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.
FFS. I can't stand seeing so many people who have absolutely no clue why we're in the mess that we're currently in. The housing bubble/mortgage crisis that touched off all of our economic problems is the direct result of government interference in the free market. Our politicians, in all of their wisdom, decided that people who can't afford houses should own houses and coerced banks into giving out bad loans that were never going to be paid back, thereby leading to the bundling of bad loans and the creation of all of those derivatives in the subprime mortgage market. REGULATORS fucked everything up -- not the free market.
Look your system crashed because your banks were authorized to do "financially creative" (all Wall Street has masturbated for ten years with financial creativity) speculative bullshit that they were not allowed to do before and that they are not allowed to do anywhere else. If your politicians didn't deregulated every fucking thing, maybe the world wouldn't have become the giant casino for mad bankers it is since 30 years. Simple as that.
Look at the fact, the crisis didn't happened in France, or in Germany, or anywhere else where the stock market is kind of regulated. It happened in the holy land of the free market, where putting rules and laws to make sure people don't do completely irresponsible stuff is a terrible attack against liberty. The fact that there are indeed bad regulations doesn't mean that deregulating brainlessly as it has been done since Reagan is good. In fact, it's the reason we have astronomical debts, and the reason we are in the worst crisis since 1929.
You guys would support that 2 + 2 = 5 if it could serve your free market / anti-statist mantra.
expansionary monetary policy causes bubbles and crisis... you keep coming back every 20 pages posting exactly the same thing... it's still wrong you can stop.
Speculation isn't a bad thing when it's not encouraged by cheap credit, because no one in their right mind is going to over-speculate because of how risky it is... unless of course localized inflation makes it risky to NOT save, this results in bubbles.
All bubbles are bound to burst regardless of how strict the regulations are.
The government fucked up twice:
Once when it encouraged the bubble by interfering with the free market by manipulating the interest rates.
The second time when it bailed out wall street and the banks.
We don't have a free market by definition, because a true free market is IMPOSSIBLE.
Why? Because it is impossible for everyone in the market to have perfect symmetrical information, which is required for perfect competition.
FFS. I can't stand seeing so many people who have absolutely no clue why we're in the mess that we're currently in. The housing bubble/mortgage crisis that touched off all of our economic problems is the direct result of government interference in the free market. Our politicians, in all of their wisdom, decided that people who can't afford houses should own houses and coerced banks into giving out bad loans that were never going to be paid back, thereby leading to the bundling of bad loans and the creation of all of those derivatives in the subprime mortgage market. REGULATORS fucked everything up -- not the free market.
Did you read anything I wrote in my explanation of the entire event? It was not due to politicians pushing banks to make bad loans AT ALL, the banks did that on their own. Deregulation was the entire problem, investment banks and commercial banks need to remain separate, and we need more regulation on speculation in the commodities markets.
Speculation isn't a bad thing when it's not encouraged by cheap credit, because no one in their right mind is going to over-speculate because of how risky it is... unless of course localized inflation makes it risky to NOT save, this results in bubbles.
See, you'd think this is reasonable, but history shows differently, there are multiple instances of companies over-investing in extremely risky speculations, and failing miserably as a result, even when there isn't cheap credit.
Once when it encouraged the bubble by interfering with the free market by manipulating the interest rates.
The second time when it bailed out wall street and the banks.
No, we don't have a free market, nor is it possible to have a free market, because people can't make proper decisions with imperfect information. The bubble also was a direct result of the deregulation allowing them to do business the way they did, manipulation of the interest rates was only a problem in conjunction with the deregulation.
And no, bailing out the banks and wall street saved millions of jobs and helped prevent the crisis from become a catastrophe. You might think the companies deserved to fail (and they did), but the consequences would have been disastrous. Congress needs to start thinking about preventing businesses from getting to be so big that if they fail, millions suffer.
FFS. I can't stand seeing so many people who have absolutely no clue why we're in the mess that we're currently in. The housing bubble/mortgage crisis that touched off all of our economic problems is the direct result of government interference in the free market. Our politicians, in all of their wisdom, decided that people who can't afford houses should own houses and coerced banks into giving out bad loans that were never going to be paid back, thereby leading to the bundling of bad loans and the creation of all of those derivatives in the subprime mortgage market. REGULATORS fucked everything up -- not the free market.
Did you read anything I wrote in my explanation of the entire event? It was not due to politicians pushing banks to make bad loans AT ALL, the banks did that on their own. Deregulation was the entire problem, investment banks and commercial banks need to remain separate, and we need more regulation on speculation in the commodities markets.
yeah the banks WILL do that on their own when you suppress the interest rates duh.
See, you'd think this is reasonable, but history shows differently, there are multiple instances of companies over-investing in Last edit: 2011-12-23 08:25:16 extremely risky speculations, and failing miserably as a result, even when there isn't cheap credit.
That's fine, companies fail all the time, it's different, however, when localized inflation encourages investment. Investment is something that needs to be made based on business plans, and real growth, not a market that's becoming over-inflated with currency.
The truth is the smaller the localized inflation is in a particular market the smaller is the chance of creating a bubble, and when a government is knowingly pumping money into a system in hopes of a re-election... who's the real culprit?
On December 23 2011 08:24 Whitewing wrote: We don't have a free market by definition, because a true free market is IMPOSSIBLE.
Why? Because it is impossible for everyone in the market to have perfect symmetrical information, which is required for perfect competition.
FFS. I can't stand seeing so many people who have absolutely no clue why we're in the mess that we're currently in. The housing bubble/mortgage crisis that touched off all of our economic problems is the direct result of government interference in the free market. Our politicians, in all of their wisdom, decided that people who can't afford houses should own houses and coerced banks into giving out bad loans that were never going to be paid back, thereby leading to the bundling of bad loans and the creation of all of those derivatives in the subprime mortgage market. REGULATORS fucked everything up -- not the free market.
Did you read anything I wrote in my explanation of the entire event? It was not due to politicians pushing banks to make bad loans AT ALL, the banks did that on their own. Deregulation was the entire problem, investment banks and commercial banks need to remain separate, and we need more regulation on speculation in the commodities markets.
yeah the banks WILL do that on their own when you suppress the interest rates duh.
So you're saying that banks will be stupid on their own when interest rates are made artificially low? Why are we trusting banks to make decisions again?
On December 23 2011 08:24 Whitewing wrote: We don't have a free market by definition, because a true free market is IMPOSSIBLE.
Why? Because it is impossible for everyone in the market to have perfect symmetrical information, which is required for perfect competition.
FFS. I can't stand seeing so many people who have absolutely no clue why we're in the mess that we're currently in. The housing bubble/mortgage crisis that touched off all of our economic problems is the direct result of government interference in the free market. Our politicians, in all of their wisdom, decided that people who can't afford houses should own houses and coerced banks into giving out bad loans that were never going to be paid back, thereby leading to the bundling of bad loans and the creation of all of those derivatives in the subprime mortgage market. REGULATORS fucked everything up -- not the free market.
Did you read anything I wrote in my explanation of the entire event? It was not due to politicians pushing banks to make bad loans AT ALL, the banks did that on their own. Deregulation was the entire problem, investment banks and commercial banks need to remain separate, and we need more regulation on speculation in the commodities markets.
yeah the banks WILL do that on their own when you suppress the interest rates duh.
So you're saying that banks will be stupid on their own when interest rates are made artificially low? Why are we trusting banks to make decisions again?
They're not making stupid decisions they are making decision that will keep them from going broke when other banks make that decision. They are reacting to the STIMULUS thrown by the government, however it is a fake stimulus.
low interest rates indicates high amounts of savings, and high amount of resources that are unused... if you just go ahead and make interest rates low ARTIFICIALLY by printing money, banks have 2 choices:
1) Go broke, by not investing enough in a market that's inflating.
2) Invest in order to stay in business, and thus perpetuating the need for other banks to over-invest resulting in a bubble...
If it is indeed how you say it is, kiarip, then why have investors flocked to US (and other countries) bonds? Bank credit is at an all time high, with banks able to borrow at record low rates, and yet they continue to choose to put their money in the safest bets they can, for guaranteed payout. If cheap credit was really a reliable source of unsafe investment, we'd see people jumping all over toxic assets in an attempt to find the "diamond in the rough."
Yes, but think about what happened with the mortgage crisis - the signs were there but the masses of the finance industry didn't add it all up and realise what was going on. In simple terms though, which is how I like to keep it in - people get into the U.S. dollar because they think it's safe. What makes a currency safe? It's backed by its government and that country's economy is sound. But when you look at the U.S. economy it's not sound. The U.S. is spending way more than it makes, and its massively in debt.
We don't have a free market by definition, because a true free market is IMPOSSIBLE.
Why? Because it is impossible for everyone in the market to have perfect symmetrical information, which is required for perfect competition.
That's straight out of the Stiglitz playbook, and it's predictably wrongheaded. When we speak of free markets, we're not discussing a Platonic ideal, but a particular direction on a continuum. Unsurprisingly, free(r) markets are markedly more efficient than controlled economies, which is basically the story of the 20th century, not that anyone seems to have paid attention. Stiglitz' error is the same one that American collectivists are making today, namely blaming failures of government and its reckless meddling on the market economy itself.
The question remains the same today that it was a hundred years ago, namely whether we want an inefficient planned economy (or whatever the Top Men in Washington like to call their homage to this relic of the 20th century) or the only successful means of consistently producing wealth that the world has ever known.
We don't have a free market by definition, because a true free market is IMPOSSIBLE.
Why? Because it is impossible for everyone in the market to have perfect symmetrical information, which is required for perfect competition.
That's straight out of the Stiglitz playbook, and it's predictably wrongheaded. When we speak of free markets, we're not discussing a Platonic ideal, but a particular direction on a continuum. Unsurprisingly, free(r) markets are markedly more efficient than controlled economies, which is basically the story of the 20th century, not that anyone seems to have paid attention. Stiglitz' error is the same one that American collectivists are making today, namely blaming failures of government and its reckless meddling on the market economy itself.
The question remains the same today that it was a hundred years ago, namely whether we want an inefficient planned economy (or whatever the Top Men in Washington like to call their homage to this relic of the 20th century) or the only successful means of consistently producing wealth that the world has ever known.
The question is only the same because some people decide to keep asking regardless of the answer. We have had great success in the past century, not despite of, but hand in hand with increased government interloping. In fact, the 50 or so years before that were mired by a roller-coaster of booms and busts which make our current one look like a small blip.
We don't have a free market by definition, because a true free market is IMPOSSIBLE.
Why? Because it is impossible for everyone in the market to have perfect symmetrical information, which is required for perfect competition.
That's straight out of the Stiglitz playbook, and it's predictably wrongheaded. When we speak of free markets, we're not discussing a Platonic ideal, but a particular direction on a continuum. Unsurprisingly, free(r) markets are markedly more efficient than controlled economies, which is basically the story of the 20th century, not that anyone seems to have paid attention. Stiglitz' error is the same one that American collectivists are making today, namely blaming failures of government and its reckless meddling on the market economy itself.
The question remains the same today that it was a hundred years ago, namely whether we want an inefficient planned economy (or whatever the Top Men in Washington like to call their homage to this relic of the 20th century) or the only successful means of consistently producing wealth that the world has ever known.
We don't have a free market by definition, because a true free market is IMPOSSIBLE.
Why? Because it is impossible for everyone in the market to have perfect symmetrical information, which is required for perfect competition.
That's straight out of the Stiglitz playbook, and it's predictably wrongheaded. When we speak of free markets, we're not discussing a Platonic ideal, but a particular direction on a continuum. Unsurprisingly, free(r) markets are markedly more efficient than controlled economies, which is basically the story of the 20th century, not that anyone seems to have paid attention. Stiglitz' error is the same one that American collectivists are making today, namely blaming failures of government and its reckless meddling on the market economy itself.
The question remains the same today that it was a hundred years ago, namely whether we want an inefficient planned economy (or whatever the Top Men in Washington like to call their homage to this relic of the 20th century) or the only successful means of consistently producing wealth that the world has ever known.
Perhaps you haven't actually paid attention to the history of how economic policies play out. Increased regulation is always a reaction to serious market problems when regulation wasn't present previously. If the market didn't have a major failure, the regulation never would have been suggested in the first place.
There has never been nor ever was a truly successful free market ever in the history of mankind. Either the market didn't succeed, or it did but wasn't actually a free market with no government regulation. You might ask yourself why multiple countries in Europe are doing significantly better than the U.S. in many areas of their economy despite having significantly more government regulation.
Every time we take a step towards deregulating the markets, we wind up increasing the wealth gap. The rich get richer, the poor get poorer. Maybe you don't care about the poor.
We don't have a free market by definition, because a true free market is IMPOSSIBLE.
Why? Because it is impossible for everyone in the market to have perfect symmetrical information, which is required for perfect competition.
That's straight out of the Stiglitz playbook, and it's predictably wrongheaded. When we speak of free markets, we're not discussing a Platonic ideal, but a particular direction on a continuum. Unsurprisingly, free(r) markets are markedly more efficient than controlled economies, which is basically the story of the 20th century, not that anyone seems to have paid attention. Stiglitz' error is the same one that American collectivists are making today, namely blaming failures of government and its reckless meddling on the market economy itself.
The question remains the same today that it was a hundred years ago, namely whether we want an inefficient planned economy (or whatever the Top Men in Washington like to call their homage to this relic of the 20th century) or the only successful means of consistently producing wealth that the world has ever known.
Except when we look at health care and firefighting, the socialist systems are more efficient than the private system counterparts. You can look at those two industries as places where the free market is a disaster for consumers.
Perhaps you haven't actually paid attention to the history of how economic policies play out. Increased regulation is always a reaction to serious market problems when regulation wasn't present previously. If the market didn't have a major failure, the regulation never would have been suggested in the first place.
Increased regulations are never the reaction to market "failures." It's a natural human tendency to witness something bad happen and demand that it be fixed. Now these "failures", in actuality, are the low points of the fluctuations that occur with an unconstrained market. Enacting laws in events like these does nothing but hamper growth for everybody. Friedman starts talking about this at ~16:38-17:30 in the video below.
On December 24 2011 01:11 Whitewing wrote:
There has never been nor ever was a truly successful free market ever in the history of mankind. Either the market didn't succeed, or it did but wasn't actually a free market with no government regulation. You might ask yourself why multiple countries in Europe are doing significantly better than the U.S. in many areas of their economy despite having significantly more government regulation.
Every time we take a step towards deregulating the markets, we wind up increasing the wealth gap. The rich get richer, the poor get poorer. Maybe you don't care about the poor.
Watch this entire video. "Never in history has the quality of life for the common man increased so dramatically as in 19th century USA in which government played a minimal role."
Milton Friedman also had a debate where somebody tried using the Scandinavian countries as a counterexample, which he promptly destroyed. I'll try to find it and post it shortly. Basically his response was that socialism and high levels of taxation work only in very homogenous societies because that's already built in the construct of socialism itself, to make everybody the same. Additionally the dramatic rise in wealth of countries like Norway directly coincides with the oil boom in the North Sea during the 1960's and the corresponding capitalistic sale of petroleum products.
Now, on a philosophical level, I suggest you read this chapter from Thus Spoke Zarathustra. Nietzsche was a huge critic of socialism/communism and writes that attempts at forcing equality are always born out of envy. This book, and this chapter particularly, is one of the most insightful and important writings in all of human history imo. + Show Spoiler +
On the Tarantulas
Look here, this is the hole of the tarantula! Do you want to see the tarantula itself? Its web hangs here; touch it, make it tremble.
Here it comes, willingly – welcome, tarantula! On your back your triangle and mark sits in black; and I know too what sits in your soul.
Revenge sits in your soul: wherever you bite, there black scabs grow; your poison makes the soul whirl with revenge!
So I speak to you in parables, you who cause the souls to whirl, you preachers of equality! Tarantulas you are to me and hidden avengers!
But I want to expose your hiding places to the light; therefore I laugh into your face my laughter of the heights.
Therefore I tear at your web, so that your rage might lure you from your lie-hole lair, and your revenge might spring forth from behind your word “justice.” For that mankind be redeemed from revenge: that to me is the bridge to the highest hope and a rainbow after long thunderstorms.
But the tarantulas want it otherwise, to be sure. “That the world become full of the thunderstorms of our revenge, precisely that we would regard as justice,” – thus they speak with one another.
“We want to exact revenge and heap insult on all whose equals we are not” – thus vow the tarantula hearts.
“And ‘will to equality’ – that itself from now on shall be the name for virtue; and against everything that has power we shall raise our clamor!”
You preachers of equality, the tyrant’s madness of impotence cries thus out of you for “equality”: your secret tyrant’s cravings mask themselves thus in your words of virtue!
Aggrieved conceit, repressed envy, perhaps the conceit and envy of your fathers: it erupts from you like a flame and the madness of revenge.
What is silent in the father learns to speak in the son; and often I found the son to be the father’s exposed secret.
They resemble the inspired, but it is not the heart that inspires them – but revenge. And when they are refined and cold, it is not the spirit but envy that makes them refined and cold.
Their jealousy even leads them along the thinkers’ path; and this is the mark of their jealousy – they always go too far, such that their exhaustion must ultimately lay itself to sleep in snow.
From each of their laments revenge sounds, in each of their praisings there is harm, and being the judge is bliss to them.
But thus I counsel you my friends: mistrust all in whom the drive to punish is strong!
Those are people of bad kind and kin; in their faces the hangman and the bloodhound are visible.
Mistrust all those who speak much of their justice! Indeed, their souls are lacking not only honey.
And when they call themselves “the good and the just,” then do not forget that all they lack to be pharisees is – power!
My friends, I do not want not be mixed in with and mistaken for others.
There are those who preach my doctrine of life, and at the same time they are preachers of equality and tarantulas.
They speak in favor of life, these poisonous spiders, even though they are sitting in their holes and have turned against life, because they want to do harm.
They want to harm those who hold power today, for among them the sermon on death is still most at home.
If it were otherwise, then the tarantulas would teach otherwise; and they after all were formerly the best world slanderers and burners of heretics.
I do not want to be mixed in with and mistaken for these preachers of equality. For thus justice speaks to me: “humans are not equal.”
And they shouldn’t become so either! What would my love for the overman be if I spoke otherwise?
On a thousand bridges and paths they shall throng to the future, and ever more war and inequality shall be set between them: thus my great love commands me to speak!
Inventors of images and ghosts shall they become in their hostility, and with their images and ghosts they shall yet fight the highest fight against each other!
Good and evil, and rich and poor, and high and trifling, and all the names of values: they shall be weapons and clanging signs that life must overcome itself again and again!
Life itself wants to build itself into the heights with pillars and steps; it wants to gaze into vast distances and out upon halcyon beauties – therefore it needs height!
And because it needs height, it needs steps and contradiction between steps and climbers! Life wants to climb and to overcome itself by climbing.
And look here, my friends! Here, where the tarantula’s hole is, the ruins of an ancient temple are rising – look here now with enlightened eyes!
Indeed, the one who once heaped his thoughts skyward here in stone – he knew the secret of all life like the most wise!
That struggle and inequality and war for power and supremacy are found even in beauty: he teaches us that here in the clearest parable.
How divinely the vault and the arch bend and break each other as they wrestle; how they struggle against each other with light and shadow, these divinely struggling ones –
In this manner sure and beautiful let us also be enemies, my friends! Divinely let us struggle against each other!
Alas! Then the tarantula bit me, my old enemy! Divinely sure and beautiful it bit me on the finger!
“Punishment and justice must be” – thus it thinks. “Not for nothing shall he sing his songs in honor of hostility here!”
Yes, it has avenged itself! And alas! Now it will also make my soul whirl with revenge!
But so that I do not whirl, my friends, bind me fast to this pillar here! I would rather be a stylite than a whirlwind of revenge!
Indeed, Zarathustra is no tornado or whirlwind; and if he is a dancer, nevermore a tarantella dancer!
My opinion is that when you think about modern life and society, I think that you should expect something, we have such riches that it's just unacceptable for so many people to be so poor and suffer as much as they are. It's just unnecessary, and not worthy of a modern society. The state's function should be to safeguard every citizen, and to make sure that as many of them as possible can have a good, safe life. This includes regulating the financial market and the banks. At the same time, the state should not go too far, tax too high, when it can do enough at a certain level of control and taxation that brings the biggest gains for as many as possible at the least cost.
Anybody that thinks we've been doing well the last 20-30 years needs to look back and realize that for a long time after ww2, the American ideal was 1 man providing for a wife and 3-4 children with a house and car. Now, you have husband, wife, and sometimes children working, almost always with less vacation time.
FFS. I can't stand seeing so many people who have absolutely no clue why we're in the mess that we're currently in. The housing bubble/mortgage crisis that touched off all of our economic problems is the direct result of government interference in the free market. Our politicians, in all of their wisdom, decided that people who can't afford houses should own houses and coerced banks into giving out bad loans that were never going to be paid back, thereby leading to the bundling of bad loans and the creation of all of those derivatives in the subprime mortgage market. REGULATORS fucked everything up -- not the free market.
Did you read anything I wrote in my explanation of the entire event? It was not due to politicians pushing banks to make bad loans AT ALL, the banks did that on their own. Deregulation was the entire problem, investment banks and commercial banks need to remain separate, and we need more regulation on speculation in the commodities markets.
Speculation isn't a bad thing when it's not encouraged by cheap credit, because no one in their right mind is going to over-speculate because of how risky it is... unless of course localized inflation makes it risky to NOT save, this results in bubbles.
See, you'd think this is reasonable, but history shows differently, there are multiple instances of companies over-investing in extremely risky speculations, and failing miserably as a result, even when there isn't cheap credit.
Once when it encouraged the bubble by interfering with the free market by manipulating the interest rates.
The second time when it bailed out wall street and the banks.
No, we don't have a free market, nor is it possible to have a free market, because people can't make proper decisions with imperfect information. The bubble also was a direct result of the deregulation allowing them to do business the way they did, manipulation of the interest rates was only a problem in conjunction with the deregulation.
And no, bailing out the banks and wall street saved millions of jobs and helped prevent the crisis from become a catastrophe. You might think the companies deserved to fail (and they did), but the consequences would have been disastrous. Congress needs to start thinking about preventing businesses from getting to be so big that if they fail, millions suffer.
The housing bubble wasn't partly caused by politicians/central planners? Really?
Bill Clinton, Andrew Cuomo, when he was head of HUD, the whole Community Reinvestment Act. That's where subprime lending came from, right? Centrally planned low interest rates which made lending easy? I'm confused...are we not talking about the same housing bubble?
Also, how is more regulation going to solve the problems? There are over 50 institutions that regulate finance in the USA alone. They gave Americans a false sense of security when dealing with their finances and allowed big, established banks to do crazy things. You think the average person is going to allow for his money to be invested into opaque securities if there was no regulation? I'm of the opinion that things would simplify very quickly if there was no false sense of security from the armies of regulators that are out there.
Regulation is obviously a necessity, and no one would honestly deny that. However, more regulation is not what we need; if anything we need less regulation--consolidated, strengthened, and streamlined. And, there needs to be less reliance on regulatory bodies and more accountability from within and from reputation. Transparency and accountability are regulatory measures as well, you know. Layering on regulation is going to make things more confusing and opaque.
EPT
