Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

FReeper Book Club: Atlas Shrugged, Wyatt's Torch
A Publius Essay | 21 March 2009 | Publius

Posted on 03/21/2009 7:41:56 AM PDT by Publius

Part I: Non-Contradiction

Chapter X: Wyatt’s Torch

Synopsis

Dagny and Hank visit the county seat and discover that the Twentieth Century Motor Company is tied up in litigation with two owners vying in court for possession. Mark Yonts of the People’s Mortgage Company of Rome, Wisconsin, an S&L known for easy credit, had sold the company to a concern in South Dakota and had used it again as collateral for a loan from a bank in Illinois. When his S&L collapsed, he disappeared after stripping the factory of its assets. All records are gone due to a courthouse fire.

They visit Mayor Bascom of Rome who had sold the factory to Yonts. The mayor, whose ethics are flexible and has no room for principle, had looted the factory of Jed Starnes’ mahogany desk and a manager’s high class stall shower. He had picked up the factory from the crash of the Community National Bank in Madison. Eugene Lawson, the “banker with a heart” who had owned the bank, is now with the Bureau of Economic Planning and National Resources, working with Wesley Mouch!

It takes them a 200 mile drive to find a place where they can make a long distance phone call. Dagny reaches Eddie to ask him to send two engineers to Starnesville, but Eddie tells her in a panic that “they” are planning to kill Colorado.

Back in New York, Dagny and Eddie stash the mysterious motor in a vault under the Taggart Terminal.

Political chaos has broken out. The rail unions are demanding lower speeds and shorter trains. The states surrounding Colorado are demanding that they receive an equal number of trains as Colorado. Orren Boyle’s political action committee is demanding a Preservation of Livelihood Law that would limit Rearden’s mill output to an amount equal to his competitors. Mr. Mowen’s PAC is demanding a Fair Share Law to give equal supplies of Rearden Metal to all customers. Bertram Scudder’s PAC is demanding a Public Stability Law that would forbid Eastern businesses from leaving their home states. Wesley Mouch is issuing directives left and right based on a national emergency due to an unbalanced economy. Jim Taggart is firmly on the looters’ side, but says he is going to protect the railroad’s interests.

Hank discovers that Paul Larkin has not kept his word on the shipment of ore to the Rearden mill. He has been shipping it by rail, not lake boat, to support Jim Taggart’s failing branch line in Minnesota. And he has shipped it to Orren Boyle. Hank now works the back alleys of the steel business to find the ore he needs.

At home, Lillian enters Hank’s bedroom; she wants something. She speaks of the virtue of telling an ugly women she is attractive and how loving a woman for her virtues is meaningless. She notices that Hank has been less tense of late. As she embraces him, he tears himself away from her in revulsion. Hank asks her what is her purpose in life. She hints that simply being is enough for an enlightened person.

Dagny visits Eugene Lawson at his Washington office; he thinks she is there to beg favors of the bureau for her railroad, but Dagny disabuses him of that notion. Lawson feels no guilt in the collapse of his bank because he lost everything in the crash; he is proud of his sacrifice. He based his bank’s lending policy on need, not greed. Lawson put up the money for the purchase of the Twentieth Century Motor Company because the plant was absolutely essential to the region. While saying that the common worker at the plant was his friend, he can’t seem to remember anyone’s name. As Lawson sees it, he suffered for an ideal: Love. Dagny asks if he has seen that section of Wisconsin lately, and Lawson becomes defensive, blaming the rich. But Lawson remembers Lee Hunsacker, the man from Amalgamated Services, who bought the plant and is now living in Grangeville, Oregon. As Dagny leaves, Lawson states that he is proud that he has never made a profit. Dagny tells him that is the most despicable statement a man could ever make.

Lee Hunsacker lives in squalor, cadging free space from a working married couple in their home, and he blames the world for having never given him a chance. Jed Starnes was a backwoods garage mechanic, while Hunsacker came from the New York Four Hundred, the city’s richest and most prominent citizens. Hunsacker’s mission in life is to complete his all-important autobiography; he has no interest in pulling his weight at the house. His shot at the Twentieth Century Motor Company was his life’s dream. The Starnes heirs had run it into the ground, and he went to the bankers to get money to buy the plant, only to discover that the bankers were intent on profit! Midas Mulligan, the Chicago banker, had been particularly rough on him. Hunsacker says he was the only man who beat him.

Dagny remembers the legend of Michael “Midas” Mulligan, who had bankrolled Rearden Steel in its early days. You never dared mention “need” when you went into his office to ask for a loan. Seven years ago, Mulligan had vanished in the most orderly bank run in American history; everyone got his money back.

Hunsacker had applied to Mulligan for a loan, and Mulligan had told him he was unqualified to run a vegetable pushcart. So Hunsacker sued, and a liberal lawyer and an Illinois law aimed at emergency situations got him into court. Judge Narragansett ruled against him, but an appeals court granted him the loan. Mulligan shut down his bank and disappeared rather than comply. Narragansett retired and disappeared six months later.

Eugene Lawson granted him the loan, though, but it wasn’t enough. The new factory owners went bankrupt when Nielsen of Colorado put out a similar motor at half the price. Hunsacker’s top priority was to make the plant’s offices prettier for the sake of his mental attitude, to include that high class stall shower in his executive washroom. He blames the failure on outside conditions beyond his control. But he does have the location of the Starnes heirs: Durance, Louisiana.

The Durance police chief tells Dagny that Eric Starnes had killed himself years ago after a life of whining about his sensitive feelings. When a 16 year old girl spurned his advances and married someone else, Eric had broken into their house and slashed his wrists. Gerald Starnes lives in a flophouse married to a whiskey bottle and an attitude that the world is totally rotten. Ivy Starnes lives in a house by the Mississippi inhaling incense while sitting on a pillow on the floor. She is far above the mundane concerns of mere mortals thanks to a trust fund from her father. But she has a story to tell.

Jed Starnes was an evil man because all he thought about was money; the fact that he had built a successful business was immaterial. Ivy and her brothers existed on a more enlightened plane. So the heirs of Jed Starnes implemented “The Plan” for the factory according to a historical precept: From each according to his ability, to each according to his need. Everyone was paid the same, and there was an annual meeting for each employee to present his needs to the collective. But things did not work out; The Plan collapsed over four years into a morass of lawyers, cops and courtrooms. She can only remember the name of William Hastings, the lab chief, who quit as soon as The Plan was introduced and who moved to Brandon, Wyoming. He was the second person to quit, and she can’t remember the name of the first. Dagny’s impression of the visit is an encounter with pure evil.

Dagny meets Mrs. Hastings, now a widow. After working for some years in Wyoming, her husband retired. In the last two years of his life he went away for a month every summer and wouldn’t tell his wife where he was. Mrs. Hastings remembers the motor, however, and says it was designed by a 26 year old colleague of her husband. Mrs. Hastings had seen the designer as he left on a train along with an older, distinguished looking gentleman. More recently she had seen that same older gentleman working at a diner west of Cheyenne in the mountains.

Traveling to Cheyenne, Dagny sees the older gentleman cooking at the diner, and he cooks her the best burger she has ever tasted. She offers him the job of head of the dining car department at the railroad, but he refuses. Dagny is upset that she can’t find anybody who can do a job properly, and she gets compassion from the cook. She asks him if he knew the engineer at Twentieth Century, and after a pause he says yes. He tells her that she will never find him. The cook is Hugh Akston! Dagny can’t figure out why the leading philosopher of the age is cooking at a diner in the Rockies. He tells her to give up the quest and to check her premises; if there is a contradiction, then something is wrong. Dagny asks about the three students he and Robert Stadler had shared at Patrick Henry University; Akston says that nobody would remember the nameless third man. But he is proud of all three. Akston offers Dagny a cigarette and tells her that the designer of the motor will find her when he chooses. The cigarette is stamped with a dollar sign.

At the Cheyenne station, Dagny overhears a conversation about the latest directives issued by the government bureaucracy, apparently authorized by the National Legislature. Alarmed, she grabs a newspaper and discovers that Wesley Mouch has been very busy, issuing a set of directives due to a national emergency.

Dagny senses that Ellis Wyatt is going to do something rash; she tries to stop him before it is too late, but Wyatt doesn’t answer the phone. As her train comes to an emergency stop, in utter horror Dagny witnesses Wyatt’s oil fields going up in flames. His last message before his disappearance is, “I am leaving it as I found it. Take over. It’s yours.”

”Picket Fences” and Rome, Wisconsin

The CBS series “Picket Fences” aired in the early Nineties, and was set in the fictional town of Rome, Wisconsin. Producer David Kelley was hardly a conservative, and the show was about the town’s police chief and his wife, a doctor, who spent much of their time admiring their own liberalism. I can’t help but think of this as a slap at Rand.

Beatniks, Hippies and Atlas

Following the end of World War II, the bebop movement in jazz gave birth to the beatniks, who became one of the two rebel classes of the Fifties. (The other was the greasers.) Rand witnessed the rise of the beatniks, but gave them no space in the book. What she did, however, is astonishing.

A decade after the publication of the book, during the late Sixties, the hippies came along. These were the children of Timothy Leary who urged people to “Tune in, turn on and drop out.” They were all about detaching themselves from the annoying realities of mundane material concerns. It’s fascinating that Rand could so clearly anticipate the hippy movement with her portrayal of Ivy Starnes. Ivy lives in a house by the Mississippi River inhaling the vapors of incense – and God only knows what else – while she sits on a pillow on the floor contemplating her navel, no doubt in a lotus position. She is a practicing communist and will keep practicing until she gets it right. She attempted to bring Marxism to Wisconsin and destroyed a company and a town in the process.

But Rand’s other surprise is Lillian Rearden. When hippies of the Sixties were asked about their purpose in life, they would often reply that it was not necessary to achieve, but merely to be. Ivy Starnes would have understood this sentiment. Lillian says much the same thing to Hank when she is asked this question, and she is as far away from being a hippy as one could imagine. It’s impossible to visualize Lillian Rearden in jeans, peasant blouse with no bra, and sandals. (Even Gucci sandals!)

Lee Hunsacker, Coleman Young and the CRA

In many respects, the real life Lee Hunsacker was long-time Detroit mayor Coleman Young. Back in the early Seventies, he noticed that different sections of Detroit had differing degrees of investment, a phenomenon known as “redlining”. Bankers would invest in one area but not another, which meant that unelected bankers, not elected officials, were deciding which neighborhoods of Detroit would prosper and which would decline. Young was joined by other big city mayors, to include Dennis “the Menace” Kucinich of Cleveland.

What the mayors chose to ignore was that banks are businesses. They are not only interested in return on investment, but return of investment. People in certain parts of town understood the importance of paying the local bookie or loan shark, but didn’t feel the same sense of urgency when it came to paying the local banker. Had bankers employed Mafia soldiers armed with baseball bats to be applied to certain knees, these problems would never have surfaced. Young’s success came from framing the argument in terms of racism and civil rights.

So in 1977 Congress passed the Community Reinvestment Act. This gave the Federal Reserve, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Office of Thrift Supervision the authority to supervise banks to make sure they were not engaging in discrimination and to act as an approval authority for the opening of new branches, and for mergers and acquisitions. Banks were not being forced to make risky loans – that was strictly forbidden – but bank lending practices were now placed under government supervision.

In 1992 the other shoe dropped; the Federal Housing Enterprises Financial Safety and Soundness Act was passed. Up until this point, bankers were not required to write loans to those who could not meet the appropriate criteria. But now that the loans were to be backstopped by Fannie Mae and Freddie Mac, the banks were on the hook. And with these government guaranteed loans, the banks didn’t protest all that much. The price for rape was right.

Coleman Young didn’t go to court to beat Midas Mulligan, he went to Congress. And that led to our current crisis with sub-prime mortgages and the derivatives intended to protect them.

Lee Hunsacker and Richard Wagner

What does Lee Hunsacker have in common with German opera composer Richard Wagner? Wagner spent much of his time soliciting funds from wealthy Germans to subsidize him while he wrote great German operas, and he was not shy about describing his “music dramas” that way. Once someone gave Wagner money, he treated the donor shabbily, and the more the donor gave, the more contemptuous Wagner was. He had an attitude of absolute entitlement.

Victor Borge had a wonderfully droll, but absolutely accurate, view of Wagner.

”I cannot live like a dog,” he wrote to Franz Liszt, “I must be soothed and flattered in my soul if I am to succeed at this horribly difficult task of creating a new world out of nothing.” Well, I don’t know about his soul, but Wagner did all right for his body. He imported lilac curtains and satin quilts and silk ribbons. He ordered huge quantities of exotic powders and delicate cold creams and perfumed bath salts. He installed soft lights and hung brocaded tapestries and put up Chinese incense burners and kept his music scores in red velvet folders. He filled his house with golden cherubim and ivory figurines and hand-decorated porcelains. After that, composing was a snap.

At least, Wagner delivered on his promises. He not only reformed German opera, gone dissolute after Mozart and Beethoven, but completely reformed the art of opera, influencing Verdi among his contemporaries, and those who came after.

Lee Hunsacker is Richard Wagner without the talent. He needs pretty colors in his office to be properly inspired, not to mention that classy stall shower. He is contemptuous of those who would help him, and his failures are always somebody else’s fault. And he didn’t write one single opera.

Some Discussion Topics

  1. It would appear that the Federal Deposit Insurance Corporation, created by the government during the Depression, somehow managed to fall by the wayside. When Eugene Lawson, the “banker with a heart”, had his bank in Madison fail, the depositors were wiped out just as they would have been before FDR’s reforms. But Lawson wasn’t the only banker who was free and easy with credit in the name of compassion. Mark Yonts ran an S&L in Rome with easy credit policies, no doubt writing mortgages for people who never should have owned homes in the first place. In this early era, Yonts didn’t have the ability to sell those loans upstream by packaging them with derivatives as insurance. Was Rand prescient, or does financial corruption always follow a set pattern?
  2. What’s all this about an unbalanced economy? Martin Armstrong has pointed out that if an economy is balanced, then everyone will be poor because there will be no economic activity. Feudalism was a system with a balanced economy. It’s the “unbalances” that create economic activity, prosperity and wealth. You don’t think government regulators want us all to be serfs, do you?
  3. Increment the body count by three and decrement by one. Michael “Midas” Mulligan and Judge Narragansett disappeared some years ago. Mulligan was almost dancing with joy as he departed. Ellis Wyatt has disappeared after torching his own oil fields. And the celebrated Hugh Akston, once head of the Philosophy Department at Patrick Henry University, turns up running a diner near Cheyenne, Wyoming! Check your premises, folks!
  4. ”Who is John Galt?” comes this time from a bum. Rand gives some of her better lines to bums in this book. Is there a better class of bum in Atlas Shrugged, and if so, why?

Next Saturday: The Man Who Belonged on Earth


TOPICS: Culture/Society; Free Republic; Government; Philosophy
KEYWORDS: atlasshrugged; freeperbookclub; indoctereination; obamanation; propoganda
Navigation: use the links below to view more comments.
first 1-5051-100101-121 next last

1 posted on 03/21/2009 7:41:56 AM PDT by Publius
[ Post Reply | Private Reply | View Replies]

To: ADemocratNoMore; Aggie Mama; alexander_busek; AlligatorEyes; AmericanGirlRising; Amityschild; ...
FReeper Book Club

Atlas Shrugged

Part I: Non-Contradiction

Chapter X: Wyatt’s Torch

Ping! The thread has been posted.

Please, no spoilers, folks!

Earlier threads:
Our First Freeper Book Club: Atlas Shrugged
FReeper Book Club: Atlas Shrugged, The Theme
FReeper Book Club: Atlas Shrugged, The Chain
FReeper Book Club: Atlas Shrugged, The Top and the Bottom
FReeper Book Club: Atlas Shrugged, The Immovable Movers
FReeper Book Club: Atlas Shrugged, The Climax of the d’Anconias
FReeper Book Club: Atlas Shrugged, The Non-Commercial
FReeper Book Club: Atlas Shrugged, The Exploiters and the Exploited
FReeper Book Club: Atlas Shrugged, The John Galt Line
FReeper Book Club: Atlas Shrugged, The Sacred and the Profane

2 posted on 03/21/2009 7:42:51 AM PDT by Publius (The Quadri-Metallic Standard: Gold and silver for commerce, lead and brass for protection.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Publius

I am interested in joining this reading club. I did not know that you did this. I have heard this Atlas Shrugs book for the last couple months...but never heard of it before. I thought it was a liberal book. Are we reading it to find out what liberals think and disbute it? Regardless this group sounds very interesting and would be proud to be a member if approved.
Thank you.
Sincerely,
Bob


3 posted on 03/21/2009 7:45:25 AM PDT by napscoordinator
[ Post Reply | Private Reply | To 1 | View Replies]

To: napscoordinator

Bob - just read it myself (over 2 week period) it describes what happens when government runs things. It is earily similar to what has been happening to your country over the past 70 years.


4 posted on 03/21/2009 8:10:46 AM PDT by Coachm
[ Post Reply | Private Reply | To 3 | View Replies]

To: Coachm

Thanks. So it is conservative?


5 posted on 03/21/2009 8:13:32 AM PDT by napscoordinator
[ Post Reply | Private Reply | To 4 | View Replies]

To: napscoordinator

It’s a long but GREAT read...just do it


6 posted on 03/21/2009 8:35:49 AM PDT by demsux
[ Post Reply | Private Reply | To 5 | View Replies]

To: Publius

Where’s the chapter that has the holy captialist privatizing years and years of gains only to run to the government for hundreds of billions of dollars in bailout money paid for by taxpayers in order socialize their losses and maintain their plutocracy.


7 posted on 03/21/2009 8:37:35 AM PDT by Tempest (Ayn Rand is morally dead.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: napscoordinator

It is neither Liberal or Conservative, its Objectivist.


8 posted on 03/21/2009 8:38:18 AM PDT by tonyinv (I Want Obama To Fail ..there I said it...now say it with me.)
[ Post Reply | Private Reply | To 5 | View Replies]

To: napscoordinator

Ayn Rand expressses her political philosophy, called Objectivism, in this book.


9 posted on 03/21/2009 8:39:28 AM PDT by George Smiley (They're not drinking the Kool-Aid any more. They're eating it straight out of the packet.)
[ Post Reply | Private Reply | To 5 | View Replies]

To: napscoordinator

Atlas Shrugged is a conservative masterpiece. Very long but well worth the time.

The basic premise is “What would happen if the real engines of the business, manufacturing, and the economy go on strike”

It was a counter to the labor movements claim that without them, the businesses would shut down. So basically the heads of the major industries say, ok, you think you know how to run things without us. Go ahead. We’re leaving. And one by one they disappear.


10 posted on 03/21/2009 8:40:01 AM PDT by cotton1706
[ Post Reply | Private Reply | To 5 | View Replies]

To: Tempest

She didn’t write about OBAMA and his legacy.


11 posted on 03/21/2009 8:43:27 AM PDT by Paige ("All that is necessary for the triumph of evil is that good men do nothing," Edmund Burke)
[ Post Reply | Private Reply | To 7 | View Replies]

To: Tempest

And if the government had stayed out of it and let them fail and reap what they had sewn, then it wouldn’t have cost the taxpayer a dime.

Wake up.


12 posted on 03/21/2009 8:43:54 AM PDT by cotton1706
[ Post Reply | Private Reply | To 7 | View Replies]

To: Publius

Eugene Lawson reminds me of Anthony Mozillo, the CEO of Countrywide Financial. He made it a point to figure out how to make home mortgage loans to those who were unworthy. He never seemed to realize that making loans to those who could never hope to repay them was only setting the poor into bankruptcy.


13 posted on 03/21/2009 8:44:07 AM PDT by MtnClimber (Bernard Madoff's ponzi scheme looks remarkably similar to the way Social Security works)
[ Post Reply | Private Reply | To 2 | View Replies]

To: cotton1706

Thanks. I will start right now.


14 posted on 03/21/2009 8:49:16 AM PDT by napscoordinator
[ Post Reply | Private Reply | To 10 | View Replies]

To: demsux

I am going to start after this post...thanks.


15 posted on 03/21/2009 8:50:02 AM PDT by napscoordinator
[ Post Reply | Private Reply | To 6 | View Replies]

To: cotton1706

Who was in charge of the legeslative and executive branch when TARP, Fannie, Freddie, and AIG bailouts were 1st instituted?

Where is the sense of saying “oh governemnt is bad” AFTER you’ve already given the money to the crooks? If anything the only true capitalist thing to do is to look after your investments and to make sure that they’re working the way they should. Since we are now the defacto owners of AIG we should be allowed to dictate to them what their policies are, just like any other owner.


16 posted on 03/21/2009 8:53:05 AM PDT by Tempest (Ayn Rand is morally dead.)
[ Post Reply | Private Reply | To 12 | View Replies]

To: Publius

Please put me on your FBC ping list.

Hope you’re doing well....

LM


17 posted on 03/21/2009 8:54:19 AM PDT by Loud Mime (The IRS collectes $1 trillion in taxes each year. Why not forgive all taxes for a year? Stimulus!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Publius

“You don’t think government regulators want us all to be serfs, do you?”

I have two answers to this:

A) I think they do; why else would they keep introducing so much anti-business and anti-growth legislation?

B) No, but they don’t realize that is exactly what they are doing.

In light of recent events, I can’t help thinking the answer is A.


18 posted on 03/21/2009 8:54:40 AM PDT by ZirconEncrustedTweezers (Hitler was a great speaker too, and HE didn't need a teleprompter.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: napscoordinator
Like I said, it's a long read, but you won't believe the relevance to current events.

Enjoy it

19 posted on 03/21/2009 8:58:38 AM PDT by demsux
[ Post Reply | Private Reply | To 15 | View Replies]

To: napscoordinator

Very much so!


20 posted on 03/21/2009 8:59:58 AM PDT by Coachm
[ Post Reply | Private Reply | To 5 | View Replies]

To: Tempest

I’m not just saying government is bad now. I said it then. I cheered from the rooftops when the bailout was initially defeated in September. Then the worthess polititcians (of both parties) twisted arms and put in sweeteners to get it passed. Then we had the ridiculous stimoulous bill, which was written behind closed doors and wasn’t allowed to be read or amended. So now the politicians are covering their asses.

Last fall we were told that AIG is too big to fail. Nonsense. It should have been allowed to go bankrupt, then all contracts would have been null and void and there wouldn’t have been any money for bonuses.

But we didn’t choose that path. The government should not be an owner of any company. It’s dangerous.


21 posted on 03/21/2009 9:07:38 AM PDT by cotton1706
[ Post Reply | Private Reply | To 16 | View Replies]

To: Tempest

“Where’s the chapter that has the holy captialist privatizing years and years of gains only to run to the government for hundreds of billions of dollars in bailout money paid for by taxpayers in order socialize their losses and maintain their plutocracy”

Check your premises. This NOT capitalism!! This is socialism in the name of not allowing businesses to fail, or jobs to be “lost”. And we (our government) should not have bought in to it. Capitalism DEMANDS that businesses and individuals be allowed to fail, in order to free capital and labor to move to where it is needed and away from where it is not. Read Joseph Schumpeter.

One can hardly expect anyone, Capitalist or Socialist, Marxist or Feudalist not to look to his own self-interest, and accept (or even demand) alms, IF THEY ARE AVAILABLE. But that doesn’t reflect on the economic system, rather on the people within it. The free market is the ONLY one in which society is benefitted by the natural selfishness of men, and is not dependent on largesse (even if such selflessness might exist in sufficient amount to provide for society’s needs).

I’ll state it baldly: NO economy can long exist which ignores the individual and his selfish motives as its driving force, and when “selfless” people, usually bureacrats with a vested interest in the status quo, attempt to drive an economy in the direction in which they THINK it should go, regardless of economic reality, you will get the kind of chaos we are now seeing.

It will be interesting to see how many “green” cars GM will sell per government mandate (it’s easy talking “green” when it doesn’t cost anything), and how long it will be before they come to Washington to ask for more money. Oh, wait; they already did.

BTW, has anyone noticed, re. a previous thread, that “General Motors” has its corporate mouth firmly pressed to the Federal teat, but (Henry) Ford does not? And (Walter) Chrysler doesn’t count; I doubt they will see the end of the year as an “independent” company. Schumpeter will be satisfied, at least to that extent.

Kirk


22 posted on 03/21/2009 9:21:58 AM PDT by woodnboats
[ Post Reply | Private Reply | To 7 | View Replies]

To: Publius
This chapter had me particularly upset simply because the relevance to what's happening today is eerily similar.

Eugene Lawson allowing the Community National Bank of Madison to fail simply because he was "doing good" for people who needed money. His decision to loan based on that simple criteria, and his statement that he was proud to have never made a profit in his life, not only destroyed everything his grandfather and father worked for, but in the long run helped to destroy his ability to help people who needed it further down the road. It was a short term solution to a long term problem.

Lee Hunsacker too expressed disappointment that after he was given a loan from Eugene Lawson no one would GIVE him a railroad. His indignation at the people who took him in when he had nowhere else to go, yet expected him to earn his keep.

Ivy Starnes who completely blew a fortune by setting up a workers paradise at the Twentieth Century Motor Company by paying everyone the same, then distributing "from each according to their ability, to each according to their needs", the meetings to determine how money would be split up, then getting mad at people for quitting. Her statement that the company was ruined by people who didn't understand the concept of "requiring men to be motivated NOT by personal gain, but by love for their brothers."

Finally the passage of laws that made everyone "equal" thereby eliminating competition. Mr. Wyatt, however, has the last laugh as he purposely destroys his oil fields before the "looters" can get their hands on a gold mine and leaving it as he found it.

All these things had me seeing red throughout the chapter. HOWEVER, look at this quote and see if it could have been put into Rand's novel in this chapter:

"The rich and powerful think mainly about preserving and expanding their wealth and power. President Obama must realize that under the emergency powers of his office, he not only has the authority to seize our assets, but also has access to all the assets of America’s richest men for meeting those emergencies that threaten the common good."

The above was taken from a post at DemocraticUnderground TODAY..truly, truly scary..

23 posted on 03/21/2009 9:33:56 AM PDT by GeorgiaDawg32 (A democrat will break your leg, then hand you a crutch and take credit for your being able to walk.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Publius

“Now, let me address my second issue, and that is the manual underwriting process itself. While Countrywide’s own internal evidence supports the notion that manual underwriters are approving a good majority of the loan applications that get referred, the fact of the matter remains that a human is involved in this step of the process thereby creating the possibility that a decision is made based upon the level of the borrower’s FICO score.

Thus, the current protocol intentionally creates an environment where borrowers with lower FICO scores are subject to being disproportionately affected by the manual underwriting process. I say we need to amend these systems to do more than just approve the “cream of the crop,” by creating a system that says “no” only to those deemed unwilling to make their mortgage payments.

We must understand that the credit scoring system we have built is still imperfect, and that if we are to have any chance at closing the homeownership gap, we must make a serious investment in improving its capacity and capabilities. We must do this through improved automated underwriting models that take into account more variables, and measure true indicators of risk and willingness to pay. We need an ongoing educational process, not only at the primary market level, but also in the secondary markets and with mortgage insurers to help lead this effort to recalibrate the scoring system. And finally, it must be recognized that borrowers with credit scores below what is currently defined as “creditworthy” levels can still be acceptable credit risks. Thus, the credit score bar dividing creditworthy from high-risk borrowers, must be substantially lowered by the GSEs, the secondary market in general, and with bank regulators. The GSEs have made good progress over the last few years in expanding their credit criteria, but I encourage them to become much more aggressive in this regard.”

Angelo Mozilo, CEO Countrywide and flaming leftwing idiot, February 4, 2003 speech to shareholders.


24 posted on 03/21/2009 10:40:05 AM PDT by MtnClimber (Bernard Madoff's ponzi scheme looks remarkably similar to the way Social Security works)
[ Post Reply | Private Reply | To 1 | View Replies]

To: MtnClimber
Eugene Lawson reminds me of Anthony Mozillo, the CEO of Countrywide Financial. He made it a point to figure out how to make home mortgage loans to those who were unworthy. He never seemed to realize that making loans to those who could never hope to repay them was only setting the poor into bankruptcy.

There was no down side when the government said write and we will back it up. Until, they wrote more than the country could afford. Congress couldn't be bothered with overseeing, what, with all the votes bought with others people's money. Congress stills does not see a problem. They see a solution that is the problem. Obozo makes the claim that the deficits are not that large compared to GDP, not once, realizing the GDP is getting smaller. They are playing a numbers game that a Dow 15,000 is better than Bush had, but, those dollars are worth less than when Bush was there. Obummer's treasury is, probably, planning a million dollar note with his picture. They can be used as toilet paper in Zerovilles.

I am struck by how far they can drive in desolate Wisconsin.

25 posted on 03/21/2009 10:53:51 AM PDT by depressed in 06 (I feel so much better now that Code Pink is standing up for the taxpayer.)
[ Post Reply | Private Reply | To 13 | View Replies]

To: MtnClimber
Eugene Lawson reminds me of Anthony Mozillo, the CEO of Countrywide Financial.

And the only thing Mozillo didn't say was that he was proud that he had never earned a profit.

26 posted on 03/21/2009 11:38:31 AM PDT by Publius (The Quadri-Metallic Standard: Gold and silver for commerce, lead and brass for protection.)
[ Post Reply | Private Reply | To 13 | View Replies]

To: napscoordinator

While you’re reading, check in with the earlier threads to keep up. And check out the introductory thread because there’s some good stuff in there, too.


27 posted on 03/21/2009 11:40:00 AM PDT by Publius (The Quadri-Metallic Standard: Gold and silver for commerce, lead and brass for protection.)
[ Post Reply | Private Reply | To 15 | View Replies]

To: ZirconEncrustedTweezers
I agree that the answer is "A". They believe we are not capable of running our lives, and for our own good they will run things for us.

Bureaucrats crave stability, and feudalism was the most stable economic and social system ever seen.

28 posted on 03/21/2009 11:41:50 AM PDT by Publius (The Quadri-Metallic Standard: Gold and silver for commerce, lead and brass for protection.)
[ Post Reply | Private Reply | To 18 | View Replies]

To: woodnboats
This NOT capitalism!! This is socialism in the name of not allowing businesses to fail, or jobs to be “lost”.

True. Everything you said in your post was true.

But the path from one system to another passed through something I call "creditism".

Henry Clay was correct when he said, "The United States were built on credit," back when the renewal of the Second Bank of the United States was being discussed during Jackson's second term. Credit is very important, a precious object that needs to be properly maintained in order to work. Hamilton understood that when he monetized our war debt to make those worthless Continentals have some value. What went wrong was the profligate use of credit where it was not warranted.

Our own modern Lee Hunsacker (Mayor Young) perverted credit when he insisted on managing the growth of Detroit according to liberal principles that had nothing to do with capitalism or Schumpeter. Detroit should have been plowed back into the farmland from which it rose if it served no useful purpose. Social need trumped wise use of credit.

By creating the character of Eugene Lawson, Rand pinpoints the abuse of credit as the source of what went wrong. Compare this with Hank's willingness to defer accepting payment from the railroad for his metal. That decision was driven by financial wisdom, not trying to do Dagny (and Jim) a favor. It was credit well applied.

We seem to have lost that value in our current world.

29 posted on 03/21/2009 11:54:49 AM PDT by Publius (The Quadri-Metallic Standard: Gold and silver for commerce, lead and brass for protection.)
[ Post Reply | Private Reply | To 22 | View Replies]

To: GeorgiaDawg32

That quote was almost verbatim Claude Slagenhop from the party at Hank’s house in a previous chapter.


30 posted on 03/21/2009 11:57:03 AM PDT by Publius (The Quadri-Metallic Standard: Gold and silver for commerce, lead and brass for protection.)
[ Post Reply | Private Reply | To 23 | View Replies]

To: MtnClimber

Good grief! That speech from Mozillo could have come out of the mouth of Eugene Lawson. Or maybe Mark Yonts before he looted his S&L and disappeared.


31 posted on 03/21/2009 11:59:08 AM PDT by Publius (The Quadri-Metallic Standard: Gold and silver for commerce, lead and brass for protection.)
[ Post Reply | Private Reply | To 24 | View Replies]

To: depressed in 06
There was no down side when the government said write and we will back it up.

Boy, did you ever say a mouthful! The abuse of credit created this whole mess from the derivatives protecting mortgages sold upstream to huge swaths of commercial paper based on betting on interest rates. The banks didn't take the stance of Midas Mulligan. They agreed to be raped if the price was right. And what a price!

I am struck by how far they can drive in desolate Wisconsin.

And I was sruck by the fact that they had to go 200 miles to find a phone. Where were the gas stations?

32 posted on 03/21/2009 12:04:05 PM PDT by Publius (The Quadri-Metallic Standard: Gold and silver for commerce, lead and brass for protection.)
[ Post Reply | Private Reply | To 25 | View Replies]

To: Publius
Howdy, Pub’!

So we’ve made Chapter 10, Wyatt’s Torch, one of the most significant chapters in Atlas Shrugged. Chapter 10 is a quest chapter, a series of episodes describing Dagny’s search for the engineer who created the mysterious motor that Dagny and Hank found in the wreckage of the Twentieth Century Motor Company. Each step along the way helps us fill in the picture of what happened there to cause the company’s downfall, the abandonment of the motor, and the crippling poverty now gripping the surrounding countryside.

Our first stop is the decaying community of Rome, Wisconsin, (the Rome of AD 476, perhaps, that has not fallen but is in the hands of the barbarians) wherein one Mayor Bascom presents an argument that is critical to the understanding of the economic and philosophical underpinnings of socialism.

Within a long and frightening list of characters and events chronicled in the next few chapters is Rand’s own Bernie Madoff, a fraudulent financier named Mark Yonts:

“He wasn’t the kind who ever operates anything. He didn’t want to make money, only to get it.”

That didn’t, of course, prevent the Mayor from helping Yonts’s plunder:

“There’s plenty of laws that’s sort of made of rubber, and a mayor’s in a position to stretch them a bit for a friend. Well, what the hell? That’s the only way anybody ever gets rich in this world” – he glanced at the luxurious black car – “as you ought to know.”

“Property is theft” said Pierre-Joseph Proudhon, the proto-anarchist. (He also stated that “Anarchy is Order” in Confessions of a Revolutionary. A bit of trivia there – I capitalized both nouns in the second sentence to highlight the origin of the “circle-A” logo that anarchist kiddies like to spray-paint on vertical surfaces, raging against the capitalist machine with weapons purchased on special from Costco at $1.39 a pop). Interesting fellow, Proudhon. Before his breakup with Marx he was quite the thing in post-revolutionary France, at one point attempting to institute a curious scheme for the redistribution of wealth - a bank that obtained its money from the evil capitalists through an income tax and lending it to the workers at what amounted to sub-prime rates of interest. It failed, of course. Surely nobody would be stupid enough to try that in the United States? All that we learned from it is that folly renamed and taken to a national scale is still folly.

This fundamental article of faith, of received truth underlying socialism is that wealth is theft; that any movement from the “natural” even distribution of wealth is illegitimate, that the wealthy are ipso facto criminal, and that as such it is not a criminal act, but one of “social justice” to steal it back on behalf of the people (and take a prime cut off the top for being clever enough to figure the whole thing out). I’ve never run into a thief yet who didn’t consider himself cleverer than his victims. Clearly the Mayor feels he has the whole thing figured out, and Hank has to restrain his hands from the Mayor’s throat.

A crooked financier, and next a failed bank. The reader is to be forgiven for suspecting that Rand owned a crystal ball.

“Some say it was this motor factory that broke the bank, but others say it was only the last drop in a leaking bucket, because the Community National had bum investments all over three or four states. Eugene Lawson was the head of it. The banker with a heart, they called him.”

This is the same Eugene Lawson who is now working with Wesley Mouch at the Bureau of Economic Planning and National Resources. The “banker with a heart,” meaning he made loans on a basis of something other than the likelihood of repayment. Banks that do that tend to fail, as we are learning so bitterly of late, having compounded one banker’s foolishness to all the banks by governmental mandate. Incredibly, Rand anticipated that as well.

One of Dagny’s stops involves a fellow named Hunsacker, who was attempting to raise the capital necessary to come into possession of the old Starnes/Twentieth Century factory. A hard-hearted, classic, and very successful banker Midas Mulligan, who disappeared under mysterious circumstances seven years ago, turned him down as incompetent to make enough money for repayment. As if that were the primary criterion, instead of ”Need, not greed,” as Eugene Lawson puts it later. And so what does Hunsacker do? Why, he sues, of course:

“…the state of Illinois had a very humane, very progressive law under which I could sue him…I had a very smart, liberal lawyer who saw a way for us to do it. It was an economic emergency law which said that people were forbidden to discriminate for any reason whatever against any person…[Judge Narragansett threw it out]…but we appealed to a higher court – and the higher court reversed the verdict and ordered Mulligan to give us the loan on our terms.”

We’re living this part of the chapter, and notwithstanding what Marx said about it, the first fictional occurrence of this history was the farce and the second, real one, the tragedy – a government forcing banks to lend money at an unacceptable risk for criteria other than ability to repay, and an ensuing default when the borrower proves incapable of generating wealth sufficient to meet his obligations. It took half a century for this to grow from a fictional tadpole to a real-world Godzilla, but grow it did. This was not prophecy, it was a necessary consequence of the sort of corruption she was positing and that the United States came later to embrace.

Mulligan paid off all of his creditors and got the heck out. We’ll meet him later. But lest anyone think it outlandish that a bank could be punished for not making loans at unacceptable risks I offer that individual This Story. Once again, reality has caught up with fiction.

Dagny next tracks down the Starnes siblings, offspring of the entrepreneur Starnes who founded the Twentieth Century Motor Company. They ruined it within a few short months following a set of precepts that make an observer of 20th-century history shudder with recognition. After Starne’s death his children actually tried to manage the firm on the Marxian basis of “From each according to his ability to each according to his need.” Literally. The factory was run by workers’ councils – the Russians call these “soviets” – who adjudicated salary on the basis of the employees’ abilities to state their need. Naturally where need was rewarded and achievement punished the achievers departed very rapidly and the needy remained to divide the pie, dwindling because those capable of replenishing it were gone.

Lenin actually tried something like this between 1918 and 1921. His industries went broke nearly as quickly as Rand’s fictional one, and the upshot was a new, “realistic” approach named the New Economic Policy. But along with this was a subtle difference that Trotsky pointed out in The Revolution Betrayed that “to each according to his need” was shown not to be a feasible principle during this “stage” of historical progress toward communism. It became “to each according to his work,” and naturally that work included a premium on the activities of the ruling class, to their enrichment. Stalin followed this with full collectivization and central direction, after which the workers’ soviets went the way of the workers’ councils at the Twentieth Century Motor Company. Some of their inhabitants were stood against a wall and shot, blinking, never understanding why their socialist fantasyland had such a grim ending.

In the event, however, one of the Starnes heirs did manage to leave with some of her fortune intact and all of her self-righteousness. Djilas’s “New Class” always does. Dagny manages to keep her jaw from dropping at this cold recitation of ruin.

Dagny heard a cold, implacable voice saying somewhere within her: remember it well – it is not often that one can see pure evil…

The result of this ethical and economic catastrophe was the broken bits of a revolutionary motor residing in the rubble of the abandoned factory. They’d run out of things to steal, but what they ran out of first was the vision necessary to recognize the motor for what it was. Those capable of that left early on, disgusted. One of these was named William Hastings, the supervisor and defender of the young engineer who invented the motor. Dagny tracks down his widow, who gives her two interesting pieces of information in addition to verifying the connection with the inventor. First, that her late husband disappeared for one month each year, in the summertime, to where she does not know. And second, that she has seen the inventor himself in the company of a white-haired gentleman on a railway platform. Can this inventor be his mysterious third student, the friend of both Ragnar Dannerskjold and Francisco d’Anconia?

Dagny is given a lead to the older man (with rather improbable precision) by Mrs. Hastings, and she tracks him down to a diner in which the quality of the food, and everything else, is high enough for her to offer the cook a job. He declines. She ups the offer and still he declines, but she finds out that he is, in truth, the philosopher Hugh Akston. She is close to her quarry now, very close. But what on earth is Akston doing as a fry cook in the middle of Wyoming?

“What are you doing out here?”

“Making a living.”

“This doesn’t make sense!”

“Are you sure? …By the essence and nature of existence, contradictions cannot exist. If you find it inconceivable that an invention of genius should be abandoned among ruins, and that a philosopher should wish to work as a cook in a diner – check your premises. You will find that one of them is wrong.”

“Check your premises.” It is Aristotle’s iron law and the war cry of Objectivism. It is the answer to an individual who presents you with a logical conclusion that flies in the face of observed fact. Check your premises.

She started: she remembered that she had heard this before and that it was Francisco who had said it.

Akston’s other student. But Akston will not help her find the inventor. Dagny remains determined.

“I will find him.”

“Not until the day he chooses to find you – as he will.”

Dagny abandons her search out of a sense of honor, at least for the time being. Nothing she can do honestly will take her any closer to the elusive inventor of the motor. She returns to the frantic world of politics and industry to find a distraught Eddie Willers, who has been holding Taggart Transcontinental together with his bare hands, describing what to him is simply unbelievable:

“Dagny, you’re going to think I’m insane, but I think they’re planning to kill Colorado.”

He is correct. Eddie understands what the looters do not, that wealth is the product of achievement, not theft, and that when the achievement ceases or is deliberately prevented, wealth is no longer created. Eventually the theft ceases as well, because as we have seen at the Starnes company, there is nothing left to steal.

But to the looters – we may openly call them socialists by now, I hope - wealth is a pile of material goods that someone has amassed immorally, to be confiscated and divided by those who have established political control over it. They are killing Colorado because they cannot control it, and because it represents a threat to the piles of material goods they do control. And, on a deeper level, they are killing Colorado so that the achievers, who appear to them only as particularly skilled thieves (although not so skilled as themselves) will have nowhere else to go.

That is, parenthetically, the reason that communism – its own proponents state this – can only succeed if it is established on a worldwide basis. There must be no escape. That strikes me as a particularly revealing admission. If communism is, as Marx insists, the acme of human actualization, then why would anyone wish to escape from it? And yet every communist state ever established became a prison camp in pursuit of some mythical, never realized benefit to the prisoners. To the communist the inhabitants wish to escape because they are not yet perfect enough for the system. In no sense must the system be perfect enough for them. It is the collective, after all, that is supreme, not the individuals making it up. But in fact this is the death of the human spirit, not its transcendence, and that is the point Rand is attempting to convey in Atlas Shrugged.

And so the Bureau of Economic Planning and National Resources makes its move, and if this too sounds disturbingly familiar it ought to:

“The laws shouldn’t be passed that way, so quickly.”

“They’re not laws, they’re directives...there’s no time to palaver when it’s a national emergency.”

We have to remind ourselves here that it is a fictional character speaking this and not Rahm Emanuel, for whom such an emergency is not to be wasted. It is a complete enough package, to be sure. The railroads on which Colorado depends are to be limited in performance, the mills limited in output, existing firms prohibited from moving there, and the interest on the bonds they purchased in order to stay alive is placed under a moratorium for five years. And in addition the cost for all of this is to be covered by a special tax on the very people at whom it is aimed.

And, in reply, Ellis Wyatt makes his own move:

[Dagny recalled] two pictures: Ellis Wyatt’s implacable figure…saying, “It is now in your power to destroy me; I may have to go; but if I go, I’ll make sure that I take all the rest of you along with me” – and the circling violence of Ellis Wyatt’s body when he flung a glass to shatter against the wall.

“Ellis, don’t! Don’t! Don’t”

…In a break between mountains, lighting the sky…the hill of Wyatt Oil was a solid sheet of flame…later, she looked at his handwriting on the board… “I am leaving it as I found it. Take over. It’s yours.”

And so Rand strips us of the romantic hope that persons of achievement must always prevail over the obstacles presented to them by lesser men. It isn’t so. And a society corrupted to the point where it isn’t so, is committing suicide. Gone now is the hope for an industrial renaissance in Colorado, for the presumptive progressive ascension. It turns out that progress can also descend. And here, at the end of the first section of Atlas Shrugged, we realize which direction progress will be progressing.

Have a great week, Publius!

33 posted on 03/21/2009 12:10:23 PM PDT by Billthedrill
[ Post Reply | Private Reply | To 2 | View Replies]

To: cotton1706
The government should not be an owner of any company. It’s dangerous.

Absolutely. We're on the road to socialism.:(

BTW, hello from another 'cotton'!
34 posted on 03/21/2009 1:39:32 PM PDT by CottonBall
[ Post Reply | Private Reply | To 21 | View Replies]

To: Billthedrill
And so Rand strips us of the romantic hope that persons of achievement must always prevail over the obstacles presented to them by lesser men. It isn’t so. And a society corrupted to the point where it isn’t so, is committing suicide.

Too apropos. Very depressing.

Brilliant post, as usual, Bill.
35 posted on 03/21/2009 1:44:31 PM PDT by CottonBall
[ Post Reply | Private Reply | To 33 | View Replies]

To: napscoordinator
So it is conservative?

The story is very PRO-capitalism, PRO-limited government, so, in that sense, it is very conservative/libertarian - on the Right. The book was written in the late '50's, but it strangely coincides with what's happening today. I recently read it for the first time, too (thanks to this FReeper book club). The story affirms the free market, limited government priniciples that we all espouse here (well, most of us).

The story's heroes are the "producers" - industrialists and businessowners who, through the virtue of their own hard work and talent, create products and services that have value to people and also create jobs. But, they are criticized by society for their wealth and pride. (Sound familiar?)

The antagonists are the "looters" and the "moochers" - the people who expect the producers to provide everything for them, the people who want to nationalize industry, the businessowners who destroy their competition through government under the guise of "anti-monopoly", and those who want to punish the producers and reward the looters.

What I just gave is an overly simplistic description of the story, but the answer is, yes, this is a very FReeper-friendly book!

36 posted on 03/21/2009 2:00:56 PM PDT by Tired of Taxes (Dad, I will always think of you.)
[ Post Reply | Private Reply | To 5 | View Replies]

To: Billthedrill; Publius

I look forward to this thread every week. The two of you are doing a great job.


37 posted on 03/21/2009 2:03:58 PM PDT by r-q-tek86 (The U.S. Constitution may be flawed, but it's a whole lot better than what we have now)
[ Post Reply | Private Reply | To 33 | View Replies]

To: r-q-tek86

Aw, gosh, golly and shucks. Thank you. (blush blush)


38 posted on 03/21/2009 2:14:31 PM PDT by Publius (The Quadri-Metallic Standard: Gold and silver for commerce, lead and brass for protection.)
[ Post Reply | Private Reply | To 37 | View Replies]

To: Tempest
Where’s the chapter that has the holy captialist privatizing years and years of gains only to run to the government for hundreds of billions of dollars in bailout money paid for by taxpayers in order socialize their losses...

That's in the book, too. The government bails out bad businesses in this story.

39 posted on 03/21/2009 2:16:48 PM PDT by Tired of Taxes (Dad, I will always think of you.)
[ Post Reply | Private Reply | To 7 | View Replies]

To: MtnClimber

I’d say Mozilo wasn’t as interested in altruism as he was in turning a profit by tweeking credit scores so that he could sell more and more mortgage securities.

What I like about “Atlas Shrugged” is that not all businessowners are heroes in the story. Some are looters. It does seem the companies who drove us into this “subprime mortgage crisis” fall into the category of looters.


40 posted on 03/21/2009 2:39:05 PM PDT by Tired of Taxes (Dad, I will always think of you.)
[ Post Reply | Private Reply | To 24 | View Replies]

To: Tired of Taxes
What I like about “Atlas Shrugged” is that not all businessowners are heroes in the story. Some are looters.

The businessmen in the book who are looters have one thing in common. They rely on government. Orren Boyle got a $200 million government loan to create Associated Steel. Jim Taggart wants government protection from competing railroads.

Our current looters seek government backstopping for their endeavors, like mortgages to people who shouldn't have them. That isn't capitalism.

41 posted on 03/21/2009 2:45:00 PM PDT by Publius (The Quadri-Metallic Standard: Gold and silver for commerce, lead and brass for protection.)
[ Post Reply | Private Reply | To 40 | View Replies]

To: Publius
That isn't capitalism.

Exactly. It isn't. If you check my post #36, you'll see that I indicated the "looters" included businessowners who destroy their competition through government under the guise of "anti-monopoly", etc.

That's not a criticism of capitalism, but a criticism of businessowners who work against it through their connections in the government.

42 posted on 03/21/2009 3:22:12 PM PDT by Tired of Taxes (Dad, I will always think of you.)
[ Post Reply | Private Reply | To 41 | View Replies]

To: Tired of Taxes; woodnboats

Let me ask you something. what do you think the impact of credit default swaps and deregulation has had on the courrent financial situation?


43 posted on 03/21/2009 3:24:25 PM PDT by Tempest (The Republican party racing to lose 2010)
[ Post Reply | Private Reply | To 39 | View Replies]

To: Publius

To qualify further: Mozilo was interested in profit. That would’ve been capitalism if Countrywide had been allowed to fail, and every bank/company who’d bought those mortgages had been allowed to fail right along with it. But, because the government bailed out Mozilo’s company (with our money), as well as others, it’s not capitalism. That’s the way I see it, anyway.

We’ve never lived in a truly capitalist country. With the FDIC, banks are insured by our tax dollars, and Fannie and Freddie offered them a false sense of security. I’m one of the few here (and maybe the only FReeper) who sees the CRA as a minor factor, if one at all, although I agree it’s bad policy. The Federal Reserve and the low interest rates Greenspan set was the major factor. JMHO. And the book AS is right on the mark. Government is to blame, though we each may disagree on how government is to blame.


44 posted on 03/21/2009 3:38:20 PM PDT by Tired of Taxes (Dad, I will always think of you.)
[ Post Reply | Private Reply | To 42 | View Replies]

To: Tempest

WHAT deregulation???

The problem lies in government defining the manner of business, instead of putting the market to work, or at least allowing it to. Had those mortgagers not been rewarded (because of regulation) for making bad loans, and those mortgagees not been rewarded with mortgages the market couldn’t bear, we (semi-innocent bystanders and proponents of still more regulation) wouldn’t be on the hook.

Kirk


45 posted on 03/21/2009 3:48:18 PM PDT by woodnboats
[ Post Reply | Private Reply | To 43 | View Replies]

To: Tired of Taxes
We’ve never lived in a truly capitalist country.

If by "we" you mean those people alive today, you're absolutely right.

46 posted on 03/21/2009 3:48:38 PM PDT by Publius (The Quadri-Metallic Standard: Gold and silver for commerce, lead and brass for protection.)
[ Post Reply | Private Reply | To 44 | View Replies]

To: Tempest

If you ever have an hour to spare, watch the video on this thread:

http://www.freerepublic.com/focus/f-news/2209660/posts

IMHO, Peter Schiff explains so well in that video how government policy and regulation led us into this crisis. I see it the way he sees it, but I could never put it into words like he can. Anyway, if you want to know where I stand, that’s where.


47 posted on 03/21/2009 3:51:15 PM PDT by Tired of Taxes (Dad, I will always think of you.)
[ Post Reply | Private Reply | To 43 | View Replies]

To: Tired of Taxes

That’s an excllent video, BTW. After viewing it late one night, I had trouble sleeping.


48 posted on 03/21/2009 3:52:50 PM PDT by Publius (The Quadri-Metallic Standard: Gold and silver for commerce, lead and brass for protection.)
[ Post Reply | Private Reply | To 47 | View Replies]

To: Publius

In your opinion, when did this country ever have pure free market capitalism? I’m not trying to be argumentative. I’m just wondering what your opinion is. Everyone has a different take on it.


49 posted on 03/21/2009 3:53:53 PM PDT by Tired of Taxes (Dad, I will always think of you.)
[ Post Reply | Private Reply | To 46 | View Replies]

To: Tired of Taxes
Before the War Between the States, we had the Second Bank of the United States picking favorites -- which is why Jackson got rid of it. There was a lot of influence peddling to get the railroads started, too. But in that period, we had more free market capitalism than we have today.

After Lincoln, we settled into a rather primitive form of corporate fascism in which Congress, aided and abetted by the robber barons, dictated success in the marketplace by rationing capital. No free market there.

We thought we could fix the problem with more democracy via the 17th Amendment, but nothing really changed.

The Progressives decided to revive the Jeffersonian impulse by taking control of Hamilton's central government and diverting it to Jeffersonian principles, but all they did was create what Robert Heilbronner calls "government capitalism", the current bane of our existence and creator of the present crisis.

So I'd have to say that we briefly had a shot at free market capitalism before 1861, but industrialists took their successes and parlayed them into shifting the playing field to one side. We've been reacting to that fact ever since.

50 posted on 03/21/2009 4:02:50 PM PDT by Publius (The Quadri-Metallic Standard: Gold and silver for commerce, lead and brass for protection.)
[ Post Reply | Private Reply | To 49 | View Replies]


Navigation: use the links below to view more comments.
first 1-5051-100101-121 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson