On December 22 2011 20:13 Biff The Understudy wrote:
On December 22 2011 20:09 nebffa wrote: Ok and what is your evidence to say that his belief in the free market is wrong? I have nothing against you for your viewpoint - in fact I used to think Ron Paul was completely wrong myself. In Australia we don't have nearly as much a free market economy and tax rates are quite high and I thought that was the way to go. It works here, but that's beside the point - I started learning more about Ron Paul's policies and they are based on sound evidence, he predicted the housing market crash in 2008, so what is your evidence to back up your claim?
That deregulation of financial sector and blind belief in free market are directly responsible of the crisis we are in today? What Ron Paul suggest is very simple: throw oil to try to extinguish a fire.
Look I completely get where you're coming from, and a LOT of people don't make a particular distinction here. This is EXACTLY why I thought Ron Paul was crazy when I was hearing about him in 2008. I only started to realise how intelligent he is when I paid more attention this year btw.
What happened with the financial crisis is governments were essentially covering corporations' backs. That's what we all saw with all the corporate bailouts. If you think about an every day person, they will be normally fairly frugal with their money, not taking much risk. But if they have their money guaranteed so even if they lose it it will be paid back to them by the government, they will naturally start taking bigger and greater risks, as they are no longer bigger and greater risks anymore. This is EXACTLY what happened with the big banks with their risky lending as they tried to skirt danger to make more money.
Ron Paul was saying for YEARS that this was going to happen, and he constantly called for government to not be protecting these corporations' backs, as this was interfering with the free market.
The big realisation came for me when I realised that the U.S. market was not nearly as free as I thought, and it was this interference by the government that allowed business to take heavy risks that lead to the situation we're in today. Ron Paul specifically advocated and advocates that Gov't should not do what it did
No. What allowed the companies to do what they did was deregulation of the markets, specifically the repeal of the Glass-Steagall act, which was passed in 1933 when our government knew what would happen if they didn't deal with the bank issue (it was repealed in 1999). The government did bail them out (which you can choose to disagree with if you like, no problem from me if you do), because the consequences of failing to do so would have been disastrous for an incredible amount of people. Specifically, the problem is the lack of separation between investment banks and commercial banks, which allowed all of the shenanigans which eventually lead to the creation and then crash of the housing bubble. Bad loans were given out and then packaged and sold off with absurd amounts of risk to investment banks, which had major issues due to these toxic assets. In other words, more freedom in the market created this problem, and this is one of the most major issues with capitalistic economic theories: the free market requires perfect symmetrical information for all parties to make appropriate decisions, and that is infeasible and impossible. People tend to be greedy, and the only way to deal with both of these issues together is to have regulations in place that prohibit certain major issues.
Further, the companies had no guarantee ahead of time that they'd be bailed out if shit hit the fan, they got lucky. Therefore, they weren't banking on having a backup if they failed, so that didn't impact their decision making.
Well, I'm not so sure about that - I certainly haven't looked into it so I can't say you're wrong or right. All I can say is I definitely listen to the people that get the predictions right. Here is a video, and the relevant part starts from about 1 minute. Ron Paul was one of the few people to get the predictions right.
The only people I have seen that predicted the economic crisis were people that said similar things to Ron Paul. If someone else said something different and predicted it I'm happy to hear about them, but I have yet to hear of it. So all these other explanations are people analysing the shrapnel and the aftermath and trying to analyse what happened. But guess what? These are pretty much all the people that did not see the economic crisis coming, so why would you trust them? Rather than the people that got it right????
On December 22 2011 20:48 nebffa wrote: Well, I'm not so sure about that - I certainly haven't looked into it so I can't say you're wrong or right. All I can say is I definitely listen to the people that get the predictions right. Here is a video, and the relevant part starts from about 1 minute. Ron Paul was one of the few people to get the predictions right.
The only people I have seen that predicted the economic crisis were people that said similar things to Ron Paul. If someone else said something different and predicted it I'm happy to hear about them, but I have yet to hear of it. So all these other explanations are people analysing the shrapnel and the aftermath and trying to analyse what happened. But guess what? These are pretty much all the people that did not see the economic crisis coming, so why would you trust them? Rather than the people that got it right????
The issue isn't that Ron Paul was right or wrong about his prediction, it was that his prediction was based on the wrong reasons. The reason others didn't see it coming was because they weren't aware of the toxic assets being handled in this fashion through subprime mortgage loans with extremely high probability of default, and this is the reason the companies failed and the crash occurred. Yes, Ron Paul was correct about the crash, but his reasons for it were faulty, and thus, in essence, he got lucky.
Ok, and what makes you so sure that his reasons were faulty? I'm not saying you're wrong, but I am only interested in who really is correct, and I think people deserve to hear the truth
On December 22 2011 20:53 nebffa wrote: Ok, and what makes you so sure that his reasons were faulty? I'm not saying you're wrong, but I am only interested in who really is correct, and I think people deserve to hear the truth
He states what his reasons are.
"The special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions... like all artificially created bubbles, the boom in housing prices cannot last forever..."
The problem is, is that the collapse of the housing market had nothing to do with extra capital Fannie and Freddie had from any 'special privileges' they received, but had to do with their ability to purchase assets from commercial banks, which happened to be extremely toxic (it's not clear they understood or knew the risks involved with those assets, which is even worse, and points towards what I said before about imperfect, asymmetrical information). As it so happens, the housing market was a bubble, and was artificially inflated, but for entirely different reasons for what he stated: it was inflated as a result of the subprime mortgage issues, not due to excess investment in Freddie and Fannie or other forms of capital. Mind you, the results are similar, but the cause is important.
Yes, and he asserts that the bubble came about from over-investment in this particular market, with Fannie and Freddie having led the charge from the start due to their line. Where do you say the bubble came from?
On December 22 2011 21:06 nebffa wrote: Where is your quote on that?
Assuming you were responding to my claim that Paul considers health care 'slavery', he states that in this video. Unfortunately I don't have the time at which he says it, but the video is worth watching anyway.
Assuming you were responding to my claim that Paul considers health care 'slavery', he states that in this video. Unfortunately I don't have the time at which he says it, but the video is worth watching anyway.
No, if you want to make assertions like that, you need to state where it comes from, otherwise what if you're wrong? Rand Paul, his son, has made such comments, but I don't recall Ron Paul ever saying it, and I did a quick google search to see if he said it and I didn't turn up anything.
On December 22 2011 20:21 Velr wrote: If you don't see what a pure free marked would create for problems you better don't go voting at all, you seem to lack common sense...
We wouldn't have the problems we have nowadays.. We would have diffrent, most probably worse ones. Inequality allready is a huge problem.. And thats with the "nanny"-state takeing somewhat care of the poor people...
Income inequality is the result of NOT having a truly free market, and the existence of welfare at the extent that we have only serves to perpetuate the problem. Are you actually a citizen of the United States? Have you ever been to Detroit? A majority (yes, an actual majority) of Detroit residents are receiving Welfare and are below the poverty line. This isnt new, either, but it has gotten worse in the last 30 or so years. Prior to the existence of widespread Welfare there in 1963, the Detroit economy and job market was booming. There is a lot more information regarding the economic downfall of Detroit, and what socialist principles can do to destroy a society, but if you actually care enough to try and look at things objectively you'll go and find them yourself.
Detroit today is an example of what the rest of the United States will look like if we continue in our current economic policy of subsidizing everyone (the rich AND the poor).
Also, your assertion that we lack common sense because we are for a free market is asinine. If anything, acknowledging the fact that we do not have a truly free market already puts us over the threshold of what is common knowledge. The fact alone that we know the difference between Austrian and Keynesian economics means we are more qualified to vote than a majority of American citizens.
On December 22 2011 21:21 nebffa wrote: Yes, and he asserts that the bubble came about from over-investment in this particular market, with Fannie and Freddie having led the charge from the start due to their line. Where do you say the bubble came from?
No no, he asserts that the bubble came from special privileges leading to over investment into certain companies, there is an important difference. Where the bubble actually came from was commercial banks going way overboard with recklessly giving out subprime mortgages to people with little chance of paying them back, over and over again, which resulted in an inflation of housing prices (demand for houses was up due to a significantly larger amount of people suddenly having the ability to purchase a home, despite the fact that they couldn't pay for it in the long run). Many people were tricked into these loans with lousy terms by not understanding the fine print or the loan information, and in some cases fraud was involved. Regardless, a significant amount of bad loans were made, and this created the bubble. The bubble burst when the extremely risky assets were purchased by investment banks, and then the defaults began occurring.
This wouldn't have happened were it not for the deregulation of the banking system that occurred in the late 1990's and early 2000's, because there were laws in place specifically to prevent this sort of thing.
On December 22 2011 20:21 Velr wrote: If you don't see what a pure free marked would create for problems you better don't go voting at all, you seem to lack common sense...
We wouldn't have the problems we have nowadays.. We would have diffrent, most probably worse ones. Inequality allready is a huge problem.. And thats with the "nanny"-state takeing somewhat care of the poor people...
Income inequality is the result of NOT having a truly free market, and the existence of welfare at the extent that we have only serves to perpetuate the problem. Are you actually a citizen of the United States? Have you ever been to Detroit? A majority (yes, an actual majority) of Detroit residents are receiving Welfare and are below the poverty line. This isnt new, either, but it has gotten worse in the last 30 or so years. Prior to the existence of widespread Welfare there in 1963, the Detroit economy and job market was booming. There is a lot more information regarding the economic downfall of Detroit, and what socialist principles can do to destroy a society, but if you actually care enough to try and look at things objectively you'll go and find them yourself.
Detroit today is an example of what the rest of the United States will look like if we continue in our current economic policy of subsidizing everyone (the rich AND the poor).
Also, your assertion that we lack common sense because we are for a free market is asinine. If anything, acknowledging the fact that we do not have a truly free market already puts us over the threshold of what is common knowledge. The fact alone that we know the difference between Austrian and Keynesian economics means we are more qualified to vote than a majority of American citizens.
In other words: inequalities have exploded since everything has been deregulated and taxation lowered (and don't force me to show you graph with explosion of inequalities AND public debts since Tatcher/Reagan ultraliberal reforms), but if we deregulate even more and tax even less, it will be better.
Libertarianism: Making no sense at all with over-simplistic principles to be applied everywhere in any circumstances. It's like hardcore Marxists, it's useless to discuss because these guys forge their own nonsensical reality according to their principles instead of forging their principles according to reality.
"Dr. Paul’s experience in science and medicine only reinforced his belief that life begins at conception, and he believes it would be inconsistent for him to champion personal liberty and a free society if he didn’t also advocate respecting the God-given right to life—for those born and unborn." "* Defining life as beginning at conception by passing a “Sanctity of Life Act.”"
On December 22 2011 19:44 nebffa wrote: Have you even looked at his policies? All of them are evidence-based and he has been making all the right predictions, unlike the other candidates
Definitely, evidence based "God-given" stuff. I mean seriously? Even his economics policy isn't based on any evidence.
"Eliminating the income, capital gains, and death taxes to ensure you keep more of your hard-earned money and are able to pass on your legacy to your family without government interference."
That's completely insane, no less. He just intends to put his ideals to work regardless of the real-world repercussions. His dream land has no efficient application. (As such, it doesn't surprise me that neo-cons would like him).
To explain how incredibly out of touch this man's campaign is with reality, it's comparable to the story where Marie Antoinette was told basically "the population has no bread, they're starving" and she said "them let them eat cake". What is this BS? Sorcery?
On December 22 2011 20:21 Velr wrote: If you don't see what a pure free marked would create for problems you better don't go voting at all, you seem to lack common sense...
We wouldn't have the problems we have nowadays.. We would have diffrent, most probably worse ones. Inequality allready is a huge problem.. And thats with the "nanny"-state takeing somewhat care of the poor people...
Income inequality is the result of NOT having a truly free market, and the existence of welfare at the extent that we have only serves to perpetuate the problem. Are you actually a citizen of the United States? Have you ever been to Detroit? A majority (yes, an actual majority) of Detroit residents are receiving Welfare and are below the poverty line. This isnt new, either, but it has gotten worse in the last 30 or so years. Prior to the existence of widespread Welfare there in 1963, the Detroit economy and job market was booming. There is a lot more information regarding the economic downfall of Detroit, and what socialist principles can do to destroy a society, but if you actually care enough to try and look at things objectively you'll go and find them yourself.
Detroit today is an example of what the rest of the United States will look like if we continue in our current economic policy of subsidizing everyone (the rich AND the poor).
Also, your assertion that we lack common sense because we are for a free market is asinine. If anything, acknowledging the fact that we do not have a truly free market already puts us over the threshold of what is common knowledge. The fact alone that we know the difference between Austrian and Keynesian economics means we are more qualified to vote than a majority of American citizens.
In other words: inequalities have exploded since everything has been deregulated and taxation lowered (and don't force me to show you graph with explosion of inequalities AND public debts since Tatcher/Reagan ultraliberal reforms), but if we deregulate even more and tax even less, it will be better.
Libertarianism: Making no sense at all with over-simplistic principles to be applied everywhere in any circumstances. It's like hardcore Marxists, it's useless to discuss because these guys forge their own nonsensical reality according to their principles instead of forging their principles according to reality.
You are completely ignoring one of the main ideas in Pauls policies though when you say this, and its something that a lot of people have a tendency to do when it comes to economics.
You can't just say lower taxation and deregulation without also mentioning the amount of spending that is happening at the time. I acknowledge that lower taxation in the Reagan era was not a good thing, and a potential contributor to the problems that we are having today, but we didn't cut spending to match. If you lower the amount of revenue the govt brings in, you also need to spend less. If you spend more, you need to increase revenue. It is simplistic because it IS that simple, it just hasn't been done for a very long time.
I admit there is a certain amount of regulation that needs to happen, and I do think that is one flaw in a lot of policy today, but the most important thing is that we are spending far too much when it is completely unnecessary.
And the bailouts should have never happened, because while the initial few companies weren't sure if they would get bailed out, now that the doors are open, any sufficiently large company that plays a role in our economic well-being can expect to be bailed out. Now they know for sure that you can be "too big to fail" so there is little risk involved in what would otherwise be a risky investment.
And the bailouts should have never happened, because while the initial few companies weren't sure if they would get bailed out, now that the doors are open, any sufficiently large company that plays a role in our economic well-being can expect to be bailed out. Now they know for sure that you can be "too big to fail" so there is little risk involved in what would otherwise be a risky investment.
Most of the TARP was returned with interest though, and let's not forget how many jobs it kept going.
On December 23 2011 00:09 Biff The Understudy wrote:
On December 22 2011 22:49 ryanAnger wrote:
On December 22 2011 20:21 Velr wrote: If you don't see what a pure free marked would create for problems you better don't go voting at all, you seem to lack common sense...
We wouldn't have the problems we have nowadays.. We would have diffrent, most probably worse ones. Inequality allready is a huge problem.. And thats with the "nanny"-state takeing somewhat care of the poor people...
Income inequality is the result of NOT having a truly free market, and the existence of welfare at the extent that we have only serves to perpetuate the problem. Are you actually a citizen of the United States? Have you ever been to Detroit? A majority (yes, an actual majority) of Detroit residents are receiving Welfare and are below the poverty line. This isnt new, either, but it has gotten worse in the last 30 or so years. Prior to the existence of widespread Welfare there in 1963, the Detroit economy and job market was booming. There is a lot more information regarding the economic downfall of Detroit, and what socialist principles can do to destroy a society, but if you actually care enough to try and look at things objectively you'll go and find them yourself.
Detroit today is an example of what the rest of the United States will look like if we continue in our current economic policy of subsidizing everyone (the rich AND the poor).
Also, your assertion that we lack common sense because we are for a free market is asinine. If anything, acknowledging the fact that we do not have a truly free market already puts us over the threshold of what is common knowledge. The fact alone that we know the difference between Austrian and Keynesian economics means we are more qualified to vote than a majority of American citizens.
In other words: inequalities have exploded since everything has been deregulated and taxation lowered (and don't force me to show you graph with explosion of inequalities AND public debts since Tatcher/Reagan ultraliberal reforms), but if we deregulate even more and tax even less, it will be better.
Libertarianism: Making no sense at all with over-simplistic principles to be applied everywhere in any circumstances. It's like hardcore Marxists, it's useless to discuss because these guys forge their own nonsensical reality according to their principles instead of forging their principles according to reality.
You are completely ignoring one of the main ideas in Pauls policies though when you say this, and its something that a lot of people have a tendency to do when it comes to economics.
You can't just say lower taxation and deregulation without also mentioning the amount of spending that is happening at the time. I acknowledge that lower taxation in the Reagan era was not a good thing, and a potential contributor to the problems that we are having today, but we didn't cut spending to match. If you lower the amount of revenue the govt brings in, you also need to spend less. If you spend more, you need to increase revenue. It is simplistic because it IS that simple, it just hasn't been done for a very long time.
I admit there is a certain amount of regulation that needs to happen, and I do think that is one flaw in a lot of policy today, but the most important thing is that we are spending far too much when it is completely unnecessary.
And the bailouts should have never happened, because while the initial few companies weren't sure if they would get bailed out, now that the doors are open, any sufficiently large company that plays a role in our economic well-being can expect to be bailed out. Now they know for sure that you can be "too big to fail" so there is little risk involved in what would otherwise be a risky investment.
But its hard to deny a trend where ever since the 1980's (when the current deregulation started), wages started freezing and income inequality pretty much all over the world started increasing. The countries with strongest deregulation, such as the US, are facing the extremes of these consequences, while more 'socialist' countries manage to contain the effect somewhat. In those cases, where all countries face the same systemic restraints, is the conclusion that neo-libertarianism distributes wealth (which is the end conclusion) really justified?
A similar religious adherence to neo-liberalism (or liberarianism in Paul's terms) can be seen in economic development policy. No country has ever developed economically due to 'free markets', yet it is what we are prescribing for the 3rd world. When your expectations are wrong at such a basic level, how can you continue to support the idea as a whole?
Which of course, is not to say that free markets don't have their benefits, but choosing for a complete free market society is choosing for a very skewed income distribution in your country, where a distinct upper class will be formed. Comparative advantages only work out when you start with equal players, otherwise you're forcing people to specialize in being poor.
On December 22 2011 20:48 nebffa wrote: Well, I'm not so sure about that - I certainly haven't looked into it so I can't say you're wrong or right. All I can say is I definitely listen to the people that get the predictions right. Here is a video, and the relevant part starts from about 1 minute. Ron Paul was one of the few people to get the predictions right.
The only people I have seen that predicted the economic crisis were people that said similar things to Ron Paul. If someone else said something different and predicted it I'm happy to hear about them, but I have yet to hear of it. So all these other explanations are people analysing the shrapnel and the aftermath and trying to analyse what happened. But guess what? These are pretty much all the people that did not see the economic crisis coming, so why would you trust them? Rather than the people that got it right????
I want to repeat what I've said many times in the past. It's easy to predict disaster when you preach it every day. If you want a prophet to follow, find somebody who can predict both small and big booms and busts. I'm personally not aware of any, but don't settle for somebody who will puts all his chips on black every spin.
On December 23 2011 02:15 aksfjh wrote: I want to repeat what I've said many times in the past. It's easy to predict disaster when you preach it every day. If you want a prophet to follow, find somebody who can predict both small and big booms and busts. I'm personally not aware of any, but don't settle for somebody who will puts all his chips on black every spin.
This was mentioned in a recent Freakonomics podcast.
In the Wall Street Journal survey, if you look at the extreme outcomes, either extremely bad outcomes or extremely good outcomes, you see that those people who correctly predicted either extremely good or extremely bad outcomes, they’re likely to have overall lower level of accuracy. In other words, they’re doing poorer in general. … Our research suggests that for someone who has successfully predicted those events, we are going to predict that they are not likely to repeat their success very often. In other words, their overall capability is likely to be not as impressive as their apparent success seems to be.
The idea is that we pay so much attention to getting a big prediction right that we overlook getting many other predictions wrong. This creates a poor system of incentives, as well as creating a climate in which it is difficult for consumers of information to know who they should be listening to.
I don't see how people can believe an unregulated market is a good thing... What's wrong today is that there are some regulations which disturb incentives and some that just don't work as intended. But removing all regulations doesn't seem like an asnwer since one would remove every single market regulation that keeps the society together. Just take a look at history... early industrialisation, have fun fighting against corporate interests in an unregulated economy...
EPT
