Free-market capitalism? Ha!

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The Augusta Chronicle editorial “Giving capitalism a bad name” (Oct. 20) shows how ignorant the writer is.

In free-market capitalism, the investments made by entities that lose money suffer loss of their capital. If the losses are large enough, the entity goes away (bankruptcy). Not only did the mega-financial institutions (Goldman Sachs, J.P. Morgan Chase, bank of America, etc.) suffer gigantic bankrupting losses, they were bailed out of their losses in 2008 by the Federal Reserve Bank and the U.S. Treasury Department. The bailout bill was given to the taxpaying citizens of the United States.

But worst is that the worthless derivative investments these financial institutions sold as “AAA”-rated around the world – through which they made hundreds of billions of dollars – was criminal.

Since big banks own our government, the U.S. Justice Department has neither prosecuted nor imprisoned even one CEO from these financial institutions. Capitalism can operate only where the rules of law and justice are enforced.

Today the U.S. economic system is not free-market capitalism, but fascist-market capitalism. Fascist-market capitalism economies have formed a symbiotic government/corporatist relationship, enabling both to be enriched at the expense of its citizens.

So we as citizens are now rapidly becoming poorer; our government/banking/corporation heads are becoming richer; and they are wielding ever more power – and allowing less freedom – over U.S. citizens.

The Occupy Wall Street protesters are living in reality a lot more than the editors of The Augusta Chronicle.

Richard Fishel

Hephzibah

Comments (19) Add comment
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southernguy08
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southernguy08 12/03/11 - 07:31 am
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Mr. Fishel, let me ask you
Unpublished

Mr. Fishel, let me ask you this. If free market capitalism is so dead, why did the countries of eastern Europe, countries that had been living in the "paradise" of Communism, throw off such to become free market capitalism nations? I've been there many times, including recently. Like most of the world, their economies are hurting, but ask anyone on the street old enough to remember Communism and see how fast they say no if you ask should the nation go back to Communism. Ours isn't a perfect system, but look at what government does when its in full control of pursestrings. Pitiful.

shrimp for breakfast
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shrimp for breakfast 12/03/11 - 07:32 am
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I'd love to be able to vote

I'd love to be able to vote every Senator and Represenative out of office and just start over.
Americans who want real change need to speak with their votes to get these carrer politicians OUT!

Carleton Duvall
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Carleton Duvall 12/03/11 - 08:05 am
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The problem is, Shrimp, that

The problem is, Shrimp, that every voter wants every Senator and Congressman replaced with the exception of their own.

allhans
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allhans 12/03/11 - 08:38 am
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.

.

dichotomy
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dichotomy 12/03/11 - 09:33 am
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As long as you are placing

As long as you are placing blame, let's go on back and blame Senators Frank and Dodd for implementing policies that forced the banks to make mortgage loans to people who were bad risks. The government created the sub-prime mortgage crisis. The banks created derivatives in order to sell these forced loans which the banks knew would collapse with the first burp in the economy. So we are mad at the banks for being smarter than the government.....go figure. But Barney Frank is pretty much the one who said things were AAA rated....no problem with Fannie Mae. And then the politicians provided the catalyst that brought on that burp in the economy by causing instability in the middle east while the Democrats were preventing every effort to develop our domestic oil and gas reserves and driving the price of gasoline to $5.00 a gallon. The people who had these sub-prime loans were forced to decide whether to make their mortgage payment or put gas into their car in order to get to work. For every "evil" thing we think the banks did, I can show you a government policy that interfered with the marketplace and set the bad results in motion.

I am not totally excusing what the banks did. I am saying I understand why how "derivatives" came to be and it all goes back to the government interfering with free market capitalism by injecting liberal social policies masquerading as government regulations and oversight.

If the American people are angry about having to bail out the banks, maybe they should be smart enough to throw off a government and it's unelected agencies who do everything possible to hurt businesses and the economy in general. You cannot continue to have suicidal economic and environmental policies and then complain because the economy is bad. The Democrats' only answer is class warfare. But when pressed, the Democrat leadership readily admits that higher taxes are bad for the economy and that, even if you taxed the rich at 100%, it would not make a dent in our spending problem. But the ignorant masses have been worked up into a "lynch the rich" and punish the corporations frenzy.

For every problem we have today from the economy to the schools to the breakdown of our families, if you look deep enough you will find a government policy, regulation, agency, or program that caused it. The Occupy Wall Street crew living in reality? I don't think so. They nor the masses are living in reality if they think that the banks are the main source of our problems. When I see OWS protestors sitting on the White House lawn and the Capital steps, then I will think they might be living in reality.

CorporalGripweed
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CorporalGripweed 12/03/11 - 09:36 am
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I agree with parts of this

I agree with parts of this letter, but not all of it. I believe as well that we are heading towards a fascist type system but with the election next year this trend might be slowed and hopefully reversed. But the banks should NEVER have been bailed out. If you are too big to fail you SHOULD fail. Let the market shake out the winners and losers. Not the government.
I agree with you ..dich...these protesters are picketing the wrong people. If they were living in reality they'd be camped out at the Capital or the White House.

wtinney
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wtinney 12/03/11 - 09:48 am
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Only in a very narrow and

Only in a very narrow and specific way is Mr. Fishel correct here. One must also look at several other entities that helped create these problems. Those entities are: people in general, unions, companies, and government.

For instance, in order for mortgages to be granted for, can we say, questionable, risky borrowers, the government used Fannie Mae, the FHA, and other entities to push banks to make those loans - some of the pushes were based on carrots (the ability to make greater profit in what was, at the time, an always increasing commodity - houses) and the other was stick (government entities and other associated entities would sue banks if they did not meet a prescribed quota of loans to low-income, high risk, borrowers. Our dear president actually was a public organization legal advisor that saw to this kind of lawsuit against Citibank.

The fact is that we do not have nor have we ever had by definition a free market. What we currently have, based on the regulations out of Washington, D.C. is what "they" call a "fair market". This market, if you play the class warfare game is actually anything but fair. In truth, the low income folks get a significant leg up so that they may participate more robustly in a market that they technically should not have as much access to; the well-to-do benefit from the process Fishel talks about above but mainly because the government made sure it was gamed in their favor so that they'd be willing to provide the loan capital. The ones hurt the most are the working class and middle class that do not benefit at all because they do not fall in any of the above categories. Therefore, their spending capabilities deminish while prices increase to cover losses that were provided by subprime loan defaults and housing price drops.

This might be the reason that Occupy Wall Street is so misguided. And equally, the reason why the Tea Party and their focus on government - not capitalism in general - is so well-aimed and innovative. In conclusion, just as Ronald Reagan said, "Government is not the answer, it is part of the problem". Mr. Fishel, that's the real world we live in now - not the utopian, Marxist ideals of a hopeful, classless society of which the OWS protestor's seem to desire. It was that very socialism that brought about this problem in our economy - not capitalism.

JRC2024
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JRC2024 12/03/11 - 11:07 am
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Some may think there will be

Some may think there will be or is a class-less society but believe me there is a class difference. Just look around and open your eyes to the the way some talk, dress, act and the image they project. Clothes properly worn vs not, clean grooming vs not, piercing vs not, body art everywhere vs not, vulger music vs not, clean vs not, and numerous other things that are not the attitudes of a polite society. Does this look like the OWS's and what Obama and others before him want to set up with them at the top? I hope not.

harley_52
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harley_52 12/03/11 - 11:24 am
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Some excellent comments here

Some excellent comments here already.

The banks are not the villains here. Banks were prodded, embarrassed, threatened, and scorned by the Federal government into making loans they otherwise would not have made. They made the loans because they had to make them or go out of business.

By nature, bankers don't loan money to people who won't pay them back. It's contrary to their business model and their training. Only when threatened by government on the one hand, and assured of repayment by the other hand were banks willing to make the loans. 'If you don't make them we'll shut you down, but if you do make them we'll make sure you're covered by taxpayer funding' is what they were told. They got the message.

Barney Frank and Chris Dodd should be in the slammer. The OWS protests should be in front of the halls of Congress.

If things were right, that is.

bjphysics
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bjphysics 12/03/11 - 11:45 am
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In what areas of the country

In what areas of the country were the subprime loan foreclosures most concentrated?

Haki
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Haki 12/03/11 - 12:12 pm
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Banks are not the villains?

Banks are not the villains? How could anyone take you serious at that point?

raul
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raul 12/03/11 - 12:13 pm
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@bjphysics. Tell us. I am

@bjphysics. Tell us. I am sure you already know the answer or you wouldn't have asked the question.

bjphysics
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bjphysics 12/03/11 - 12:31 pm
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In what areas of the country

In what areas of the country were the subprime loan foreclosures most concentrated?

“…the biggest concentrations of foreclosures can be found in well to do areas like Boca Raton, Riverside County near San Diego, and of course Las Vegas. Does anyone really believe that there was an explosion of lending in Vegas because banks were attempting to meet some sort of quota of lending to poor folks? In fact, the real estate boom had a fairly negligible effect on the poorest areas of the country. In fact, the same areas Boca, Phoenix, Miami, and Vegas that boomed the most during the height of the real estate market are also now the ones suffering the most now that it is over.”

http://bayoustjohndavid.blogspot.com/2008/09/cra-caused-mortgage-crisis-...

Carleton Duvall
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Carleton Duvall 12/03/11 - 12:49 pm
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Poor people do not have the

Poor people do not have the market cornered on making stupid mistakes. Too many people at every strata of our society bought more house than they could afford. Now, the piper is being paid. Did you know that even today one can finance $62000 on the purchase of a $58000 car? When I was young a 20% down payment was required on the purchase of a home. That kept people from over buying more than they could afford. I know, I am rambling.

Carleton Duvall
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Carleton Duvall 12/03/11 - 12:55 pm
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Haki said: Banks are not the

Haki said:
Banks are not the villains? How could anyone take you serious at that point?
My response:There are a lot of villains with the banks being at the bottom of the mix. I think Harley, for the most part, explained it correctly. There are exceptions. Some banks exploited the situation but that, IMO, was not the rule.

Haki
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Haki 12/03/11 - 01:13 pm
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@scooby, so are you saying

@scooby, so are you saying banks are villains or villains with exceptions?

Carleton Duvall
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Carleton Duvall 12/03/11 - 01:30 pm
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Neither, Haki. I am saying

Neither, Haki. I am saying that banks are not villains with some exceptions. Let me make a point. I am not in love with banks, insurance companies , stock brokers or anyone that makes money off our money. They are a necessary component of our system and with proper but not overbearing regulation will function well. Just remember though humans are involved and all humans are greedy including you and me and that human trait can make for disaster just as we have recently seen. The trick is to react but not to over react. Some of us are doing the latter.

harley_52
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harley_52 12/03/11 - 03:07 pm
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scoobydo said "Some banks

scoobydo said "Some banks exploited the situation but that, IMO, was not the rule."

No argument from me on that one. Of course some did. But they did it because the Federal government let them, no...prodded them to do it and knew all along it was the taxpayers who would foot the bill.

It's not illegal to make bad loans.

And who is to protect us from banks who "exploited the situation?"

Yep....the very same folks who prodded the bankers into exploiting the situation in the first place.

drivenslow
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drivenslow 12/03/11 - 03:45 pm
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the banks never wanted to
Unpublished

the banks never wanted to make the loans THE BANK KNEW THE PEOPLE COULD NOT AFFORD THEM....but the banks were FORCED by the governemnt to make the loans or else..... you can thank bill clinton AND THE DEMOCRATS FOR THAT.....so a bank is a villian for demanding the money back they loaned you only in america is it someones elses fault for stupidity

drivenslow
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drivenslow 12/03/11 - 03:55 pm
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jrc2024 i bet you hate to
Unpublished

jrc2024 i bet you hate to have to drink from the same water fountain as other ethnicities what does clothes piercings or music have to do with who that person is...i know a guy with tattoos everywhere rides a harley and has long hair....he was my dads heart surgeon

bjphysics
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bjphysics 12/03/11 - 10:13 pm
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“A Community Reinvestment Act

“A Community Reinvestment Act Reader”

http://www.cjr.org/the_audit/a_community_reinvestment_act_r.php?page=all

Zombie Lie: Lies that just won't die, no matter what the facts are; continuously animated by armies of undead prevaricators.

harley_52
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harley_52 12/04/11 - 12:23 pm
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bjphysics said "Zombie Lie:

bjphysics said "Zombie Lie: Lies that just won't die, no matter what the facts are; continuously animated by armies of undead prevaricators."

Good one. These are zombie lies. Kinda like the anthropogenic global warming lies. You get a bunch of fellow liars to write articles supporting your cause and pretty soon you can overwhelm the truth with sheer numbers of liars, especially liars with fancy titles.

The Community Reinvestment Act was definitely a factor in the whole mess, but nobody has ever suggested it was the only factor, or even the principal factor, in the housing/banking mess.

It was a well orchestrated conspiracy with lots of useful idiots duped into supporting it, many thinking they were doing something else. It was a stroke of genius and continues, to this very day, to have most people convinced it is "wall street" who are the villains.

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