated DOD budget and outsourcing to China and India. A shift in global economics is inevitable, but let's not accelerate it and present it on a plate!
jonwalksred 1 year ago
I wish someone would acknowledge the reality. Michael Shermer makes sense, but when will we understand the oxymoron of our capitalist society? Take December. Retail sales were up. Sounds positive, right? Well...did consumers use leverage buying, or in other words, credit? Probably, so this means the consumer just accumulated more debt? Hang on, I thought that was bad...but every single advert and cultural custom told me to spend like a lunatic for Christmas as it would stimulate the economy?
jonwalksred 1 year ago
I don't like the bailout of the banks,
However would a run on the money supply and everybody losing confidence in the banking system be an ideal situation ?
cartoeratos 1 year ago
Wow...he has a surprisingly narrow veiw of the financial organsim that is America. You can't cut off your foot because you tripped over it, and not expect it to effect the entire organism, any more than you can expect that not keeping a huge financial buisness from failing will not effect our greater economy. Im not saying that it was wise to let such organizations & banks, etc. get so large in the first place..but thats a different matter. This guys veiws are incredibly short sighted, and naive
frankensteinmoneymac 1 year ago
@frankensteinmoneymac "Naive" implies you know more than Dr. Shermer. Maybe the simple answer is the right one. Maybe we would have been better off in the long run suffering a little hardship and allowing the demise of these corporations. Your answer is to reward people for making bad decisions. Now we have less money AND we still have to deal with the companies. Do you REALLY think they learned their lesson? The vast majority of us have nothing to lose, so I say fuck 'em.
albinoman13bt 1 year ago
@albinoman13bt Well apparently I know more than you too (if you will allow that bold a statement). I've seen first hand what happens to my automotive Industry fueled town when a Company suffers. Thousands, upon thousands go out of work. This is why we needed the bail-outs. Punishment & Reward are irrevelant here. Had we not bailed out anyone then the entire country would've felt the consequences. I don't like handing those greedy bastards money either. But think how many would've suffered.
frankensteinmoneymac 1 year ago
@frankensteinmoneymac Frankly, I dont care about all your auto workers. Theyre way overpaid to begin with (UAW is a problem too). They can move and find other jobs like anyone else who loses one. It's a career they chose with the inept company they chose which failed. I don't buy the idea that a company can swell to such a size that it isn't expendable. If they government must help, then help those people pack up and move don't give a shitload of money to company that obviously can't handle it.
albinoman13bt 1 year ago
@frankensteinmoneymac "the entire country would've felt the consequences" We were gonna feel something either way. It sucks that those workers had to lower their standard of living, but it isn't the duty of a citizen to prop up everyone else's lifestyle. Wages and benefits for the average UAW from Ford, GM, and Chrysler were over $70/hr. 3x national average. If they couldn't save money making that much, if they made no plan contingent on their job, than that is their short sightedness.
albinoman13bt 1 year ago
@albinoman13bt But of course we would feel something either way. The difference is a matter of How Bad. I can't for the life of me understand how someone cannot understand that hurting a great mass of people, will not come back to hurt them. Perhaps if I explain it to you with this analogy. The Economy is like an Ecosystem. In order to prosper it needs to be in a state of balance. If you can't understand how much larger a blow to the Economy that failing banks and large businesses [CONTINUED]
frankensteinmoneymac 1 year ago
@albinoman13bt [CONT] are then I am afraid you are the one being shortsighted. How can you not understand that, just like an ecosystem, even a small change can have a huge impact to the whole. Let me give you a real world example. I have a friend who was a Truck Driver who's job was to deliver Auto parts to the Plants in my Town. When they started to go under he found himself out of work, and remained that way for about half a year. Because they were saved he's actually working again now.
frankensteinmoneymac 1 year ago
@frankensteinmoneymac So, under what circumstances would it be okay for one of the auto manufacturers to fail? Are they just a permanent American institution now? WE are not hurting a great mass of people, they are hurting themselves, and such are the only ones responsible. It's not like we would've let them starve. The UAW was unwilling to allow them to work for less. The more money is in circulation, and the faster it moves, the more inflation we get.
albinoman13bt 1 year ago
@frankensteinmoneymac You act as if we didn't bail them out the whole economy would have collapsed. Just today I saw an article about companies moving some operations to Detroit because costs have dropped. The void would be filled. I think government has no business getting involved with private industry and vice versa. The bailout banks and all was $700B. They took $2300 out of everyone's pocket, without choice and gave it to them, and that is wrong. Are you German? You capitalize randomly.
albinoman13bt 1 year ago
@albinoman13bt Um....Thats a horrible example. You do realize how long Detroit has suffered right? Even if the void is being filled now...(which I doubt, its probably just a drop in the bucket...but I will assume otherwise for the sake of the argument) ...Even if its being filled now, think of how long it has taken there. Think of how many have suffered. There was no void filling mechanism that suddenly jumped into place. Its taken years...Have You not seen the 'ghost town photos of Detroit?CONT
frankensteinmoneymac 1 year ago
@albinoman13bt CONTINUATION As for your question "[when] would it be okay for one...auto manufacturer to fail?" I think you are either misunderstanding the problem, or misrepresenting it, if you do understand it. The question was never about ONE Auto Manufacturer......or ONE Bank...it was MULTIPLE that were threatened at going under at one time. You seem to be trying to moralize everything. Trying to lay blame, and suggesting we should let them suffer. Im not sure how U cannot understand [CONT]
frankensteinmoneymac 1 year ago
@albinoman13bt [CONTINUATION 2] .......not sure how you cannot understand that hurting just one part of the Economy hurts all of us. Its stable enough to take on one or two hits now and then...but the reason for the Bail-outs were because MULTIPLE were failing at once. As I suggested before...you tend to moralize this too much. Thats an emotional reaction...when it comes to this you have to think with logic. 1 thing more you say I act as if the whole economy would've crashed. How do [CONT]
frankensteinmoneymac 1 year ago
@albinoman13bt *note*I spent some time writing replies, but while adding the last of them it appears that one or more of them disapeared on their way through cyberspace LOL! Unfortunately I don't have time to re-write them at the moment, so I appologize if I seem to leave you hanging. I will try to get back to it later today...PS random capitalization is just a really bad habit that I have LOL! :) Im from the US, not Germany, why do you ask? Are they known to capitalize randomly?
frankensteinmoneymac 1 year ago
This has been flagged as spam show
The Fed spent $350 billion in taxpayer funds to save 35 foreign banks.
Of the 110-billion Euro Greece bailout, approx $40 billion will be paid for by the IMF. The US supplies almost 20% of the IMF's funding (per quotas). So that means US taxpayers are providing ~$8 billion of the $145 billion
States have pension liabilities of $5.17 trillion, which means that state pension plans are unfunded by $3.23 trillion. Local government pension plans are unfunded by $574 billion.
Fed = EPIC FAIL
SirWinstonChurchill 1 year ago
mortgage goes tits up? good foreclose.....
all the banks too......everyone should pay especially the corporations.
00Billy 1 year ago
Michael Shermer is the most boring man in the world, with nothing of any interest to add to any subject. Why do people listen to such a pleb? Everything he comments on it's always the same, some jackass comment that Joe Blow down the front bar would say, every time I listen to him I wonder if he really has a mind or if he's a zombie.
TheTrashytramp 1 year ago
@TheTrashytramp That comment was an exceptionally more boring and drawn out than the worst of Mr. Shermer's comments.
He's listened to because he dares to question and is a man willing to organize a much-needed forum for like-minded (admittedly sometimes more interesting) skeptics. Whilst I think he strives to be interesting to an extent (and in my opinion succeeds at least some of the time), he ultimately seems to be trying to (with success) inspire change.
mrbrownjeremy 1 year ago
@TheTrashytramp really? a zombie? a real zombie? do they exist? or are the zombie banks devoid of people?
FrekeOne 1 year ago
@TheTrashytramp Just say "I disagree with him". Next time, don't try to be creative.
ninjajesus81 1 year ago
Sound a bit egocentrical to me.
reafdaw01 1 year ago
@reafdaw01 Gee, I wonder if you're one of those pigs who's now upside-own or foreclosed on.
kossmikham 1 year ago
@kossmikham No I´m not. I live in europe, am wealthy and generally well of. Funny enough there are people who care about others. I know it must be strange to you but it´s true.
reafdaw01 1 year ago
People are sheep and deserve to be destroyed. No pitty.
Seigu007 1 year ago
@Seigu007 Slaughtered. They deserve to get slaughtered, not destroyed. As with sheep, we do, after all, want to put what remains to good use after the slaughter.
kossmikham 1 year ago
wait he is now giving an opinion on finance ...wow !!
AIMANALI 1 year ago
I used to respect Shermer, after the last few videos I have watched I have changed my mind. I no longer think of Shermer as an intelligent person.
Cajunninja65 1 year ago
@Cajunninja65 And why is that?
jazzfan5000 1 year ago
@Cajunninja65 Why??
kossmikham 1 year ago
@kossmikham Watch his video on aliens, he comes off as a very ignorant person.
Cajunninja65 1 year ago
In USA capitalism works like this: If you fail you die. Tough luck, thats free market. But if a huge company fails they are "too big to fail". Then there is no free market.
omnissient 1 year ago
Nothing like a Libertarian to rant on the lowest & the poorest guy on the totem pole of blame.
Sure, those sub-prime borrowers were fully responsible for their own stupidity but what they did, they did not do with malice...the bankers did. Yet who is still standing & who is left out in the cold?
More importantly Mr Shermer, by letting the sub-prime homes default ALL the home owners got screwed; especially those who bought in the last 4 years & need to sell in the next couple of years.
Hopeful71 1 year ago
@Hopeful71 No, they didn't do it out of malice. They did it because they were stupid and/or greedy. That doesn't mean I or any other tax payer has to pay for their stupidity and greed.
And if you haven't noticed, it's no longer just about tax dollars going down a giant hole. It's now the very livelihood of those of us who all along have been prudent, honest and hard-working. Now we're just plain screwed.
If that "poorest guy" had made a killing, he wouldn't have given me or you a dime of it.
kossmikham 1 year ago
Hear, hear, Michael Shermer.
ChristophDollis 1 year ago
i agree with him in sentiment, the issue i have is that when he says halt the meltdown, that is what the bailout was suppose to do, and it did to an extent in that we didn't enter into a depression with our economy destroyed. granted the economy isn't great even today, but it could have been much worse.
i dislike the bailout tremendously, but i see it as a necessary evil.
rns13 1 year ago
The purpose of the bailout was to avert a collapse of the international financial system which might have led to worldwide panic, violence and war. The bailouts are justified only if followed up with proper banking regulations and responsible government spending.
TheForwardGaze 1 year ago
@TheForwardGaze "Insert government propaganda here..." Wow, not a single original idea in that statement. I have one simple question... if this crisis happened because banks, and financial institutions made bad moves with easy credit... how is giving those same banks and financial institutions more easy credit going to actually fix the problems we had of easy credit and bad investments...if the same banks and financial institutions who made those bad moves are still in business...?
daveyg07 1 year ago
@daveyg07 Are you sure you're replying to my comment?
TheForwardGaze 1 year ago
Simplistic scarecrow fallacies.
doubtsalmon 1 year ago
Michael Shermer reminds me of Dana White from the UFC, I guess its the mouth.
33Barker 1 year ago
This is fairly obnoxious...it's not like the entirety of the US is a disaster free zone. A hurricane came through Brooklyn and destroyed half a block...
Also - bilking is a crime. Writing poor loans, giving them to people who would not qualify under normal conditions and then betting on tem failing through the derivatives markets - is basically theft...sophisticated Yaley/Harvardy kinda theft but theft non the less.
We don't all have 150 IQs either - preying on the weak is sick.
CityzenJane 1 year ago
also - I can't type apparently.
CityzenJane 1 year ago
Comment removed
MindfulFuture 1 year ago
@CityzenJane the'weak' can be an excuse too, for they were more than willing to live beyond their means earlier, right? I think that's all he was pointing out..
MindfulFuture 1 year ago
@MindfulFuture theft is what were talking about here...there used to be laws that protected people from it - even if it were done through contracts and legalese...not any longer apparently.
CityzenJane 1 year ago
@CityzenJane the government has always stolen from the people...so, I'm not sure what's 'new' here?
MindfulFuture 1 year ago
Does this not demonstrate the problem with the "Good old American way"?
The problem is not that we're sharing the risk, but that we aren't sharing the gain (at least not enough, and certainly not fairly).
ConradW 1 year ago
@ConradW the problem is, you're not even sharing the risk!
MindfulFuture 1 year ago
@MindfulFuture Oh, as I understand it, the risk is all someone else's problem, sure. But all those that sweated blood to make the gain don't get to see any of that either
ConradW 1 year ago
@ConradW Sorry, maybe I wasn't clear enough, I'm saying the little guy takes ALL the risk, not zero risk ;)
MindfulFuture 1 year ago
@MindfulFuture ah! now i see you. And I agree :-/
ConradW 1 year ago
@ConradW that's the flip side consequence of their choice, at least to some degree. Those who took the larget risks and/or lived beyond their means should feel the heat the most is what I think Shermer is arguing..why should we all pay for it?
MindfulFuture 1 year ago
@MindfulFuture well to have a stake in the consequences of success.
that and compassion - i don't really want to see people lose their jobs and become homeless.
ConradW 1 year ago
This has been flagged as spam show
For those interested in seeing Shermer having his ass handed to him by the brilliant and far more "Bright" Stephen C. Meyer, check out my profile. Once you see the intellectual beatdown Meyer gives him you'll never look at Shermer the same again.
Thanks
signatureinthecell 1 year ago
The dude's aging well, I must say.
eswyatt 1 year ago
I think the problem here is that the corporations themselves are getting too big and too out of control. And people, stop saying the word socialist as if you were talking about Nazis. a completely capitalistic society would be doomed from the get go, as well as a completely socialist one. Our economic system is a bit of a mix of the two whether you like it or not. No company should be "too big to fail", and if things have gotten that way, then it means that we need smaller corporations
grimwatcher 2 years ago 23
@grimwatcher The regulated always out-think the regulators. If company size is limited, expect to see many small companies all running off the same apparently successful model all failing together systemically. Shermer is right: the problem was that people took loans they couldn't afford offered by banks prodded by the govt to lend (at the behest of the public) then got upset because it bit them. A better educated public can make choices that represent the level of risk the public wants. Educate
AnachronicDoctrine 1 year ago
@AnachronicDoctrine
I think you're right we need a better educated public that knows how to invest its money, but that doesn't necessarily contradict my point of smaller, corporations. This just seems like situation where we would benefit from both course of actions
grimwatcher 1 year ago
Comment removed
MindfulFuture 1 year ago
@grimwatcher I agree with the first half of your statement, but not the last part..that doesn''t logically follow. We need smarter corporations. If there is a smart, responsible, honest corporation succeeding there should be no limit imposed on their 'size'.
MindfulFuture 1 year ago
@MindfulFuture
The problem with any company as well as any human form of gov't is the problem of centralized power. In the perfect world, yes there would be one entity that is all good and honest, but in the real world, No company or even form of gov't can be given the benefit to always be thought of as good and honest. Add that to the danger of having a giant multinational corporation failing and bringing down with itself the other trees in the forest, that becomes a recipe for disaster.
grimwatcher 1 year ago
@grimwatcher A private corporation is just that, private. It has nothing to do with 'centralized power' nor is there any reasonable cause to think it would get large enough to 'bring down the other trees in the forset'..that falls under 'not smart corporation'. And I didn't say 'given the benefit to always be thought of as good and honest.', they should be watched.
MindfulFuture 1 year ago
@MindfulFuture but a big corporation is highly more efficient than many smaller corporations taking on the same type of task of providing a service. In other words, one can recognize that that one giant is better at providing X service than many smaller corporations, on average. So it is a matter of regulating the size of company's, of judging the risks and benefits, the pros and cons of a giant's reach
grimwatcher 1 year ago
@grimwatcher I disagree with 'a big corporation is highly more efficient than many smaller corporations'. And this goes against your previous statement about centralized power...you can't argue both sides.
MindfulFuture 1 year ago
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@MindfulFuture
don't really know where this is going, but I was throwing you a bone there. I said that a big corporation is highly more efficient than many smaller corporations, guess I should have said arguably so, but I never said anything to the contrary.
I did say that the bigger a corporation gets the higher the risks that it will monopolize the market, and that it's failure would be more disastrous without a significant competition to it. and Thus a need for regulation.
grimwatcher 1 year ago
@grimwatcher Letting them bomb FORCES them to become smaller. More capitalism is the answer, not artificial limits to freedom.
sybo59 1 year ago
@grimwatcher @grimwatcher In truly capitalist society, no company is too big to fail. Also, there isn't a big "socialist" government, wich chooses to bail out failing companies, and therfore surpress "curing" effects of crisis on the free market and deform the market even more.
RUBENSolol 1 year ago
@RUBENSolol Couldn't agree with you more. It's refreshing to see someone who actually understands capitalism.
kossmikham 1 year ago 7
@kossmikham THANK YOU! I have the same feeling. At least one person on youtube is both pro market libertarian AND agnostic/atheist! We should start a commune or something.:)
RUBENSolol 1 year ago
@grimwatcher Its not the corporations it is the government. True capitalism can only fail if companies can use the government to help them out. This is where you get the corrupt politicians, bribes, favors, and lobbyists. Central planning and government intervention in our economy not needed. When the legislature sets the rules for buying and selling, the first things to be bought and sold are the legislatures. Government creates monopolies and does not destroy them. Gov't is the problem
AroundSun 11 months ago
@grimwatcher We are not living in a capitalistic society. We live under corporatism and corruption. We live under safety nets and handouts. Tax and spend bullshit. Regulation is the red tape that destroys an economy. We are privatizing profits while socializing losses in the current system. Corporations would HATE to see true capitalism because that means they now have to compete fairly. Many of them can't do well without the government this is why you and I suffer.
AroundSun 11 months ago
@grimwatcher That is very true.
Aslapacrosstheface 10 months ago
I thought that the purpose of the bailout was to stop the meltdown? The consequences of not bailing out the too big to fail would have been much worse for the taxpayer than putting up the money.
That was why the Bush administration, of all possible administrations was the one to flirt with nationalizing the financial industry.
In the future there should be a regulatory scheme to prevent major corporations' bad decisions from hurting the responsible people just trying to make an honest dollar
oraclecrank 2 years ago
Michael Shermer is 100% Right.
Everyone who disagrees with him are bleeding heart Liberals who think worshipping poor people solves problems.
F1REbomb 2 years ago
well your wrong. and this is because you have built such a ridiculous straw man.
actually you can be very individualistic and still be for the bailouts to some degree, and also forms of welfare and healthcare. this is because these things actually help everyone as a whole. fire departments, the military are also examples of this. acting for self interest only works if you do it rational. and rational means working together. he is wrong and so are you.
thesparitan 1 year ago
Ummm, the Military and Fire Departments are not social welfare programs.
Bailing out businesses and giving poor people money because "they need it" are social welfare programs.
Two very different concepts my ignorant friend.
F1REbomb 1 year ago
umm well they are from the government and that makes them socialism. you dont read any milton friedman do you.
you're not a very good capitalist.
ignorant, i dont think so.
but i do have enough evidence to say that you are a ass. but so am i lol
thesparitan 1 year ago
You think all government is a form of socialism...lol!
Who told you that and why did you believe them? They obviously were trying to make you look foolish...and it worked!
F1REbomb 1 year ago
milton freidman.
ron paul
the austrian school.
murray rothbard
the bush admin wanted to privatize the military. what are you talking about. its called privatization. others take it further but the idea is the same.
you strike me a rather strange person, why are you trying to hard to prove you are smarter then me. why are you trying to start a fight with me. you can just talk, if you want. but i am ok with attack as well.
insecure are we.
thesparitan 1 year ago
I usually agree with Michael Shermer, but not so much on this one. Most sub-prime home buyers were not house flippers who were looking to make a quick buck. They were people who wanted to buy a home and thought they were doing the financially responsible thing. The real house flippers were the so called "prime" home buyers who bought expensive houses as investments using exotic mortgages. And many of those mortgages are set to implode 2010-2012
boztone 2 years ago
Wrong, people bought houses because they were guarenteed cheap rates on loans and they were told there house would never lose value.
NoSz4 2 years ago
Wrong? You're basically supporting my argument. If houses never lost their value, they would indeed be good, safe investments. Again, many subprime buyers though they were being financially responsible by investing in a house.
boztone 2 years ago
my mother works in the housing market as a real-estate law firm manager and she see what you are talking about all the time. Most people didnt know what they were getting into. The paper work was so much that most people couldnt understand it if they tried. One man did ask questions, and it took 3 hours before he gave up and signed anyways.
and what about predatory lending. he should be more of a skeptic about the easy stuff
thesparitan 1 year ago
I agree is Michael Shermer on this.
America's newfound socialism will only ruin it.
amitp2 2 years ago
Let them stand or fall on their own work product, and if they fail, let the board of directors and CEOs of the company be held liable; not the American people.
We have laws that are designed to insulate the public from a corporation that is failing; or several corporations becoming insolvent at the same time. Uphold those laws during an economic emergency, and do NOT abandon them just because a strong wind is blowing.
s3tt4h 2 years ago
If an earthquake cracks the ground underneath your low risk located home, and you're hanging on the edge of the cliff, screaming for a helping hand, don't ask for help.
No one should help you. You're the one that bought a house that would fall through an earthquake crack. Too bad for you. Don't waste my time. Time is money...your weakness is interfering with the free market.
Hurry up and fall through the cracks! Die you socialist scum!
MemeScythe 2 years ago
Socialist scum? Um... His reasoning is in antithesis od socialism... WTF?
He should hurry up and fall though...
In this case he is saying that we should not have to pay for people who do things where there is a far greater expectation of failure inherent in the system they choose to utilize. Risk should be paid for only by those who took the risk.
spotonstupid 2 years ago
U misunderstood my sarcasm...I still disagree with Shermer however
I don't believe that all people who take high risks are doing it because they're daredevils out for an adrenaline rush by buying high risk housing. Had it ever occurred to anyone, that people who are high risk, are so because they're poor and have no other choice?!
And that the people who sold those mortgages to them were taking advantage of their misfortunes? But you see, if I mention this at all, I'm labeled as a socialist!
MemeScythe 2 years ago
@MemeScythe you need to understand the difference between the two. I actually only partially disagree w/ Shermer here. I consider myself a bit generous as a libertarian, and actually most libertarians would say that in the case of Katrina or Haiti, people should be helped out by the government and some form of corporatism, should be permitted& courts, police, defense-but that's it for government. They should not be there to take transfats out of food and all these stupid special favors like now.
DaveEZ2009 1 year ago
I agree with Shermer, but it isn't realistic. It's like saying : "Why help the poor people in Africa? They shouldn't be having kids."
Or why have emergency services for car accidents?
Ramshobraja 2 years ago
Helping africa is not like helping car accident victims.
Starvation is a self solving problem. If starvation is constant then the problem is births. Increasing food will be a temp solution, then you will have more starving. Unless you can increase food production faster then they reproduce.
A car accident is an accident, not a self caused problem. But still we have insurance for that. The gov doesnt bail you out, neither do your neighbours.
lubermanl 2 years ago
Similarly homes on the coast, its your own damn fault. Like driving a car bad things can happen, its your job to plan for them. How we generally do that is through insurance. If tornadoes happen regularly then get tornado insurance, no insurance then insurance should perhaps be sold by the government, or you should move someplace without tornadoes.
pure random acts of nature should be covered by the gov perhaps. But they are generally covered by insurance anyway. Like if a meteor hit your car
lubermanl 2 years ago
I agree in principle. But in practice it isn't realistic. Very much like libertarianism.
Btw, starvation is a result of natural disasters most of the time. It's not a constant.
If there was no bailout, there was the potential for a massive depression. If we don't help out natural disaster victims, there is a huge chance that we will have millions of hungry and homeless.
Considering that libertarians believe in gun rights, that is a dangerous thing!
Ramshobraja 2 years ago
'if there was no bailout, there was the potential for a massive depression'
That is true, but it is just postponed as long as the system remains the same. And the bailout was incorrectly handled. The bailout should have been to the consumer, not the companies.
The main issues are
Corporate based policies - corporate protectionism ie - GM. A healthy free market is consumer driven.
Debt based wealth creation. This system is inherently volatile, and potentially exploitable by foreign money.
lubermanl 2 years ago
Tax law is designed to give unfair treatment to certain companies, which is an anti-free market policy. Protectionism should be limiting the flow of profits to other countries, not manipulating flow of goods. In a totally free market everything will even out. Which is not what we want. As a Canadian my country has 1/10 the pop of the US, and ~ the same raw natural resources, and the US is not a high pop dense country. The fact that we get more resources then others seems fair to me.
lubermanl 2 years ago
The changes to tax law/free trade is kinda a different gripe with me. But the real problem is giving tax credits or breaks to certain companies, allowing them to participate in the free market but not competing fairly.
The debt based economy can be offset by printing off more money. Printing more money also hurts money hoarding rich (it loses value). It doesn't deal with the potential issue of foreign countries owning your debt (ie china) and thus 'leeching' prosperity through interest.
lubermanl 2 years ago
I completely agree with what you say. We pulled out of a potential depression but are sowing the seeds for another depression. Banks too big to fail are even bigger, a high deficit is even higher. Not a single developed nation is actively tackling the pensions problem.
I'm also worried about the rise in protectionism. Which can trigger isolation and the possibility of war. Everyone forgets history it seems...
Ramshobraja 2 years ago
lubermanl, I agree with you except for "then insurance should perhaps be sold by the government". I can't imagine the circumstance where it would be a good idea for the govt to sell insurance. If it's a good business, insurance companies would sell it. If insurance isn't available for the area you want to live, then you should choose between risking it all without insurance, or finding someplace else to live.
yegreskin 2 years ago
Emergency's are unavoidable most times, and can be nobodies fault in some cases. Plus, that's in place to save lives and uphold the law. There's a difference.
And I personally think we shouldn't be helping any other country. When has any other country helped us in any way? Ever?
But that said, the poor people in africa didn't choose to be born into poverty, they just were.
Basically what he's saying is; people can take risks and not have to pay the price when they fail. And we do.
bigpyoopypants 2 years ago
As religion declines socialism rises? Will Durant said this? I don't know about that. hopefully you can have capitalism and reason together.
358Liberty 2 years ago
Economic Darwinist too. I love it. Keep up the good work, Mr. Shermer.
atdelamare 2 years ago
I agree. But to some extent I think the banks are just as culpable, sometimes even more so. They made it very easy to get the money. So the banks that loaned the money, the home owners, who got the loans and the government that pushed the banks to make the loans for economic development reason, and the market capital money all 70 trillion of it, that made it all possible, all bear responsibility. It was not just the banks or just the dumb homeowners, or Acorn, or Fannie mae, and Freddie mac.
Seeker64 2 years ago
A bank interested in their own profit would never loan out money to people they knew could never pay it back. For that to occur, you need government intervention forcing banks to loan out money.
TheEfkk 2 years ago
If the bank can originate the loan and then sell it to another that will repackage it as a secure derivative it will.
Many Banks will do just that. Check into Bank of America. My mother had a loan from them. A loan we got for our house from a local bank was sold also.
It always easy to blame the other guy. Often we have look in the mirror.
Seeker64 2 years ago
The idea of a state without socialised risk is a nice one, but probably impossible to achieve.
wid85 2 years ago 6
Its Libertarianism. One person's suffer should not be everyone's loss. If you spend spend spend and everybody else does they should suffer and the few that had nothing to do with it should not have to suffer
Reido2828 2 years ago
It makes me more interested in NLP than anything.
sweetdreamerzz 2 years ago
I just viewed his interview on the science of good and evil.
It's interesting where and how he applies the word "Immoral" in this interview.
And the expression of guilt at the end over his opinion. Isn't that the definition of cognitive dissonance?
Aaargh
sweetdreamerzz 2 years ago
He's totally read Atlas SHrugged lol.......good for him :) A lot of non religious people fall into the socialist trap. To bad, cuz capitalism rocks. It's the thieves that suck.
InFromTheVoid 2 years ago 2
*the UFO video shermer on Larry King Live, is systematically removing our pro ET-UFO posts" no he is not as you well know! because the thread owner has to be online and he hasn't for two weeks, look at his profile! dahur has a hidden agenda of some kind, because he has bought into the "UFO" myth lock, stock and barrel! Just look at his other posts elsewhere!
blackadderthe4 2 years ago
This comment has received too many negative votes show
the UFO video shermer on Larry King Live, is systematically removing our pro ET-UFO posts, and within minutes 5-10 negative ratings. We are really putting it to the shermer machine, and somebody(guess who) doesn't like it.
Aww, we're picking on mikey....maybe he should call mommy, those mean boys are picking on me.
dahur 2 years ago
Usually, atheists replace faith in god with faith in government. Shermer does not do that. I applaud him for it.
pitbull103 2 years ago
By your reasoning, a credit union is the equivalent of a bank because it can do many of the same functions. But it's not a bank. And neither is a mortgage service company.
tantokris 2 years ago
With that said, I don't see how this excuses the people who bought more house than they could afford. Again, no one had a gun to their heads and forced them to sign.
tantokris 2 years ago
That also holds true for the corporations. When they were making money, they wanted less government interference. When they crashed and burned, they all lined up to get their handout from the government. Convenient, isn't it? No one wants to take responsibility for their actions. And people who took sensible risks and bought what they could afford (like myself) now have to watch their tax dollars go to help people who bad decisions.
tantokris 2 years ago
This video has some suspicious reasoning in it. The question is: Why should Michael Shermer pay for those people who took high risk loans and failed? The answer is that because Michael Shermer voted in the elections that chose the leaders who forced the banks to give high risk loans. Banks in the free market without statist interventions would never make high risk loans, because they might not get their money back. Shermer conveniently fails to mention this.
Mattara 2 years ago
And you failed to mention how many people took those high risk loans to buy homes they couldn't afford. No one had a gun to their head and forced them to buy. And if they didn't understand then they shouldn't have signed the mortgage. While you are correct that the government started this years ago by forcing banks to lower their lending standards, the people who bought more home than they could afford bear some responsibility. I believe that was Shermer's point.
tantokris 2 years ago
This is of course completely irrelevant. If the government did not force banks to make high risk loans, people would not have been able to take high risk loans to buy homes they could not afford in the first place. If left to themselves, the banks would never ever agree to give high-risk loans to people who they knew could not pay back.
Mattara 2 years ago
The Community Reinvestment Act and/or any subsequent legislation did not require banks to not verify income of mortgage applicants. Nor did it require banks to provide no money down mortgages or mortgages with 120% loan-to-value ratios. Also, half of the subprime mortgages were made by mortgage service companies, not banks. While CRA did compel lenders to adjust their lending practices, it did not force banks to make the high risk loans that caused the downturn.
tantokris 2 years ago
No one is arguing that they did not require banks to not verify the income of mortgage applications. That is the precise point, The state forced banks to knowingly make a bad deal that would never happen in a free society.
Mortgage service companies fall under the umbrella term of "banks".
Mattara 2 years ago
You said "the state forced banks to knowingly make a bad deal...". What laws (state or federal) are you referencing? Please be specific.
Mortgage service companies are not banks, as they do not have all of the regulatory requirements as banks. Do a google search.
tantokris 2 years ago
That would be The Community Reinvestment Act (CRA) together with Home Mortgage Disclosure Act of 1989. Not to mention that this made political activist groups able to basically blackmail banks to give out high-risk loans to people they knew could not pay back.
Yes, mortgage service companies have all the distinctive features that would qualify then as being equivalent to banks.
Mattara 2 years ago
Neither the CRA or HMDA compelled banks to make no money down, 120% LTV, or no doc loans. These Alt-A loans were the bad loans. I agree that both started the ball rolling and you are correct that activist groups did abuse them. However, both were implemented in the 1970s. The Alt-A loans were grouped together, packaged as securities and sold. Fannie and others loaded their balance sheets with these securities because of the high yields. That is why they got into trouble.
tantokris 2 years ago
We bought up the companies to keep them from declaring bankruptcy, what did they do, they did it anyways, because they always were going to, it gave them a legal easy way to fire all the people they needed to clear things up. Ok so why did we bail them out, and the moment they said were fucked, other people stepped up, and someone bought saturn, someone bought viper and someone bought hummer, I mean that's the free market, and we have to let that happen, if we want things to ever improve.
UrinationNation 2 years ago
Comment removed
Meloera 2 years ago
In the midst of all this nonsensical / empty points, including character bashing only because somebody disagrees with a few of you on how to think about fiscal issues there is a rewarding discussion that occurred earlier (8 months) on this comment page: check out the comments amcnea made. He single handedly stopped at least three people in their tracks using historical perspective, clarity, and reason alone. (to be continued)
Meloera 2 years ago
someone makes sense :]
lionslicer9999 2 years ago
now that is just amazing.... we are listening to him regarding economics....now I am starting to doubt anything out of his mouth
AIMANALI 2 years ago
here here!
istressyou 2 years ago
This has been flagged as spam show
BTW, a CIA chartered plane that was used to "rendtition" "detainees" recently crashed in Yucatan peninsula with ~3.2 tonnes of cocaine on board. But, Mr. shermer is right their ARE no conspiracies.
FOOOOOLS
This neo-skepticism is part of every neo movement in the last 50 years. It is all Orwellian in language and thought.
biped19 2 years ago
while i still respect him for his skeptical work, ill don't think ill trust this guy when it comes to economics and the the current reccession
Xerxes356 2 years ago
After listening to his comment on this video, I have come to the further conclusion that this man is a idiot. The whole "flipping this house and making money" was the charade. After the repeal of the Glass Steagle Act, banks were allowed into the real estate game. Subsequently they convinced people who did not have the money for a house that it was fine, even profitable. Then they would take those poor rated loans and re-sell than with a high value status.
biped19 2 years ago
So...therefore these banks should be given billions of dollars??
DentalFlossBush1 2 years ago
NO, if you read my statement correctly you would understand that I am implicating banks. Wall street has hijack state and federal government. This country was secretively fascist. Now, it is progressing out in the open.
biped19 2 years ago
So disagree with the bank bailouts? Sorry if I read too much into what you wrote. It's just that most people who implicate banks and deregulation agree with the bailout.
Nothing that you said was wrong per se, but it was like saying that fever causes the flu. Nobody asks where all this money was coming from. Every piece of property had nearly doubled in value, yet there was somehow money in the system to pay for it all plus pay to leverage the investments by giant ratios. cont'd:
DentalFlossBush1 2 years ago
None of this would've been possible without the Fed's easy money policy. If interest rates are lowered below the market value it causes unsustainable business activity, or malinvestment. Businesses think that there is more value in the system than there really is. That's the primary cause.
There are secondary causes, like the implicit government backing of Fannie and Freddie which allowed them to buy assets they knew were worthless as long as it mad them money in the short term. cont'd
DentalFlossBush1 2 years ago
But you focus on the tertiary cause, deregulation, because that's what fits your world-view. Yeah, if you set up a system where losses are socialized and an endless supply of cheap credit is waiting at the Federal Reserve, it'll cause harm to deregulate. But deregulation is not the problem by itself. Without the rest of the intervention, deregulation may have done some good.
DentalFlossBush1 2 years ago
We can safely state that the FED is by all intents and purposes an illegal institution. Deregulation IS to a degree a major problem. Banks were not, and should have never been, in "speculating" business, buying properties, becoming involved in the credit industry, Monopolizing smaller banks on and on. Its not a "world view." it is what it is. To state otherwise is disingenuous.
biped19 2 years ago
You can't just ignore the underlying problems and point to the trigger and say "that's the cause." Especially since without those underlying problems deregulation would never have has this effect. There would not have been enough credit in the system; the returns would not have been nearly as great, and there would be nobody to pass the toxic assets on to when things go wrong.
DentalFlossBush1 2 years ago
I've lost respect for Michael Shermer. His latest column in SciAm dismisses all power systems with cute words like "agency" & "patternicity." According to shermer one should not listen to their intellect & reason; or ignore history when it comes to things such as the bank bailouts/FED, Valery Plame, the overthrow of Salvador Allende by the CIA, 9/11 report inconsistencies, etc.
(Continued below)
biped19 2 years ago
This comment has received too many negative votes show
BTW, a CIA chartered plane that was used to "rendtition" "detainees" recently crashed in Yucatan peninsula with ~3.2 tonnes of cocaine on board. But, Mr. shermer is right their ARE no conspiracies.
FOOOOOLS
This neo-skepticism is part of every neo movement in the last 50 years. It is all Orwellian in language and thought.
biped19 2 years ago
(Continued)
Pick any period in history that did not have powerful people with common interests, culture & history, collaborating at the expense of other less privileged.
For shermer his skepticism had become his religion.
biped19 2 years ago
ya it all filters down. Sorry he couldnt explain wha tyou wanted to hear in 2 mins looks like your a hater.
Bigturns33 2 years ago
Funny how he didn't mention the fact that the Federal Reserve Is a Private Illegal central bank !
mmtot 2 years ago
he knows trust me he has major libertarian views
Bigturns33 2 years ago
I highly doubt more than a small minority of people with sp mortgages were house flippers or investors. They were mostly ignorant people who were told they would be able to own a home and the fact that they couldn't afford it didn't matter. They were duped. I don't think that it would be going too far to say that some were even victims of outright fraud.
johnfraserm 2 years ago
I can listen to Shermer for years. <3 i would let him have sex with my wife.
vlanos 2 years ago 2
This has been flagged as spam show
Funny how he didn't mention the fact that the Federal Reserve Is a Private and Illegal central bank !
mmtot 2 years ago
Yeah. I'd let him have sex with your wife too.
rocknfuckenroll 2 years ago
Shermer is right. We have to take the people responsible who are risking too much. And thats the only way to get other people in the future not to risk so much. If we always help, other guys will risk much again.
janjanjan0 2 years ago
I think there are two different arguments for this problem. The moral argument and the economical argument, Shermer seems to be giving the moral argument. The economical argument is that these assets are poisonous to our economy and will hurt our economy in less something is done. In a way by helping the sub prime mess we are helping us.
nospacesallowed 2 years ago
precisely. People can't disentangle the moral and economic argument.
DanHipp 2 years ago
All you guys are right, we should let big companies take huge risks and if they profit and get richer great, and if they don't we should give them their money back and say try again.
MichaelSJLH 2 years ago 2
I totaly agree with u and Shermer on letting the major corporations go under for their risky behavior. However, as far as the people at the bottom who accepted these bad loans, at least some of them need to be rescued as the banks realy took advantage of them in predatory lending.
slaballinmytrunk 2 years ago
Agreed.
MichaelSJLH 2 years ago