US Politics, unnumbered

[Guest Raidne]

What is actually needed, IMHO, is a questioning of the entire concept of regulating period in certain fields. Which means a complete revisting of the question of whether the federal government should be involved in something in the first place.

Fair enough. Like what? What should it not be involved in in the first place?

Because as I recall, the bitch now is that college is unaffordable, and it is the folks saying that who are demanding that something be "done".

Yeah, and I agree with that. It's advantageous for the whole society - as a nation that competes with other nations - for our citizens to go to college, and the benefit than a college education for an individual can provide for the society as a whole doesn't have a lot to do with whether they can afford upwards of $50K out of pocket. So I'd have to agree with that. The only alternative is to keep pushing the debt until that bubble crashes, or live in a nation where only those people with the top 1% of grades, test scores, and achievements get to go to college irrespective of cost. Otherwise, we're going to have a nation run by the idiot privileged children of the wealthy.

Okay, okay, I'm not saying all kids who have parents that don't bat an eye at those costs are idiots, and I know there is a correlation with success and the class you grew up in, but I'm thinking that correlation doesn't correspond to having the kind of money where you can send your kids to college without taking on debt.

Frankly, past generations generally were a lot more cautious with their money than we were.

Wow, you have a much more optimistic view of human nature than I do. To me, you are engaging in fantasy about how things "used to be." IMHO, people didn't do this stuff during the 1950s because they couldn't. People didn't run up the same kind of consumer debt either because it was not available to them.

But regardless of all that, I do not think our economic problems are simply a product of the 2008 crash. I think the 2008 crash was largely just the particular mechanism by which a generalized credit-fueled binge came to an end. And that one of the reasons for that reliance on credit was a steady decline on the ability of our country to produce as much as we consume. That latter problem still remains, IMHO, and is not one I see the president remotely interested in addressing. Or whose existence he even concedes beyond lip service.

This is a genuine disagreement between us. I do not think that. This is good to know. I can see how you think the stimulus plan is a nightmare head-in-the-sand disaster if that's what you think, and maybe you can see how I think it was a good idea if I think we are having economic problems that are simply the result of the 2008 crash.

[Former Lord of Winterfell]

Fair enough. Like what? What should it not be involved in in the first place?

Oh gosh, I really don't want to get bogged down in all that stuff because I was simply trying to address the principle of why incrememtal regulatory reform cannot work. But just so you don't think I'm copping out, I don't think the Feds should have any role, whatever, in regulating what health care policies(or insurance of any kind) are offered or how they are applied. Zip. Zero. None. No role in price supports or subsidization of any product, good, or service. No role in labor relations at all. No role in dictating what wages should be paid, or by whom. I don't see any reason that stuff couldn't all be handled by states, especially given that much of it is already and there is considerable overlap. I'd also support a huge streamlining of the tax system to eliminate all those business/industry/activity based regulations imbedded in the tax code. Can I tag off to Tormund for a bit?

ETA: Just to clarify, I don't support any of that on the basis that I want to make rich people rich. I support it on the grounds that I could see a whole lot of my fellow citizens participating in a rebirth of American industry and jobs that gives them some hope for the future. Because to quote a great Lady, sooner or later you run out of other people's money.

Yeah, and I agree with that. It's advantageous for the whole society - as a nation that competes with other nations - for our citizens to go to college, and the benefit than a college education for an individual can provide for the society as a whole doesn't have a lot to do with whether they can afford upwards of $50K out of pocket. So I'd have to agree with that.

Heh, well, we disagree again. But civilly, which is nice. I believe there is a great deal of college education going on that does not produce an economic return on that investment, and a lot of kids going to college who either shouldn't, or aren't getting out of it what they should. I don't believe in dictating what those numbers should be, or what people should study in college, but I do agree in letting the compensation the market is willing to provide control that.

The only alternative is to keep pushing the debt until that bubble crashes, or live in a nation where only those people with the top 1% of grades, test scores, and achievements get to go to college irrespective of cost. Otherwise, we're going to have a nation run by the idiot privileged children of the wealthy.

I don't see why. There are plenty of people going to college who end up doing pretty much nothing with their degrees. But they go because that is what you're "supposed" to do after high school. Other people who go to college make the most of that time, take courses that will help them the most in finding a job and earning more money, and generally will be able to earn enough to pay off those debts. Then there will be really smart people on partial or full scholarship, who really should be going. But it won't be limited to anything close to 1%.

The idiot privileged children of the wealthy will study, well, what it was that upperclass twits studied before education was commonplace anyway. Commercially useless shit that amuses them. And those people help finance the educational infrastructure for the rest of us, which is nice.

Btw, I've never seen any data on this, but I suspect those who go to college after a stint in the working world, when they're a bit more aware of what is out there and what they need/want, tend to get more value out of that education as a rule than the class of people who go into college right from high school.

Wow, you have a much more optimistic view of human nature than I do. To me, you are engaging in fantasy about how things "used to be." IMHO, people didn't do this stuff during the 1950s because they couldn't. People didn't run up the same kind of consumer debt either because it was not available to them.

The folks I know of that generation now are pretty cheap bastards even if they have money. Just sayin'.

This is a genuine disagreement between us. I do not think that. This is good to know. I can see how you think the stimulus plan is a nightmare head-in-the-sand disaster if that's what you think, and maybe you can see how I think it was a good idea if I think we are having economic problems that are simply the result of the 2008 crash.

Just out of curiousity, do you think we have any serious, long-term economic problems that are not 1) due to wealth disparity or 2) the 2008 crash?

[snake]

T'was reading Al-Jazeera when I came across this article. I haven't seen any mention of it in other media sites that I frequent and I cannot recall much, if any, talk about it here. Is this indefinite detention business of so little concern? I know if I was an American I wouldn't be too happy about it. Also, does anyone think the President will veto it? I personally don't think he will.

[Shryke]

Doesn't matter if he does. 93-7 means a quarter of the Senate can still go home early to beat the traffic and they can override his vote.

For the rest, I believe it's the standard bill they've passed for like almost 50 years now with just a few additions that alot of people I've talked to seem to think will pretty much instantly be challenged.

We shall see though. The comments on how it's ok are off the wall on this one though:

“It is not unfair to make an American citizen account for the fact that they decided to help Al Qaeda to kill us all and hold them as long as it takes to find intelligence about what may be coming next,” [GOP Senator Lindsey] Graham said. “And when they say, ‘I want my lawyer,’ you tell them, ‘Shut up. You don’t get a lawyer.’

”

[snake]

Doesn't matter if he does. 93-7 means a quarter of the Senate can still go home early to beat the traffic and they can override his vote.

For the rest, I believe it's the standard bill they've passed for like almost 50 years now with just a few additions that alot of people I've talked to seem to think will pretty much instantly be challenged.

Being unfamiliar with the US system I thought the President could veto any legislation. I take it I was wrong?

[ThinkerX]

CBS evening news tonight featured clips of Romney and Gingrich sniping at each other, each boasting that *HE* was the 'true conservative' while his opponent was a flip flopper. They also accused each other of being out of touch with the middle class. The accusations against each other are, of course pretty much true. Their self centered boasting about their credentials....'greatly stretched' might be the kind way of putting it.

I find myself wondering now and again if the GOP is actually serious about putting a president in the Oval Office this time around. I mean, right now they get to heap all of the blame for what is wrong on the guy already sitting there, sabotage Obama's plans every step of the way, and (in their deluded dreams) escape condemnation in their role for creating catastrophe. Were it their man in charge, they might actually be forced to do something constructive - except they've screwed things up so much, there is not much that can be done at this point.

[Swift]

Being unfamiliar with the US system I thought the President could veto any legislation.  I take it I was wrong?

The Senate can override a veto with a two-thirds majority vote. That's probably what was being referred to.

[Shryke]

Being unfamiliar with the US system I thought the President could veto any legislation. I take it I was wrong?

The President can veto anything he wants, but a 2/3rds majority in both the House and the Senate can over-ride that veto.

So any veto Obama lays down is purely a symbolic gesture and won't actually stop the bill. I don't think there's any gain in doing it so I doubt he bothers and I'm pretty sure he's said as much already.

[Verboten]

Being unfamiliar with the US system I thought the President could veto any legislation. I take it I was wrong?

I see it as very similar to the Governor Generals ability to veto any legislation in that it's an outdated formality.

[DanteGabriel]

The President can veto anything he wants, but a 2/3rds majority in both the House and the Senate can over-ride that veto.

So any veto Obama lays down is purely a symbolic gesture and won't actually stop the bill. I don't think there's any gain in doing it so I doubt he bothers and I'm pretty sure he's said as much already.

Then he can go on the record against it and make the bastards override it. I'm sure it's actually to protect his right flank with the election coming but god damn.

[Shryke]

Then he can go on the record against it and make the bastards override it. I'm sure it's actually to protect his right flank with the election coming but god damn.

It's a purely political move so just do whatever is best for the coming election. Real victories are better then symbolic ones.

I see it as very similar to the Governor Generals ability to veto any legislation in that it's an outdated formality.

Oh no, it's quite real. It just generally doesn't happen as much these days because the President generally goes "Yeah, I'll veto that, fyi" and they don't bother passing it without the requisite margins or they do it as political stunt to make him veto the "Don't Strangle Kittens" bill that actually makes it a crime to be black so they can use it in attack ads.

Obama's done a few and GWB had like ~10 or so as I remember.

[Shryke]

Expectations rising and some people viewing college as a necessity are matters of personal opinion that people are entitled to hold.

No, it's an economic reality. College education is a huge boost in potential income. And that's not even touching on the large societal benefits of a more educated workforce. Especially in an international economy where lots of low-skill can easily be exported.

I suspect we have a difference in opinion as to who is responsible for pumping in the additional cash that fueled that specuation.

Well yeah, you have one that has been shown many times to be wrong and other people don't.

Where I do see the problem is if people are bitching/complaining about the consequences of their opinions and choices, as if there must be something "wrong" if these risen expectations aren't met. Because as I recall, the bitch now is that college is unaffordable, and it is the folks saying that who are demanding that something be "done".

Expectations of college haven't risen in the past like decade. The cost of college on the other hand, has increased by insane amounts.

Of course, you have trouble acknowledging this because of this:

We talk generally about what the how things "used to be", and the decline of the "American Dream" from what our parents/grandparents thought, but our memories seem incredibly selective. Yes, we want things as they "used to be", except for all the increased expectations and extra goodies we have now. We want all those things too, while deluding ourselves into believing they are without cost. People talk about externalities as if that ends the discussion, but the truth is that there is tremendous economic cost to ending all those "externalities". If we value eliminating those externalities that much, then we should have an adult recognition of the effect upon our standard of living otherwise.

Namely, your continued desire to see everything in terms of some nebulous per-conceived "entitlement" narrative. It's not that people have less, no, it's that people want more. Ignore the stagnation in real wages behind the curtain.

Rather than rehashing all those causation arguments, I'll just say that I think there are far more pernicious, structural problems than can be fixed by additional disclosure requirements and regulations for Wall Street, which is why we diverge on the merits of Obama's speech. Frankly, past generations generally were a lot more cautious with their money than we were. They didn't buy houses to "flip" and make great profits, and preferred more conservative investments. They didn't buy houses without more money down, they saved much better than we do, etc. And I think a lot of the Wall Street excesses are largely enabled by our own abandonment of prudence on an individual level.

Wall Street excesses are created by their own constant search for new ways to make money. Those personal excesses you talk about are created by these new fancy ways Wall Street finds of moving money around. People didn't used to flip houses or other shit of that sort because they couldn't. They didn't have the money and people wouldn't give it to them.

But regardless of all that, I do not think our economic problems are simply a product of the 2008 crash. I think the 2008 crash was largely just the particular mechanism by which a generalized credit-fueled binge came to an end. And that one of the reasons for that reliance on credit was a steady decline on the ability of our country to produce as much as we consume. That latter problem still remains, IMHO, and is not one I see the president remotely interested in addressing. Or whose existence he even concedes beyond lip service.

Credit was used to replace the lack of growth in real wages for most people. Wealth moved upward in American society and that wealth was replaced by easy credit to maintain a standard of living.

[Shryke]

Oh gosh, I really don't want to get bogged down in all that stuff because I was simply trying to address the principle of why incrememtal regulatory reform cannot work. But just so you don't think I'm copping out, I don't think the Feds should have any role, whatever, in regulating what health care policies(or insurance of any kind) are offered or how they are applied. Zip. Zero. None. No role in price supports or subsidization of any product, good, or service. No role in labor relations at all. No role in dictating what wages should be paid, or by whom. I don't see any reason that stuff couldn't all be handled by states, especially given that much of it is already and there is considerable overlap. I'd also support a huge streamlining of the tax system to eliminate all those business/industry/activity based regulations imbedded in the tax code. Can I tag off to Tormund for a bit?

Wait, what? You are saying regulatory frameworks are a drag on the economy and your solution is .... to create 50 different regulatory frameworks for companies to navigate? Have you really thought about this?

Not to mention this generally just leads to smoke-stack chasing, which helps no one and is basically moving jobs from one state to another while generating little wealth for the US as a whole.

There's a reason Delaware is so popular to be incorporated out of.

Heh, well, we disagree again. But civilly, which is nice. I believe there is a great deal of college education going on that does not produce an economic return on that investment, and a lot of kids going to college who either shouldn't, or aren't getting out of it what they should. I don't believe in dictating what those numbers should be, or what people should study in college, but I do agree in letting the compensation the market is willing to provide control that.

The job market is willing to pay more for a worker with a college degree. The college market is willing to charge it's students insane amounts to get that key to a higher wage. The disparate economic starting points of the population combines with these two factors to put that degree and thus the ability to move up the income ladder out of reach of many.

[Swift]

Except I don't think most people take into the consideration the compensation they will make with their degree while choosing their major. Everyone goes to college because they want to make more money, but I don't think many students are out looking at statistics and data and saying "Hot damn, I should be a petroleum or a computer engineer." I think they say "My High School and Parents tell me to do what I enjoy, so I'll major in English with a concentration in literature."

Which is fine... I just don't think that many of these people are doing cost/benefit analysis while looking at the cost of college and their future earning potential. One reason is because student loans aren't underwritten. Other reasons the students probably aren't getting the support from their school/family about whether their major choice is a good one. I know I didn't really "think" about my future earnings potential, but I was lucky enough to enjoy a major that leads to decent compensation.

[Guest Raidne]

First things first: Am I getting fucking furloughed over CHRISTMAS???

Just asking. I got notice of the possibility from the Secretary today. We'll get informal notice tomorrow if it happens. Fucking bastards.

Oh gosh, I really don't want to get bogged down in all that stuff because I was simply trying to address the principle of why incrememtal regulatory reform cannot work. But just so you don't think I'm copping out, I don't think the Feds should have any role, whatever, in regulating what health care policies(or insurance of any kind) are offered or how they are applied. Zip. Zero. None. No role in price supports or subsidization of any product, good, or service. No role in labor relations at all. No role in dictating what wages should be paid, or by whom. I don't see any reason that stuff couldn't all be handled by states, especially given that much of it is already and there is considerable overlap. I'd also support a huge streamlining of the tax system to eliminate all those business/industry/activity based regulations imbedded in the tax code.

I follow you. That would be a discussion outside the scope of the thread, yeah. Just to give you a general sense of where the disagreement is, I actually think a market-based health care system divorced from employee benefits that also madated easily understandable and clearly-worded insurance policies, i.e. where some effort was made to actually make citizens more aware of their market choices and make the insurance companies beholden to those contracts could have worked had we done that in the first place. But we are so far away from any market influence in the health care industry that you'd kind of have to reset wages, pricing, etc. in such a totaltarian fashion that the Chinese would look capitalist to get that anywhere near back on track. Labor doesn't exist without the NLRA, as you know - shit just gets violent. I'm in favor of all manner of employment law provisions, so we just disagree there, but I'm with you on the last one.

ETA: Just to clarify, I don't support any of that on the basis that I want to make rich people rich. I support it on the grounds that I could see a whole lot of my fellow citizens participating in a rebirth of American industry and jobs that gives them some hope for the future. Because to quote a great Lady, sooner or later you run out of other people's money.

I want people who have good ideas and - to a lesser extent - work hard to get rich. I want that to be an incentive for people to innovate and produce. But the difference between me and a Republican is that I don't think it's the only incentive, or even the major incentive, and when it is the only incentive, we end up with viagra over a cure for cancer. Which is not necessarily a bad thing, and I'm sure someday I will really appreciate viagra, but you get my drift? Prestige in another incentive, as is intellectual curiosity, etc. There are other factors at work here, and those things together with compensation work to produce good societal results. Pushing money by itself leads to less desirable outcomes.

You think of yourself is being very hands-off, but I think of conservatives as being very hands-on about using the government to put forth the idea that money is the primary and only real motivator. I see conservatives as getting government involved in all manner of things in pursuit of that principle.

Heh, well, we disagree again. But civilly, which is nice. I believe there is a great deal of college education going on that does not produce an economic return on that investment, and a lot of kids going to college who either shouldn't, or aren't getting out of it what they should. I don't believe in dictating what those numbers should be, or what people should study in college, but I do agree in letting the compensation the market is willing to provide control that.

We agree on the premise, just not the conclusion - I'd set incentives up front.

Btw, I've never seen any data on this, but I suspect those who go to college after a stint in the working world, when they're a bit more aware of what is out there and what they need/want, tend to get more value out of that education as a rule than the class of people who go into college right from high school.

This might be one way to do this because you are so so right, IMO. Right now you get penalized, if anything, for pursuing a job first. This is stupid. People certainly make better educational choices after working for a bit, IMO, and definitely tend to get more value out of their education. I just wanted to be free when I graduated from high school and was totally not in a place to think about making smart educational choices.

The folks I know of that generation now are pretty cheap bastards even if they have money. Just sayin'.

Right. Precisely. Because when the shit ever hit the fan for them, there wasn't any cheap credit to fall back on. So they learned better habits and those habits have stuck with them. There is a pretty obvious lessen there. I don't think they are inherently better than us - I think if credit were available they would have used it, and did - there is a reason the banks were seizing people's farms.

Just out of curiousity, do you think we have any serious, long-term economic problems that are not 1) due to wealth disparity or 2) the 2008 crash?

Nicely phrased question. No. Global intellectual property enforcement, maybe? But that seems to be going okay. Redirecting the manufacturing sector to other jobs? But a lot of those people have hit retirement age - I think we're past the worst on that, honestly.

Oh - pensions. Holy fuck. That's going to be a big problem. And - as stated above - the over-availability of credit, which continues to a problem. I know, because I'm leveraged to the hilt with the divorce and people keep trying to loan me money. WTF are they thinking? I think you and I could really agree on that one, no? Think about like this - people will always be fucking dumb. It is the way of the world. And I get why you want to punish people for their stupid decisions, or let them reap what they sow, because you think they'll learn (why I don't know), and we can disagree about that, but can we really disagree about giving them the money in the first place? The market is broken on that. People shouldn't be given money that they can't repay. But nobody cares. People just care if they can repackage that loan and sell it off as a security. And the person buying the security only cares about the rating of the security. The lending market is broken for market purposes. Time to step in and fix it, for the sake of the market. That's the kind of capitalist I am.

Other than that? No, not really.

[Former Lord of Winterfell]

You think of yourself is being very hands-off, but I think of conservatives as being very hands-on about using the government to put forth the idea that money is the primary and only real motivator. I see conservatives as getting government involved in all manner of things in pursuit of that principle.

I'm not sure I'm quite following you here, because I don't see the problem with elected officials putting forth mere "ideas" is they're not enacting new controls to push them. Other than that, I'll just say that I can't speak for every "conservative" on this. Really, there are different kinds of conservatives who don't always agree with each other on every issue, and that divergence is a lot more when you talk about GOP members as a group.

This might be one way to do this because you are so so right, IMO. Right now you get penalized, if anything, for pursuing a job first. This is stupid. People certainly make better educational choices after working for a bit, IMO, and definitely tend to get more value out of their education. I just wanted to be free when I graduated from high school and was totally not in a place to think about making smart educational choices.

Thanks. One of the problems I have with the current thinking about college is that it seems a great many people simply assume that college is the automatic step after high school. I think "expectation" and "sense of entitlement" can become so close as to be indistinguishable, and when that happens, people stop taking personal responsibilty to actually considered the true costs, pluses, and minuses involved.

Nicely phrased question. No. Global intellectual property enforcement, maybe? But that seems to be going okay. Redirecting the manufacturing sector to other jobs? But a lot of those people have hit retirement age - I think we're past the worst on that, honestly.

I don't see that a country as large as we are can offer enough job opportunities based only on the service sector. I think that is a dead end. We are even losing high-tech manufacturing jobs right now, with a bunch of those neat "green technologies" that were supposed to provide jobs actually creating jobs in places like China because costs here are too high.

And I get why you want to punish people for their stupid decisions, or let them reap what they sow, because you think they'll learn (why I don't know),

Well, I don't want to punish them, and I'd hope they'd learn, but that's not the motivation. The motivation is not to stick other people with the bill for their bad decisions. That's it, really.

and we can disagree about that, but can we really disagree about giving them the money in the first place? The market is broken on that. People shouldn't be given money that they can't repay. But nobody cares. People just care if they can repackage that loan and sell it off as a security. And the person buying the security only cares about the rating of the security.

If that's all the people buying the security care about, that is their mistake.

The lending market is broken for market purposes. Time to step in and fix it, for the sake of the market.

I think part of the problem is that a lot of people just assume that investments must be okay, else the government wouldn't let it be sold. So, they underestimate the risk involved, and invest in risky enterprises. Suppose you removed ratings, a bunch of the oversight, etc. Announced publicly that if you buy something, you're essentially on your own absent being able to prove a legal case of fraud. Keep FDIC, maybe, but that's it. Do you think people would start being a lot more cautious? I dunno about that, but I'm just sort of tossing it out there.

[awesome possum]

Two articles stuck out at me this morning on my AM news read-through:

Census Data shows 1 in 2 people are in poor or low income.

But no worries, according to some douche at the Heritage Foundation, those numbers are skewed because people live in houses and drive cars and own TVs. That means you can't be poor!

Meanwhile,

CEOs enjoyed pay increases of up to 40% last year.

But really, they're just earning their keep as the best of the best among Americans, right? I mean, the CEO of one healthcare provider took home $145 million last year. That was his pay for one fucking year.

Yet, the problem with this country is that those in the poor and middle class just need to learn how to do manual labor again. The insane amount of greed at the top has absolutely nothing to do with our country's financial situation.

[Serious Callers Only]

Halfway there...

[awesome possum]

This reminded me of the statistic I recently heard about said televisions. Apparently a little over 50% of the population has an HD TV. So, the trope of the poor people using credit cards to buy flat screen TV's is just stupid, given that the ~50% who are poor are probably the ones without TV's. Stupid trope is stupid.

Yep. Wasn't there also some idiot who said something like, "if you have a refrigerator, you're not poor."

[Guest Raidne]

Well, I don't want to punish them, and I'd hope they'd learn, but that's not the motivation. The motivation is not to stick other people with the bill for their bad decisions. That's it, really.

Ah okay. I don't mind getting stuck with the bill if that means I will still earn a greater net income that year or the next than if I wasn't stuck with the bill. This is where I've noticed that conservatives - some of them - start looking at the economy like a zero-sum game. That's an empirical question, and situation-specific. For instance, we, the taxpayers, were stuck with the bill for the bank bail out. In the end, it has been shown that I did better that year and the next, and so did you, because we paid that bill than if we had not.

Others will argue that even if the net effect on most individuals of getting stuck with the bill works out for the positive in the short run, we're still encouraging bad spending and investing habits over the long term and will proportionately cost us over the long term (to which I say that these people don't learn, no matter what, and regulation is necessary, or alternatively, in the case of the banks, the cost of letting them learn even if it would work out to the same situation we could see post-regulation in the end, would just be too high in the interim). And others will just argue that the idea that stupid people should be punished for their stupid behavior is a foundational premise that needs no further justification.

If that's all the people buying the security care about, that is their mistake.

No, it's not a mistake on their part. For a long time it was a solid investment decision. As long as the market doesn't break and people don't default on mortgages, it's fine. Very, very, very, very few people figured out that CDOs were a really, really bad investment and that CDSs were a really, really good investment, although possibly not if you consider the fact that what you have to gain is possibly more than Goldman Sachs could ever pay out, which substantially reduces your chances of collecting.

Market forces on that scale, and with that level of uncertainty, is akin to playing Russian roulette with the entire United States economy. That is not any individual's problem.

But that is beside the point. The problem is that people who could not afford mortgages were given them, and that normally market forces would keep that from happening. Here, they did not. So whether it's someone's mistake or whatever is really besides the point - that is just the reason that the market didn't work. The point is that the market didn't work. Or if it did, it worked at the nuclear level.

I think part of the problem is that a lot of people just assume that investments must be okay, else the government wouldn't let it be sold. So, they underestimate the risk involved, and invest in risky enterprises. Suppose you removed ratings, a bunch of the oversight, etc. Announced publicly that if you buy something, you're essentially on your own absent being able to prove a legal case of fraud. Keep FDIC, maybe, but that's it. Do you think people would start being a lot more cautious? I dunno about that, but I'm just sort of tossing it out there.

Those people deserve what they get. That is not at all how it works right now. Credit rating agencies aren't government agencies. And there is no oversight about whether the investment is financially sound. All there is are reporting requirements. All the SEC does is ensure that your S-1 and quarterly reports and all that aren't fraudulent. For many investments, you have to be an accredited investor anyway, just to buy them. I honestly think that applies to CDOs and CDSs.

But really, that's not the problem. Sure, markets would have busted during the mortgage crisis regardless. But really, what happened, is an investment vehicle created that - to this day - has a value larger than anyone has been able to calculate. The initial sellers of CDSs basically settled on the price with Goldman Sachs, and then Goldman essentially turned around and held everyone else hostage (and made a great profit), but that action eventually bit them on the ass in 2008, when they quit investment banking altogether.

I think it's just that people can't get their heads around the amounts of money involved in all of this. But it's the size of the thing that's the problem. Otherwise, what you suggested? That's how it already is. The government doesn't go around ensuring that anything is a good investment or telling anyone that it is. The government is there to prevent fraud and mandate disclosures in certain cases that do not include mortgage securities or other investments that can only be purchased by accredited investors. Period.

You didn't suffer through securities law like I did, did you? :)