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Timeless Video Clip

354 Views 18 Replies 7 Participants Last post by  Kevin Gibson
It's an excellent exchange between Milton Friedman and Phil Donohue (Who was an object of scorn in Real Men Don't Eat Quiche.)

A 31 year old video clip ABSOLUTELY worth your time - dauckster's posterous

Milton was making the audience laugh at Phil.
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I love Milt Friedman, he’s such a great educator. I wish we had some other real options during the financial meltdown to apply his concepts. But his “let the market work it out” doesn’t really work when you’re facing a complete worldwide failure of the banking system. But other than that, it’s typically best to “let the market figure it out”. You know, most think he was against Keyneysian economics, but most forget that Keyneysian economics is focused mostly on major collapses. When you get out of the major collapses, Keynes has a LOT in common with Friedman, and Friedman would probably be the first to state you don’t allow the world banking system to collapse just to make an ideological point.

And at the end of the day…Donohue will always be a socialist idiot.
A huge part of the problem we're facing is the result of government meddling in the banking system and the cozy relationship the banksters have with politicians. Now is a good time to remember that Goldman Sachs was one of Barry's most generous contributors in 2008. The problems were allowed to build a few loans at a time until the house of cards collapsed. A genuine free market would never have painted itself into this corner. That being said, A free market is still subject to the rule of law. The bankster who steals millions by deception and fraud should be sent to the same prison as the bank robber who steals a few thousand.

We're not out of the woods yet. Student loan debt is over a trillion dollars and the vast majority of borrowers with soft degrees don't have enough earning potential to pay off the loan and can't qualify for a mortgage until it's paid off.
If you get under the hood, you'd see that it was the investment banking industry that was pushing those laws such as the CRA and the things that lead to the sub-prime mortgages. Most Americans with good credit already had a home, and the investment bankers didn't want the party to stop. Those banks engineered their own demise and they knew the government would bail them out. When Lehman fell, the market straight up panicked because that was the first inkling that the government may not bail them out. If the banks "would have protected themselves" Lehman would have stopped the risky investments after Bear Stearns, but they doubled down instead. Then Paulson let Lehman crash and the investment banking community came down on him like a ton of bricks. He received calls from every central banker in Europe telling him that if we let banks that large fail, we run the risk of bringing the whole system down.

Banking is the one industry that has shown time and time and time again, that they are completely incapable of self regulation. This is one industry where I support government regulation…but our government regulators also have a habit of getting a bit too cozy with their industries; reference the FDIC during the Bush years, and the MMA under Bush & Obama. Federal regulations don't do a damn thing if the regulators fail to regulate. During the 2000's the FDIC allowed banks to leverage 33:1, that's crazy. And the MMC just rubber stamped deep water drilling plans without any serious review or oversight. Really dumb stuff.

So here we have an industry in which the entire US depends, an industry that needs to be regulated, but we have a government that chooses not to regulate them. If this isn't insanity, I don't know what is. The US investment banking industry is THE biggest threat to the security of the United States; I dare anyone to say they aren't. I'll bet Freidman would agree.
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I remember him most for his "Trans-sexual Lesbian Nun's Who Want to Adopt" shows. I really think he was the beginning of the end of Television. :censored:
Yeah he was the poster child for the "your mind's so open it's leaking out".
Kevin, IF the CRA was done because the invester meisters were behind it that is just one more argument that good leadership encompasses the Art of Saying "NO" when it is bad policy.
If bankers are incapable of self regulation (hundred of years of banking has given developed & ejumakated people plenty of experience & knowledge in banking) then may God help us; we're at the mercy of nimrods like Chris Dodd and Barney franks!!:censored::censored::mad::mad::mad:

A large part of the truth was it was done by President Peanut Carter and reinforced under the Clinton Administration esp. by AG Janet "Sterno" Reno, who twisted many banks' arms into expanding the CRA. This may have made the invester meisters smile in onanistic anticipation but it still shows how tangled up government is in this whole mess -- in ways it OUGHT NOT BE!!!!
As the Roman Juvenal asked; "who shall stand guard to the guards?"
The bank examiners may be too limited in scope.....but our government is too ham-fisted & involved.

And think; we've been doing the same thing with regards to college loans. How many college kids have taken out huge loans to pay for their ejumakashun upon anticipation of employment and paying it back out of their salaries? Where are these kids now?
Living with their parents.
When is THIS bill gonna come due?:twisted:

'Tain't over 'til it's over, pal.:eek:mg:
I find a curious lack of holding Republican presidents accountable...double standard, or do you honestly think they had nothing to do with it?
Kevin, show me a repuke that actually teamed up with Clinton, Carter & Company and I'll take my shots at them just as easily.
Are you aware George W. Bush, AKA, "Shrubbie," actually tried to reign in Freddie Mac & Fannie Mae on atleast two occasions?
Do you know the names of the two dipshits who led the cavalry charge against Dubya that stopped these efforts down?
Chris Dodd & Barney Franks.
Both of these dipshits are democrats.
You can complain about Bush for not doing more -- certainly he COULD have used the bully pulpit of his office to warn the country -- and this might well have overcome the efforts of Dodd & Franks to shut down his reform efforts -- but defense of the CRA and adjoining government & quasigovernment entities was chiefly a democrat tradition.
I suppose if there was one republican president in the lineup who would have been best positioned for blame it would have been Ronald Reagan. But at the time I think the dangers of what was being done seemed more theoretical than real, even though they violated sound banking principles that have been known and obeyed for hundreds of years.
Reagan, despite how revered he is, did make mistakes. OTOH he had a democrat kongress to deal with and given that he accomplished a great deal.
Despite the collusion of republicans (if you know names I suggest you NAME THEM) the CRA was a democrat idea, enacted by a democrat, and reinforced by a democrat and strongarmed by a democrat appointed AG.
I usually try to give due credit to the original artists ........ but that's just me......

First, I'll say that W is about the only politician who can say he really wasn't a part of the problem. Yes, he did mention pulling back Fannie & Freddie, but only enough to cover his ass, not wholeheartedly. His hands aren't really "clean" per-se, but he had WAY less to do with it than pretty much anyone else in Washington.

But his hands do have some blood…He didn't wholeheartedly seek to reign in Freddie & Fannie. Nor would he, or any other president for that matter; they are political animals. Had Bush put a real push on reigning Freddie & Fannie in, it would have completely stopped our economy dead in its tracks. So he kicked the can down the road in the hopes the next guy would have to deal with it; but it didn't work out for him. He inherited the problem, but did next to nothing to stop it. But honestly, had he done what was really necessary to stop it, he would have been finished; and NO president is going to commit political suicide.

Reagan can take a little blame, but he can do so with at least SOME knowledge that what he did, he did in good faith. He planted the seeds that gave us the S&L debacle and the "Great Recession", but I don't think he and other Monetarists could really foresee the effects; so honestly, I give him a pass. (but a hardcore democrat will always say he did it all, which is BS).

As for the roles of the Republicans, it may not have been the presidents, but Republicans were up to their elbows. Deregulation of the banking industry was largely a Republican program. Oh there certainly were Democrats in there…in fact, banking deregulation was one of the things that the two parties largely agreed upon. Notice that no one has gone to jail over what I call the "Great Recession", that's because we had de-regulated the industry to the point to where it was LEGAL to commit outright fraud. Packaging home mortgage derivatives that they knew were garbage and selling as AAA, and then shorting their OWN derivatives on the market. They all did it, and no one went to jail; that is what deregulation of the financial industry has netted us.

I will freely say that BOTH parties had a fair and equal share in the catastrophe. Republicans like to talk only about sub-prime lending and the CRA, as if that was the cause of everything. It but one slice of a large pizza of financial instruments that a fully un-checked banking industry used to make a fortune at the expense of everyone else. I will never deny that Democrats had a BIG freaking hand in it, but I look deeper than parties and presidents. I've looked into the entire mess and I find Republicans with blood on their hands just as much as democrats. Just because it wasn't a Republican president who signed in some piece of law, doesn't acquit the Republicans of their culpability.

The single biggest legislative mistake (which still exists by the way) was the Graham-Leach-Bliley Act. The Graham-Leach-Bliley Act (all 3 were Republicans) was conceived of by Republicans, and successfully lobbied by Republicans. I'm sure you will quickly point out was signed it law by Bill Clinton. But what seems to be forgotten is that it was first vetoed by Clinton(probably the only right thing he ever did), but then a Republican lead congress forced it through, by way of a deal struck with Larry Summers (who is one of the original de-regulators himself). And it was a Republican Fed Chairman who allowed and actively encouraged deregulation of the financial sector, and has since fully admitted that his actions were completely wrong and naive. It was republican appointed banking industry regulators who failed to regulate and allowed the industry to just run unchecked.

So don't give republicans a pass just because you can't point to just ONE guy. BOTH parties lead us down this path. And while the CRA didn't help things, the financial crisis was only about 10-15% CRA, and the rest was just reckless deregulation and failure to keep an eye on our most critical, and non-trustworthy business sector.
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Can you think of an agency that is up to the task?????:twisted:
Yeah, you and me standing behind them at all times with a fully functional version of what you have hanging on your wall there…That would be a good start.

In the future, we should allow those financial institutions that are "too big to fail" to be placed under the supervision of the US Bankruptcy Court and either be re-structured or liquidated. - Who came out fine was the RICHEST people. The rest of us paid, and paid, and paid.
(same old, same old.)

yours, sw

I agree with the bailout, it had to be done or the whole house of cards would have come crumbling down. Good, solid businesses that never did anything wrong would have been severely hurt by the lack of short term credit. The job loss would make our current situation look like a Nirvana state. Pensions and personal IRA/401k/investment accounts would have been decimated. All because Wall Street has a gambling problem. So the bailout made sense from that position. It's what they did AFTER the bail out that infuriates me.

They took the "Too Big To Fail" banks and made them BIGGER! And then did nothing to prevent the whole things from happening again.

What they should have done after the bailout… Once our financial system stabilized, each bank should have then been put under control of the bankruptcy courts and then been systematically dismantled. If they did this, then we stabilized our economy with the bailout, but the banks didn't get away with it. But we all know that would NEVER happen, because the banks own Washington.
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