And perhaps there's no other way? The Japanese did the same with their overpriced real estate provlem, Europe did the same with their almost defaulting countries.
Think about who gets hurt if the banking system collapses. It ripples out into the rest of the economy, because in fact the economy runs on debt. It would be harder to maintain existing businesses and start new ones if there was a credit crunch -- we lived through a credit crunch after 2008 and it was very bad for everyone.
Even if you want certain people to get hurt by this (and there is definitely a baying mob that seems to want to cause as much suffering as possible because they just don't like certain classes of people), keep in mind that this could cause a 2008-style recession that hurts everyone.
Who do you think gets hurt more by an economic downturn? The billionaires who lose millions and end up still being rich, or the working people who lose their jobs and can't afford housing? This isn't a theoretical question, we know the answer because it happened before.
I have some off-the-grid and expat friends who I suspect are rooting for a collapse primarily to justify all the shit they did and said. These types seem to thrive on doom and I have no doubt they've always existed throughout history.
Eventually I suppose they'll be right, but primarily as a result of one of those broken clock coincidences ...
The desire to let it all burn comes from those who played by the rules.
The government's intervention creates moral hazard: those that played with fire got burnt, and those who didn't didn't, but those who didn't get burnt were positioning themselves to take advantage of the opportunities that the crispy bodies would have generated.
But the government swooped in and saved the crispies, without penalty to them, at the cost of those who had proper risk-adjusted positioning.
We see this time and time again. The government is changing the rules after the game is over to change the losers to winners. It's nonsense.
Sounds similar to when people were rooting for airlines and auto manufactures to just die in 2008 to say "fuck the rich". I'm glad they were all saved.
In human psychology, fairness is a big driving force in society. I think studies have regularly shown that people will tolerate outcomes that are objectively worse for themselves if the alternative seems unfair but objectively better.
People are not rational. Homo economicus is a myth.
Isn't spite just wanting that version of karma or justice but hurting yourself in the process. If we let these banks collapse it's definitely going to hurt lower income people more than wealthy people so to me that is 100% spite
No. Spite is hurting yourself to hurt someone else. A desire for karma is willing to hurt yourself for justice. They look very similar, but are different.
That is incorrect, spite is seeking the deliberate harm of another. It’s possible for spite to include hurting yourself to inflict it, but that’s not in any way necessary.
Sure, and karma doesn't require hurting yourself either. I meant in the specific case we were discussing, in which harming yourself was already baked into the situation. I admit I could have been clearer initially and am sorry I spoke clumsily.
Justice is the idea that people are treated equally, impartially, and fairly under a set of standards. If someone breaks the rules justice is them getting the same punishment anyone else would get, concerns about externalities don’t come into it.
Is everyone getting hurt ideal? No. But that’s a different question than is it justice.
IMO this is what happened during 2008. The government tried to minimize harm at the expense of justice, and people are angry because they don’t realize how bad it could have been.
If the two options are a) everybody except the rich get hurt and b) everybody including the rich get hurt, then I think the majority of Americans would go with b.
B is definitely where we're at. Many Americans are tired of watching the rich get bailed out with socialism-for-the-rich-not-for-the-poor. Meanwhile the not-rich continue to struggle in every aspect of life, from food to housing. And blame is placed squarely on the rich, who have a greater voice in the elected government.
No. That is called crony capitalism. True capitalism would let these banks burn and allow those who saved or have capital buy them up. No gov intervention allowed.
No, it's just called "capitalism". The thing you call cronyism is a core feature, not a bug: under capitalism, the capitalist class advances its own interests.
Please stop trying to redefine basic terminology to suit your agenda.
Yes, but we're disagreeing about the specific meaning of words. Capitalism describes an economy where capital is the mechanism through which goods and services are allocated. It is not the partnership of public and private entities, as you suggest. That would be crony capitalism.
That page describes how "crony capitalism" is used colloquially. Dictionaries are not a great source for determining canonical meaning of complex political terminology.
I argue that usage of the term "crony capitalism" is itself a form of capitalist ideology.
The socio-economic system where social relations are based on commodities for exchange, in particular private ownership of the means of production and on the exploitation of wage labour.
Wage labour is the labour process in capitalist society: the owners of the means of production (the bourgeoisie) buy the labour power of those who do not own the means of production (the proletariat), and use it to increase the value of their property (capital). In pre-capitalist societies, the labour of the producers was rendered to the ruling class by traditional obligations or sheer force, rather than as a “free” act of purchase and sale as in capitalist society.
Value is increased through the appropriation of surplus value from wage labour. In societies which produce beyond the necessary level of subsistence, there is a social surplus, i.e. people produce more than they need for immediate reproduction. In capitalism, surplus value is appropriated by the capitalist class by extending the working day beyond necessary labour time. That extra labour is used by the capitalist for profit; used in whatever ways they choose.
The main classes under capitalism are the proletariat (the sellers of labour power) and the bourgeoisie (the buyers of labour power). The value of every product is divided between wages and profit, and there is an irreconcilable class struggle over the division of this product.
It probably doesn't need to be said, but it's pretty obvious the bias in that definition.
There is no singular definition of capitalism, but many others would differ on the distinction you've drawn from earlier posts. E.g., a system based on the reinvestment of excess profits does not necessarily equate to crony-capitalism. It seems your issue is with the person using the word "socialism" to describe a social ill of crony capitalism. But there is a distinction there that is being muddled in the conversation.
Can you coherently define "crony capitalism" and explain how it's not a fallacious no-true-Scotsman defense of "real capitalism" (or whatever term you prefer)?
Capitalism disallows private and public collusion beyond what is necessary to ensure public goods, defined by those gods which are nonexcludable and nonrivalous.
How does capitalism "disallow" any of that? Where is your evidence that disallowing this is a stated goal under capitalism?
I think you're confusing "free market" USAmerican right-Libertarian ideology with capitalism itself.
Capitalism, simply put, is defined as private ownership over the means of production, and the people who have that ownership are called the capitalist class. None of that precludes any sort of collusion.
Such collusion (and other things, such as child labor) was commonplace in the Western world recently and is still commonplace elsewhere — capitalists still wail and cry foul when legislation, no matter how toothless or perfunctory, is introduced to curtail such behavior.
You’re confusing what is a central tenet and what may occur as an outcome of a poorly executed version of the principle. By that same logic, tyrannical despots could be argued as a stated goal of socialism.
>You’re confusing what is a central tenet and what may occur as an outcome of a poorly executed version of the principle.
Where does capitalism define "non cronyism" as a central tenet? Can you point to a working example of "non-crony" capitalism?
>By that same logic, tyrannical despots could be argued as a stated goal of socialism.
A central tenet of socialism is that is rejects despotism and tyranny. Supporters of socialism explicitly reject tyrannical behavior and seek to root it out if it appears.
On the other hand, capitalists cheer every time they wield state power to enrich themselves and excuse it as "just business".
Competition is a central tenet of capitalism. Collusion, particularly collusion between govt and private enterprise, aims to modify the system to reduce competition. So it follows that such collusion is a perversion that goes against the central tenets of capitalism. Which is why is gets a separate name, like crony capitalism, to differentiate it.
It’s no different than saying “dictatorial socialism”. The fact that a rather simple distinction has to be explained multiple times by multiple people becomes a chore and a Sisyphean task when it is clear someone doesn’t want to acknowledge the difference.
I don't think those are the only two options though. b) The rich now have less billions but still billions and everyone else now has to budget even harder.
There was no guarantee that the govt will make money but there is a guarantee it creates a moral hazard. If you are a banker take excessive risks and enjoy the profits, if things go wrong, the govt will bail you out.
Heads I win, Tails I dont lose.
You also ignored that govt/Fed keeps printing more money, so the taxpayer ultimately loses with inflation.
