Naomi Klein and Spitzer Shoot Down Frum's Arguments About Stifling "Creativity" on Wall Street
What is it with these Republicans who constantly pretend they want to clean up a system, but when it comes to the specifics, they really just want to keep the status quo. While discussing what needs to be done to fix Wall Street, David Frum expresses his concern for throttling "the creativity of the system". As Naomi Klein and Eliot Spitzer point out to him, it was exactly that "creativity" that got us into the mess we're in now.
FRUM: The fix is here. There's a -- let's do -- there are technical fixes, the kinds of things I've said about the way banks hold their securities.
And then, be careful about doing too much, because you can throttle something that I think is precious to everybody, which is the creativity of the system.
SPITZER: Well, let me respond. I got it. Not to make this partisan, but...
(LAUGHTER)
... statutes don't work. Enforcement does.
We have had for 15 or 20 years an absence of enforcement, except with a few nodes of activism, which gets beaten down over time.
What we need is adherence to very simple principles of ethics and transparency in the marketplace. And then, it would work.
ZAKARIA: On that note, we are going to take a break and come back, and discuss all of this and more. We will be right back.
[...]
ZAKARIA: And we are back with our star-studded panel -- Eliot Spitzer, David Frum, Naomi Klein and Steve Dubner.
What should be the purpose of financial regulation moving forward?
KLEIN: And this isn't a free market system. That's what's been revealed in this crisis. It's a classic, crony capitalist system, where favors are traded amongst the elites.
And, you know, I have to -- this idea that we are going to squelch creativity, you know, I think there's definitely been too much creativity in the realm of derivatives trading. I mean, we would all do with them being a little less creative, and maybe go into the arts, you know, take up creative writing.
(LAUGHTER)
This is not helping. But the idea...
ZAKARIA: Because the bonuses are huge in the arts.
(LAUGHTER)
KLEIN: But the idea that we suffer from an under-reaction...
SPITZER (?): If you (UNINTELLIGIBLE) long enough they are, if you have possession of the tapes (ph).
KLEIN: The idea that we suffer from an under-reaction to this crisis -- an over-reaction to this crisis -- to me is absurd. I mean, this has been the most incredible under-reaction, if we look at what we have some consensus about in terms of what caused the crisis.
The over-leveraging of the banks, the fact that derivatives are not regulated, the fact that the banks are too big to fail, the fact that they've become so intermingled -- we have not dealt with a single one of them, a single one of them, a year-and-a-half later. We have not reacted.
And in the meantime, we've put around $14 trillion on the table and used none of the leverage. And the whole premise of banking is that, when you're handing out money, you can put conditions on it. You can ask for all kinds of things. And it is just extraordinary that they blew that moment of leverage.
DUBNER: Can I ask you a question? So, you seem to -- I may interpret this wrong -- but you seem to feel that government is kind of handcuffed in this situation. You feel that -- you three have very different views -- I'm sorry. I don't mean to be jumping in your chair.
(LAUGHTER) It's just that there's interesting perspectives. We all have -- we have some very, very different views of how and why and to what end government should be regulating, intruding, whatever we want to call, in all these different realms.
My question to all of us is, however, no matter what you want and think is not being done, no matter what you're afraid may be done, to me the question is the larger one, which is, government right now in Washington is at this bizarre place -- we were talking about this earlier -- where, if it's not paralyzed or broken, it's pretty darn close.
It's really hard to -- it's really hard for me, as someone who doesn't really traffic in the political realm willingly or all that often, to see, where's a good outcome here from a political perspective, because I don't see it.
ZAKARIA: And by the way, on any issue, if you look at, you know, immigration, energy, it's just -- it's paralyzed, in general.
FRUM: The United States government doesn't govern all that well. We'll concede that. But the American private sector does deliver unbelievable things.
And we're sitting here at the end of a period of extraordinary technical innovation. And not just -- I mean, the Internet, we're all familiar with. But all kinds of products, and products that people want.
The ability of people to tap the equity in their homes when they face a financial crisis, that is a good innovation. The availability of more than one -- lots of kinds of mortgage to people in different kinds of circumstances.
There are a lot of reasons why a rational person might intelligently want an interest-only mortgage. That can be a useful instrument.
We have the ability to raise capital to finance development all over the planet. And the idea that...
(CROSSTALK)
... you say, well, let's give it to the poets, I mean, I'm all for the poets. But what we -- to be at the end of this period, it's like being in one of the railway crises of the middle 19th century and saying, eh, nothing real was accomplished. Something real was accomplished over the past 20 years.
(CROSSTALK)
SPITZER: (UNINTELLIGIBLE) very effectively to then beat it down.
All of us here -- I'll talk for myself. I don't want to speak for others. I am a devout capitalist. I believe in the creativity, the innovation, the conflict that emerges -- let me finish. The reality is that we have an economy right now that has tremendous innovative capacity, but also, over a 10-year period, has not created any net jobs. And the distribution of those proceeds is getting less and less equal. And our position vis-a-vis the rest of the world in terms of debtor-creditor situation, our world power -- 100 different metrics you could use -- we're on the losing end.
And therefore, we have to step back and say, how do we extend those benefits, and both continue them and make sure we create an environment where they can...
(CROSSTALK)
ZAKARIA: But do you worry that you're...
SPITZER: And that's where we are not...
(CROSSTALK)
FRUM: I'm not going to dispute with you on that. And it's true. I mean, not enough of this came through to the typical worker during the years from 2001 to 2007. That was a big problem.
And there a lot of things we can talk about to fix that, including getting control of health care costs, which has been the great burden on the incomes of middle income people.
But let us not crush the creativity. And let us not look for a financial solution to economic problems.
ZAKARIA: On that note, thank you all very much. We will be back right after this.
"What we need is adherence to very simple principles of ethics and transparency in the marketplace. And then, it would work."
Is the big lie. We need strong laws and stronger enforcement. 'Creativity' can go fuck itself.
Exactly why I have ZERO invested in the stock market, ZERO invested in bonds. I will leave all of mine (what little I have!) in cash.
I would convert that "cash" (soon to be worthless) ...into gold and silver.
audit-prosecute-incarcerate
and hallucinating that some particular commodity will make a better investment does not change that situation. It's why we very sanely disconnected monetary policy from the commodities market. The Spanish failed to do this when they stole all that Central- and South American gold, and the resulting inflation tanked them as a world power.
I was talking about (preserving wealth)
...I think our fiat currency will be devalued soon. ..by as much as 1/3 or 1/2 even.
besides...gold has tripled since 9/11...silver has also...
The "oil dollar" is on its way out!
...boycott Wall st. and buy a gold coin instead!
audit-prosecute-incarcerate
Yes, of course, jump on the top of the gold bubble.
sheesh, some folks never learn.
Yuh, that one is just about over too...suckers
going to accept as change when they go to the grocery store?
We went through this in the '80's too, I know a bunch of chumps that bought in high and lost their asses.
That's the funny thing, when everybody buys gold, that decreases the values for the holders whilst inflating the prices for new would be buyers, so when the scales even out again everyone loses value in the long run.
Diabolus est Deus Inversus
Gold will be confiscated by the government in the face of a massively deflated dollar per executive order 6102.
It is by the goodness of God that in our country we have those three unspeakably precious things: freedom of speech, freedom of conscience, and the prudence never to practice either of them.
Mark Twain
"...the creativity of the system..."
What a load of Hornswoggle . . . whatever hornswoggle is!
Generally speaking, Republicans profit from a broken system and they will do anything they can to keep it that way.
The standard GOP line is, 'that which is not explicitly forbidden is legal.'
The only 'creativity' that regulation would stifle is the creative moral and ethical constructs these people use to justify their actions.
Reality: Torture is illegal under international treaty and federal law.
GOP Creativity: We need 'moral clarity' on torture.
It's what the banks and Big business have thrown away and what needs to be forced back onto them.
Institution. That's right Socialism Privatize the Profits and Socialize the Losses. Further proof the Glass Seagull Act has to be re-instated, and the CRIMINALS brought to justice (hahahaha).
If Capitalism works why aren't the No RISK NO PAYOUT LOSERS in the Financial Industry allowed to Fail, because SOCIALISM WORKS and works real well when only a small fraction of ELITIST receive the designated FUNDS with Absolutely NO, NO, NO CONTROLS, yes all you have to do is present a stammering, stuttering incoherent presentation and everyone falls apart and NO ONE is HELD ACCOUNTABLE isn't it beautiful. Oh, do not be a little guy and still $20.00, that is automatic 15-20 with hard time but, if you are a CAREER Financial Criminal the Bank is Open TAKE what YOU want.
but the term "Socialism" is far too broad a term for what has happened to the USA economic system. The more appropriate term is "National Socialism", or even more properly "Fascism". In "Socialism" (or "Communism"), the State owns the means of production, whereas in "Fascism", the means of production, or those favored oligarchical corporations owns, or controls, the State. Mussolini's Italy was the first modern Fascist State.
In every other regard, you are fundamentally correct. The Corporatist State has been growing in power and influence since before World War I, with the creation of the private for-profit Federal Reserve, and the creation of the Federal Income Tax, without which the Federal Reserve could not exist. It has been growing exponentially since the end of World War II, with the creation of the CIA and NSA in 1947, without which the Military Industrial Complex could not have become what is today the USA's largest exports -- wars, rumors of wars, and the vast industry of military armaments.
Essentially, there are 3 primary spokes in the flywheel of the engine that is called the Corporatist State -- the Military Industrial Complex, the National/International Bankers, and the Oligarchical Corporations. At least 2 out of 3 need to be reined in, rehabilitated or regulated in order to bring democracy back to the USA.
"Those who make peaceful revolution impossible will make violent revolution inevitable."
-- John F. Kennedy
Getting the last word and talking the most. I can't believe people still think the media is liberal. It sad to see this is still debated. It should be clear that the top have been waging class warfare for the past 10-30 years on everyone else, and we have hit the point were its killing the country. I just don't understand anymore why people even entertain the idea that Business and the rich need to be protected. Jobs growth has been nil, wages have gone DOWN after stagnating for 10 plus years. Our social infrastructure has been eaten away over the past 30 years, to pay for the loss of 40% taxes from the Top in 1980.
We need to go back to the tax rates and regulations of the pre 1980s period. The longer we wait the worse it's going to get.
'creativity of the system' ????
they can shove their 'creativity of the system' where the sun don't shine.
Heck almost anyone of us could do a better job than these greedy bastards.
I will personally revamp and improve the banking system for only $100,000 and all the pizza i can eat...
The "creativity" meme is hilarious.
Their creativity is in game creation. Vegas creating a new card game. A new slot. Betting vehicles...markets for more risk. Laughable.
But the best Frum line on "creativity" was: "...something that I think is precious to everybody..."
Yeah...Everybody on Wall Street.
"I can't keep doing this on my own with these...people."
Love how quickly Frum moves from banking "creativity" to tech innovation. See David, when the goal is to make a tiny sector of elites as rich as possible at the expense of others, unfettered "creativity" may not be the best thing for the population at large.
I suppose Frum is strongly opposed to govt subsidies of the tech sector (often disguised as defense spending) since that would be government intervention.
I also suppose Frum doesn't care at all about who is manufacturing all these great innovative products, you know the type of thing that creates jobs and a strong middle class. I guess Frum is very happy about all the jobs we've created....in China.
He has no idea what real wealth is and obviously does not know what got us into this mess to begin with. My ears damn near fell off when he said.
Goodnight, Frau Blücher
when you have unfettered capitalism there sure are plenty of times when people have to go into huge debt just to get by..., and we wouldn't want the government to interfere from corporate bankers making a shit-load a money off of them, do we?
the3y got lazy and figured out how to make money off the poor and innocent to enrich themselves. If they were creative, they could figure out how to make money without screwing everyone else.
the Mafia figured this shit out in the early 1900s and they outlawed it then.
'Scam' or 'score' in everyday English.
about healthcare, though. Killing HCR on the 1-yard line is just going to look like nihilism, and the politics could well rebound on the Republicans. Taken with their opposition to financial reform and bank taxes, powerful arguments against Republican obstructionism could be made.
Supporters will just say it takes us back to the Founding of our Country, when we were all dirt poor dirt farmers eating dirt hoping for a Heaven.
Have y'all noticed that the only time we get the sermons against the evils of materialism from conservatives it's to protect the holdings of the wealthy who were advantageous in an unjust form of economic distribution if not outright criminality?
Of course the wealthy would argue tradition if all they did was inherit it, or some version of Social Darwinism and/or Prosperity Gospel if they are among the Nouveau Riche.
Diabolus est Deus Inversus
Milquetoast - try to buy gas or groceries with a gold bar. See how far you get. You sounds like one of Glenn Beck's loons. Do you have a stockpile of guns and canned goods in your basement, too?
No can opener though.
Diabolus est Deus Inversus
David Frum is a waste of space. He's like a bad TV commercial. Basic Corporate apologist that doesn't have a clue about running a business.
And his mother dresses him funny.
Bob Frum said at the last," And let us not look for a financial solution to economic problems". Tell us Bob how would you do that?
'
If Wall Street was interested in creativity would they be pushing alternative energy research and greening technology as investments?
Diabolus est Deus Inversus
Look at the private sector. It's not the corporate elite - the ones that have DC in their pocket - that have created anything. It's to their benefit to SQUASH any kind of creativity because it translates to competition. They are the enemy of the very thing the Frums of this world say they believe in - the so-called Free Market.
The only creativity to have come out of Wall St. is their accounting.
"Marked-to-Market" was a major fraud (Ponzi Scheme) when Enron did it. It hasn't become any better, or legitimate when the Wall Street Mobsters adopted it en mass to prop up their CDOs and CDSs.
"Those who make peaceful revolution impossible will make violent revolution inevitable."
-- John F. Kennedy
The Wall St. Banksters were not practicing Democratic Capitalism, they were practicing "Command Capitalism" very similar to that practiced in the old Soviet Union, Mao's Communist China, and other despotic countries where the decisions came down from those on high.
Democratic capitalism lets the regulated marketplace work and keeps the "ship" from crashing onto the rocky shores. Regulation saves capitalism from it's own deadly financial sins. We must regulate our our system will die!
He is willing to face the opposition in front of the camera, contrary the the rest of his ilk. I don't think Kristoll or Feith would show up elsewhere than at Fox
when all I can see are his discount hair plugs. omg.
Made from horse hair.
Diabolus est Deus Inversus
extracted from the posterior part of the animal.
Canada to Frum:
"Dont come back....ever."
I'm Boycotting NewsCorp! Heres what not to buy: http://www.cjr.org/resources/index.php?c=news...
Frum is a speech writer, and I guess other people are better at spew his venom. I've never seen him make a coherent part, just use alot of words that amount to nothing.
The home computer, the cell phone, GPS ................
If you need funds to pay for essentials, you have a revenue problem
If you need funds to pay for frivolity, you have a spending problem
...and I want my explanation positively laden with specific, verifiable examples.
And I want a scorecard and a pencil.
... Repugs arguing against the 'Redistribution of Wealth' mantra, as if fairer taxation were a criminal act by the government.
'Redistribution of Wealth' is really the appropriation of
wealthmoney from the common people and distributed to the super rich, via high interest rates on credit cards, overdraft fees on same, and bad check fees on checking accounts. High premiums on health insurance where 30% goes to the rich and super rich and not health care with reasonable overhead. I am sure common people would pay off their credit card debt if they had the wherewithal and self-insure like fat-ass Limbaugh. What repugs call 'Redistribution of Wealth' is in reality 'Reclamation' of what was wrongfully misappropriated.If you need funds to pay for essentials, you have a revenue problem
If you need funds to pay for frivolity, you have a spending problem
Frum: "Look at me! I made a dreamcatcher"!
Many thieves are very creative and we don't want to stifle that.
Watch this car thief:
http://www.youtube.com/watch?v=NXu4vhstK0s
Promote creativity. Shrink big government. Abolish all laws.
"What is it with these Republicans who constantly pretend they want to clean up a system, but when it comes to the specifics, they really just want to keep the status quo." [sic]
Edited for accuracy:
What is it with these Republicans and Democrats who constantly pretend they want to clean up a system, but when it comes to the specifics, they really just want to keep the status quo?
"And let us not look for a financial solution to economic problems."
Because finance and the economy are not related? Then why did we give all that money to prop up the banks, if it wasn't for the reason they told us, which was to lessen the impact on the economy or prevent an economic meltdown?
"And let us not look for a financial solution to economic problems."
The same comment hit me too. If "financial solutions" don't solve economic problems, why did they want the BAILOUT?
And it has been the history of my life that "financial solutions" solve my own economic problems.
We need to get the people who are full of B.S. Gibberish off these shows. Maybe if we quit watching them? Or complain to their sponsors?
Attention bankers: Your profession is boring. We do not require creativity or innovation from you anymore. We need you to keep a balanced sheet at the bank. If it is boring, that's too bad. If you wanted to innovate, you should have become a scientist or an inventor. Any talk about stifling your creativity is obviously an attempt to escape regulation. That is all.
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