The failure of Obama's economics

[BigKingBob]

Nomadic, your thinking of Libertarianism.

No he's right, its just that somehow the terms "liberal" and "conservative" have become twisted to mean "left wing" and "right wing"

 

[Eiseman]

I think you mixed those up. Liberalism comes from the latin "liber", meaning free. Liberalism stands for personal freedoms and as limited government meddling as possible. To liberals, government is a necessary evil - an evil they want to limit as much as possible.

Conservatism, on the other hand, comes from the latin "conservare" - to preserve. Conservatism, and conservative individuals through it, want to conserve the social and economic order with the motivation that society is a frail thing, and change must therefore be brought about with care. Conservatives want to limit personal freedom in favour of government control, so that change may be easier regulated.

I just felt you needed a bit of correction, since you had those two concepts severely mixed up, heh.

Well that's only half true. You've defined "liberal" and "conservative" in terms of social issues, not economics. I think you'll find that both sides' opinions on the role of government change when money is involved.

 

[TomNook]

I think you mixed those up. Liberalism comes from the latin "liber", meaning free. Liberalism stands for personal freedoms and as limited government meddling as possible. To liberals, government is a necessary evil - an evil they want to limit as much as possible.

Conservatism, on the other hand, comes from the latin "conservare" - to preserve. Conservatism, and conservative individuals through it, want to conserve the social and economic order with the motivation that society is a frail thing, and change must therefore be brought about with care. Conservatives want to limit personal freedom in favour of government control, so that change may be easier regulated.

I just felt you needed a bit of correction, since you had those two concepts severely mixed up, heh.

Well that's only half true. You've defined "liberal" and "conservative" in terms of social issues, not economics. I think you'll find that both sides' opinions on the role of government change when money is involved.

Liberalism is the school of thought that teaches all men are good. This can lead to larger government in order to make everyone equal. Conservative is the school of thought that teaches the duality in man. This can lead to smaller government to allow the skilled to rise to the top.

 

[werepossum]

Conservatives believe government is a necessary evil and that the free market and individuals acting in their own best interest make America great. Liberals believe the free market and individuals acting in their own best interest are necessary evils and government makes America great.

I think you mixed those up. Liberalism comes from the latin "liber", meaning free. Liberalism stands for personal freedoms and as limited government meddling as possible. To liberals, government is a necessary evil - an evil they want to limit as much as possible.

Conservatism, on the other hand, comes from the latin "conservare" - to preserve. Conservatism, and conservative individuals through it, want to conserve the social and economic order with the motivation that society is a frail thing, and change must therefore be brought about with care. Conservatives want to limit personal freedom in favour of government control, so that change may be easier regulated.

I just felt you needed a bit of correction, since you had those two concepts severely mixed up, heh.

I'm sorry, I didn't realize anyone still actually believed what a politician says whilst running for office.

[...]

Similarly, if you do not understand liberal and conservative wings of the American political spectrum, how can we even have a political conversation? Have you not noticed that for every problem, liberals call for government regulation, a new government program? Have you not noticed conservatives calling for smaller, less intrusive government and de-regulation?

Err... Again. Liberal = Less government, conservative = more government. First you say you shouldn't trust the politicians when they say they do one thing, but rather look at them doing the opposite... Then you completely ignore your own advise by accepting people that (apparently) call for more government as liberal, while accepting people that (apparently) call for less government as conservative. Following your reasoning, you should completely disregard what they say they are, and instead look at the republicans as liberal and the democrats as conservative (if their policies do drift the way you say they do). Because really, now you're just contradicting yourself.

While liberal in the classic sense stood for a love of freedom, that's no longer true of American politics. Those who style themselves liberal here want the government involved in everything, whilst our conservatives supposedly want government to be less intrusive. A good way to think of contemporary American politics is that conservatives want to control everything thing you do, while liberals want to control everything you do AND everything you think.

 

[Samurai Goomba]

Conservatives believe government is a necessary evil and that the free market and individuals acting in their own best interest make America great. Liberals believe the free market and individuals acting in their own best interest are necessary evils and government makes America great.

I think you mixed those up. Liberalism comes from the latin "liber", meaning free. Liberalism stands for personal freedoms and as limited government meddling as possible. To liberals, government is a necessary evil - an evil they want to limit as much as possible.

Conservatism, on the other hand, comes from the latin "conservare" - to preserve. Conservatism, and conservative individuals through it, want to conserve the social and economic order with the motivation that society is a frail thing, and change must therefore be brought about with care. Conservatives want to limit personal freedom in favour of government control, so that change may be easier regulated.

I just felt you needed a bit of correction, since you had those two concepts severely mixed up, heh.

I'm sorry, I didn't realize anyone still actually believed what a politician says whilst running for office.

[...]

Similarly, if you do not understand liberal and conservative wings of the American political spectrum, how can we even have a political conversation? Have you not noticed that for every problem, liberals call for government regulation, a new government program? Have you not noticed conservatives calling for smaller, less intrusive government and de-regulation?

Err... Again. Liberal = Less government, conservative = more government. First you say you shouldn't trust the politicians when they say they do one thing, but rather look at them doing the opposite... Then you completely ignore your own advise by accepting people that (apparently) call for more government as liberal, while accepting people that (apparently) call for less government as conservative. Following your reasoning, you should completely disregard what they say they are, and instead look at the republicans as liberal and the democrats as conservative (if their policies do drift the way you say they do). Because really, now you're just contradicting yourself.

While liberal in the classic sense stood for a love of freedom, that's no longer true of American politics. Those who style themselves liberal here want the government involved in everything, whilst our conservatives supposedly want government to be less intrusive. A good way to think of contemporary American politics is that conservatives want to control everything thing you do, while liberals want to control everything you do AND everything you think.

Drat. I was gonna say this. Sometimes what a word meant WHEN IT WAS CRAFTED is not the same thing IT MEANS NOW. Case in point: "gay." Words and meanings change over the years. The liberals of today are more socialist than anything else. Conservatives, on the other hand, favor the "sink or swim" nature of free enterprise, and are generally against sweeping social reforms and handouts. These are generalizations, of course. People are still people, and I think most people (if they were honest) would admit they have moments where they agree with one side, and others where they favor the opposite position. For example, I am strongly against abortion, but very much in favor of destroying big trusts.

 

[werepossum]

SNIP

You make it very hard to debate when you take one line from a paragraph, then challenge it or just state that it isn't true. Making a counterpoint would be more useful.

My point was that the USA's economy is the source of much of the EU nations' wealth, overcoming low productivity by investing in American companies and American markets. When much of the EU economy was bad, the USA was only marginally affected. Similarly, when Japan's economy crashed it had a dampening effect in the USA, but not an answering recession. The converse isn't true because other nations rely on American markets much more so than America relies on their markets, something which has resulted in a lot of wealth being drained from America. (True, this is due both to other nations structuring their economy to take advantage of the US market and to the US being unable to find the will to live within our means.) Piggybacking American investments IS deriving wealth from the USA, and this particular time, it bit the EU nations in the ass big time. Assuming that the USA will always be the goose laying the golden eggs is no longer a safe assumption.

As to the things you specifically mentioned, we already have uniform laws and regulations. As I was attempting to point out, within every bill passed in Congress there are myriad interventions for individual companies in the case of tax breaks, regulatory breaks, and other special treatment. But we're now going past even that. Now the government is actually buying a stake in certain companies. How can we have anything approaching a free market when the government is one of the players? Bad enough that lobbyists are buying Congressmen; now those same Congressmen will be a second layer of shadow management in selected companies. And like the Mafia, the government's interests and the government's share always come first.

One of our big problems is that in this case, the government has been driving very unsound economic policies via Fannie Mae and Freddie Mac. It's bad enough to insist that banks make loans to people who either manifestly can't afford to pay them back, or else have a record of financial irresponsibility. Our government did even worse, by setting up a system whereby GSEs bought the dodgy mortgages, removing the risk from the people making those loans. Consequently those people went to even greater lengths, using in-house appraisers to inflate the actual value of the homes, charging higher interest rates which are set artificially low for the first year or three, loaning up to 125% of the home's supposed value. This was brought out in Congressional hearings in 2004 and 2005; McCain, to his credit, led the charge. Democrats blocked any changes using procedural rules until in 2006 they took over both chambers.

And of course, to be fair the Republicans led the charge in de-regulating banks and other financial institutions. Thus what should be a crash in the housing and home mortgage industries becomes a crash that threatens companies in every sector. There aren't any clean hands on either side, and worse, both sides are ignoring the underlying problems. That means this bailout will only insure that even larger future bailouts will be necessary.

EDIT: Forgot to mention - anti-trust legislation is government intervention; of course American Democrats and liberals are more likely to support it than are American Republicans conservatives.

 

[werepossum]

Those who style themselves liberal here want the government involved in everything, whilst our conservatives supposedly want government to be less intrusive.

Except marriage, abortion, drug use, and the separation of church and state.

You know, minor stuff people don't really care about... ;-D

To be fair, a strong majority of Democrats also oppose gay marriage, late-term abortion, and legalized drug use, and are believers in Christ, although admittedly much less so than for Republicans. I think the smart view is the Libertarian view: Marry whom you wish but force no insurance company to cover your spouse, abort any non-viable babies you wish but no viable babies, use drugs if you wish but demand no wealth from others to patch up your wretched life, and establish no State Church but feel free to enact laws based on morality derived from your religion to the extent they do not affect another's freedom.

Although come to think of it, that's really more my philosophy than the Libertarians. They just want legalized drugs.

 

[JMeganSnow]

-Olgiopoly, or worse, Monopoly (check out history if you don't beleive me)

There are two major points that rebut this:

a.) Coercive monopolies cannot come into existence without government intervention.

b.) Non-coercive monopolies are not a bad thing.

A coercive monopoly is one that enjoys the ability to use force to prevent the existence of competitors. An example of this would be the Central Pacific railroad, which received a grant from the California legislature that prevented competitors from entering any California port.

Non-coercive monopolies only come into existence because they are massively efficient and productive and no competitor has yet been able to match them. Outlawing *this* means *forcing* people to pay *higher* prices for *shoddier* goods. Just how is this company abusing people? I'm not hurt if there's only *one* neighborhood store as long as the prices are reasonable. Competition is not intrinsically beneficial.

A massivly dissatisfied, dehumanised workforce. (Leading to civil unrest, and,if unchecked, communsim)

So, *just like* the faceless mobs of half-starved Soviet peasants standing in line for four hours for bread? Oh, wait, that's COMMUNISM. Funny how you're pretty much directly quoting Marx here. Are you saying that we should adopt Socialism to save us from Communism? Isn't that like saying "you should commit suicide so I can't murder you."

Grossly uneven distribution of wealth (leading to economic instability See: tne Great Deppression)

What's wrong with uneven distribution of wealth? If I don't produce like a CEO, I don't expect to be rewarded like one. Economic instability on a massive scale is ultimately caused by the government screwing around with the natural factors that control the economy--kind of like importing rabbits to Australia. If you turn off a man's pain receptors he has no way to know that he has developed a major infection until it's too late.

And you shoulc pick up a nice British one (Written by the Cambridge. C.A.M.B.R.I.D.G.E.). And compare the british economy to the Austrian one. Then actually engage the brain, and consider WHO HAS THE BETTER SYSTEM.

*Snort* The Austrian school of economics was founded by Ludwig von Mises (an Austrian). That doesn't mean they actually use his system *in* Austria, which IIRC is another irrelevant quasi-socialist European mediocracy.

1. How was the Great Deppression caused by 'interference in the money supply'? How in gods good name can interest rates create so gross a period of economic devestation as happened between 1929 and 1941!? Oh, wait, it can't.

Oh yes it can. I'll quote from Nathaniel Branden's essay "Common Fallacies About Capitalism":

Throughout most of the 1920's, the government compelled banks to keep interest rates artificially and uneconomically low. As a consequence, money was poured into every sort of speculative venture. By 1928, the warning signals of danger were clearly apparent: unjustified investment was rampant and stocks were increasingly overvalued. The government chose to ignore these danger signals.

A free banking system would have been compelled, by economic necessity, to put the brakes on this process of runaway speculation. Credit and investment, in such a case, would be drastically curtailed; the banks which made unprofitable investments, the enterprises which proved unproductive, and those who dealt with them, would suffer--but that would be all; the country as a whole would not be dragged down. However, the "anarchy" of a free banking system had been abandoned--in favor of "enlightened" government planning.

I recommend the entire essay so that you can see those paragraphs in context, of course.

Consumers are irrelvevant. Well, please cite whatever bullshit textbook/magaxine/cornflakes packet you're getting that from. The entirity of the world's wealth is regarded (by every economist since ADAM SMITH) as being tied up in consumers.

This is known as "argument from authority" e.g. "who are you to question what everyone else said"? And is a logical fallacy.

It is important to be precise with terminology. Properly in economics consumers and producers are the same thing regarded from slightly different angles--you cannot consume goods unless you have first produced them, and you cannot trade unless you have a valuable consideration to offer in exchange. Hence why the "consumption" aspect is irrelevant. However, nowadays this has become an equivocation, a word that conflates a *desire* for products with the ability to *pay* for those products. As in my farm example above, people consuming goods creates no wealth--it is a steady *drain* on wealth. Your only hope to increase your wealth is to outrun your immediate needs for consumption and accumulate *unconsumed* goods.

By the modern model, a man who spends every penny he earns is somehow "wealthier" than a man with a million dollars in the bank. How on earth does this make sense? It is this detachment from actual reality that has rendered modern economic theories utterly impotent.

Without supply, there is no demand, and without demand, there is no supply.
Each is utterly interdependant on the other.

And here we have another example of dealing in terms of abstractions detached from reality. It is when the supply greatly exceeds the demand that some of the greatest beneficial changes in human history have come about. Are we *suffering* now because we have an *abundance* of food?

It is true that it is possible for a company to make a bunch of stuff and go bankrupt because it cannot recoup its investment, but this is not oversupply--this is inefficient use of capital. The same company may discover a new method of production, make the same amount of stuff, drop prices by half, and *still* rake in a huge profit.

This comes about because supply and demand are *characteristics* of economic activity--just like competition is a common characteristic of laissez-faire capitalism--but the fact that you *have* competition does not therefore mean that you have laissez-faire capitalism.

Demand for goods is *unlimited*, what is not unlimited is demand for *particular* goods at *particular* prices.

Investment is what causes all these damn reccesions, my good sir!

Don't call me "sir". I filled out my profile for a reason. Unless you're implying that my obvious superiority is not limited by considerations of gender, in which case you would be absolutely correct.

It is overconcentration of wealth in the hands of the rich that leads to stock market booms, as they invest in the stocks/bonds market. But what happens when it all goes pear-shaped? Wages get cut, welfare gets scaled back, lots of money in essence stops flowing, and we all hunker down for the economic equivalent of a nuclear winter.

Huh? Most investment capital comes from the savings of the middle class, with banks and various other financial entities acting as a kind of clearinghouse or intermediary. How is this overconcentration of wealth in the hands of the "rich"? Unless you are making a *very* unclear allusion to the way the corporate business model functions (In which case I would recommend you listen to Yaron Brook's lecture series on The Corporation.) and the fact that the use of much of this money is directed by heads of companies, people who usually command high salaries and are thus "rich".

There are two kinds of stock market booms: one is the kind when productivity is greatly increasing (and hence, profits) stemming from a large amount of *justified* speculation. The other occurs when there is a great deal of *unjustified* speculation occurring and stocks are overvalued. The situations are not equivalent and have different results.

When stocks become *overvalued* there is always, eventually, a correction (as with the .com bubble). The *problem* is that this correction comes about because banks find themselves with restricted capital reserves and must raise interest rates and curtail lending in order to remain profitable. With the Fed, interest rates are centrally controlled and banks are no longer limited to the state of their reserves to dictate how much they can lend. More and more resources get pumped into the bubble as the unprofitable businesses take out more and more loans until there is a titanic crash.

I'm sorry, by your logic the person who put their life savings into a bank, which subsequently collapses, is at fault for making use of that bank. I find this idea so abjectly unpalateble that I'm having trouble holding back the bile in my throat. Leaving aside the fact that many smaller towns only have one bank in them, the same laissiz-faire system promoted by rightwingers such as yourselves is alos responsible for many people being unable to actually tell whether a bank is stable or not, as it places no requirement on banks to be open at all with their investements

So, irresponsible people who don't question what the bank is doing with their money or seek alternatives should just be cosseted at the expense of people who *were* responsible? *WHY?!* I find it many things "unpalatable" but I don't let that interfere with my knowledge of reality or my sense of justice.

You think a system where these people's funds are instead backed by the unknowable whim of government politicians is somehow *better?* HOW?! Are these people going to be better off when it's not just *their* bank failing but the *financial system of the entire country*?

There are no guarantees in life and there is no divine right to stagnate in ignorance. It is unfortunate when people make bad decisions but it is by no means the end of the world if they retain the freedom to act.

As Benjamin Franklin famously said: "They who would give up an essential liberty for temporary security, deserve neither liberty or security."

And boy, do they get it.

 

[Brett Alex]

Those who style themselves liberal here want the government involved in everything, whilst our conservatives supposedly want government to be less intrusive.

Except marriage, abortion, drug use, and the separation of church and state.

You know, minor stuff people don't really care about... ;-D

I'm just shooting off the hip here, but wouldn't it be fair to say that both sides want governments involved in everyday life, but in different areas of everyday life?

For example (and I'm speaking really broadly here):

"Liberal" governments want to have gun-control and limited economic control. They want to stay out of religion and issues like abortion.

"Conservatives" want the government to have tighter law and order control (PATRIOT act etc) and a say in issues like gay marriage and keeping drugs illegal. They want to leave the market free and things like gun laws to not be highly restrictive.

But then again thats just my pretty uninformed opinion.

 

[JMeganSnow]

While liberal in the classic sense stood for a love of freedom, that's no longer true of American politics. Those who style themselves liberal here want the government involved in everything, whilst our conservatives supposedly want government to be less intrusive. A good way to think of contemporary American politics is that conservatives want to control everything thing you do, while liberals want to control everything you do AND everything you think.

Actually it would be more correct to say that the Liberals here are in a hurry to make America socialist and the Conservatives claim they want to go slower--an amusing claim considering that most of the really big leaps and bounds in the direction of outright socialism have been enacted by Conservatives. (See Bush's lovely prescription-drug benefit.)

The main difficulty of deciding who to vote for in this election is the fact that the candidates are fundamentally identical: they're both bad. Very, very bad. Both favor some form of mandatory "national service". Both want massive increased government interference in everyone's lives. Both have nothing but disdain for freedom of speech--one of the most important and fundamental freedoms because it is the only method by which persuasion and thus *peaceful* change can come about. Once people are no longer able to attempt to persuade their opponents, their only recourse is to the muzzle of a gun. Both are frightfully ignorant of basic economics.

You can conceivably make the case that McCain is worse because, like many Republicans, he wishes to demolish the wall between church and state and legislate Christian morality, whereas Obama doesn't *seem* in such a hurry to destroy what are commonly called "personal" freedoms. I emphasize *seem* because the Obaminator has made a point of declaring himself a "human Rorsach test" attempting to be all things to all people.

Personally, I'm not going to vote because I refuse to even make the suggestion that I'm somehow in *favor* of one of these candidates. When asked to choose between evils, I always select "none of the above".

 

[werepossum]

Those who style themselves liberal here want the government involved in everything, whilst our conservatives supposedly want government to be less intrusive.

Except marriage, abortion, drug use, and the separation of church and state.

You know, minor stuff people don't really care about... ;-D

I'm just shooting off the hip here, but wouldn't it be fair to say that both sides want governments involved in everyday life, but in different areas of everyday life?

For example (and I'm speaking really broadly here):

"Liberal" governments want to have gun-control and limited economic control. They want to stay out of religion and issues like abortion.

"Conservatives" want the government to have tighter law and order control (PATRIOT act etc) and a say in issues like gay marriage and keeping drugs illegal. They want to leave the market free and things like gun laws to not be highly restrictive.

But then again thats just my pretty uninformed opinion.

On the contrary, that sounds like a very informed opinion. You nailed it.

A conservative is a liberal who has just been robbed, and a liberal is a conservative who's just been arrested. Or something like that. We've become addicted to using the power of government.

 

[werepossum]

While liberal in the classic sense stood for a love of freedom, that's no longer true of American politics. Those who style themselves liberal here want the government involved in everything, whilst our conservatives supposedly want government to be less intrusive. A good way to think of contemporary American politics is that conservatives want to control everything thing you do, while liberals want to control everything you do AND everything you think.

Actually it would be more correct to say that the Liberals here are in a hurry to make America socialist and the Conservatives claim they want to go slower--an amusing claim considering that most of the really big leaps and bounds in the direction of outright socialism have been enacted by Conservatives. (See Bush's lovely prescription-drug benefit.)

The main difficulty of deciding who to vote for in this election is the fact that the candidates are fundamentally identical: they're both bad. Very, very bad. Both favor some form of mandatory "national service". Both want massive increased government interference in everyone's lives. Both have nothing but disdain for freedom of speech--one of the most important and fundamental freedoms because it is the only method by which persuasion and thus *peaceful* change can come about. Once people are no longer able to attempt to persuade their opponents, their only recourse is to the muzzle of a gun. Both are frightfully ignorant of basic economics.

You can conceivably make the case that McCain is worse because, like many Republicans, he wishes to demolish the wall between church and state and legislate Christian morality, whereas Obama doesn't *seem* in such a hurry to destroy what are commonly called "personal" freedoms. I emphasize *seem* because the Obaminator has made a point of declaring himself a "human Rorsach test" attempting to be all things to all people.

Personally, I'm not going to vote because I refuse to even make the suggestion that I'm somehow in *favor* of one of these candidates. When asked to choose between evils, I always select "none of the above".

This is all true except that American law is pretty much already based on Christian morality, at least to the extent of 16th to 18th century English common law. What is in play today is not how much we extend that, but to what extent we tear it down. In any event, I don't think McCain is much of a religious right kind of guy. Until he began running for president and needed their votes, he spent most of his time attacking social conservatives, especially the religious right. It's why he was the media's favorite Republican (not a title with a lot of competition, admittedly) until he became the candidate to oppose The Messiah.

Also, although I agree with most of your previous posts, almost nothing is completely black or white. While FDR's big government plans and work programs didn't help the country out of the Great Depression, they were very important to the large numbers of people who depended on those programs for food and shelter at the time. My paternal grandmother used to tell stories of people coming to the back door to trade chores for food, as her mother (though a widow) owned two rental houses and, although they were very mean little houses, was therefore one of comparatively few people in the town town in a position to give food. The New Deal also kept a lot of people from becoming so desperate that they became bandits, which is the case in many countries suffering that kind of economic downturn.

Also, this is off topic, but don't I know your name? Do you have work published?

 

[Rolling Thunder]

There are two major points that rebut this:

a.) Coercive monopolies cannot come into existence without government intervention.

b.) Non-coercive monopolies are not a bad thing.


Non-coercive monopolies only come into existence because they are massively efficient and productive and no competitor has yet been able to match them. Outlawing *this* means *forcing* people to pay *higher* prices for *shoddier* goods. Just how is this company abusing people? I'm not hurt if there's only *one* neighborhood store as long as the prices are reasonable. Competition is not intrinsically beneficial.

It would seem that you are a rather fanatical beleiver that somehow the the market system is one of grandeur, splendour and enlightened beauty, rather than accepting the fact that human beings are intrinsically flawed and any overconcentration of power is in general, a bad thing.

Your analogy to the single neighbourhood store is also intrinsically flawed, because you can easily drive elsewhere to purchase goods. However, if every store in your country was owned by a single company, and we accept your form of government whereby the state fails to intervene, then we see a situation whereby said company can set prices and their own profit margins to absurd levels in the knowledge that THEY HAVE NO ONE TO COMPETE WITH. Never mind the pre-documented tendancies to spiralling costs due to the lack of competitors, never mind the overlap between absurdly powerful businessowners and politicians (As said before, we're assuming some higher power is preventing government from intervening), the simple fact of the matter is that you, you cannot name a single example of an efficent monopoly outside of state control that has ever been efficent.

So, *just like* the faceless mobs of half-starved Soviet peasants standing in line for four hours for bread? Oh, wait, that's COMMUNISM. Funny how you're pretty much directly quoting Marx here. Are you saying that we should adopt Socialism to save us from Communism? Isn't that like saying "you should commit suicide so I can't murder you."

As Truman said, people will turn to communism when capitalism fails. That is what happened in Cuba, Russia, China-all the communist nations, in fact! Whether it will produce a higher standard of living for them is irrelevant-starving people are desperate people. Therefore, they will try anything-including communism. Why? Because they have nothing to lose. Again, surely it is logical to utilise a system whereby there is at least a minimal guarantee that people will not reach this level. I beleive thephrase is: Instead of having a large slice of cake with a dagger hidden in it, why not take a smaller slice but enlarge the cake.

What's wrong with uneven distribution of wealth? If I don't produce like a CEO, I don't expect to be rewarded like one. Economic instability on a massive scale is ultimately caused by the government screwing around with the natural factors that control the economy kind of like importing rabbits to Australia. If you turn off a man's pain receptors he has no way to know that he has developed a major infection until it's too late.

1. Provide some evidence, please. Historical evidence, that is, not randomised essasys written by your fellow rabid partisans. What is wrong with uneven distribution of wealth?

Well, firstly, it limits the markets of most producers. Henry Ford understood this, when he paid his men enough money to buy the cars they produced. If an enormous concentration of wealth occurs, then it puts inherent limits on the amount of goods that the market can absorb. No matter how rich you are, you can only purchase a set number of radios, TVs etc. The middle classes are much the same, in that these people will only, on average, purchase at most two cars, 2 TVs, 3/4 radios in the short run. Once you've sold all the TVs, radios, cars and computers that you can, the demand naturally begins to plummet.

Since a teenager of 14 years can be made to understand this, I am honestly surpirsed that you find it so difficult a concept to grasp.

Secondly, it is entirely alien to the concept of equity. While I have no objection to 'the rich' as a group, I do object tothem pretending that there wealth is purely a result of their own efforts, rather than a result of their own efforts and a good-sized helping of good luck thrown in.

Thirdly, if superconcentrated wealthwas the most economic system around, the feudalism would have been incredibly efficent. Yet pre-industrial, commerialised Holland was able to conclusively beat semi-feudalised England at several wars despite being one-quarter of her size! (Neill Ferguson: Empire, and Britain and Her Army, Correli Barnett)

Throughout most of the 1920's, the government compelled banks to keep interest rates artificially and uneconomically low. As a consequence, money was poured into every sort of speculative venture. By 1928, the warning signals of danger were clearly apparent: unjustified investment was rampant and stocks were increasingly overvalued. The government chose to ignore these danger signals.

A free banking system would have been compelled, by economic necessity, to put the brakes on this process of runaway speculation. Credit and investment, in such a case, would be drastically curtailed; the banks which made unprofitable investments, the enterprises which proved unproductive, and those who dealt with them, would suffer--but that would be all; the country as a whole would not be dragged down. However, the "anarchy" of a free banking system had been abandoned--in favor of "enlightened" government planning.

Gott in Himmel! I never realised how stupid people honestly were. Well, I did, but I assumed most of them would at least have the decency to hide their ignorance away.

Firstly, Nat here is mistaking 'cause' for 'effect'. The cause of the 1920s boom was the little blip known to most English-speakers as 'The First World War', where America made so much money off Western Europe's struggle it catapulted your industy forward approximately 40 years. The effect of this war was to traumatise the dear mothers of America into electing a series of pro-business Republican Presidents ('Return to normallcy'-HAH!) and enact a series of rather stupid policies based on the principles of laissaiz-faire economics. This, being an effect, as also a cause of THE GREAT DEPPRESSION (Thunder and Lightning effects)




T

his is known as "argument from authority" e.g. "who are you to question what everyone else said"? And is a logical fallacy.

It is important to be precise with terminology. Properly in economics consumers and producers are the same thing regarded from slightly different angles--you cannot consume goods unless you have first produced them, and you cannot trade unless you have a valuable consideration to offer in exchange. Hence why the "consumption" aspect is irrelevant. However, nowadays this has become an equivocation, a word that conflates a *desire* for products with the ability to *pay* for those products. As in my farm example above, people consuming goods creates no wealth--it is a steady *drain* on wealth. Your only hope to increase your wealth is to outrun your immediate needs for consumption and accumulate *unconsumed* goods.

No, but again, your analogy is so grotesquely flawed it resembles nothing so much as a Caliban of right-wing economics. Without anyone to consume your goods, then you will go out of business. If the man who saves a million dollars does not spend it, that million dollars is doing fuck-all for the world aside from possibly being loaned out. But investment is nothing more than a neccesary aide to the firm for expansion-it's very surivival hinges upon consumption.

Put simply: If people can't buy, you can't sell. Since, as I've said earlier, nearly every human and some of the more intelligent dogs can understand that, I am truly surprised you find it so difficult to comprehend

And here we have another example of dealing in terms of abstractions detached from reality. It is when the supply greatly exceeds the demand that some of the greatest beneficial changes in human history have come about. Are we *suffering* now because we have an *abundance* of food?

Whenit becomes so that farmers are incapable of selling their goods at a profit because of gross overproduction, then yes, an excess of supply is a bad thing. (Great Deppression again-never argue with a man with more history at his fingertips than most school history departments)

Demand for goods is *unlimited*, what is not unlimited is demand for *particular* goods at *particular* prices.

Is that why a demand curve always slopes downwards? Hmmm....

Investment is what causes all these damn reccesions, my good sir!

Don't call me "sir". I filled out my profile for a reason. Unless you're implying that my obvious superiority is not limited by considerations of gender, in which case you would be absolutely correct.

That will not save you. And as for mistaking you for a male- I do apolgise. Profusely. I am simply unused with females who fail to grasp such simple economic terms, though I must praise your capacity for waffle-it excedes all the expectations of your sex.

Huh? Most investment capital comes from the savings of the middle class, with banks and various other financial entities acting as a kind of clearinghouse or intermediary. How is this overconcentration of wealth in the hands of the "rich"? Unless you are making a *very* unclear allusion to the way the corporate business model functions (In which case I would recommend you listen to Yaron Brook's lecture series on The Corporation.) and the fact that the use of much of this money is directed by heads of companies, people who usually command high salaries and are thus "rich".

And much of this investment capital is invested in the stock market, which is of no benifit to anyone barring stockbrokers. The market creates nothing productive, nothing substantial and nothing of any value. It is, in the words of my right-wing economics teacher 'Paper chasing paper'

There are two kinds of stock market booms: one is the kind when productivity is greatly increasing (and hence, profits) stemming from a large amount of *justified* speculation. The other occurs when there is a great deal of *unjustified* speculation occurring and stocks are overvalued. The situations are not equivalent and have different results.

When stocks become *overvalued* there is always, eventually, a correction (as with the .com bubble). The *problem* is that this correction comes about because banks find themselves with restricted capital reserves and must raise interest rates and curtail lending in order to remain profitable. With the Fed, interest rates are centrally controlled and banks are no longer limited to the state of their reserves to dictate how much they can lend. More and more resources get pumped into the bubble as the unprofitable businesses take out more and more loans until there is a titanic crash.

I would agree with you, except I object to the fact that the poor sap on the street who dosen't invest in the markets is the one who bites the bullet.

So, irresponsible people who don't question what the bank is doing with their money or seek alternatives should just be cosseted at the expense of people who *were* responsible? *WHY?!* I find it many things "unpalatable" but I don't let that interfere with my knowledge of reality or my sense of justice.

You think a system where these people's funds are instead backed by the unknowable whim of government politicians is somehow *better?* HOW?! Are these people going to be better off when it's not just *their* bank failing but the *financial system of the entire country*?

There are no guarantees in life and there is no divine right to stagnate in ignorance. It is unfortunate when people make bad decisions but it is by no means the end of the world if they retain the freedom to act.

I point out why-
A) The fact most people haven't the time to find out.
B) Even if they did, there is no legal obligation for banks to show them, or refrain from burying them in jargon.
C) 'Responsible' investment is always a subjective judgement call, and yet you expect some poor bastard on the street to be able to calculate what is a good or bad investment by a bank without access to most of the material.

And you ignore it. Why? Because you're lost. Because you're arguments are old-hat, antiquated and as viable in economic terms compared to mine as war elephants against mechanised infantry. Plus I have the moral high ground as well. Your system argues that somehow producers are the supreme form of life on this planet, rather than simply being a end-result of consumer demand, and, arguably, only 1/2 of the Yin-Yang spectrum.

As Benjamin Franklin famously said: "They who would give up an essential liberty for temporary security, deserve neither liberty or security."

And as Franlkin also said: 'Work faster, you fucking ni**er!' Actually, he probably employed people to do that for him.

I'll leave you with another quote: 'You remembered me.' The forgotten man

 

[Imitation Saccharin]

You make it very hard to debate when you take one line from a paragraph, then challenge it or just state that it isn't true. Making a counterpoint would be more useful.

I don't know enough to make counterpoints.

And like the Mafia, the government's interests and the government's share always come first.

Why?

This was brought out in Congressional hearings in 2004 and 2005; McCain, to his credit, led the charge. Democrats blocked any changes using procedural rules until in 2006 they took over both chambers.

Please cite a source.

 

[werepossum]

You make it very hard to debate when you take one line from a paragraph, then challenge it or just state that it isn't true. Making a counterpoint would be more useful.

I don't know enough to make counterpoints.

And like the Mafia, the government's interests and the government's share always come first.

Why?

This was brought out in Congressional hearings in 2004 and 2005; McCain, to his credit, led the charge. Democrats blocked any changes using procedural rules until in 2006 they took over both chambers.

Please cite a source.

Here are excerpts from the Wall Street Journal's coverage of the 2003 hearings, when the non-partisan Office of Federal Housing Enterprise Oversight (OFHEO) first came to Congress and told them that Fannie Mae and Freddie Mac were being mismanaged and were well on their way to insolvency. There were hearings in both House and Senate. Note the Democrats savaging the regulators. Note that these same Democrats are among the largest recipients of money from Fannie Mae and Freddie Mac. Not their supporters, not their fund raisers, the actual politicians. Note that this was after both GSEs admitted they had overstated earnings by billions of dollars.
http://online.wsj.com/article/SB122290574391296381.html

Here is a general description of the Fannie Mae and Freddie Mac debacle. Note that Bush tried to have oversight of these GSEs taken away from Congress, without success. There was a 2003 bill introduced by Hagel after the Freddie Mac accounting fraud came out. It never garnered enough votes to make it out of committee. I have read, though not confirmed, that McCain was a co-sponsor of that bill as well. A bill introduced by Senator Corzine similarly never made it out of committee. (Note that Republicans have not had enough votes in most committees to vote a bill out without at least one Democrat defection.)
http://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae_and_Freddie_Mac

Here is John McCain in May 2006, when he joined as a co-sponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005 after the report of Fannie Mae's malfeasance.
http://www.govtrack.us/congress/record.xpd?id=109-s20060525-16&bill=s109-190

Here is the text of the bill, Senate bill S.190, and a summary.
http://www.govtrack.us/congress/billtext.xpd?bill=s109-190
http://www.govtrack.us/congress/bill.xpd?bill=s109-190&tab=summary
The intent of the bill, like the 2003 Hagel bill, was to create an office outside of Congressional control, as Congress had proved itself unable to resist playing politics with its GSEs, to the point that both business ethics and good business practices had been abandoned.

These things are common knowledge to those who pay attention to politics between elections. To those who DON'T pay attention to politics between elections, this is a prime example of why you should. The government has a huge amount of power over our lives, and relatively seldom chooses to do what is best for the country rather than what is best for the party, politician, relative or lobbyist.

As to why the Mafia and the government's interests and shares always come first, it's because in each case, they are the partner with the power.

 

[Imitation Saccharin]

Note the Democrats savaging the regulators. Note that these same Democrats are among the largest recipients of money from Fannie Mae and Freddie Mac.

Although fascinating, you've only evidenced one of the sourced quote's claims

Please Cite
-usage of procedural rules to defeat the Republican majority
-Mccain's "leading the charge"

These things are common knowledge to those who pay attention to politics between elections.

It's not my politics.

As to why the Mafia and the government's interests and shares always come first, it's because in each case, they are the partner with the power.

If this is true, why isn't the average person under the yoke of tyranny?

 

[Panayjon]

I'm not an economist and I barely even pay attention to politics. However, I just really latched onto something because it was simple enough for my mind to wrap around.

This is easily demonstrable by the following thought experiment: what would happen if you were to start a farm in a remote area and then import 10,000 people who eat what you've grown but produce nothing? Within days your farm and anything you've saved will be gone. Those 10,000 consumers didn't somehow *magically* make your farm produce more. What happened? I thought consumption fuels production!

Although I understand you're making a point, the real world doesn't even remotely work that way. Because people want to consume they'll produce. Of those 10,000 people at least one of them is going to go start his/her own farm. In addition because you didn't specify that this was the end of the world, they can still import food to tide them over. In this way consumption still fuels the economy. The desire to obtain things and the need to eat are things you can pretty much count on, supplying to demand. Not supplying to... oh, you don't want this? Well, I guess I'll just throw all these E.T. cartridges over here then.

Back when most countries were agrarian societies this wasn't as true because you'd be more or less stuck in one profession. The candle maker made candles and damned, if the village wasn't going to buy his candles he'd just go to the next town over and hope they wanted them. However, its a global economy now and the nets can pretty much teach you how to do anything.

---

On another note, I really liked the form of government that Starship Troopers (the book, not the damned movie) presented. To quote from Wikipedia:

Starship Troopers is a political essay as well as a novel. Large portions of the book take place in classrooms, with Rico and other characters engaged in debates with their History and Moral Philosophy teachers, who are often thought to be speaking in Heinlein's voice. The overall theme of the book is that social responsibility requires being prepared to make individual sacrifice. Heinlein's Terran Federation is a limited democracy with aspects of a meritocracy based on willingness to sacrifice in the common interest. Suffrage belongs only to those willing to serve their society by two years of volunteer Federal Service "the franchise is today limited to discharged veterans", (ch. XII), instead of anyone "...who is 18 years old and has a body temperature near 37°C"[15] The Federation is required to find a place for anyone who desires to serve, regardless of his skill or aptitude.

There is an explicitly-made contrast to the democracies of the 20th century, which according to the novel, collapsed because "people had been led to believe that they could simply vote for whatever they wanted... and get it, without toil, without sweat, without tears."[16] Indeed, Colonel Dubois criticizes as unrealistic the famous U.S. Declaration of Independence guarantees concerning "Life, liberty and the pursuit of happiness". No one can stop anyone from pursuing happiness, but life and liberty are said to only exist if they are deliberately sought and paid for.

 

[Bored Tomatoe]

Can you say Biased?