SEC’s Chair’s Bailout Bull$%&t
In what I can only type with a combination of disgust and astonishment, SEC Chairman Christopher Cox blames the current crisis on the “boom-and-bust cycles” of markets.
“Financial markets, of course, are not perfect. In particular, they are susceptible to boom-and-bust cycles. Cycles of this sort have been a hardy perennial over the past 400 years of experience with organized markets. Addressing the results of these cycles is why we have protective mechanisms such as the Federal Reserve System and federal deposit insurance.
But clearly these mechanisms proved inadequate to prevent the current crisis. As the Congress and the new administration consider what improvements are necessary, they should take exceptional care to preserve the premise of well-ordered markets that underlies our enforcement and regulatory regime. Maintaining the arm’s length relationship between government, as the regulator, and business, as the regulated, is essential. Otherwise, when the government becomes both referee and player, the game changes dramatically for every other participant.
Rules that might be rigorously applied to private-sector competitors will not necessarily be applied in the same way to the sovereign who makes the rules. On several occasions during the past year the Treasury and the Fed took on the unusual role of negotiators and principals in merger and acquisition transactions that normally would have been arranged by private parties. Even in these extraordinary cases, however, it remained the role of the SEC to regulate these transactions for the protection of investors. We took pains to stay at arms length in these cases, but our close collaboration with these same government agencies has made this truly terra incognita.”
Talk about an imperfect messenger: You will note that nowhere in his entire Op-Ed is there any mention of the role of the SEC in the entire credit or financial mess — most notably, the SEC’s nonfeasance. They utterly failed to discharge their legal responsibility to regulate the Rating Agencies (Moody’s, S&P, Fitch). Note that these same agencies are the ones that slapped triple AAA rating ont he mortgage backed paper at the root of the current crisis.
Nor does he address the role of the SEC in allowing the 5 biggest investment banks — now wards of the state — to waive net cap rules and lever up to 40-to-1.
Cox takes zero personal responsibility for the current crisis for the acts of his own agency, or even himself.
You may dismiss the entire Op-Ed written by the Chairman as a steaming pile of cluelessness and evasive subject changers.
Whether you read it or not is up to you, but my advice: Don’t step in it.
>
Source:
We Need a Bailout Exit Strategy
Let’s not forget that free markets made America strong.
CHRISTOPHER COX
WSJ, DECEMBER 10, 2008, 11:24 P.M. ET
http://online.wsj.com/article/SB122895345612296365.html
December 11th, 2008 at 7:46 am
“Cox takes zero personal responsibility for the current crisis for the acts of his own agency, or even himself.”
Seriously, isn’t this what we are facing square here in the United States at these perilous times? Listen, it may not be my place here to talk (for i don’t own any stocks or T-bills or anything or i don’t even consider to be a middle-class person), but my question is- WE HAVE NO LEADERS because leadership requires courage and responsibility. If you think any of the CEOs that we have in most companies are leaders, then how come no one yet, as far as i know, has come out and said, “I regret that we have had to put the whole country in such a condition?” You all might think i am some right-wing christian with the next statement, but i am far from that. Capitalism never works unless there’s some moral responsibility for the actions that those that are in power to be have towards those that are at their mercy. If anything, this crisis should teach us, it’s that we have gone down the tube when it comes to what it means to be a citizen of a country.
December 11th, 2008 at 8:24 am
Cox and Bush….perfect together….More revisionist history. Either they have sick minds or they think (know) the average sheep will eat their crap.
December 11th, 2008 at 8:29 am
The biggest disappointment in everything that has surfaced over the last few years is the recognition of the total idiocy of so many people who got into powerful positions in this country. I’m not sure what mechanisms propel them there, but we deserve what we have gotten for letting it happen.
December 11th, 2008 at 8:50 am
The biggest irony is how the actual creator of the business cycle, the Fed, is portrayed as the saviour who just couldn’t get around the problem this one time.
How comfy…Two years ago they were talking about the Bush Boom, Goldilocks 2.0 and how their enlightened and magical policy measures showered prosperity on every single American. Now that Greenspan’s chicken are coming home to roost, it’s the market’s fault for spoiling everyone’s party.
What I’m still trying to figure out is whether we’re talking about economic illiteracy on a massive scale, or plain old special interests exploiting big government’s tentacles to grab their share of the pie.
Either way the now ubiquitous dinner table quote of the evening, “Its obvious capitalism has failed”, is starting to get on my nerves. Reminds me of that classic scene in “The Aviator” where Howard Hughes meets Hepburn’s family and gets pissed off by their lofty pro-socialist rhetoric, when neither of them has worked a day in their lives.
December 11th, 2008 at 8:52 am
dig1 said: “Capitalism never works unless there’s some moral responsibility for the actions that those that are in power to be have towards those that are at their mercy.”
Libertarian dogma (of which Cox is undoubtedly the most zealoous of acolytes) is closely associated with two current popular economic schools–Chicago and Austrian. Both schools suffer from the same fatal flaw that Communism does, and that is that at their core is a concept of human nature that is a fiction.
In the case of Communism, the best critique I’ve encountered was rendered by Cornel West in “Race Matters.” West discusses the philosophies of W.E.B. Dubois, who touted the mantra of the “talented tenth”–10 percent of the black populaton that is better educated and well informed, that “knew best” and supposedly would act benevolently and lead the other 90% to the promised land. The flaw in this is that the “talented tenth,” when empowered as they were in Communist regimes, didn’t act at all benevolently, but according to human nature.
The Chicago and Austrian schools have at their core a construct of man that is equally fictitious. Homo economicus, or Economic man, is the concept in these theories that holds humans to be rational, perfectly informed and self-interested actors who desire wealth, avoid unnecessary labor, and have the ability to make judgments towards those ends. But as the theologian Reinhold Niebuhr points out, this is a simplistic, sentimental view of human nature:
“The false abstraction of ‘economic man’ remains a permanent defect in all bourgeois-liberal ideology. It seems to know nothing of what Thomas Hobbes termed ‘the continual competition for honor and dignity’ in human affairs. It understands neither the traditional ethnic and cultural loyalties which qualify a consistentent economic rationalism; nor the deep and complex motives in the human psyche which express themselves in the desire for ‘power and glory.’ All the conflicts in human society involving passions and ambitions, hatreds and loves, envies and ideals not recorded in the market place, are beyond the comprehension of the typical bourgeois ethos.”
December 11th, 2008 at 8:54 am
“personal responsibility”?
So we elected a new regime who’s entire economic ideology runs counter to the concept of personal responsibility.
I almost agree with dig1, but responsibility doesn’t need to be driven by “morals” in order for capitalism to work. “Risk-takers” need to have real skin; unescapable, devastating consequences for making poor decisions. Capitalism fails without those consequences, and the current actions by our government demonstate they’re not capitalists.
December 11th, 2008 at 8:57 am
Boom and bust cycles? The reason we are in this mess is because Greespan (who neither takes zip responsibility) thought he is God and can do away with it. And everybody else played along.
December 11th, 2008 at 8:57 am
Cox is really one of the prime culprits here not very far behind Easy Al. Basically he was a personally lazy, but fervent believer in extreme free market capitalism and deregulation. He reminds me of one of those Czarist war ministers before 1914 who was completely blinkered and oblivious to reality while the troops went off to war without rifles. This guy makes Brownie look like dedicated public servant. Ultimately of course the book stops with Bush or more likely Cheney who chose this bozo but then ultimately you have to blame the American people who were dumb enough to elect Bush and Cheney twice. People get the governments they deserve.
December 11th, 2008 at 9:01 am
But Cox’s attitude is perfectly reflective of the managerial oligarchy. It’s a cultural “best practice” equivalent of socialize losses and privatize gains, socialize blame and privatize credit that is deep seeded and embedded in the upper echelons of those within managerial oligarchy. Cox’s comments illustrate why a cultural re-boot is required among this class.
December 11th, 2008 at 9:09 am
DownSouth Says:
December 11th, 2008 at 8:52 am
DS,
no offence meant, but your post is utter BUL**HIT
why walk it over to http://www.mises.org , and the them what they think of ‘homo economicus’ ?
December 11th, 2008 at 9:20 am
try this:
Psychic Impairment
October 26, 2008 8:19 PM by Jim Fedako
Last week I suffered a psychic loss in the form of a goodwill impairment charge. What?!? Only the business firms take goodwill charges. Not so fast. While it is true that firms take such charges, it is also true that everyone experiences psychic profits and losses throughout the day.
Acting man seeks to increase the asset side of his psychic value in every exchange; he seeks psychic profit. However, just as in a free market, losses are everywhere. And it’s our value judgments of potential psychic profits and losses, and our value judgments alone, that have the ability to guide an economy toward an efficient utilization of scarce resources.
Unlike other schools of economic thought, the Austrians do not construct homo economicus as the originator of action. In its place, the Austrians assume a myriad of acting individuals, all basing their actions on purely subjective valuations. The key here is that acting man can change his valuations at any point, based purely on subjective reasoning. ..
http://blog.mises.org/archives/008851.asp
for starters,
and, further: http://www.google.com/search?oe=utf8&ie=utf8&source=uds&start=0&hl=en&q=homo+economicus+site%3Amises.org
and to clarify this: “DS, no offence meant, but your post is utter BUL**HIT
why Not walk it over to http://www.mises.org , and Ask them what they think of ‘homo economicus’?
Sorry, but you False Equivalancy of Chicago=Austrian, is Something that Cox, himself, might try to pull-off..
December 11th, 2008 at 9:20 am
> You may dismiss the entire Op-Ed written by the Chairman as a steaming pile of cluelessness and horseshit
Yes I do !
Stiglitz has an excellent article in Vanity Fair on how we got to the worst economic times since the 1930s. He points to five key mistakes—under Reagan, Clinton, and Bush II—and one national delusion.
The truth is most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal.
Joseph Stiglitz on Capitalist Fools: How We Crashed the Economy
http://www.dailykos.com/story/2008/12/10/82418/061/679/670543
December 11th, 2008 at 9:26 am
Occasionally, an actual physical beating has to be administered – not out of anger, but for the good of industry and the public interest. Without beating Cox hard in front of a Web Cam, we are saying to the next generation of regulators, “do or don’t, we care not, let us rot, here’s your check, get ready to lobby in a few years”.
December 11th, 2008 at 9:30 am
Downsouth,
If you’ve read enough Austrian work you’d know full well that neither Mises, nor Menger, nor Bohm-Bawerk who put the pillars of Austrian theory consider man to be purely rational. They abstracted and said that economics should be value-free (vertfrei) for precisely this reason.
If I like a Porsche for its superb build quality and engineering, and thus, relative to other goods and services in the economy, place a higher value for it than the $100,000 the dealer asks for it, that’s “homo economicus” at work. But so is liking a contemporary painting with cats and dogs getting it on because it satisfies some inner sexual perversion, and again, placing a higher value for it than the $100,000 the dealer asks for it.
In Austrian theory, human action demonstrates choice, and since it is HUMAN, and subject to individual whims and desires, this choice CAN’T be predicted. That’s why you don’t see any Austrians making forecasts, but rather, issue warning about the sustainability of credit bubbles, and the economic booms that follow them.
The Chicago or Neoclassical School on the other hand aggregates to enormous levels, and makes technical predictions about what an ENTIRE ECONOMY is going to do if the supply of money falls X percent, or inflation goes beyond a certain benchmark. They, of course DO assume perfectly rational players, and that is partly due to their positivist leanings – a scientific methodology that works wonders when applied to the physical sciences, but fails horribly when transfered over to social ones (like economics was, is and always will be).
Neoclassicals will even apply game-theory to make predictions, something that again, fails horribly when taken out of the context of GAMES.
It’s one thing reaching sub-game perfect equilibrium in a chess game, and quite another to do the same in the famous bank robbery scenario where the robber asks you for the password to the bank vault at gunpoint, but you know that is an empty threat because only you know the password.
Herein lies the difference. The Neoclassical, in order for his nifty model to work, will assume that you make the perfectly rational choice of withholding the password from the robber. The Austrian, who doesn’t even need to make that prediction to make some model work, will accept that in all likelihood, you’d be scared shitless or fear the other guy is a nutcase and give him the password in your best practiced smile.
It is precisely these Chicagoite pipedream models and ideas that have given the free-market a bad name.
December 11th, 2008 at 9:34 am
Mark E. Hoffer:
DownSouth’s premise, while not 100% correct, is towards the target. Hell, Greenspan was bosom buddies with Ayn Rand. It’s a combination of Rand-ism gone amuck and Republicans not being interested in governing(see Grover Norquist and his want to drown government in a bathtub).
December 11th, 2008 at 9:39 am
@DownSouth
Your analysis of the Austrian school’s view of human nature is grotesquely cartoonish. Most humans are indeed “self-interested actors” – which doesn’t necessarily mean they make decisions that ultimately result in their own best interest. Nor do Austrian’s believe humans are “perfectly informed” or even desire substantial wealth – I could argue manyAmericans are satisfied by fulfilling the basic requirements of the lower rungs of Maslow’s pyramid.
The idea that government is better suited to “make judgments” for individuals is where socialists (and social democrats) go wrong. Humans are flawed, and even the most “perfectly informed” will make poor decisions from time to time. That isn’t a “simplistic, sentimental view of human nature”. Socialism uses the flawed-human concept to ultimately strip everyone of personal liberties…and sense of personal responsibility.
December 11th, 2008 at 9:40 am
dig1,
To finish my thoughts, libertarian (free market) true believers like Cox live in a world completely disconnected from reality. As Eric Hoffer pointed out about these doctrinaire types:
“A doctrine insulates the devout not only against the realities around them but also against their own selves. The fanatical believer is not conscious of his envy, malice, pettiness and dishonesty. There is a wall of words between his consciousness and his real self. ”
Cox’s fanatical embrace of his ideology thus allows him to make nonsensical claims such as “government is an auxiliary to the market, not a substitute for it or a participant in it.” This of course flies in the face of any impirical analysis, such as the one conducted by Kevin Phillips for his recent book “Bad Money.” Phillips meticulously documents the massive government largesse and special legislative protection lavished on the banking and finance industry during the past 30 years. In “Wealth and Democracy” Phillips takes a longer view, showing that government has always been the principle engine of economic development in the United States, not “free markets” as the fiction embraced (and evangelized) by Cox would have us believe.
The libertarian, free-market zealots now have their hands firmly on the levers of power. Their power must be broken. I had high hopes that Obama might be the first step in this correction, but thus far he is shaping up to be a major disappointment.
December 11th, 2008 at 9:42 am
km4 Says:
December 11th, 2008 at 9:20 am
The truth is most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal.
Interestingly this is the conclusion at the end of Krugman’s recently re-issued Depression Economics. Probably because they both have a roughly similar view of the world. It’s the age old dilemma isn’t it. Capitalism is the one economic system that works, even the Chinese communists now believe it, but in any well ordered society it has to be harnessed for the greatest public good and this is sometimes a messy process. You see a classic playing out of this conflict in the pharmaceutical industry which is a tremendous engine for producing medications that benefit us all but is constantly being caught in unethical or downright illegal activities in pursuit of ever higher profits. Capitalism needs gatekeepers and they need to be awake. Cox didn’t believe in gatekeepers but took a well paid assignment as a gatekeeper and then went to sleep.
December 11th, 2008 at 9:46 am
Calvin,
to continue BR’s meme, your post, as well, is ########.
Rand has Nothing to do Austrian Economics, and the same goes for the current crop of ‘our leaders’: the Neo-Cons y Neo-Liberals..
Time to Realize: There’s hardly a different between the (R)’s and the (D)’s , “Hope”-ing for “Change” not withstanding..
December 11th, 2008 at 9:53 am
I’m not reading it. These people are criminals and need to go to prison. Plain and simple. I’m waiting…….
December 11th, 2008 at 9:55 am
DownSouth Says:
December 11th, 2008 at 9:40 am
dig1,
To finish my thoughts, libertarian (free market) true believers like Cox live in a world completely disconnected from reality. As Eric Hoffer pointed out about these doctrinaire types:
“A doctrine insulates the devout not only against the realities around them but also against their own selves. The fanatical believer is not conscious of his envy, malice, pettiness and dishonesty. There is a wall of words between his consciousness and his real self. ”
The Hoffer quote could of course be applied with equal force to communists. Hence the belief that when it comes down to it there isn’t much difference in approach between the far right and far left although their economic theories may be very different. We’re clearly entering a period when the pendulum is going to swing back against far right economic theories and much of the orthodoxy of the past thirty years is jettisoned. The far right’s worst nightmare is probably going to happen. We’re going to look rather like Old Europe. Don RIP.
December 11th, 2008 at 10:00 am
hoffer says:
“Time to Realize: There’s hardly a different between the (R)’s and the (D)’s , “Hope”-ing for “Change” not withstanding..”
That’s because this is a border war. The basic economic geography was settled long ago. There’s no real disagreement about the basic shape of the economic system but merely about how it’s operated and how the spoils are divided up.
December 11th, 2008 at 10:03 am
this: “The Hoffer quote could of course be applied with equal force to communists. Hence the belief that when it comes down to it there isn’t much difference in approach between the far right and far left although their economic theories may be very different. ” from ottovbvs
Was Eric Hoffer’s whole point, the observation was a Universal one..
To try apply it against one Group, to the Exclusion of another, is a perfect example of what E. Hoffer was describing. IOW, to hoist one’s self upon their own pretard..
nice point otto..
December 11th, 2008 at 10:10 am
“That’s because this is a border war.”
yes, where We take orders, dig the Trenches, and serve as Cannon Fodder, a la WWI.
“The basic economic geography was settled long ago.”, sadly, from the same era, 1913..
“There’s no real disagreement about the basic shape of the economic system but merely about how it’s operated and how the spoils are divided up.”
…”"The powers of financial capitalism had (a) far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. Each central bank…sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world.” –Carroll Quigley
http://quotes.liberty-tree.ca/quote/carroll_quigley_quote_e775
December 11th, 2008 at 10:16 am
People like Cox can not take any responsibility either personally or philosophically since it would be a tacit admission of fault or failure. This is the conundrum we all face as evidenced by the continued denial and strict adherence to demonstrated failed policies. Other than Greenspan’s admission who prey tell in this camp has said anything was wrong? Bush still believes he did the right thing in Iraq for God’s sake. Kudlow and the other wingnuts still cling to the supply side philosophy. The problem is that these beliefs define these people and in some cases their very existence. If Kudlow ever changed his philosophy he would not continue in his role as a supply side advocate and have no place as the chief cheerleader. I use Kudlow as an example since he is the vocal and viable.
December 11th, 2008 at 10:17 am
Of course markets can “regulate themselves”, or more accurately, appoint referees, standards and rules by which all market participants must abide.
What do you think would happen if the aviation industry began and no FAA was ever established? Do you think the airlines would do as they please and operate flying coffins, killing a few thousand passengers in the process, and continue business as usual? No, what would happen is that no aircraft manufacturer, or airline would get any form of insurance without demonstrating their operational and safety standards. Alliances, safety standards, and endorsements would all play a part in what airline people chose to fly.
Now substitute that for an FAA that sets the rules, but the minute one major airline lawndarts a 747 full of people, and the public’s confidence in flying with this company has all but evaporated, it deems the stricken airline as systemically important, and instead of letting it go down the drain for its shady safety standards, grants it with a couple of new Boeings to get “bums on seats” again.
And then you blame Rand and the free-market….
December 11th, 2008 at 10:24 am
Of course markets can “regulate themselves”, or more accurately, appoint referees, standards and rules by which all market participants must abide.
Really.
Can you name one?
December 11th, 2008 at 10:30 am
Folks, the spectrum that’s important isn’t Left vs. Right. The spectrum is Command vs. Market systems, and the whole global system has sat squarely on the side of command economies for the past century. You can’t have central banks, fiat money, mammoth welfare/warfare states and still claim we lived in a market-driven society.
Now, AFTER all mainstream politicians and ideologies have IN PRACTICE agreed on the level of government involvement they’d like to have, their quarrel is about how to divide the spoils.
Remember, we’re talking about politicians whose life ambition is to attain power and govern. And we expect THEM to start limiting themselves and letting free people make their choices? Are we so naive as to assume they won’t just use these positions to award themselves more powers? Everyone thinks that THEY can govern even as big and complex an organization as the US. So why not give THEMSELVES more power to let their magic work?
Sadly, we’ve seen the outcome every single time the state gobbles up more power. Theft, Oppression, and War.
Everybody’s calling for the new FDR to arrive. Beware what you wish for.
December 11th, 2008 at 10:30 am
How does anyone that does something so ludicrously stupid as banning short selling of anything get branded a “free-market” idealogue?
Free-market v. socialism; Chicago/Austrian school v Keynesian; these are all very nice dichotomies that have no particular relevance to gathering an understanding of what in fact has happened and what might happen in these unsettled days–they mainly serve to operate as an ink-blot test for political-lizard brains.
“Free” markets are an illusion, but then so is the notion that government-directed markets will do what the government directs. Bigger forces are at work than can be controlled by governments, and markets are never free, but require specified rules and the ability to enforce them, implying some sort of governmental influence and participation.
Blaming the present problems on any particular ideology only reveals one’s own ideology and biases, tainting the analysis. Good economic analysis (which one rarely sees) has no ax to grind, but rather tries to understand what actually happened, and using scientifically-valid correlative/causative analysis, tease out possible reasons why.
Christopher Cox is an idiot because he made no attempt to figure out what was really happening in the markets. Exhibit A to his idiocy was his feckless attempt to prevent a particular type of market transaction (short selling), which was both inept (there are other ways to bet against a company) and anyway had nothing to do with market realities.
December 11th, 2008 at 10:36 am
Prostitution. (Fed aside).
December 11th, 2008 at 10:43 am
@whitespiral: You ARE kidding (“prostitution”), right?
December 11th, 2008 at 10:45 am
And I don’t think “everyone’s calling for a new FDR to arrive”. Who exactly is “everyone”? I DO think that many of us want our government to be COMPETENT, NON-IDEOLOGICAL, PRAGMATIC, EVEN-HANDED, and WISE. Is that too much to ask?
December 11th, 2008 at 10:47 am
Of course markets can regulate themselves
Chinese farmers put poison into watered down milk to make more profit
US Governors sell senate appointments
Let the market regulate itself – but you must harden your heart for all the innocents that are harmed; unless you are prepared to do some regulating of the otherwise free market.
December 11th, 2008 at 10:51 am
I forget to mention HONEST. Thought that was a given but in this day and age, I guess not. No laughing now.
December 11th, 2008 at 10:52 am
Mannwich, no I am not kidding. (Although I’ll admit to choosing for its association to the Fed).
Regarding what you (and I, for that matter) would like our government to be, tell me, when was the last time we’ve had all these wonderful things in a government?
Government should be left with the very basic notions that hold us as societies together. Protect our bodies, our laws, and make sure they’re enforced. Trouble is, it takes government to limit itself to that-and it don’t like it one bit.
December 11th, 2008 at 10:57 am
whitespiral, let me guess: those same insurance corporations would NEVER agree to insure a class of investments unless banks could “demonstrate” the REAL value of those investments.
December 11th, 2008 at 10:59 am
When we elect leaders who don’t believe in government doing anything but doling out our treasury monies to their friends, then it’s no surprise we are where we are.
But “prostitution” as an example that runs quite nicely without government interference? You must be kidding? You think most of those prostitutes live great lives? See that’s the thing with too many so-called “libertarians”, as long as it’s not they, their family or friends who are being exploited, “free market” capitalism is great. I wonder how you’d feel about prostitution if your daughter was one? Just sayin’.
I still think my theory holds true – most so-called “libertarians” love the “free markets” when they’re on top of the heap (and justify their actions as being virtuous because, well, “it’s the free market, and everyone knows it works so well when allowed to flourish freely”), but go squealing to Mommy government when the excrement hits the fan. Notice I said “most”. There are actually some honest libertarians out there but I’ve yet to actually meet one in person.
December 11th, 2008 at 11:00 am
ottovbvs Said: “The Hoffer quote could of course be applied with equal force to communists.”
Absolutely.
This is not the first time that libertarian (free market) fundamentalism has been inflicted on humankind. If we look at the grand sweep of history, communism was actually a reaction to previous excesses of the “bourgeois ethos.” As Niebuhr points out:
“Marxism is so formidable as a political creed precisely because it expresses the convictions of those who have discovered the errors in the liberal-bourgeois creed in bitter experience. Marxism is so dangerous because in its consistent form it usually substitutes a more grievous error for the error which it challenges. In this debate between errors, or between half-truth and half-truth, America is usually completely on the side of the bourgeois credo in theory; but in practice it has achieved balances of power in the organization of social forces and a consequent justice which has robbed the Marxist challenge of its sting.”
Niebuhr goes on to illucidate that it has been America’s great propensity for pragmatism and common sense that has saved us from the excesses of both libertarianism and communism.
Phillips shows that the U.S. has once before–during the Gilded Age and up until the 1920s–decended into the hell hole it now finds itself in. This era was also a time characterized by the unholy alliance between state power and corporations, banking and finance. We managed to break the death grip of corporations, banking and finance during the 1930s and we had almost 50 years of reasonably good governance in the United States. Will we be able to do so again? I for one intend to do my best to see that we do.
December 11th, 2008 at 11:02 am
molten_,
you’re cherry-picking, the “Insurance” companies you are referring to Are creatures of the State, not the Market..
towit, they are some of the most Regulated businesses, de jure, if not de facto, the history of business has ever witnessed..
December 11th, 2008 at 11:02 am
rknox,
An economy’s or society’s products and accomplishments is analogous to the quality of its constituents. Markets aren’t perfect because humans aren’t. Rather, they’re the best and most efficient way to allocate resources and organize societies.
How a free-market’s participants interact with each-other has a lot to do with the level of sophistication that society has already reached. Germans did fine under a decentralized system of principalities – I doubt Russians would have done as well.
I think market-based societies is the closest one can get to true democracy, where you don’t vote on one person every four years, but rather, on a gazillion different things, every second of the day. I think they’re well-suited to more educated, sophisticated, and mature societies, just like an older kid requires less and less restrictions as it grows up.
They’re not perfect. They’re better.
December 11th, 2008 at 11:03 am
Now, AFTER all mainstream bankers and CEOs have IN PRACTICE agreed on the level of market share they’d like to have, their quarrel is about how to divide the spoils.
Remember, we’re talking about business men (and women) whose life ambition is to attain power and wealth. And we expect THEM to start limiting themselves and letting free people buy what they want? Are we so naive as to assume they won’t just use these positions to take for themselves more wealth? Everyone thinks that THEY can run even as big and complex an organization as a multinational corporation. So why not give THEMSELVES more wealth to let their magic work?
December 11th, 2008 at 11:09 am
Oh yeah, I forgot: the Feds MADE AIG insure all those MBS. Just like they made Moody’s and S&P slap “AAA” on those same securities. I’m not saying AIG was doing it intentionally (someone might have known; hard to prove either way). I’m saying: information asymmetry is something I don’t believe free markets can solve. Belief being the operative word; I’m open to suggestion.
December 11th, 2008 at 11:10 am
I’m thinking beyond jail for these folks, after all we’ve seen happen ( as if we didn’t see it coming,) after 350 billion down payment and another 350B coming from the pockets of taxpayers, you’d think they could start to think about lending money to improve liquidity. but no they’re still thinking about the bonuses they still hope to get. On tuesday I read in the NYTimes, proposed ideas to allow bonuses to be paid with a three year takeback option. The stated logic was that sort of thing would help the financiers focus on longer term goals. are you *&%^$ kidding me? These people are incapable of focusing on anything other then themselves. With the nations economy in a shambles the world economy ripping apart at the seams, and these folks are spending time trying to think of a way that they can still get their bonuses!
I think we need a place like Siberia in this country. Some place where we can send folks like Cox here and delusional bank executives to eke out an existance way below the bottom of the food chain. Hard work would result in a modest bonus, for intance after a 12 hour day of labor, if you are in the top ten post hole diggers in your group, you might request cockroaches added to your oatmeal. Perhaps if you show a capacity to work together to lighten the burden when hauling your sledge load of fresh cut lumber, you might be allowed to take a 3 minute shower in snow and sawdust. If you are too weak to keep up and just can’t take anymore, perhaps you would be allowed to wander off into a blizzard.
People can argue about rationality of human beings and markets until they are blue in the face, but if we keep investing our gnp into a bunch of selfish hoarders the markets will be adjusted, but in ways that most people can not imagine currently. Still history is bound to repeat itself and if we’re going to socialize our banking system we are likely to go all the way. You can not have support for failing institutions, borne by all without having corrections being allowed to happen.
December 11th, 2008 at 11:13 am
Also curious is how the uptick rule was abolished precisely at a time when investment banks and hedge funds were becoming starved for capital. Which raises the question whether a theft of historic proportions was perpetrated on the backs of the average Joe and Jane saving for retirement, creating a rigged game wherein stocks could easily be manipulated lower, all so capital could be raised to plug massive holes in financial firm balance sheets. This is what I think of when President Bust vaunts the free market and claims protectionism should be avoided at all costs…
December 11th, 2008 at 11:14 am
molten_
you make a distinction w/o a difference..the “Business” people, you are describing, are, merely, the other side of the duopolistic Coin–Big Biz on the Obverse, Big Gov’t on the Reverse..
DownSouth,
way to be self-contradictory, with this: “This is not the first time that libertarian (free market) fundamentalism has been inflicted on humankind.”
v.
“Phillips shows that the U.S. has once before–during the Gilded Age and up until the 1920s–decended into the hell hole it now finds itself in. This era was also a time characterized by the unholy alliance between state power and corporations, banking and finance.”
and, self-delusional, with this: “We managed to break the death grip of corporations, banking and finance during the 1930s and we had almost 50 years of reasonably good governance in the United States.”
all in one post. Nice job. Aptly, though, it was in a thread pertaining to C. Cox
December 11th, 2008 at 11:14 am
@bcasey: “These people are incapable of focusing on anything other then themselves.”
I know the faux-libertarians well ream me for saying this, but this mentality is a direct by-product of faux-libertarianism and nearly 30 years of the uber-focus on the individual over the collective. If I’m doing something in the name of the free market God, then it MUST be virtuous, after all, everyone has “free will”. That’s the mentality we’ve become mired in.
December 11th, 2008 at 11:19 am
whitespiral, one of the things standing in between you and me on the “voting” aspect of spending money is the raw subliminal power of advertising. That being said, you know now how I feel about the current state of political campaign finance and in some ways, modern elections in general.
Remind me again how everyone can become “educated” without a “public” education system?
December 11th, 2008 at 11:20 am
Mannwhich,
I feel your pain. But these are precisely the thugs that use the term “free-market” to do all that you mentioned and more. You are right in that true free-market advocates are indeed very few, not just because they like markets only on the way up, but also because most of them are economically illiterate.
I mentioned prostitution not as a social ideal, but rather in the purely economic sense of how supply, demand and risk are handled by a system with (almost) no government intervention.
Imagine government handing out prostitution licenses (forget the ghastly ethical implications for a minute) and regulating all aspects of that market. You’d have 50% of the male population with HIV, and a ten-fold increase in sex-change operations after the government decided to boost the now flailing industry with special tax-breaks and subsidies.
But in classic Statist/Keynesian stupidity, you’d then have Kudlow on the air claiming that all this scheme is actually a good thing for the economy because after all, look at the stimulus effect it’s had on plastic surgeons, hospitals, and morticians. Quick, jump on those graveyard stocks before the party’s over will ya?!
December 11th, 2008 at 11:23 am
molten_,
see: RiskAverseAlert Says:
December 11th, 2008 at 11:13 am
for some additional clues.
LSS: We’re being Looted, Latin-American estilio, while we’re still stuck in the same, useless, Right-Left paradigm, meant to distract us, in the first place..
The argument that the two parties should represent opposed ideals and policies, one, perhaps, of the Right and the other of the Left, is a foolish idea acceptable only to the doctrinaire and academic thinkers. Instead, the two parties should be almost identical, so that the American people can “throw the rascals out” at any election without leading to any profound or extreme shifts in policy.
- Carrol Quigley, Tragedy and Hope
December 11th, 2008 at 11:26 am
Mannwich Said: “I still think my theory holds true – most so-called ‘libertarians’ love the ‘free markets’ when they’re on top of the heap (and justify their actions as being virtuous because, well, ‘it’s the free market, and everyone knows it works so well when allowed to flourish freely’), but go squealing to Mommy government when the excrement hits the fan.”
I’ll let Niebuhr respond:
” ‘Power,’ [John Adams] wrote, ‘always thinks it has a great soul and vast views beyond the comprehension of the weak; and that it is doing God’s service when it is violating all His laws. Our passions, ambitions, avarice, love and resentment, etc., possess so much metaphysical subtlety and so much overpowering eloquence that they insinuate themselves into the understanding and the conscience and convert both to their party.’ Adams’s understanding of the power of the self’s passions and ambitions to corrupt the self’s reason is a simple recognition of the facts of life which refuste all theories, whether liberal or Marxist, about the possibility of a completely disinterested self. Adams, as every Christian understanding of man has done, nicely anticipated the Marxist theory of an ‘ideological taint’ in reason when men reason about each other’s affairs and arrive at conclusions about each other’s virtues, interests and motives. The crowning irony of the Marxist theory of ideology is that it foolishly and self-righteously confined the source of this taint to economic interest and to a particular class. It was, therefore, incapable of recognizing all the corruptions of ambition and power which would creep ineviatbly into its paradise of innocency.”
Libertarianism, because it is also based on a fiction about human nature, suffers from the same flaw. It is “incapable of recognizing all the corruptions of ambition and power which would creep ineviatbly into its paradise of innocency.”
December 11th, 2008 at 11:26 am
@whitespiral: I hear you and understand your point. Believe me, I have a “libertarian” streak in me as well and respect people who truly espouse those views (accountability has to be an integral part of true libertarianism), but I just don’t think true, pure “libertarianism” works in the real world. Human nature is just too messy.
What irritates me to no end are the faux-libertarians who use that ideology to justify their exploits but never take responsibility for their actions. That’s the most galling aspect of it. It’s utterly disingenuous and they need to be called out.
December 11th, 2008 at 11:27 am
Hoffer, I’m not quite sure what you are trying to say, but if I understand you: you say the events I was describing were merely a reaction of the insurance companies to various government insanities? Like – lowering rates, or something?
December 11th, 2008 at 11:32 am
@DownSouth: Nicely put.
December 11th, 2008 at 11:32 am
Right got it, the people running the system are rotten, so the system must be broken (or useless). I mean, I’d never hold up the people currently in government (Republicans more than Democrats, but Democrats too) as “regulators” so much as “part of the problem”. I can definitely hate ALL politicans and LOVE market regulation in the same breath.
December 11th, 2008 at 11:34 am
Also, I’d just like to weigh in but I think legalizing regulating prostitution is a good idea. Why not legalize, regulate, and tax pot while were at it?
December 11th, 2008 at 11:37 am
.001% of the population in the Netherlands has AIDS; just looked it up to provide a data point in that particular conversation.
December 11th, 2008 at 11:37 am
err sorry .1%, can’t do math… hate self…
December 11th, 2008 at 11:40 am
Molten_tofu:
You are assuming that a free-market can’t supply quality education to everyone. Well, if we were talking in a world where food was handed down to every citizen by its government, you’d be saying food too should be provided by the government else we’ll starve.
Mannwich,
The people of which you speak are just looking for an excuse and snippets of an ideology to cover their loot. Beware of placing the collective above the individual though. Hitler required Germans to do the same and look where they ended up.
I have no problem with the notion of families or communities, or the traits of selflessness and altruism. In fact, I consider them some of the most noble virtues a man can have.
But let ME choose whom that collective includes and whom it does not. For me, that may be men and women of the Zoroastrian faith, or dodgeball enthusiasts. For you it may be some other group, and sure enough, that might well not include me.
That’s how prosperous, harmonious societies are formed, and any institution that makes you include OR exclude someone from this group by force is setting you, and them, up for disaster.
December 11th, 2008 at 11:43 am
@whitespiral: I’m not “placing the collective above the individual” but I AM advocating some level of balance and accountability to one’s community. That’s it. It’s all about balance and we’ve gotten so out of whack in recent years in the frenetic pursuit of wealth by the individual at all costs……..
December 11th, 2008 at 11:44 am
by 2007 that was up to .2%, U.S.: .3% ok I’m done with the AIDS stuff
December 11th, 2008 at 11:46 am
molten_
you went with: “Oh yeah, I forgot: the Feds MADE AIG insure all those MBS. Just like they made Moody’s and S&P slap “AAA” on those same securities. I’m not saying AIG was doing it intentionally (someone might have known; hard to prove either way). I’m saying: information asymmetry is something I don’t believe free markets can solve. Belief being the operative word; I’m open to suggestion.”
my point is that few people have any idea of how Regulated, de jure, our business sector, especially Anything Financial, really is..there are whole Industries predicated upon ‘Compliance’ alone..
I’m, also, saying, that to think that this ‘crack-up’ happened ‘by accident’/'was just human nature’, is not to be thinking, at all.
Too many ‘watchdogs’ went to sleep, many, that did Bark, or were about to, were ‘put to sleep’..(Spitzer is a famous example)
to this: “merely a reaction of the insurance companies to various government insanities?” more specifically, see: http://www.icerocket.com/search?tab=web&fr=h&q=Insurance+company+regulation
for starters, and: http://books.google.com/books?id=zuX32UT4K3kC&pg=PT42&lpg=PT42&dq=bank+holding+company+regulators&source=web&ots=XSUEQi_TbF&sig=s0CAG3g2YpFKBpjnLLMRQjBouvI&hl=en&sa=X&oi=book_result&resnum=2&ct=result
for further background. Good Luck!~ b/c that’s only the surface of, but, two facets of what’s at play.
Forests have been felled, to produce the paper, to print the regs promulgated by our beneficent Gov’t..fat lot of good it did.
People have been ‘Cained out of their Critical Thinking faculties, lulled by the soft-crooning of “That’s why we have Gov’t”–like it’s, somehow, from without us..and, sadly, it is.
December 11th, 2008 at 11:47 am
I don’t want to be trite, but whitespiral your assuming it can. All I know is a payed 40k a year for four years for my private education.
December 11th, 2008 at 11:52 am
And as an interesting comparison, isn’t the current median income of a US household more or less what I payed for said education?
December 11th, 2008 at 11:56 am
Mannwich,
w/ this: @whitespiral: I’m not “placing the collective above the individual” but I AM advocating some level of balance and accountability to one’s community. That’s it. It’s all about balance and we’ve gotten so out of whack in recent years in the frenetic pursuit of wealth by the individual at all costs……..
of course there needs to be ‘accountability to one’s community’–read the Federalist Papers, and, especially, the Anti-Federalists, as well. The driving Ethos of the system those boys devised was to keep it Local, in plain view of those that could, readily, correct the wayward actions, of the few, before they threatened the many..
guess what? that pyramid has been inverted, now, the wayward actions, of the few, out of sight of most, are/do effect the many, before it can be, effectively, stopped-short..
December 11th, 2008 at 11:59 am
molten-yes I am, because just like in the example of food, it works.
To all that are running with this common theme… Accountability for government is good but it will always be inferior to the market’s way of rewarding/punishing good/bad behavior.
Besides, is it any wonder that any point in a democracy’s history, all you’d hear a citizen complain about is one of the following:
-”There just is no real leadership in our government any more”
-”Isn’t there any honest politician out there?”
-”How can this government have screwed this up so badly?”
AND IT NEVER GETS ANY BETTER.
Customers complain too. But the companies that serve them better do something about it or they go out of business (at least in the pre-bailout era).
December 11th, 2008 at 11:59 am
Right, so it’s our responsibilities as citizens to make sure the government works for us; I could go either way on the notion that quantity of regulation is inversely proportional to quality of regulation. Human beings are both very good at (accidently) making and (and very purposefully) finding loopholes, and less good at fixing them; perhaps the quantity is justified. I’ll check out those links when I’m not not working at work. Which is what I shouldn’t be doing.
I’m definitely not saying it happened by accident…
December 11th, 2008 at 12:14 pm
We’re never going to go anywhere but downhill unless the voters in this country wake up and throw out every career politician in office today, and restrict all Representative candidates to two terms just like the POTUS and one term for the Senators.
We are in this mess today SOLELY because the people who have the power in their hand will not reconcile their 18% approval rating of Congress to their return of incumbents to office, time after time.
There isn’t a reason in the world to give these very flawed men and women lifelong ‘jobs’ in which they work maybe two days a week on people’s business.
Either vote them out and make them get real work or put up with these kinds of consequences the rest of your natural life.
The people have no one to blame but themselves ultimately, for the actions of the corrupt people they keep putting back in office.
December 11th, 2008 at 12:16 pm
Absloutely BR, and again, thanks for being a voice for truth, there are very few these days.
I’d just ad that, effectivelly everyone operating in the financial and government worlds today has grown up in the regulatory environment created by the 1930’s. Everything we knew (up til now) was rooted in that experience. The efforts to over throw regulated, ‘limited’ capitalism that the Republican party has been spear heading for 30 years were thus an attempt to throw out the prosperity and public contentment brought about by regulation and by the commitment to fair, honest, and legal dealings created by the experience of the consequences of not doing that which was the 1930’s. These people didn’t know what the world they were advocating for, scheming for, manipulating for, looked like. They sold themselves a pile of home cooked crack (called ‘free markets’ — even Adam Smith didn’t believe in ‘free markets’), and it got them good and high, and off they went to destabilize the world, confident in thier haze that they knew best. And now the chickens have come home to roost. Free Markets are back and lo and behold — without regulation, with out effective policing, without honest dealing, without limitations on gambling…. the card game turns in to a bar fight, and the bar fight into a burning building. And the rest of the town? They get to lump it. They get to put out the fire, instead of tending to their business. But it’s only in the modern age of fools and suckers run rampant in every corner, that anyone could possibly believe that 1) it wasn’t the gamblers fault, and 2) they gamblers deserve to get paid for the fire they started.
Christopher Cox has been an obvious stooge, handing out the matches, and the whiskey, for quite some time — many years in fact. That the WSJ will publish him just goes to show you… they are working for the same master.
December 11th, 2008 at 12:22 pm
There is human nature, the product of eons of natural selection, which has both selfish and altruistic components – usually the altruistic components only manifest in terms of an interest group with which one identifies, such as family, clan, village, nation, religious affiliation group, etc. The relative deficiencies being discussed above of both the “free market” and the “(government) regulated environment” result when the “selfish” component takes advantage of a situation to the detriment of the wider group. While we decry this, it’s actually only human beings acting according to their instinctual nature. This aspect shows both in a “free market” arena (e.g., Chinese mini-capitalists slipping melamine into the baby formula) and in a regulated environment (the USDA denying a meat processor the right to inspect every animal for mad cow disease). So how does this species, the human species, move itself out of selfish instinct born of ancient evolutionary forces towards “responsibilities as citizens to make sure the government works for us”. My guess would be widening what we see as our interest group to include more and more people – not just your own moneyed, political, or religious cohort – but the wider world. At this point of near global meltdown, it would seem that it would be clearer now that our rightful field of common interest is the entire planet. The vehicle for this is awareness fostered by education.
December 11th, 2008 at 1:24 pm
Mind,
“Widening” and aggregating yet further is just about the worst direction to take. That’s what brought us here. Arbitrary groupings of people, ever-larger aggregation, and ever-increasing centralization and isolation of control.
All this, in a world whose complexity is exploding.
Recipe for disaster if you ask me.
December 11th, 2008 at 1:34 pm
Ugh. We don’t have the Fed to mitigate the cycles. The Fed CAUSES the cycles. Or at least, it exacerbates cycles that are endemic to fractional reserve banking. The fed was created ostensibly to maintain price stability and eliminate the business cycle. It has done NEITHER. The dollar has lost 96% of its value since the Fed was created, and the cycles have become more vicious.
December 11th, 2008 at 1:47 pm
Well said vic. But in all earnest, the Fed was created to save a group of wealthy bankers and give them the most powerful tool in the world, the key to the printing presses.
December 11th, 2008 at 3:21 pm
We want heads. Bloody heads on sticks. It is clear their source of motivation. It is clear that they knew what they were doing. It is clear the result of their activity. What is not clear is why we haven’t rounded them all up and shot them.
December 11th, 2008 at 3:22 pm
“Capitalism never works unless there’s some moral responsibility for the actions that those that are in power to be have towards those that are at their mercy”
I am with you on that statement dig1. But I am a little more cynical and would go as far as saying that since the above paradigm require a morality that is completely in contrast to the selfish greed that drives capitalism, we must have a strong government to ensure that capitalism works. Because it can only work when a strong hand constantly prevent that greed from becoming destructive, yet allow it to be productive. We have pleanty of government to prevent poor people from robbing rich people with a gun, why is it so hard to understand that we also need government to prevent rich people from robbing poor people with a pen?
December 11th, 2008 at 3:26 pm
DeDude,
It is actually government that is doing the robbing of the poor, for the rich, with that pen. It’s called monetary inflation.
Excess greed, excess booms, and all the behaviors that these spawn are a direct result of the real, and ultimate cause of our present situation, fiat money.
December 11th, 2008 at 3:31 pm
@whitespiral: I’m no fan of the Fed either but I agree with Barry that you’re “tilting at windmills” in thinking they will ever be abolished, especially as longs other countries have Central Banks. You may be right about this in theory but it doesn’t mean all other forms of government regulations/oversight are necessarily “bad” for the greater good. I think the answer here is that “it depends”. Many “black/white” types who see no shades of gray won’t like it, but I think it’s true.
December 11th, 2008 at 3:52 pm
Which one of the above posters is Barry?
Mannwich, being cynical about whether or not the Fed will ever be abolished is one thing, but withholding what one know to be true is quite another.
Just because the ultimate cause of most of our problems isn’t likely to go away (for all the wrong reasons) doesn’t mean we should stop saying it, especially at a time when they’re asking for (and getting) extraordinary new powers with the same, inexistent oversight.
Unfortunately, this crisis is causing all the wrong conclusions to be drawn by policy makers-but even worse, the public is losing faith in capitalism when it should be losing faith in what’s really at fault here. It’s making the public hate entrepreneurship and the men behind it, because in their eyes mostly everyone who made money in the past 30 years did so unfairly, unethically, and as is now obvious, to the detriment of all others.
But its not moneymaking that’s so wrong, nor “greedy” and “selfish” instincts. It’s the guys with the slick smiles that are handing out free lumber for your fireplace, when in fact, they’ve been chopping it off your house’s foundation.
That’s what paper money has always done in history, and it always ends in tragedy. This stuff the public should know.
When Schiff was speaking years ago about the coming storm, he too was “tilting at windmills”. Even if he didn’t manage to change much by doing so, he still should have acted as he did because people listening to what warning he gave back then will want to hear what more he has to say.
December 11th, 2008 at 4:12 pm
whitespiral; I agree that government as it has worked since 1980 has not served its true functions. However, I have seen no indication that the lack of government is going to do it any better. What we need is a better group of people running government and an informed electorate that will throw the rascals out if they fail to serve all of the people.
December 11th, 2008 at 4:20 pm
Mannwich,
thanks for bringing back this idea: @whitespiral: I’m no fan of the Fed either but I agree with Barry that you’re “tilting at windmills” in thinking they will ever be abolished, especially as long as other countries have Central Banks. ”
what does “other countries having CBs” have to do w/ anything?
you 2 make CBs sound like Jack’s Stalk–Magic, how, exactly does that work? what’s the unilateral benefit Country A would have, over Country B, merely by having a CB?
December 11th, 2008 at 4:25 pm
DeDude-
Yes, that’s what we need, but we never got it, and we’re not going to get it now. So we can minimize the damage they do by shrinking their job description. That was the spirit of the Constitution until we started drifting toward federalism and statism. The US was founded on a premise of limited government, with checks and balances, and fully functioning state governments. The Civil War, WWI, WWII, the Cold War, and Bush II were enormous setbacks for liberalism in America.
We first adopted the Imperial British mercantilist view of the world we fought against in the American Revolution, and are now quickly moving toward the kind of corporatism that Mussolini envisioned for Italy during his time in power.
Governments with the power to print money are by definition locked in a Ponzi scheme they can’t get out of. And like the end of these pyramid schemes, the cleanup will be messy.
December 11th, 2008 at 4:45 pm
Whitespiral; The privately owned mortgage company that got some high-school drop-out into a 400K house with a subprime loan is not going to let profit from that transaction disappear without the prompting from laws and government enforcing those laws. Pretty much all of the problems that developed related to the mortgage industry and the investment in mortgages can directly be traced to a needed government action that did not occur (because the action would have served the poor not the rich). A lack of government is not going to make the predators less predatory, it will just make their job easier. A change of job desription for government is what we need.
December 11th, 2008 at 4:47 pm
whitespiral,
I’d really love to see someone show how you’re wrong. Things would be a whole lot easier if you were.
Sadly, wishing doesn’t make it so.
DeDude,
what happened, explicitly, in 1980, that was any different than ‘76, ‘72, ‘68, ‘64?
funny, as in Sad, we ‘Caines think coup d’etats only happen in ‘other’ countries..
btw, if you mentioned 3/1981, instead of 1980, you might have a better point..
December 11th, 2008 at 4:52 pm
DeDude,
sorry, but you’re either obtuse, or DeLusional. your whole ‘pvt. mtg.co./subprime loan’ fantasy would have never occured w/o our Gov’t-sanctioned FedRes fueled Fiat ‘money’ schema..
that’s the point.
December 11th, 2008 at 5:04 pm
Mark E. Hoffer; wake up to the real world and stop being so obtruse and delusional.
The smarter rich guy sucking money out of the poor guy with less insight/information or understanding of the process will happen anywhere that you don’t have an even “bigger dog” protecting the little dog. Its possible that without fiat money and FedRes etc. that it would have been a 20K house (or clay hut) sold to a guy with a 25 cent/hour salary, but the pattern and result would have been the same. There is nothing in human nature that will prevent the greedy rich bastards from sucking on the poor except for the fear of fines and jail-time.
December 11th, 2008 at 5:15 pm
The neo-con-mens Nirvana of no government intrusion into the free market forces exists already, and it doesn’t work that well – its called Somalia.
December 11th, 2008 at 5:21 pm
DeDude-
You overestimate the rich guy’s ability to pounce on the poor guy without using the government’s tentacles. If we were in a market where there were no perverse government incentives, moral hazard, and unending credit expansion, and the poor guy took on a loan he later figured out he can’t pay….well gee whiz, tough luck!
In this case though, the suckers weren’t just the borrowers (who can walk away anytime they like), but the lenders who never realized that this ponzi scheme is going to come to an end.
This little guy/big guy argument is just moot. Without government help David can certainly survive Goliath, and in many cases even beat him. Whether that’s a home owner taking out a mortgage (voluntarily I might add) from a more competitive bank, or a Microsoft upstart beating an IBM only to be beaten by a Google….
It doesn’t matter-point is-government screws things up for the small guy much more than anyone realizes (or cares to admit).
December 11th, 2008 at 5:21 pm
DeDude,
actually, if you had bothered to read any of the Papers left behind by our Founders, you would have found, at least, 2 things: 1.) sentiments similiar to yours, and 2.) their considered proscription to have the Nation’s currency to Gold & Silver–precisely to protect the ‘little dog’, as you say, from the predations of the schemers, and monetary architects they well knew of..
this,though: “Its possible that without fiat money and FedRes etc. that it would have been a 20K house (or clay hut) sold to a guy with a 25 cent/hour salary, but the pattern and result would have been the same.”–is utter G*rbage..I’d love to see you substantiate that..
That whole Pap, that you’ve suckled, all the fancy-sounding HS about “Informational Asymmetry” is nothing more than a canard–used as a Trojan Horse, to excuse Gov’t overstepping its Constitutional Bounds and proceeding, on, to enslave you..
well done, hope u got an A in that class..
‘
December 11th, 2008 at 5:34 pm
My, my, my,
Friends, the issue is not the “isms” running the economy or human nature. Can we all agree that humans are in charge here? Okay, somebody cheated and didn’t get caught. That “somebody” may or may not have an economic philosophy that punishes honesty and rewards dishonesty but the issue is that the SEC was and is ground zero in the free wheeling, devil may care behavior of the hedge funds and investment banks. Now I hear that GS is recommending CDSs on state government debt. In some countries that would be considered treason. So, is it okay to buy a CDS on Florida or California debt?
Fuck no! It’s unAmerican!
I say put teeth in the laws and staff the SEC with honest people and everything changes for the better. And that is why who ever gets the SEC job with Obama will tell us if there is hope for a decent economy.
The war by the greedy elite is centered on keeping gatekeepers in control of the regulators. If they win, we’re back to feudalism (another “ism”, I know).
December 11th, 2008 at 5:43 pm
Mark; I have no doubt that the founding fathers had the best of intensions – but that doesn’t mean that the Gold standard would have prevented any and all imaginable monetary and financial problems 300 years later. It doesn’t seem to me that the depressions our economy experienced before removal of the Gold standard were any less severe than the depressions we have experienced after its removal. Nor does it seem to me that the “suck-the-poor-dry” schemes have been any more venomous and successful after the removal of gold standard than they were before (try read a little of the more recent history from around the time Marx and Lenin were around). The pattern and results of human nature (greed and selfishness) is the same regardless of fiat or gold standard money – take a trip to Somalia; they don’t even have anything that could be called a currency and the pattern of someone trying to exploit someone else is at least as strong as here in the US. And that “canard” of informational asymmetry is not anything invented by government – it is observable every single second of every single day in the US when a deal is struck. However, to observe it you have to live in the reality based world and not be blinded by your ideology in such a way that all your observations must lead to condemnation of fiat money and/or big (libural/socialist) gubinment.
December 11th, 2008 at 5:49 pm
DeDude,
I agree that the foxes are in full control of the hen house. And also that they have a plethora of apologists for their pecadillos. Remember the Dukes of Hazard TV show? Nobody ever mentioned dethroning Boss Hog. Why is that? That’s just the way it is, says Mises. We have to work around that. The Commies say we hang Boss Hog, put the “proletariat” in charge and everything will be fine. Of course, there is the 100 year “transition” period for the “temporary” dictatorship. In other words, it’s all the SAME OLD SHIT; someone wants to tell you how to live and what to do and not do.
Ideological leaders all want you to “die for the cause” while they run for cover at the first sign of problems. Ignore all the pedantic assholes and you’ll be all right. Just don’t be too “in your face” about it; pedantic assholes get offended easily.
December 11th, 2008 at 5:59 pm
@Mark E Hoffer, whitespiral: A big part of me would LOVE to see your ideal libertarian fantasy world come to fruition just so you can be proven utterly wrong.
I really think that many of you LOVE tilting at windmills for the simple fact that you know your ideal world will never happen on this earth, so you get to stand back and theorize just how wonderful our lives would be only if the miracle of the free markets were allowed to run amok without any government interference whatsoever. If anything, we’ve devolved as a human race because rewards are far bigger, therefore, the temptation to cheat is far bigger. It would be disastrous but part of me would love to see it then quietly remind you I was right about the results.
Hard care libertarians are no better than hard core Marxists. You’re all living in a dream world that will never happen here on earth.
December 11th, 2008 at 6:08 pm
AGG; don’t think for a second that I have ANY sympathy for “Communists” of USSR or Mao China, or any of the other dictatorships that claimed to fight for the proletariat. The weakness of their particular “-ism” was the idea that you could come to something good via a “temporary” dictatorship. I understand why the ruthlessness and brutality of the forces they were up against could lead them to the dangerous idea that it was needed – but it was immensely arrogant (or naïve) of them to think that they could set such a thing loose and then control it. They were indeed not willing to risk “dying for the cause” trying to do it the right way, and ended up living a long disgracefully life of doing the wrong things.
December 11th, 2008 at 6:08 pm
Libertarians and more specifically the austrian school have to date put forward some of the most valuable insights into where the system has gone badly wrong. It’s hard to ague that we’d be alot better off without the Fed, moral hazard and FRB.
However being able to put ones finger on the problem does not mean that one is necessarily the best qualified to pronounce the solution. Reading the comments here and elsewhere on similar forums it seem that the libertarian constituency is in danger of disappearing up its own arse.
What we’re seeing is a continuing entrenchment of Libertarian dogma coupled with little self-awareness from the movement itself. Libertarians should ask themselves what their constituency is. Here’s my guess: almost certainly white male, overeducated and more likely than average to be single or childless. I can’t recall having come accross a single female libertarian as far as I know, which I think is very telling.
We hear alot about how individuals should be free, with state involvement restricted to essentially police functions to prevent fraud and improper use of force and other coercions, yet absolutely nothing about how this ‘perfect police state’ is to be enacted in terms of institutions, checks and balances and so forth. Likewise nothing on how to price externals like environmental depletion.
Libertariansim is currently just another form of economic reductionism, and until that changes it deserves no higher esteem than any other school of economic thought, and will remain largely irrelevant in the real world. This is especially true if one accepts that the future lies increasingly with groups who tend to favour collectivism (women, asia) as well as non-monetary issues of environmental and social collateral damage.
I had originally hoped that libertarianism would offer more solutions than conservatism/republicanism, but so far, I’m just not seeing it. Where’s the real vision?
December 11th, 2008 at 6:13 pm
@scepticus: Brilliantly put. Bravo.
December 11th, 2008 at 6:14 pm
Mannwich,
Perhaps what we need is what the shrinks call “acting out” behavior modification. We all treat people we despise, as well as our friends, with respect for a limited time and hope it catches on. If it doesn’t, we jail their ass. However, we need an honest sheriff. The first people he must put in jail are the ones that claim sheriffs are a bureaucratic encumbrance to the “free” market.
December 11th, 2008 at 6:16 pm
@AGG: Ideological dogma of ALL stripes needs to be put down for good. If there’s any time for that to happen, it’s now. It’s literally killing this country.
December 11th, 2008 at 6:25 pm
Agree with Mannwich. The only long term viable ideology is that of sustainability – social, polticial, environmental and monetary. Everything else is secondary (including personal freedom), and you don’t have to believe in global warming or have kids to see the sense of that.
As to whether free market or collectivist solutions are the best answer I don’t have a view currently. However libertarianism needs to frame itself in this context which it has so far failed to do. Can libertarianism forget about gold and the Fed for a moment and think about long term sustainability?
December 11th, 2008 at 6:26 pm
Mannwich,
what’s up? can’t you answer my Q:? “I’m no fan of the Fed either but I agree with Barry that you’re “tilting at windmills” in thinking they will ever be abolished, especially as long as other countries have Central Banks. ”
what does “other countries having CBs” have to do w/ anything?
you 2 make CBs sound like Jack’s Stalk–Magic, how, exactly does that work? what’s the unilateral benefit Country A would have, over Country B, merely by having a CB?”
yet, you sally-forth, trying to rope positions, that I’ve never proclaimed, onto me?
bud, you’re better than that, no?
please do, answer away..
December 11th, 2008 at 6:30 pm
scepticus:
please, refrain from self-refutation, it’s a painful thing to witness.
this: “The only long term viable ideology is that of sustainability – social, polticial, environmental and monetary. Everything else is secondary (including personal freedom), and you don’t have to believe in global warming or have kids to see the sense of that.
As to whether free market or collectivist solutions are the best answer I don’t have a view currently. However libertarianism needs to frame itself in this context which it has so far failed to do. Can libertarianism forget about gold and the Fed for a moment and think about long term sustainability?”
to: “long term viable ideology is that of sustainability – social, politicial, environmental and monetary.”
v.
“Can libertarianism forget about gold and the Fed for a moment and think about long term sustainability?”
hello, do you ever do Mathematics?
December 11th, 2008 at 6:35 pm
Scepticus; to me it always seemed that the Libertarian ideology, vision and goal were all the same: “leave me alone to do whatever the heck I want”. With that it was enevitalbe that it ended up with a very small target class of priviledged asocial white males. Whenever I get to dig a little deeper into them with questions of what kind of protections this limited government should provide, it is always turns out to be a tiny little circle of protection around that particular person himself.
December 11th, 2008 at 6:37 pm
and, scepticus, with this: “We hear alot about how individuals should be free, with state involvement restricted to essentially police functions to prevent fraud and improper use of force and other coercions, yet absolutely nothing about how this ‘perfect police state’ is to be enacted in terms of institutions, checks and balances and so forth. Likewise nothing on how to price externals like environmental depletion.”
Now, I know Jim Carrey is your favorite Actor, b/c you are talking out of ….
if you haven’t seen it, you’re not looking..
try http://www.mises.org and use the ’search’ function, then come back and tell us what isn’t there to be ’seen’..
December 11th, 2008 at 6:38 pm
mark: “hello, do you ever do Mathematics?”
yes, I do most days. I get paid for it.
Why not address my main points rather than try and be clever?
December 11th, 2008 at 6:45 pm
@mark: “if you haven’t seen it, you’re not looking..”
I’ve not read the entire manifesto I must admit.
My point is more about the ambassadors of the manifesto (such as yourself perhaps) than the manifesto itself. Simply put I have yet to hear a libertarian talk about anything significant apart from his own freedom.
December 11th, 2008 at 6:46 pm
scepticus,
I did, I drew out, for you, your self-refuting nonsense.
see: to: “long term viable ideology is that of sustainability – social, politicial, environmental and monetary.”
v.
“Can libertarianism forget about gold and the Fed for a moment and think about long term sustainability?”
it is why I asking you if you ever did Mathematics, for if you did, you’d see, readily, that the ‘Fractional-Reserve’ con game that you’d like, so much, to side-step, is anti-thetical to your predicate: “long term viable ideology is that of sustainability – social, politicial, environmental and monetary.”
LSS: exponential curves don’t fit the ‘Natural’ model
December 11th, 2008 at 6:52 pm
scepticus,
at every turn, you betray your own stupidity.
you think this: I’ve not read the entire manifesto I must admit. –is cute. Actually, it’s Ignorant.
There is no ‘manifesto’, that, classically, would have been Marx’..
and, with this: “Simply put I have yet to hear a libertarian talk about anything significant apart from his own freedom.”
you should get out more, or read more broadly.. sitting around, w/ other Statist boot-lickers, telling yourselves campfire stories about, imagined, ‘libertarians’, and their ‘horrible’ ethos is, probably, as close to subject as you’ve ever come..
December 11th, 2008 at 7:05 pm
Mark; maybe you are just a really poor communicator, but none of what you have said is getting rid of the stereotypes of libertarians that you seem to claim as unfair. And the “go-look-at-this-site-and-you-shall-see-the-light” argument is usually one trotted out by people who have no real answers. So is the “this-(Rabbit-out-of-the-hat)-and-this-(Rabbit-out-of-the-hat) proves that you are wrong or self-contradictory argument. You got to work on these things if you want to make your little club bigger.
December 11th, 2008 at 7:34 pm
DeDude,
maybe I am a poor communicator, that, certainly, is a possibility.
though, this: “And the “go-look-at-this-site-and-you-shall-see-the-light” argument (unfair of a characterization as it is) was in response to: “I’ve never seen…”–Sorry, but it isn’t my Job to pre-masticate all the knowledge, in the world, for those that don’t bother to use their teeth..it is why a pointed out a reference, for him to peruse.
past that, I have no idea what your talking about, with this: “So is the “this-(Rabbit-out-of-the-hat)-and-this-(Rabbit-out-of-the-hat) proves that you are wrong or self-contradictory argument. ”
if, assuming, you’re pointing to my pointing out his self-refutational ‘arguments’, I was, merely, quoting him, and, certainly, not pulling ‘rabbits-out-the-hat’–whatever that means..
and, lastly, do not mistake me for “want(-ing) to make (my)/your little club bigger.”
I belong to no ‘club’, I am, simply, interested in separating Fact from poli-sci-fi Fiction..
People, to me, are Free to Choose, their own Ends, just not, Their own Facts.
We’ve been given a marvelous Gift of a functioning Mind, it is, to our own, and noone else’s, detriment if we care not to acknowledge, let alone utilize, it.
December 11th, 2008 at 7:35 pm
Mannwich Said:
“I really think that many of you LOVE tilting at windmills for the simple fact that you know your ideal world will never happen on this earth, so you get to stand back and theorize just how wonderful our lives would be only if the miracle of the free markets were allowed to run amok without any government interference whatsoever. ”
Eric Hoffer came to essentially the same conclusion:
“The effectiveness of a doctrine does not come from its meaning but from its certitude. No doctrine however profound and sublime will be effective unless it is presented as the embodiment of the one and only truth… If a doctrine is not unintelligible, it has to be vague; and if neither unintelligible nor vague, it has to be unverifiable. One has to get to heaven or the distant future to determine the truth of an effective doctrine. “
December 11th, 2008 at 8:04 pm
scepticus Said: “This is especially true if one accepts that the future lies increasingly with groups who tend to favour collectivism…”
First I want to agree with Mannwich: Brilliantly put. Bravo.
Then I want to use your comment as a hook to hang this quote by Reinhold Niebuhr:
“The ironic contrast between Jeffersonian hopes and fears for Americans and the actual relaities is increased by the exchange of ideological weapons between the early and the later Jeffersonians. The early Jeffersonians sought to keep political power weak, discouraging both the growth of federal power in relation to the States and confining political control over economic life to the States. They feared that such power would be compounded with the economic power of the privileged and used against the less favored. Subsequently the wielders of great economic power adopted the Jeffersonian maxim that the best possible government is the least possible government. The American democracy, as every other healthy democracy, had learned to use the more equal distribution of political power, inherent in universal suffrage, as leverage against the tendency toward concentration of power in economic life. Culminating in the “New Deal,” national governments, based upon an alliance of farmers, workers and middle classes, have used the power of the state to establish minimal standards of ‘welfare’ in housing, social security, health services, etc. Naturally, the higher income groups benefited less from these minimal standards of justice, and paid a proportionately higher cost for these than the proponents of the measures of a ‘welfare state.’ The former, therefore, used the ideology of Jeffersonianism to counter these tendencies; while the classes in society which had Jefferson’s original interest in equality discarded his ideology because they were less certain than he that complete freedom in economic relations would inevitably make for equlity.”
“In this development the less privileged classes developed a realistic appreciation of the factor of power in social life, while the privileged classes tried to preserve the illusion of classical liberalism that power is not an important element in man’s social life. They recognize the force of interst; but they continue to assume that the competition of interests will make for justice without political or moral regulation. This would be possible only if the various powers which support interest were fairly equally divided, which they never are.
“Since America developed as a bourgeois society, with only remnants of the older feudal culture to inform its ethos, it naturally inclined toward the bourgeois ideology which neglects the factor of power in the human community and equates interest with rationality.
“Such a society regards all social relations as essentially innoncent because it believes self-interest to be inherently harmless. It is, in common with Marxism, blind to the lust for power in the motives of men; but also to the injustices which flow from the disbalances of power in the community.”
December 11th, 2008 at 8:25 pm
DeDude Said:
“I agree that government as it has worked since 1980 has not served its true functions. However, I have seen no indication that the lack of government is going to do it any better. What we need is a better group of people running government and an informed electorate that will throw the rascals out if they fail to serve all of the people.”
Exactly!
December 11th, 2008 at 8:35 pm
By the way, DeDude, what you’re talking about is called democracy, or what Cornel West called “the correction from below.”
December 11th, 2008 at 11:11 pm
scepticus,
I did, I drew out, for you, your self-refuting nonsense.
see: to: “long term viable ideology is that of sustainability – social, politicial, environmental and monetary.”
to your point of sustainability, see: http://www.precaution.org/lib/08/prn_zw_and_climate.081211.htm
ZERO WASTE ACTIVISM TAKES ON GLOBAL WARMING
[Rachel's introduction: The phrase "zero waste" includes two different activities -- municipalities aiming to recycle, reuse or compost up to 90% of municipal discards ("trash"), and "zero waste manufacturing" also know as "designing for re-use," which aims to create products that can be endlessly remanufactured and reused. Both activities are important to the future of the planet.]
By Tim Montague
The the Big Three automakers are licking their chops over the $14 to $34 billion in tax-payer bailouts they hope to find in their Christmas stocking. Meanwhile, community based environment, health, jobs and justice activists are planning an important Zero Waste Communities conference in the Motor City February 6-9, 2009.
The conference will bring together community-based activists from the U.S. and Canada aiming to create jobs by phasing out dumps and incinerators. Unlike the auto executives who have resisted innovation and the manufacture of cleaner cars, these activists will be organizing, sharing ideas, and swapping business plans to create real economic opportunity for communities of color and/or low income.
The Zero Waste Communities conference is part of a broad trend that is changing the environmental movement in the U.S. Grassroots activists are increasingly committed to solving serious environmental and health problems by creating sustainable green jobs, and using global warming as a multi-issue rallying cry for justice and sustainable prosperity.
The “Zero Waste” conference, hosted by the Coalition for a New Business Model for Detroit Solid Waste, is part of the global fight to stop landfills and incinerators from wreaking havoc on low-income people, indigenous communities, people of color, and the fabric of life on the entire planet.
do me a favor, tell me whether, or not, you had even heard of ‘Zero Waste’..
December 11th, 2008 at 11:18 pm
from nearby thread that needs to be in this context, as well:
Jono Says:
December 11th, 2008 at 8:12 pm
Machiavelli999 you know that is utter nonsense and you have deliberately misinterpreted it.
The Austrian school DO check their premises and analysis with all kinds of technical data.
What they do, is build their theory on praxeology. That all human action is purposeful. All other schools of economics, at least on a macro level, tend to work backwards and use the data to conjur up some new theory, especially on a macro level. The monetarists and Keynesians engineer the statistics to suit their agenda (CPI, GDP) and use them to create some kind of framework that involves central banks performing buying securities and controlling the supply of money to set a cash rate and target the rate of CPI (as if that were the correct definition of inflation).
The Austrians are the only school of economics that applies the same theory of human behaviour to an individual micro-level (individuals, households and firms) as they do to the entire economy. They do a brilliant job at exposing all the fallacies and underlying assumptions used by Keynesian economists, which are just a re-hash of the old mercantilist fallacies.
No other school of economics will criticise the role of the Federal Reserve in creating this crisis, and thats why they all deserve a big fail on their report cards.
December 11th, 2008 at 11:20 pm
@Mannwich Says: December 11th, 2008 at 3:31 pm
I’m no fan of the Fed either but I agree with Barry that you’re “tilting at windmills” in thinking they will ever be abolished
I would agree with you that expecting the crop of current stakeholders to slay their golden goose is folly. When I speak against the Fed myself I am not speaking to those who would destroy them but to those that would destroy their power. That is every person. The Fed and banking system’s dominance over the economy does not currently come from printing money so much as it comes from loaning it into existence. As long as people continue to borrow money they continue to ‘vote’ for the system as it is and give power to those who inflate at our peril. If you want to slay the beast the only way is to starve the beast by not feeding it interest payments and the fruit of your promised future production secured by your own collateral and credit rating.
It is much wiser to educate your fellow citizen on the destructive(via inflation) nature of a credit based society than to expect those who are benefiting from it to end their tyranny. At this point the power to change things are still in the people’s hands but they need to be willing to live in an honest money system. What has taken 100 years to build doesn’t end overnight and maybe not even in a generation but if people want to end the slavery that many of them are in then getting back to honest money and an honest economic system is the only way to go IMO.
It is time people were again consuming out of their wealth and surplus. That would be opposed to what they are doing now which is consuming out of the promise of future wealth and surplus. The latter creates two problems. It creates problems when people’s jobs go away thus exacerbating contractions and it forces them to buy and consume minus interest costs so they are actually consuming from 0% to 10% less than they could because of the cost of servicing debt. That ultimately is a drag on the entire economy. Not to mention the fact that people have to demand more in compensation just to service the cost of debt, which forces prices higher, which forces people to pay more and consume less etc. etc.
December 11th, 2008 at 11:39 pm
Ok so Agg you’re climbing into this argument way late, we were talking about market corrections, that is drastic corrections. We’ve seen it before and depending on who is the historian after all the dust settles it’s called either a revolution or a liberation. I look into all of these viewpoints and I see nothing but a larger crash, wether you call it bootstrapping or a ponzi scheme. The poor hard working can not afford devaluation of their possesions and their pay again and definately not on this scale. They’ve been done had the screws turned on their thumbtacks since Reagan. They can’t vote new leadership because they all have regional interests, and they just get more corruption, when they think of maintaining their regional power when they vote for their incumbant. There is something terribly broken in our political-economic world view. Renting some camps in Siberia as I mentioned earlier may well be the best thing, but since it’s a new millenia, perhaps we should send them to Mars.
December 11th, 2008 at 11:49 pm
AGG, Also, I do not think that we can agree that we are talking about human beings here. Isn’t that the first step to fascism, dehumanizing the opposition?
December 12th, 2008 at 2:07 am
Disclaimer: I am not a Libertarian-the term is almost as abused as the term Liberal. I do not agree, nor have ever voted for the Libertarian party, and do not associate myself with its members.
What I offered above were economic truths which no one (understandably) tried to argue against or refute. Instead, you preferred to label it as theorizing, and tilting at windmills, when your suggestions are so absurdly vague and empty as to justify a little humor.
“We need sustainability”? Well gee-f^%*ing-whiz! Why do you think Austrian economists like Schiff are so focused on the fundamentals? What do you offer? Pragmatism, common sense….a little of this and a little of that? Perhaps you should refrain from actual policy prescriptions or ideas of “let’s see what works and try it”.
All seems a little Paulson-esque if you ask me (the Hank kind of course).
Here’s the wonderfully pragmatic mainstream treated this theorist, when HE was tilting at windmills two years ago. All yours:
http://www.youtube.com/watch?v=B8r-nDBx5Jg
December 12th, 2008 at 5:13 am
Just for the record mark I do understand what the problem is with FRB and debt issued as money. I think its a horrible, exploitative and worst of all unsustainable system and it needs to be changed. We differ only in what the solution might be. You think you know the right solution, and I remain to be convinced of the right path. That does not make me a statist, however so far you have spectacularly failed to move me towards your point of view.
I hadn’t heard of this zero waste conference, but I’ll certainly take a look. Meanwhile, you might like to take a look at a possible alternative to FRB that seems to my mind more likely to happen than a gold standard.
http://www.jamesrobertson.com
This proposal advocates a 100% reserve banking system in which fiat money is created by the state (whether socialist, minarchist, capitalist or whatever – it doesn’t matter), and spent into existence rather than lent into existence. In fact if we end up having to fully nationalize most of the existing banks then this is effectively what we’d have, except that the interest earned on loans ends up as state revenue, and can therefore be used to cut taxes, and removes the need for perpetual growth.
Note that I’m not advocating this solution, and in particular I’m not saying the bad government and the usual vested interestes would not ruin it. Instead I’m highlighting it in the hope that it might lead to some intelligent and hopefully constructive (and civil) discussion, since idealogically I’m still a floating voter.
@DeDude: And the “go-look-at-this-site-and-you-shall-see-the-light” argument is usually one trotted out by people who have no real answers.
Or perhaps it is lazyness. I could be proved wrong if mark would simply and concisely state the libertarian position regarding sustainability and pricing of externals in a few simple statements without any outside references and a minimum of vitriol.
December 12th, 2008 at 7:40 am
scepticus,
simply, for one who claims to be ‘about sustainability’ and, yet, Ignorant of long-standing foudational premises thereof, you should be more considered in use of the accusation of ‘laziness’.
more simply, if you can’t be bothered to educate yourself on the underlying premises of the conclusions you regurgitate, I, surely, won’t be bothered to your work for you.
my friend, you should take a page from, the Fictional, Will Hunting:
towit, WILL
Look, don’t try to pass yourself off
as some kind of an intellect at the
expense of my friend just to impress
these girls.
Clark is lost now, searching for a graceful exit, any exit.
WILL
The sad thing is, in about 50 years
you might start doin’ some thinkin’
on your own and by then you’ll realize
there are only two certainties in
life.
CLARK
Yeah? What’re those?
WILL
One, don’t do that. Two — you
dropped a hundred and fifty grand on
an education you coulda’ picked up
for a dollar fifty in late charges
at the Public Library.
http://www.imsdb.com/scripts/Good-Will-Hunting.html
December 12th, 2008 at 7:47 am
One more clarification about my comment re viable ideologies. I don’t think what I said was self refuting if you interpret it literally, as I had intended.
That is, any ideology that does not (somehow) result in sustainability is not viable (in the biological sense) since if humans become extinct due to a flaw in the ideology then the ideology also becomes extinct.
On mises.org I found this article on sustainability within the austrian framework:
https://mises.org/misesreview_detail.aspx?control=259
I think that tells me all I need to know about Austrian Economics, assuming that is, that this article correctly states the official Austrian position. I urge anyone wanting to understand the fundamental philosophy behind the austrian school to read this piece. To summarise it quickly, the article states that if humanity becomes extinct a few generations hence then this is philosophically OK, since because future generations don’t exist yet, they therefore have no ‘right to exist’.
I think that’s going to be a very hard sell…
December 12th, 2008 at 8:10 am
scepticus,
first, it’s A Book Review, second, here’s the context around your simpering cherry-picking:
“For proponents of sustainable development, the free market is not enough. People will indeed endeavor to conserve what they own; but they will do so guided by an economic principle. For actors on the market, maximizing expected utility is the be-all and end-all.
Is this not unfair to future generations? People will make provision for their children and grandchildren but will rarely seek to conserve their resources beyond what is needed to do this. So long as people can leave something to their heirs, the pursuit of profit will impel them to wasteful use of scarce resources. Must not the government protect the rights of future generations, in order to prevent this catastrophe?
Beckerman identifies a fundamental failing in this line of thought. Let us grant that the present generation ought not to squander all its resources and leave nothing for distant future generations. It does not follow that these future generations have an enforceable right that resources be conserved at a certain rate. To introduce here the language of rights, our author maintains, is to assume without basis that whatever moral claims future generations have on the present bind us absolutely, or close to it. Why not instead view obligations to the future as one item to be weighed against other things?
Our author goes further. He maintains that ascribing rights to those who do not yet exist makes no sense. “More generally it is difficult to see how future generations can be said to have any rights because properties, such as being green or wealthy or having rights, can be predicated only of some subject that exists. . . . If I were to say ‘X has a fantastic collection of CDs,’ and you were to ask me who is X, and I were to reply, ‘Well actually, there isn’t any X,’ you would think I had taken leave of my senses. And you would be right . . . unborn people cannot have anything. They cannot have two legs or long hair or a taste for Mozart” (pp. 67–68).2
One might object, “Is not Beckerman simply playing with words? Let us grant him his point: might we still not have a binding moral obligation to preserve a sustainable environment for future generations? Where has his semantic wordplay gotten him?”
We can, as the objection supposes, speak of binding moral obligations without reference to rights, but Beckerman’s point nevertheless helps us grasp an essential issue. The language of rights at once takes us into the realm of absolute claims; and if we grasp that we need not—or cannot, if Beckerman is right—ascribe rights to future generations, we can begin to think clearly about our obligations to them. Beckerman has freed us from the prison of a false assumption.
Beckerman’s point about rights can be used, in a way that he does not consider, to strengthen his case against sustainability advocates. Future persons may not have rights, but presently existing people do have them. If so, then efforts by even moderate environmentalists to restrict property rights may be illegitimate on their face. Beckerman very effectively demonstrates that environmentalist arguments fail on their own terms. But even if these arguments were cogent, this would not suffice to justify compelling property owners to restrict their consumption. The issue of rights would first have to be addressed.
Beckerman has exposed a hidden assumption that lies behind the environmentalist case, but this is not his greatest contribution. He challenges head-on a key premise of much contemporary moral philosophy. The sustainability advocates maintain that each future generation should be provided with an equally good environment to the one we now have. With great daring, Beckerman asks, what is so good about equality?
Arguments for equality often hide behind feelings of sympathy many people have for the impoverished. Environmentalists paint a bleak picture of a future in which essential fuels are exhausted and people confront catastrophically high temperatures. Is it not unfair, they inquire, to subject people to such conditions?”
~~
Edited and written by David Gordon, senior fellow of the Mises Institute and author of four books and thousands of essays.
A Poverty of Reason: Sustainable Development and Economic Growth
Wilfred Beckerman
Fall 2003
Volume 9, Number 3
Vol. 9, No. 3; Fall 2003
Do Future Generations Have Rights?
A Poverty of Reason: Sustainable Development and Economic Growth.1, by Wilfred Beckerman. The Independent Institute, 2002. xiii + 94 pgs.
Wilfred Beckerman is an outstanding economist of a type probably more common in Britain than America. Like Anthony de Jasay, Amartya Sen, and I.M.D. Little, Beckerman is thoroughly at home in philosophy; and in A Poverty of Reason, he makes insightful remarks about the rights of future generations, equality, and the so-called “precautionary principle.”
Some environmentalists are outright enemies of humanity, who favor a drastic reduction in human population, if not the elimination altogether of our species. Once at a conference, I was seated at dinner next to that eminent Luddite, Kirkpatrick Sale. I mentioned that a critic had accused him of wishing to return to the Stone Age. To my surprise, he said that this was just what he wanted.
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poetic, though, that you picked that one..
December 12th, 2008 at 8:35 am
“first, it’s A Book Review”
So what? The author of the review obviously agrees with the author of the book.
“second, here’s the context around your simpering cherry-picking:”
Nicholas Taleb was right when he said that economists (amateur or professional, I suppose) are the easiest people in the world to rile. I thought I’d leave you the honour of posting the context, since I did not want the text to be associated with my screen name.
I suggest that your unquestioning attachment to a currently fashionable reductionist economic philosophy is a great example of what NNT calls the ludic fallacy. No doubt I’m also guilty of a similar fallacy, however I’m not the one claiming to have all the answers.
December 12th, 2008 at 4:02 pm
scepticus,
I’m sure Taleb would have much to say about your ability to bend Reason, if, of course, he would deign to waste the time it would take to point it out.
here’s a clue: it’s why it was poetic that you picked: “A Poverty of Reason” as your ‘example’–which you proceed to mischaracterize.
and, if you would, substantiate ths: I’m not the one claiming to have all the answers, backhanded accusation..
I’ll just guess that, in your household, throwing ‘Honor’ out the window is seen as a +, saves on chairs, right?