Economic meltdown!

[Humodour]

I'm increasingly seeing less and less of a problem. Why NOT smooth out the cycles of bust? We do it with reserves of crude oil. We do it with food. Why not raw capital? It's not as if Wall Street doesn't make the USGov billions each year.

because we're ultimately using the taxpayer to pay for a plan that was created by government meddling in the first place. it is not so much "smoothing out the cycles," it is redistributing wealth. let 'em fail. stop the handouts. get the government out of the system.

 

taks

 

The more and more I understand the problem, the more and more I notice it was actually a failure in terms of ineffectual government regulation; the government was either too paralysed by free market rhetoric, or too deadlocked to institute a proper regulatory framework, and tried to regulate within the laissez faire framework instead through voluntary participation schemes, nasty letters, etc. It was impotent. Kind of like the UN.

 

But I'm sure you'll tell me it doesn't matter; that no government regulation could ever possibly work even though it does and has in various other countries around the world for many years now.

[taks]

The more and more I understand the problem, the more and more I notice it was actually a failure in terms of ineffectual government regulation; the government was either too paralysed by free market rhetoric, or too deadlocked to institute a proper regulatory framework, and tried to regulate within the laissez faire framework instead through voluntary participation schemes, nasty letters, etc. It was impotent. Kind of like the UN.

 

But I'm sure you'll tell me it doesn't matter; that no government regulation could ever possibly work even though it does and has in various other countries around the world for many years now.

hehe, you're funny.

 

ok, read this statement aloud and think about it for a second: government regulation created the problem in the first place. every example you could ever provide of "government regulation working" was caused, at least in part, by the very regulations themselves.

 

man. if it were a snake biting you in the ass...

 

taks

[Meshugger]

Atleast this crisis brings people together. On the right end you have Ron Paul voting against the bill, and on the left end you have Dennis Kucinich voting against it.

[taks]

There is a flaw there, Taks. It is the taxpayer money that bought the reserves of oil and food. Having a rainy day fund tucked away makes good sense as long as it is put to good use. You are right that this problem was created by government meddling in the first place, but now we have the opportunity to remove that meddling. I agree that Fannie and Freddie, and any corporation poorly run, should die, but that rainy day fund could be used to help people directly instead of being used to bailout companies. Of course, we need to get our spending way under control and work towards of eliminating the national debt first.

not a flaw at all. and no, we don't have the opportunity to remove that meddling, we're simply going to pile on more regulations. spend more money. take away more power from the people.

 

taks

[Humodour]

The more and more I understand the problem, the more and more I notice it was actually a failure in terms of ineffectual government regulation; the government was either too paralysed by free market rhetoric, or too deadlocked to institute a proper regulatory framework, and tried to regulate within the laissez faire framework instead through voluntary participation schemes, nasty letters, etc. It was impotent. Kind of like the UN.

 

But I'm sure you'll tell me it doesn't matter; that no government regulation could ever possibly work even though it does and has in various other countries around the world for many years now.

hehe, you're funny.

 

ok, read this statement aloud and think about it for a second: government regulation created the problem in the first place. every example you could ever provide of "government regulation working" was caused, at least in part, by the very regulations themselves.

 

man. if it were a snake biting you in the ass...

 

taks

 

Yeah, I get it, you think that free market **** ups are some divine faecal matter from heaven as long as the government didn't have anything to do with them. It's all about ideaology, not reality for you.

 

The free market is a means to an end (creating competition to lower prices for people and inspire innovation), not an end in itself. One day your free market ideologues will realise that. Or maybe you already do and preach it out of simple greed.

[Killian Kalthorne]

not a flaw at all. and no, we don't have the opportunity to remove that meddling, we're simply going to pile on more regulations. spend more money. take away more power from the people.

 

taks

 

I can hope, can I? *sniff*

[Meshugger]

Here are the links:

 

Dennis Kucinich: Linky.

Ron Paul: Linky.

 

Both really dislike the federal reserve and call for a hearing on their practices, but from two completely different viewpoints. Fun, isn't it?

[Humodour]

Here are the links:

 

Dennis Kucinich: Linky.

Ron Paul: Linky.

 

Both really dislike the federal reserve and call for a hearing on their practices, but from two completely different viewpoints. Fun, isn't it?

 

I'm sorry but after that weird libertarian Internet campaign, I've learnt to shut out anybody who brings up Ron Paul in a serious conversation.

[taks]

Both really dislike the federal reserve and call for a hearing on their practices, but from two completely different viewpoints. Fun, isn't it?

it is, IMO, unconstitutional, and probably the biggest problem with our system. the fed is not a government institution, btw. booms and cycles are ultimately the result of the fed's control of the money supply. contrary to the socialist position that such regulation saves us from these extreme events, it actually causes them.

 

taks

[Meshugger]

Both really dislike the federal reserve and call for a hearing on their practices, but from two completely different viewpoints. Fun, isn't it?

it is, IMO, unconstitutional, and probably the biggest problem with our system. the fed is not a government institution, btw. booms and cycles are ultimately the result of the fed's control of the money supply. contrary to the socialist position that such regulation saves us from these extreme events, it actually causes them.

 

taks

 

Which is a bit ironic, since both want to shift the power to print money to the congress.

[Humodour]

Both really dislike the federal reserve and call for a hearing on their practices, but from two completely different viewpoints. Fun, isn't it?

it is, IMO, unconstitutional, and probably the biggest problem with our system. the fed is not a government institution, btw. booms and cycles are ultimately the result of the fed's control of the money supply. contrary to the socialist position that such regulation saves us from these extreme events, it actually causes them.

 

taks

 

Are you trying to tell me that a free market economic system is not sufficiently complex for chaotic behaviour to emerge?

[taks]

Are you trying to tell me that a free market economic system is not sufficiently complex for chaotic behaviour to emerge?

that's disingenuous on its face. a free market economic system is actually cyclical, but not to the same extremes as one that is controlled. a chaotic system does not necessarily require one that booms or busts.

 

taks

[Brdavs]

Are you trying to tell me that a free market economic system is not sufficiently complex for chaotic behaviour to emerge?

that's disingenuous on its face. a free market economic system is actually cyclical, but not to the same extremes as one that is controlled. a chaotic system does not necessarily require one that booms or busts.

 

taks

 

The irony of that bold statement being that government intervention and regulation is precisely what alleviates\averts the downturn of the so called free market sytem when it (inevitably?) occurs. Free while it works market shall we call it heh.

If there were no government interventions in this case or in 29 the faith in the financial system could very well eventually be gone. And once all the people dash to withdraw their savings to save them you dont have a financial system anymore.

[Enoch]

Both really dislike the federal reserve and call for a hearing on their practices, but from two completely different viewpoints. Fun, isn't it?

it is, IMO, unconstitutional, and probably the biggest problem with our system. the fed is not a government institution, btw. booms and cycles are ultimately the result of the fed's control of the money supply. contrary to the socialist position that such regulation saves us from these extreme events, it actually causes them.

Name one country of more than 50 million people that has been able to develop and sustain a modern economy without a central bank.

 

 

Was Fed policy a big part of this screwup? Absolutely. But that doesn't mean that central banks in general aren't an enormous help to a country's economic viability. The Dollar is the world's dominant currency for two reasons: 1) It is backed by the most valuable resource on the planet (the power to tax the American public), and 2) Control of its supply is out of the hands of politicians and in the hands of politically independent, mostly competent managers. Yeah, the people running the Fed have made mistakes and will continue to do so, but they do so with far less frequency than would political control of the money supply. To paraphrase Churchill, independent central banks are the worst form of money-supply management, except for all those other forms that have been tried.

 

Now, I have some sympathy for the monetarist argument that, in most situations, the best action the Fed can do is hold money supply steady and let interest rates go where they may. (In chalkboard models, that policy does usually work out best, although there are outside factors-- mostly having to do with the international ramifications of shifts in the dollar's value-- that inject more complexity than the simple models can account for.) But the idea that the business cycle is caused only by government meddling and would be eliminated in the distant future when everyone realizes what is best and forms a society completely based on free-market ideas is right up there with the Marxist view of the future as a worldwide worker's paradise on the "crazy wish-fulfillment" scale.

 

 

EDIT: Okay, so I'm exaggerating taks' position on that last point. But I guess my core argument is that, if you approach a situation by looking for a reason to blame (or absolve) government, you're going to find enough evidence to justify your prejudices. But if that's the way you're approaching things, what you're doing isn't analysis, it's spin. Bottom line, economies are incredibly complex things, and pretty much every effect has at least a half-dozen causes without which it wouldn't have happened. Advocates pick the causes that fit their pre-existing beliefs as to who the heroes and villains are, but that doesn't get them particularly close to a true and comprehensive understanding (to the degree that such is achievable). Question your prejudices.

Edited October 1, 2008 by Enoch

[taks]

The irony of that bold statement being that government intervention and regulation is precisely what alleviates\averts the downturn of the so called free market sytem when it (inevitably?) occurs.

ok, AGAIN, the regulation causes the downturns! how are my statements ironic? man...

 

If there were no government interventions in this case or in 29 the faith in the financial system could very well eventually be gone. And once all the people dash to withdraw their savings to save them you dont have a financial system anymore.

the crash in 29 was also caused by improper monetary controls.

 

^enoch: i am surprised at you with that, enoch. besides the fact that you probably can't name a single country with greater than 50 million that has tried to operate without a central bank, the entire system, i.e., global, is built around such a thing. it is a rigged game and you, like the rest, are comparing the system against itself telling me i'm wrong. unbelievable.

 

has everyone lost their minds? we have this huge socialist system in place, and it fails, and we go off and blame capitalism? i'm not seeing how anyone can make that logical leap. the conclusion does not follow from the premises. what a joke.

 

taks

[taks]

1) It is backed by the most valuable resource on the planet (the power to tax the American public),

which is, IMO, also unconstitutional in spite of the failed attempts to argue that in front of SCOTUS. no way to go back on that, either way.

 

2) Control of its supply is out of the hands of politicians and in the hands of politically independent, mostly competent managers. Yeah, the people running the Fed have made mistakes and will continue to do so, but they do so with far less frequency than would political control of the money supply.

um, their independence, IMO, is an illusion, and their competence... well, we've all seen how that went.

 

But the idea that the business cycle is caused only by government meddling and would be eliminated in the distant future when everyone realizes what is best and forms a society completely based on free-market ideas is right up there with the Marxist view of the future as a worldwide worker's paradise on the "crazy wish-fulfillment" scale.

well, no, but there is no way for either of us to prove his position that the free market would solve this problem. arguing back and forth is nothing more than opinion. however, it is pretty easy to go back and see how this system does not work. adding more regulation is nothing more than the standard socialist tactic. throw money at a problem, and it gets worse, advocate more money. throw regulation on top of a problem, and it gets worse, advocate more regulation. maybe only incremental, but never ending.

 

taks

Edited October 1, 2008 by taks

[taks]

Bottom line, economies are incredibly complex things, and pretty much every effect has at least a half-dozen causes without which it wouldn't have happened.

my positions are based on the opinions of people far smarter than me. i don't just "pick the cause" that i like.

 

Question your prejudices.

i do, daily.

 

taks

[Humodour]

Both really dislike the federal reserve and call for a hearing on their practices, but from two completely different viewpoints. Fun, isn't it?

it is, IMO, unconstitutional, and probably the biggest problem with our system. the fed is not a government institution, btw. booms and cycles are ultimately the result of the fed's control of the money supply. contrary to the socialist position that such regulation saves us from these extreme events, it actually causes them.

Name one country of more than 50 million people that has been able to develop and sustain a modern economy without a central bank.

 

 

Was Fed policy a big part of this screwup? Absolutely. But that doesn't mean that central banks in general aren't an enormous help to a country's economic viability. The Dollar is the world's dominant currency for two reasons: 1) It is backed by the most valuable resource on the planet (the power to tax the American public), and 2) Control of its supply is out of the hands of politicians and in the hands of politically independent, mostly competent managers. Yeah, the people running the Fed have made mistakes and will continue to do so, but they do so with far less frequency than would political control of the money supply. To paraphrase Churchill, independent central banks are the worst form of money-supply management, except for all those other forms that have been tried.

 

Now, I have some sympathy for the monetarist argument that, in most situations, the best action the Fed can do is hold money supply steady and let interest rates go where they may. (In chalkboard models, that policy does usually work out best, although there are outside factors-- mostly having to do with the international ramifications of shifts in the dollar's value-- that inject more complexity than the simple models can account for.) But the idea that the business cycle is caused only by government meddling and would be eliminated in the distant future when everyone realizes what is best and forms a society completely based on free-market ideas is right up there with the Marxist view of the future as a worldwide worker's paradise on the "crazy wish-fulfillment" scale.

 

 

EDIT: Okay, so I'm exaggerating taks' position on that last point. But I guess my core argument is that, if you approach a situation by looking for a reason to blame (or absolve) government, you're going to find enough evidence to justify your prejudices. But if that's the way you're approaching things, what you're doing isn't analysis, it's spin. Bottom line, economies are incredibly complex things, and pretty much every effect has at least a half-dozen causes without which it wouldn't have happened. Advocates pick the causes that fit their pre-existing beliefs as to who the heroes and villains are, but that doesn't get them particularly close to a true and comprehensive understanding (to the degree that such is achievable). Question your prejudices.

 

Yay for Enoch! A free market supporter who seems to actually evaluate an action based on its potential merit to the country/economy, rather than how closely it resembles some abstract, supposedly Utopian, view of markets.

 

If I'm wrong tell me. Actually, no - don't fail me now!

[taks]

Yay for Enoch! A free market supporter who seems to actually evaluate an action based on its potential merit to the country/economy, rather than how closely it resembles some abstract, supposedly Utopian, view of markets.

sigh... "evaluate an action based on its potential merit to the country/economy"... right. from within the system.

 

rather than how closely it resembles some abstract, supposedly Utopian, view of markets.

you really, can't read, can you. i've never claimed it was utopian, nor perfect. i've always said that it is imperfect, but it is the only fair way to do it.

 

If I'm wrong tell me. Actually, no - don't fail me now!

no, you're just an...

 

never mind.

 

taks

[taks]

i should add, it is the third way proponents that are hoping for some ideal or utopian way. not me. they think they can solve "the problems of a truly free market," without ever actually identifying what those problems are (other than in some abstract terms that actually apply to their third way systems, not the free market). every single argument that has ever been made is simply false. they sound convincing, but ultimately, they're based on the very rigged system that i've always been against (well, for 20 years or so anyway).

 

taks

[Enoch]

^enoch: i am surprised at you with that, enoch. besides the fact that you probably can't name a single country with greater than 50 million that has tried to operate without a central bank, the entire system, i.e., global, is built around such a thing. it is a rigged game and you, like the rest, are comparing the system against itself telling me i'm wrong. unbelievable.

OK, you're not wrong. You're just advocating that a completely untested theoretical system of currency control is better that the system that has been used for the past half-century or more by all the most successful economies on the planet.

 

1) It is backed by the most valuable resource on the planet (the power to tax the American public),

which is, IMO, also unconstitutional in spite of the failed attempts to argue that in front of SCOTUS. no way to go back on that, either way.

 

2) Control of its supply is out of the hands of politicians and in the hands of politically independent, mostly competent managers. Yeah, the people running the Fed have made mistakes and will continue to do so, but they do so with far less frequency than would political control of the money supply.

um, their independence, IMO, is an illusion, and their competence... well, we've all seen how that went.

 

But the idea that the business cycle is caused only by government meddling and would be eliminated in the distant future when everyone realizes what is best and forms a society completely based on free-market ideas is right up there with the Marxist view of the future as a worldwide worker's paradise on the "crazy wish-fulfillment" scale.

well, no, but there is no way for either of us to prove his position that the free market would solve this problem. arguing back and forth is nothing more than opinion. however, it is pretty easy to go back and see how this system does not work. adding more regulation is nothing more than the standard socialist tactic. throw money at a problem, and it gets worse, advocate more money. throw regulation on top of a problem, and it gets worse, advocate more regulation. maybe only incremental, but never ending.

The mix of free markets and democratic government regulation that has evolved in the U.S. over the course of the last few centuries has proven to be perhaps the most effective societal environment for economic growth and stability in a very large country that the world has ever seen. Yes, it has problems, flaws, and mistakes, but given the baseline that history has shown us, it is absurd to suggest that "this system does not work." So long as it's being run by human beings, economic and political systems are going to have flaws-- you're pointing out a few of them as evidence dismantle a system that has been a success of monumental proportions.

 

Also, you're talking about "regulation" as if it is a quantifiable, fungible product. It is nothing of the sort. There are good regulations and there are bad regulations (a point that you emphasized earlier when talking about transparency-enabling regulations). Good regulations can help to enhance efficiency (e.g., by reducing transaction costs or forcing firms to internalize their external costs), or sacrafice some economic benefits in favor of other goals important to the society. Sometimes the solution for bad regulations is to remove them entirely and let the market govern itself, and sometimes the solution for bad regulations is to replace or supplement them with different regulations that smart people think will be better.

Edited October 1, 2008 by Enoch

[taks]

OK, you're not wrong. You're just advocating that a completely untested theoretical system of currency control is better that the system that has been used for the past half-century or more by all the most successful economies on the planet.

with proven problems, problems people like you keep attributing to the "untested system" that i advocate. problems that the "successful economies" supposedly are trying to avoid, yet end up creating in the first place. there's a point at which we're cutting off our hands to spite our faces. it is a joke being played on us, and we are all complicit.

 

The mix of free markets and democratic government regulation that has evolved in the U.S. over the course of the last few centuries has proven to be perhaps the most effective societal environment for economic growth and stability in a very large country that the world has ever seen. Yes, it has problems, flaws, and mistakes, but given the baseline that history has shown us, it is absurd to suggest that "this system does not work." So long as it's being run by human beings, economic and political systems are going to have flaws-- you're pointing out a few of them as evidence dismantle a system that has been a success of monumental proportions.

i disagree. repeated crises resulting in a move towards even more socialist control are pretty good evidence of "not working." again, you're pointing to "success" within a rigged system... our system is "successful" in a large part simply because it is less regulated than most, and being compared to hugely unsuccessful systems such as those implemented by the USSR, china, cuba and NK.

 

Also, you're talking about "regulation" as if it is a quantifiable, fungible product. It is nothing of the sort. There are good regulations and there are bad regulations (a point that you emphasized earlier when talking about transparency-enabling regulations). Good regulations can help to enhance efficiency (e.g., by reducing transaction costs or forcing firms to internalize their external costs), or sacrafice some economic benefits in favor of other goals important to the society. Sometimes the solution for bad regulations is to remove them entirely and let the market govern itself, and sometimes the solution for bad regulations is to replace or supplement them with different regulations that smart people think will be better.

not all regulations are designed to tinker with the economy, such as fraud protection, for example. full disclosure protections, too. there's so much, however, that it is difficult to weed out in a single statement on a message board other than saying "regulations are bad." the statements are general, and i've made that pretty clear.

 

taks

[Humodour]

^enoch: i am surprised at you with that, enoch. besides the fact that you probably can't name a single country with greater than 50 million that has tried to operate without a central bank, the entire system, i.e., global, is built around such a thing. it is a rigged game and you, like the rest, are comparing the system against itself telling me i'm wrong. unbelievable.

OK, you're not wrong. You're just advocating that a completely untested theoretical system of currency control is better that the system that has been used for the past half-century or more by all the most successful economies on the planet.

 

Amen.

[Enoch]

To perform a semi-resurrection on this thread, developments so far this week have not been kind to global capital markets. It seems that, over the weekend, investors around the world began to price the strong likelihood of a potentially nasty global recession into their models. When markets opened on Monday, everything started sliding downwards, and hasn't stopped since. While earlier hits were concentrated in financial sectors and related industries that depend on cheap borrowing, the scope of this downturn in equities is far broader.

 

So... Buying opportunity for stocks, or buying opportunity for canned goods and ammunition??

[Moatilliatta]

So... Buying opportunity for stocks, or buying opportunity for canned goods and ammunition??

The latter will only be relevant in Iceland.