The More Things Change....

[JAMESBJOHNSON]

1929, by William K. Klingaman

This is a depressing revelation of how things were and are.

The folks at the top of the pile run things and control each other. Party affiliation is irrelevant.
The guys at the bottom of the pile are ignorant and unplugged and sheep to be shorn by the others.

In the late 1920s the guys at the top decided to squeeze the little investor dry. They manipulated the price of stocks up and down...up to lure the small-fry to buy inflated stocks, and down to panic the small-fry to sell for a loss. Banks and major corporations and government officials were involved in the scams. The President and Federal Reserve were afraid to expose the deceit for fear of unleashing a full-blown depression, but they knew it had to come because a point comes when stock is too expensive for anyone to buy.

But the big-fish blackmailed everyone to keep the credit rolling so the suckers could continue to buy stocks. At the end the stock market had absorbed virtually every dollar of credit, foreign debt, pensions, etc.

The fat-cats bailed out in the summer of 1929, leaving the small-fry holding a large bag of worthless paper.

The American companies were in good shape and productive, but a $10 stock is not worth $100 or $200. And when the small-fry dumped their stocks the value of good stocks went to nuthin. The fat-cats, of course, bought up the deflated stocks for pennies.

This is pretty much how it goes now.

 

[dr_mabeuse]

Nah. They don't manipulate the stock market anymore. Now they do it with hedge funds and arbitrage and all that.

But what fun is it now that the windows on the Wall Street brokerages are sealed shut?

 

[JAMESBJOHNSON]

DOC

Same thing. Every dime gets sucked up and nuthin is left to actually increase production and stimulate employment.

I was amazed at how incestuous the top of the pile is. Its almost a criminal conspiracy to dupe the American People.

 

[DeeZire]

I was amazed at how incestuous the top of the pile is. Its almost a criminal conspiracy to dupe the American People.

But wait! If you label it as free market capitalism, then those who are in an almost criminal conspiracy to dupe the American people are actually just being dutiful capitalists, trying to maximize returns for shareholders, right? Isn't getting rich off of the toil of others is supposed to be the American dream? Doesn't questioning the wisdom of free market capitalism mean you're a socialist or something?

I don't know, JBJ. I think your conservative credentials could be yanked at any moment.

 

[JAMESBJOHNSON]

DEEZIRE

Criminals arent capitalists, are they? Stealing isnt capitalism.

 

[DeeZire]

Dude! Stealing is what capitalism is all about.

One example would be insurance companies taking money from the insured, but not paying their claims.

Another would be mining companies taking minerals out of the ground but not paying a royalty on them.

Another would be places like Walmart requiring overtime from its employees, but not paying for it.

Another would be employers paying undocumented workers less than minimum wage.

Another would be mortgage service companies, who routinely overcharge customers for phony services, and underpay the mortgage holder. 60 Minutes did a piece on that a while back. The mortgage service companies get away with it because most people don't keep track of their mortgage payments. It's a calculated risk. The few customers who do keep track raise hell, and the mortgage service company eventually has to reimburse the customers.

We could start a thread on the ways capitalism steals from the people it's supposed to serve. Capitalism is based on lies and cheating. Those who lie and cheat the best make the most money. Look at Microsoft, infamous for it's underhanded dirty tricks. How many times have they been sued for screwing over a competitor? Now, look at their bottom line.

Look at the tobacco companies, who for years and years lied about the safety of their products. Look at the Wallstreeters, the ones this thread was supposed to be about. Are they not stealing by deception? Is this not capitalism?

There's a reason Jesus disapproved of the 'money changers' - not that I give a damn what Jesus thought, but there is the issue of integrity, a concept that is routinely ignored in the functioning of the capitalism model.

 

[JAMESBJOHNSON]

DEEZIRE

Theft is theft. Thieves come in all flavors.

 

[JAMESBJOHNSON]

THE GREAT CRASH, John Kenneth Galbraith.

This is a terrific little book about that chronicles and explains the 1929 Crash of Wall Street.

The American economy rocked after World War I, and the 20s were a time of tremendous technological advances in automobiles, electronics, film, aviation, science, etc. Corporations, banks, government, and the upper class were raking in piles of money. Then suddenly it all started going wrong.

Hurricanes ravaged Florida beginning in 1926, and killed the Land Boom. Suddenly land and homes in Florida were worth little. People couldnt sell their homes. Construction stopped. Realtors and developers went bankrupt. Tax revenues vanished and prostrated state/local government. Banks failed from defaulted loans.

The cream of American society turned its attention to the stock market. A crew of wiseguy bankers concocted a scheme to inflate the price of stocks, lure ignorant investors to buy the stock, then cash-out. The idea caught on, and soon lotsa people were pulling the same stunt. The brainiacs knew it couldnt last, because there wasnt enough money or fools to sustain it forever. Anyone who illuminated the coming crash was chastised. Government regulators were intimidated.

But the Crash came when America ran out of fools with cash or credit.

Initially, the people who got the ball rolling thought the Crash was a modest market correction, and they tried to make more money selling short. But Wall Street was going down like the TITANIC, to the bottom. People couldnt imagine how bad it would be. Two weeks after the Crash the DOW was 224, by 1932 it was 58.

STANDARD OIL went from 50 to 24. USSTEEL went from 262 to 22. GENERAL MOTORS went from 73 to 8. MONTGOMERY WARD 138 To 4. ATT 304 to 72. Others fell from $100 to cents.

By 1932 steel production was 12% of what it had been in 1928.

Galbraith suggests that Americans are greedy and believe in free lunches. When times are good Americans will believe any nonsense presented to them, and they punish anyone who advises prudence and caution. Government knows whats going on, but too many leaders are making money from the scams, and no civil servant wants to kill his career by blowing a whistle. They generally do something when their bosses are out of the game and its too late for the average Americans.

 

[dr_mabeuse]

From what I understand, stock manipulation in the teens and twenties was just standard operating procedure. As much money was made in the market from stock manipulation and insider trading as was made from stock appreciation.

It wasn't until the SEC was founded after the crash of 29 that this kind of thing was made illegal.

 

[JAMESBJOHNSON]

DOC

Its illegal but still common. Thats why Martha Stewart went to prison.

But wiseguys are creative. The savings & loan debacle of the 80s was people opening banks and loaning money to themselves, then defaulting on the loans.

I worked for 2 guys who opened a savings & loan. They sold shares for $1000 each. I said no, but plenty of my colleagues bought shares. Well, they raked in the money from investors and depositors, then made huge loans to themselves, their relatives, local politicians, etc., and closed the doors on the place. The FDIC paid the depositors, the investors were fucked, and no one went to jail.

 

[amicus]

Perhaps only two people on this forum are knowledgeable enough about the stock market, make that three, that I can recall, none of whom have contributed to this thread and most here don't even have a clue about general economics, let alone the specifics of the trading world.

Deezire, expressing a righteous, fundamental hatred of man, continues to criticize the economic methodolgy of free men, that of Capitalism, and of course I must object.

A self evident fact of nature is that man must eat to live. He also requires adequate shelter and some other necessities. The means by which man acquires those goods and services is by individual effort. Whether it is to shoot a deer for food, or gather wild carrots and onions and find potable water to drink, it all requires individual thought and effort.

Blond little Ayla, in Jean Auel's epic feminist series of novels, 'Clan of the Cave Bear', was no exception, it was by the fruit of her labor that she fed and clothed herself, in the 'Valley of the Horses'.

Deezire has the religious faith of a blowhard to continually demean human individual freedom and labor and glowingly dreams of an Utopian world where manna falls from the sky and the Garden of Eden provides comfort for all without anyone lifting a hand, apples from the tree.

How really silly that is.

Just as medicine, over the millenia, has moved from the witch doctor and the faith healer to lazer surgery, so too has the method by which men supply their needs.

The highest and best form of human social interaction, we have found through trial and error, is one in which men are free to act in their own self interest. The corresponding economic system that reflects that ultimate individual freedom is called, Capitalism, free market enterprise. The system itself demands honesty and integrity between humans as they trade their skills and wares.

Anything else is slavery, Deezire's preferred lifestyle.

Amicus....the Radical Capitalist

 

[DeeZire]

The system itself demands honesty and integrity between humans as they trade their skills and wares.

Anything else is slavery, Deezire's preferred lifestyle.

Ami, my friend, your reading comprehension is failing you. As I illustrated in an earlier post, the system does not demand honesty and integrity. Quite the opposite - the system rewards thievery and dishonesty.

Furthermore, I have expressed no hatred of man in general, but I have expressed a hatred for men who lack integrity. If this concept is too hard for you to understand, your mind is even shallower than your words.

I also have no desire to engage in slavery, unlike you, my friend, who thinks third world sweatshops are a boon to the children who work in them. It is you, my friend, who endorses slavery. I swear, you're getting more confused every time you post around here.

My goal is to see every man and woman able to make an honest living without some slimy capitalist screwing them out of their health insurance claim, or their mortgage payment. This is where the integrity comes in, the integrity that is lacking in the system you claim to be perfect. Perhaps in your world, it is perfect, but, obviously, your world has nothing to do with the world the rest of us live in.

So please, in the future, don't accuse me of endorsing slavery. I don't accuse you of having your head up your ass, although it's obvious that's where it resides most of the time.