Taxes

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Taxes

Get out the cannons.  I'm suspecting there  are some who will say this article is biased.  Probably so.  

http://economix.blogs.nytimes.com/2011/05/31/are-taxes-in-the-u-s-high-or-low/?ref=business

May 31, 2011, 6:00 am

Are Taxes in the U.S. High or Low?

Today's Economist

Bruce Bartlett has served as an economic adviser in the White House, the Treasury Department and Congress.

Historically, the term “tax rate” has meant the average or effective tax rate — that is, taxes as a share of income. The broadest measure of the tax rate is total federal revenues divided by the gross domestic product.

By this measure, federal taxes are at their lowest level in more than 60 years. The Congressional Budget Office estimated that federal taxes would consume just 14.8 percent of G.D.P. this year. The last year in which revenues were lower was 1950, according to the Office of Management and Budget.

The postwar annual average is about 18.5 percent of G.D.P. Revenues averaged 18.2 percent of G.D.P. during Ronald Reagan’s administration; the lowest percentage during that administration was 17.3 percent of G.D.P. in 1984.

In short, by the broadest measure of the tax rate, the current level is unusually low and has been for some time. Revenues were 14.9 percent of G.D.P. in both 2009 and 2010.

Yet if one listens to Republicans, one would think that taxes have never been higher, that an excessive tax burden is the most important constraint holding back economic growth and that a big tax cut is exactly what the economy needs to get growing again.

Just last week, House Republicans released a new plan to reduce unemployment. Its principal provision would reduce the top statutory income tax rate on businesses and individuals to 25 percent from 35 percent. No evidence was offered for the Republican argument that cutting taxes for the well-to-do and big corporations would reduce unemployment; it was simply asserted as self-evident.

One would not know from the Republican document that corporate taxes are expected to raise just 1.3 percent of G.D.P. in revenue this year, about a third of what it was in the 1950s.

The G.O.P. says global competitiveness requires the United States to reduce its corporate tax rate. But the United States actually has the lowest corporate tax burden of any of the member nations of the Organization for Economic Cooperation and Development.

Revenue Statistics of O.E.C.D. Member Countries, 2010

If taxes are low historically and in comparison with our global competitors, how are Republicans able to maintain that taxes are excessively high? They do so by ignoring the effective tax rate and concentrating solely on the statutory tax rate, which is often manipulated to make it appear that rates are much higher than they really are.

For example, Stephen Moore of The Wall Street Journal recently asserted that Democrats were trying to raise the top income tax rate to 62 percent from 35 percent. But most of the difference between these two rates is the payroll tax and state taxes that are already in existence. The rest consists largely of assuming tax increases that no one has formally proposed and that would be politically impossible to enact at the present time.

Ryan Chittum, in Columbia Journalism Review, responded with a commentary that called the Moore analysis “deeply disingenuous.”

Nevertheless, one routinely hears variations of the Moore argument from conservative commentators. By contrast, one almost never hears that total revenues are at their lowest level in two or three generations as a share of G.D.P. or that corporate tax revenues as a share of G.D.P. are the lowest among all major countries. One hears only that the statutory corporate tax rate in the United States is high compared with other countries, which is true but not necessarily relevant.

The economic importance of statutory tax rates is blown far out of proportion by Republicans looking for ways to make taxes look high when they are quite low. And they almost never note that the statutory tax rate applies only to the last dollar earned or that the effective tax rate is substantially lower even for the richest taxpayers and largest corporations because of tax exclusions, deductions, credits and the 15 percent top rate on dividends and capital gains.

The many adjustments to income permitted by the tax code, plus alternative tax rates on the largest sources of income of the wealthy, explain why the average federal income tax rate on the 400 richest people in America was 18.11 percent in 2008, according to the Internal Revenue Service, down from 26.38 percent when these data were first calculated in 1992. Among the top 400, 7.5 percent had an average tax rate of less than 10 percent, 25 percent paid between 10 and 15 percent, and 28 percent paid between 15 and 20 percent.

The truth of the matter is that federal taxes in the United States are very low. There is no reason to believe that reducing them further will do anything to raise growth or reduce unemployment.

 

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 I wasn't aware of any

 I wasn't aware of any massive movement to reduce the tax burden. Those of us who bitch about the taxes are usually arguing about the distribution of the tax burden. Sure as a country we are only paying 15% (although I would argue that stat because GDP includes government spending, over $1 trillion of which is borrowed money and therefore is not produced and should not be included in GDP imo) but many people pay little to no taxes. Most of the republican "tax cuts" that have been proposed are actually a restructuring of the rates and an elimination of loopholes, which is exactly what Reagan did.

 

If EVERYONE in the country just paid their 15, 16 17% or whatever you set the rates at, I would be a lot happier. But that is not what is happening. Many of us are paying 25-35% effective tax rates (plus state and local taxes) while millions of Americans don't pay anything. It isn't the top 400 income earners clamoring for lower taxes- you don't see Bill Gates or Warren Buffet clamoring for lower taxes. The movement for lower taxes finds its strength in those who are making 100k + but not enough to hire an army of accountants to shelter our money. This is also the group that is most likely to run small businesses and start up new small businesses.

 

Most serious tax hawks push for a flat tax or consumption tax in place of the current disaster we call tax code, which would lead to very similar revenues (and some argue higher revenues) to the government but would distribute the burden far more equitably. 

 

As far as taxing corporations goes, it is pretty pointless. You get very little money and create a lot of red tape. But I don't think the corporate tax rate is a primary reason for companies moving over seas. It might be a positive side benefit, but generally they move to avoid regulations, for cheaper labor and other business considerations. As soon as your corporation becomes big enough to pay significant taxes moving money around to avoid them is really easy.

 

Now I am all for lowering the tax burden to about 5% of GDP because I don't think the federal government has any business doing 2/3 of what it does. If the government cut back and only did what it is constitutionally allowed to do and we stopped bombing every piss pot country it wouldn't need all of that money. But I realize that isn't happening in my lifetime. For now, I would be ecstatic for my tax burden to be lowered to 15% and for everyone else in the country to start paying their fair share. After all, it is everyone else who wants all these government programs. Did you pay 15% of your gross income in federal taxes last year? If you didn't, you are not paying your fair share. 

 

Also note that this whole discussion is based solely on federal income taxes. It doesn't take into account state and local tax burdens which becomes fairly significant when you start making 6 figures. 


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Beyond Saving wrote: I

Beyond Saving wrote:

 I wasn't aware of any massive movement to reduce the tax burden.

 

Forgive me for not responding to your entire post.  Mostly, I agree with a lot of what you say.  But I do have to say that it seems to me that the Republicans are pushing for lower taxes by not allowing tax cuts for the wealthy and subsidies for various corporations that don't need them to expire.  And if I hear - no new taxes - one more time in connection with these particular government grants,  I might -- roll my eyes.

What the hell else can I do?

 

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Beyond Saving wrote:If

Beyond Saving wrote:
If EVERYONE in the country just paid their 15, 16 17% or whatever you set the rates at, I would be a lot happier. But that is not what is happening. Many of us are paying 25-35% effective tax rates (plus state and local taxes) while millions of Americans don't pay anything. It isn't the top 400 income earners clamoring for lower taxes- you don't see Bill Gates or Warren Buffet clamoring for lower taxes. The movement for lower taxes finds its strength in those who are making 100k + but not enough to hire an army of accountants to shelter our money. This is also the group that is most likely to run small businesses and start up new small businesses.


The small business remark aside, QFT. With all due respect, small business is almost pushing up daisies.

“A meritocratic society is one in which inequalities of wealth and social position solely reflect the unequal distribution of merit or skills amongst human beings, or are based upon factors beyond human control, for example luck or chance. Such a society is socially just because individuals are judged not by their gender, the colour of their skin or their religion, but according to their talents and willingness to work, or on what Martin Luther King called 'the content of their character'. By extension, social equality is unjust because it treats unequal individuals equally.” "Political Ideologies" by Andrew Heywood (2003)


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Acceptance of evolution

Isn't it odd that the acceptance of evolution chart has a similar pattern with few anomalies? Turkey and the US on the bottom.

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I don't think the problem is

I don't think the problem is that taxes are too high or too low, the problem is there is no correlation between the taxes one pays and benefits one receives.

Technology has changed the game, new wealth now is largely a function of intellectual property. Companies can farm out software services to a guy on the Internet and get around any income tax. If you raise taxes on people that receive little benefit in return, they move(either physically or in cyberspace). The people that receive more benefits than they pay stay. It is just a vicious cycle until the government goes bankrupt.

The concept of taxation where people must pay just for making or having money is quite irrational and unsustainable. We must move to a system of user fees for all government services and dump income tax altogether.

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Kapkao wrote: With all due

Kapkao wrote:

 With all due respect, small business is almost pushing up daisies.

 

I wouldn't say it is pushing up daisies so much as restructuring. Throughout the 90's and early 2000's credit was really easy to get and many small businesses got in the habit of covering things like payroll and expansion with credit. With low interest rates, there simply wasn't much incentive to keep cash on hand. Now credit is substantially harder to get, even if you have a great credit rating, so those businesses that didn't have cash reserves are in trouble since they generally have slowing consumer demand and an inability to get credit. However, the flip side of the coin is that startup costs for small businesses have dropped dramatically.

 

The real estate market is floundering and that has had an effect on commercial properties in many areas. Businesses are struggling and many don't have the resources or creativity to modify their business. There is a lot of investment opportunity and relatively few people with the cash necessary, which means there are some great deals out there. Also, the high unemployment rate has made employee quality a lot higher, people actually show up to work now and are far less likely to quit. 

 

There is going to be a period of time for small business owners to build cash reserves and start investing again- and it will suck for a lot of people. In the meantime, those with cash can pickup pretty much any business they want and will be in prime position to get the economy growing again. Businesses have to be more focussed on the bottom line and far less wasteful than they could get away with in the 90's but those that are ran well will flourish and when the economy builds back up will become the large corporations of the future. Companies that are ran inefficiently will fail- of course the big question is whether the government will allow poorly run large companies to fail. If we continue to bail out failing inefficient large companies and provide them with preferential taxes/regulations it will make it harder for smaller more efficient companies to compete.

 

The process could be sped up by increasing interest rates, decreasing government interference and going back to a strong dollar policy which will help get a handle on inflation (which is happening at a rapid rate despite our governments repeated denials) Howevereven if the government continues its destructive behavior small business people in the US will do what they have always done- find a way to make money despite the government. 


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EXC wrote:I don't think the

EXC wrote:

I don't think the problem is that taxes are too high or too low, the problem is there is no correlation between the taxes one pays and benefits one receives.

Problem; dividing law, government, or "benefits" on the basis of input essentially results in what is known as a plutocracy. Although this already happens on a limited scale in some states/locales. If a neighborhood is 'high enough on the totem pole' as to have a generous output in taxes, it tends to get an proportionate return in a well-equipped, well-paid police and fire service. The land values prevent value-killing "undesirables" from moving in next door, too.

Quote:
If you raise taxes on people that receive little benefit in return, they move

Not quite. It usually depends on how much the taxes cut in to their spending cash. If someone feels like they are being fleeced, they may make moving a future priority. The success of finding a future home depends on their moving destination, and the housing markets. A buyer's market usually isn't a good thing, and I can only guess the 'buyer's market' has only gotten worse since I tried (and failed) to move back in 2007.

“A meritocratic society is one in which inequalities of wealth and social position solely reflect the unequal distribution of merit or skills amongst human beings, or are based upon factors beyond human control, for example luck or chance. Such a society is socially just because individuals are judged not by their gender, the colour of their skin or their religion, but according to their talents and willingness to work, or on what Martin Luther King called 'the content of their character'. By extension, social equality is unjust because it treats unequal individuals equally.” "Political Ideologies" by Andrew Heywood (2003)


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Kapkao wrote: Problem;

Kapkao wrote:

 

Problem; dividing law, government, or "benefits" on the basis of input essentially results in what is known as a plutocracy.

I think the current system creates plutocracy because the rich can game the system. Corporations make money by being welfare queens and dodging the tax man better than their competitors. In a pay as you go system, you only make money delivering needed products and services and hiring real workers not just tax accountants, lobbyist and lawyers.

Kapkao wrote:

Although this already happens on a limited scale in some states/locales. If a neighborhood is 'high enough on the totem pole' as to have a generous output in taxes, it tends to get an proportionate return in a well-equipped, well-paid police and fire service. The land values prevent value-killing "undesirables" from moving in next door, too.

And the states have all gone broke paying for "well-paid police and fire services". The current system is unsustainable.

Kapkao wrote:

Not quite. It usually depends on how much the taxes cut in to their spending cash. If someone feels like they are being fleeced, they may make moving a future priority.

Things like capital investment, IP and even workers can be moved or replaced very rapidly. It's total global competition. The USA can not go back to the tax code of the 50's, we've alread bled enough jobs and business oversees.

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EXC wrote:And the states

EXC wrote:

 

And the states have all gone broke paying for "well-paid police and fire services". The current system is unsustainable.

When investment bubbles pop, lots of things suddenly become unsustainable. House payments become unsustainable. Such is the nature of investment bubbles, and few people outside of the industry being overvaluated are aware of its existence at a given moment. That's still a lot of coffers -and wallets- becoming empty, and it usually sucks.

Quote:

 

Things like capital investment, IP and even workers can be moved or replaced very rapidly. It's total global competition. The USA can not go back to the tax code of the 50's, we've alread bled enough jobs and business oversees.

Oh, so you're talking about Big Business, and not John Q taxpayer here? Because I could almost swear you were talking about the latter in the previous post...

Quote:
The USA can not go back to the tax code of the 50's, we've alread bled enough jobs and business oversees.

The means to kill globalization seem relatively simple -tariff goods imported from overseas. Watch out though... China might be upset at losing their cashcow. Fewer children's toys with mercury in them, though. It won't happen anytime soon, but the means to achieve it are rather direct.

“A meritocratic society is one in which inequalities of wealth and social position solely reflect the unequal distribution of merit or skills amongst human beings, or are based upon factors beyond human control, for example luck or chance. Such a society is socially just because individuals are judged not by their gender, the colour of their skin or their religion, but according to their talents and willingness to work, or on what Martin Luther King called 'the content of their character'. By extension, social equality is unjust because it treats unequal individuals equally.” "Political Ideologies" by Andrew Heywood (2003)


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ex-minister wrote:Isn't it

ex-minister wrote:
Isn't it odd that the acceptance of evolution chart has a similar pattern with few anomalies? Turkey and the US on the bottom.

 

If by the term "few anomalies" you mean most of the bottom of the tax chart are also among the top nations in accepting evolution, then umm, I guess so.  Otherwise not so much.

 

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i find that most arguments

i find that most arguments about taxes are woefully constrained to about a 3 inch box, should they be a little higher or a little lower, we are having a huge debate now as to whether the rate should be 35 or 39 percent or some ridiculous thing like that, id much rather have the larger and more important argument about taxes, the constitutional and, especially, moral, justifications for taxation, to me taxation is theft, and i think the moral principle on that is pretty clear and cant really be denied

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Regardless of whether you

Regardless of whether you think taxes are high or low, this is a bad metric to measure our nations tax rate.

 

Total taxes over GPD doesn't really tell you anything about the tax burden of average citizens.

 

A better analysis would look at percent of median household income paid in taxes. Then compare it to today's median household income/taxes and adjust it for inflation. 

That will give you a better understanding of whether taxes have risen or fallen for the average household in america, since it adjusts for both inflation and rising incomes (though they haven't actually risen for anyone below the 60th percentile in the past few decades).

 


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atomicdogg34 wrote:i find

atomicdogg34 wrote:

i find that most arguments about taxes are woefully constrained to about a 3 inch box, should they be a little higher or a little lower, we are having a huge debate now as to whether the rate should be 35 or 39 percent or some ridiculous thing like that, id much rather have the larger and more important argument about taxes, the constitutional and, especially, moral, justifications for taxation, to me taxation is theft, and i think the moral principle on that is pretty clear and cant really be denied

Errr.... how do you suggest we go about ensuring stable government, then?
Your post, as written, makes very little sense unless you are aiming for the complete absence of government (true anarchy.)

I think that, instead of focusing on how much is paid in taxes, a somewhat higher priority should be placed on the efficiency behind their expenditure and (above all) to ensure that the money is spent on shit the general population can use, as opposed to congressional earmarks (vote-buying with taxpayer's $$$) going to isolated pockets of the country.


 

“A meritocratic society is one in which inequalities of wealth and social position solely reflect the unequal distribution of merit or skills amongst human beings, or are based upon factors beyond human control, for example luck or chance. Such a society is socially just because individuals are judged not by their gender, the colour of their skin or their religion, but according to their talents and willingness to work, or on what Martin Luther King called 'the content of their character'. By extension, social equality is unjust because it treats unequal individuals equally.” "Political Ideologies" by Andrew Heywood (2003)


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well i think the federal

well i think the federal govt should be doing alot less so im not worried about revenues, the states should be doing most of these programs if they wished, the federal govt has no authority for most of what it does

weve only had an income tax since 1916 and we did pretty well before that id venture to say

its easy to see congressional earmark abuse, but in a broken system they atleast allow the congress to do their job and decide the spending, earmarks come out of already appropriated funds so if you got rid of them all you wouldnt necessarily save a single penny, and all youd do if shift the control of spending to the executive branch

 

Proof FDR was a tyrant and a POS: Executive Order 9066

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atomicdogg34 wrote:well i

atomicdogg34 wrote:

well i think the federal govt should be doing alot less so im not worried about revenues, the states should be doing most of these programs if they wished, the federal govt has no authority for most of what it does

weve only had an income tax since 1916 and we did pretty well before that id venture to say

its easy to see congressional earmark abuse, but in a broken system they atleast allow the congress to do their job and decide the spending, earmarks come out of already appropriated funds so if you got rid of them all you wouldnt necessarily save a single penny, and all youd do if shift the control of spending to the executive branch

 

Depends on your definition of "pretty well", I would say.

http://eh.net/encyclopedia/article/whitten.panic.1893

"The Depression of 1893 was one of the worst in American history with the unemployment rate exceeding ten percent for half a decade."

Many of the federal economic controls were put in place to attempt to smooth out the naturally recurring boom and bust cycles of a free market.  Granted, a lot of these regulations were not effective and some actually made the problem worse.  I am not attempting to defend these policies, just saying people believed they had a real problem that they felt had a solution for when the regulations were put in place.

Regulations are not dreamed up in a vacuum.  Someone says, there must be some way to fix what is perceived to be a problem.  And then they try to fix it.  It is difficult to determine if the solution applied had any affect - good or bad.  After all, we have no way to run the experiment. 

This half of the economy runs under the Federal Reserve, this half doesn't.  This state is assessed a federal income tax, this one isn't.  Okay, so which section has the most robust economy?  No way to do that experiment, so there is no way we can tell whether the regulations had the desired effect or not.  Arguing about it will not get us any further to being able to run the experiment.  Pining blame will not get us any further.  Postulating what might have been is useless.  Personally, I don't believe all regulations are all bad - and some of the ones that were recently relaxed should perhaps get reinstated.

We can start with the banking regulations.

 

-- I feel so much better since I stopped trying to believe.

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cj wrote:atomicdogg34

cj wrote:

atomicdogg34 wrote:

well i think the federal govt should be doing alot less so im not worried about revenues, the states should be doing most of these programs if they wished, the federal govt has no authority for most of what it does

weve only had an income tax since 1916 and we did pretty well before that id venture to say

its easy to see congressional earmark abuse, but in a broken system they atleast allow the congress to do their job and decide the spending, earmarks come out of already appropriated funds so if you got rid of them all you wouldnt necessarily save a single penny, and all youd do if shift the control of spending to the executive branch

 

Depends on your definition of "pretty well", I would say.

http://eh.net/encyclopedia/article/whitten.panic.1893

"The Depression of 1893 was one of the worst in American history with the unemployment rate exceeding ten percent for half a decade."

Many of the federal economic controls were put in place to attempt to smooth out the naturally recurring boom and bust cycles of a free market.  Granted, a lot of these regulations were not effective and some actually made the problem worse.  I am not attempting to defend these policies, just saying people believed they had a real problem that they felt had a solution for when the regulations were put in place.

Regulations are not dreamed up in a vacuum.  Someone says, there must be some way to fix what is perceived to be a problem.  And then they try to fix it.  It is difficult to determine if the solution applied had any affect - good or bad.  After all, we have no way to run the experiment. 

This half of the economy runs under the Federal Reserve, this half doesn't.  This state is assessed a federal income tax, this one isn't.  Okay, so which section has the most robust economy?  No way to do that experiment, so there is no way we can tell whether the regulations had the desired effect or not.  Arguing about it will not get us any further to being able to run the experiment.  Pining blame will not get us any further.  Postulating what might have been is useless.  Personally, I don't believe all regulations are all bad - and some of the ones that were recently relaxed should perhaps get reinstated.

We can start with the banking regulations.

 

The Panic of 1893: Boosting Bankers' Money and Power


Bob Adelmann | The New American
06 April 2011


Junius Morgan was, at best, a third-tier English banker in the 1850s, who was fortunate to have had a hand in a number of lucrative financings, mostly for industries seeking seasonal financing. His conservative nature was partly a cause of his lack of distinction. He’d inherited a substantial sum when his father died and was exceedingly careful when risking any part of it. One of the maxims Junius instilled into his son, John Pierpont Morgan, was, "Never under any circumstances do an action which could be called into question if known to the world."

The two first-tier international banking families were the Baring Brothers and the Rothschilds. Barings financed the Louisiana Purchase and the French indemnity payment after Napoleon’s loss to the Duke of Wellington at Waterloo. So influential was Barings that the Duke of Richelieu commented: “There are six great powers in Europe: England, France, Prussia, Austria, Russia, and Baring Brothers.” It enjoyed an exclusive list of clients: the governments of Russia, Norway, Austria, Chile, Argentina, Canada, Australia, and the United States.

The other pre-eminent international banking family, the Rothschilds, served as the agent bank for England, and was spreading its influence into countries not served by Barings.

It was a rarified world — one that Junius aspired to join. There was only so much he could accomplish on his own, with his relatively limited capital base, or as Ron Chernow, author of The House of Morgan, put it: “Only so much glory could be gained from trading Chinese tea or Peruvian guano or selling iron rails to Commodore Vanderbilt.” He needed something outrageously profitable that would propel him into the top tier. His opportunity came in 1870. The French provisional government was seeking a loan of $50 million, but it was turned down by both the Rothschilds and Barings. Putting together a syndicate of other banks, Junius offered bonds to investors with a par value of $100 at $85, meaning the bonds were sold to investors at a discount. (It was like buying a $100 bill for $85, but you couldn’t get the $100 bill for two years.) The 15-percent discount reflected not only the risk that the French might not be able to repay the loan, but gave investors an extraordinary opportunity for substantial profits if the French did repay it.

When the French did repay the loan by buying back the bonds at par in 1873, Junius was catapulted into the top tier. And it was this lesson of recognizing opportunity and seizing it that he inculcated into the mind of his son, John Pierpont.

Pierpont, as he liked to be called, already had shown a flair for recognizing opportunity. During the Civil War, the U.S. federal government had 5,000 obsolete Halls carbines stored in an armory in New York, for which it had paid $3.50 apiece. An entrepreneur, Simon Stevens, saw an opportunity to refurbish the weapons and then sell them back to the government. Lacking the capital, he borrowed $20,000 from Pierpont for a share of any profits. Stevens “rifled” the smooth-bore carbines, thus improving their accuracy, and sold them to Major General John C. Fremont for $22 each. In a three-month period, the government bought back its own rifles at six times their original price. Pierpont pocketed $5,400 on the deal.

During the last 30 years of Junius’ life (he died in 1890), he and his son worked closely together, despite being separated by the Atlantic Ocean. Junius would often travel to New York and stay with Pierpont for months at a time, while Pierpont would return the favor in the fall, staying in London with his father. In the meantime, they had a steady and fulsome communication by mail. And by the late 1880s, Pierpont knew an opportunity when he saw one.

The Panic of 1893

The “opportunity,” referred to later by historians as the Panic of 1893, had its roots in Argentina. In the early 1890s, British investors became enamored over investment prospects in Argentina and began to invest heavily there with the encouragement of the Argentinean agent bank, Baring Brothers. A failure of the wheat crop and a coup in Buenos Aires, however, abruptly ended any enthusiasm for continued foreign investing of any kind, even for investments in the United States. And thus began a run on gold in the U.S. Treasury as investors liquidated their holdings.

Causing the bubble to balloon before it burst in February 1893 were two additional forces: the Sherman Silver Act and the McKinley Tariff Act, both enacted under President Benjamin Harrison. Since 1879, when the last of the greenbacks Lincoln used to finance the north in the Civil War was redeemed for gold, the country operated on a gold standard. While the economy enjoyed an explosion in growth, there were enormous difficulties in major parts of the country, especially faced by farmers. As crop prices fell (reflecting increased efficiencies in the economy), farmers were hard-pressed to pay back loans they had obtained to finance their seedtime.

In 1890, Senator John Sherman presented a bill to Congress to require the government to purchase and coin silver, thus creating a bi-metallic monetary standard. When the bill became law, currency was printed to purchase the silver required under the Sherman Act — it was one of the few times in history where there was “price inflation” due to an expansion of precious metals backing the currency. Miners were naturally pleased, as were the farmers who recognized that the inflation of the currency in circulation would allow them to pay off their loans in cheaper dollars. But Gresham’s law — stating that good money drives out bad — could not be repealed, and since paper currency was now redeemable in either gold or silver, and since the ratio of silver to gold changed from the prevailing 16:1, silver became worth less, comparatively, to gold, and gold was hoarded. Silver was increasingly used in commerce. When new currency began circulating, holders would demand gold from the banks, and gold reserves at the U.S. Treasury soon declined below the $100 million “safe” level.

The McKinley Tariff Act, also passed in 1890, raised tariffs to an unbearable 48 percent, essentially raising prices on many commodities and slowing the economy. With the pressure from foreign investors for their gold, the demand from American citizens to redeem their currency holdings for gold, and the slowdown in the overall economy, a crack in the economy was impossible to avoid.

Behind the scenes there was another impetus: pressure for a central bank. When the National Banking Act was adopted at the end of the Civil War, national banks were created as a half-way measure to central banking. In his monumental Tragedy and Hope, Professor Carroll Quigley exposed this pressure:

 

The powers of financial capitalism had another 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. The system was to be controlled … by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences.


In 1892, an announcement to the presidents of each of the national banks was printed in the United States Bankers’ Magazine:

 

We must go forward cautiously and consolidate each acquired position, because already the inferior social stratum of society is giving increasing signs of agitation.

Therefore, prudence dictates to us a line of conduct that seems to give in to the will of the people, until the execution of our plans be well-enough established by us to be able to declare our intentions without having to fear any organized resistance.


The first crack appeared in February 1893 with the declaration of bankruptcy by the Philadelphia and Reading Railroad after failing to make interest payments on its debt. This was followed shortly by bankruptcies of the Northern Pacific Railway, the Union Pacific Railway, and the Atchison, Topeka, and Santa Fe.

The final push over the edge, following the bankruptcies of the railroads, was a leaflet (since called “The Panic Circular&rdquoEye-wink published on March 11, 1893 by the American Bankers Association and sent to each national bank president:

 

You will at once retire one-third of your circulation and call in one-half of your loans. [After this you are to] advocate an extra session of Congress to repeal the purchasing clause of the Sherman Law, and act with other banks of your city [to push] for its unconditional repeal.... The future life of national banks … depends upon immediate action, as there is an increasing sentiment of … silver coinage.


The bankers had two major objections to silver coinage: The first was that as silver was mined and converted into coinage, it expanded the monetary base (inflation), resulting in the loss of purchasing power for each unit of currency, which impacted negatively the bonds, denominated in dollars, held by the banks. The second major objection was that this particular inflation was occurring outside of the bankers’ control.

In May, the final straw was the National Cordage Company’s failed attempt to corner the hemp market, resulting in a selloff of its stock (it was one of the highest volume stocks traded at the time) and triggering the indiscriminate selling of stocks across the stock exchanges. The depression following the panic lasted five years, and resulted in the failure of more than 15,000 companies and 500 banks, with unemployment reaching nearly 20 percent.

The first opportunity that Morgan saw in the panic was the chance to re-organize the failed railroads into a private cartel. As Chernow explained:

 

Oppressed by debt and overbuilding, more than a third of the country’s railway package fell into receivership, and English investors exhorted Pierpont to bring order to the industry. Thwarted by gentleman’s agreements, Pierpont now tried another approach to forming railway cartels: he would reorganize bankrupt [rail]roads and transfer control to himself. Then he wouldn’t be at the whim of government or feuding railway chiefs.

In reorganizing railways, he ascended to a new plateau of power, beyond what any other private businessman had yet achieved. The lengthy catalog of railroads that fell under his control included the Erie, Chesapeake and Ohio, Philadelphia and Reading, Santa Fe, Northern Pacific, Great Northern, New York Central, Lehigh Valley, Jersey Central, and the Southern Railway. Virtually every bankrupt [rail]road east of the Mississippi eventually passed through such reorganization (or “morganization” as it was called). Some thirty thousand miles of railroad — one sixth of the country’s trackage — were morganized. The companies’ combined revenues approached an amount equal to half of the U.S. government’s annual receipts.


Morgan took control of the railroads, Chernow wrote, through personal energy and attention to detail that allowed him to gain and maintain control over the railroads as they became available through bankruptcies. When the scope of the takeover became too large, Morgan set up management tools and reporting requirements. Too, he used the Interstate Commerce Act, which created the ICC in 1887, to control his cartel — the ICC was mostly operated and managed by his own men.

Much of current history lauds Morgan for his organizational talents, and Chernow goes along with most of it, but it was Morgan’s insatiable desire to control that drove the cartel.

Holding Up a President

The second significant opportunity that Morgan capitalized upon was the nation’s need for gold — a need so desperate that Morgan was able to strong-arm a U.S. President.

President Grover Cleveland was the only President to have served two non-consecutive terms and thus is the only one to be counted twice when Presidents are numbered. He was the only Democrat elected to the White House during the era of Republican domination from 1860 to 1912. He opposed free silver and the inflation that would result from unlimited silver coinage by the government, mercantilism in general, and subsidies in particular to business or farmers. He infuriated railroad interests and especially Morgan when he ordered an investigation into their land grants extended for building the lines. The investigation turned up corruption, and 81 million acres were returned to the government. He vetoed nearly 300 bills passed by a Republican Congress, citing his strict interpretation of the limits placed on the federal government by the Constitution. His most well-known veto was that of the Texas Seed Act. Congress passed a bill to allow purchase of $10,000 of seed for farmers who had suffered under a severe drought in Texas. He explained his veto:

 

I can find no warrant for such an appropriation in the Constitution, and I do not believe that the power and duty of the general government ought to be extended to the relief of individual suffering which is in no manner properly related to the public service or benefit.... The lesson should be constantly enforced that, though the people support the government, the government should not support the people.... Federal aid in such cases encourages the expectation of paternal care on the part of the government and weakens the sturdiness of our national character.


However, when a bill to create the Interstate Commerce Commission was passed by Congress, Cleveland had little difficulty signing it, despite its obvious recombining, for the first time, of the executive, legislative, and judicial powers that the Founders had fought so hard to keep separate.

The Interstate Commerce Commission became the first agency of “the fourth branch of government” — a branch of government that unconstitutionally made and enforced its own laws, using federal power. Immediately after its passage, Morgan interests began holding classes to instruct bankers about strategies to help them secure the privileges granted to them through the Interstate Commerce Commission, which, as was said, quickly became controlled by the railroad interests. Morgan’s attempts to create a cartel of the railroads, this time through the sanction of government, were finally cemented into place.

Following four years as a private citizen, Cleveland was elected to his second term in 1893, just in time to face the economic pressures of the panic. He called a special session of Congress to repeal the free coinage of silver that had caused the run on the government’s gold reserves. Congress repealed the essential part of the Sherman Silver Act, but the momentum towards monetary disaster was too great. The U.S. Treasury’s reserves fell below the $100 million “safe” level, and speculators were actually betting on when the Treasury would default on its promises.

Cleveland was stuck. He couldn’t get authorization from Congress to float a bond offering to replenish the Treasury’s gold reserves. There were just too many who favored silver and sided with the farming and mining interests. And he couldn’t approach Morgan directly, as the public revulsion to Morgan specifically, and international bankers in general, had grown too strong. Cleveland’s attempt to get help from the English Rothschilds also failed, as they refused to do business with the American government unless they worked through Morgan.

By February of 1895, gold reserves had dropped to just $68 million, and Morgan smelled another opportunity. He even wrote to his London partners that the United States was “on the brink of the abyss of financial chaos,” and that he was going to Washington to see the President directly to offer his “assistance.” When Pierpont arrived at the White House, the President refused to see him, whereupon Pierpont exclaimed magisterially: “I have come down to see the president and I am going to stay here until I see him!”

In a scene out of a John Grisham movie, a meeting with the President and Morgan was finally arranged. Present were Attorney General Richard Olney and Treasury Secretary John Carlisle. As Chernow explained:

 

At the meeting, [Pierpont] sat wordless while Olney and Carlisle debated the issue. Edgy, he crushed an unlighted cigar, leaving a pile of tobacco on his pants. Cleveland still clung to the hope of a public bond issue, which would spare him congression-al obloquy [and abuse.]

Not until a clerk informed Carlisle that only $9 million in gold coin remained in government vaults on Wall Street did Pierpont pipe up, saying he knew of a $10 million draft about to be presented: “If that $10 million draft is presented, you can’t meet it,” Pierpont said. “It will be all over before 3 o’clock.” “What suggestions have you to make, Mr. Morgan?” replied the president.


Morgan most certainly had some suggestions. Specifically, Morgan and the English Rothschilds would loan the U.S. Treasury 3.5 million ounces of gold in exchange for 30-year bonds that promised not to be called before term. This insertion of specie was more than sufficient to keep the Treasury solvent, and spoiled the game speculators had been playing on the chances of a Treasury default. This, in essence, secured the gold market by removing that 3.5 million ounces from any claims by the bankers. It astonished the financial world. Speculators who were playing the “run” and counting on a government gold shortage lost out.

Under the terms of the deal, Morgan and Rothschild would purchase the bonds at $104.50 and then resell them immediately to the public at $112.25, booking a profit of between $6 and $7 million. So strong was the demand for the bonds that the price quickly soared to $119, and were sold out in 22 minutes.

Manipulation's Ripples

The uproar over Morgan’s manipulation of the situation to his favor merely added to the outrage coming from a growing populist movement, spearheaded by William Jennings Bryan. Bryan tried to beat back the predominance and travails and manipulations of gold as the U.S. standard precious metal, as opposed to increasing the silver supply. His “Cross of Gold” speech astonished his audiences:

 

Having behind us the producing masses of this nation and the world, supported by the commercial interests, the laboring interests and the toilers everywhere, we will answer their demand for a gold standard by saying to them: You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold!


At the conclusion of the speech, Bryan stretched out his arms in a Christ-like manner for five seconds, while the crowd remained quiet. According to the New York World, at that point everyone seemed to go mad at once and shrieked and rushed the stage. The New York Times exclaimed that “a wild, raging, irresistible mob” had been unleashed.

The next order of business for the bankers was to neutralize Bryan’s impact. When Cleveland declined to run again in 1896, Morgan interests backed William McKinley (of McKinley Tariff fame) who beat Bryan in the general election. The impact of that election can scarcely be overestimated.

When the Gold Standard Act of 1900 was passed during the McKinley administration, it represented a giant step toward the creation of what was to become the Federal Reserve System: Contained in the Gold Standard Act was a provision that Morgan and the Rockefellers, Kuhn Loeb, etc., wanted — namely, to create a commission to “study the need for a central bank.” This was critical, and it allowed that commission to change the public’s negative perception of central banking by bringing in outside experts (college professors, historians, disinterested third-parties with credibility, but nearly all trained under Germany’s Iron Chancellor Otto von Bismarck).

With Bryan’s defeat and McKinley’s victory (Morgan’s man), there would be little effective resistance to continued high tariffs, mercantilism, and centralization. Because of the election’s outcome, the Democrat Party capitulated on its support for maintaining gold-backed currency, essentially turning both political parties into arms of the same political machine, promoting bigger government through spending made possible by ever increasing money creation.

Perhaps the kindest things that may be said of Pierpont Morgan are that he was perceptive, courageous, and willing to risk other people’s money along with his own to turn a profit. Critics of Morgan recognize his insatiable desire for personal control and his utter and complete lack of ethics or loyalty to country or Constitution. He was an astonishingly wealthy pragmatist who, for all his efforts, left the world ultimately less free.


SOURCE:
http://thenewamerican.com/history/am...oney-and-power

 

Proof FDR was a tyrant and a POS: Executive Order 9066

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atomicdogg34
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cj wrote:atomicdogg34

cj wrote:

atomicdogg34 wrote:

well i think the federal govt should be doing alot less so im not worried about revenues, the states should be doing most of these programs if they wished, the federal govt has no authority for most of what it does

weve only had an income tax since 1916 and we did pretty well before that id venture to say

its easy to see congressional earmark abuse, but in a broken system they atleast allow the congress to do their job and decide the spending, earmarks come out of already appropriated funds so if you got rid of them all you wouldnt necessarily save a single penny, and all youd do if shift the control of spending to the executive branch

 

Depends on your definition of "pretty well", I would say.

http://eh.net/encyclopedia/article/whitten.panic.1893

"The Depression of 1893 was one of the worst in American history with the unemployment rate exceeding ten percent for half a decade."

Many of the federal economic controls were put in place to attempt to smooth out the naturally recurring boom and bust cycles of a free market.  Granted, a lot of these regulations were not effective and some actually made the problem worse.  I am not attempting to defend these policies, just saying people believed they had a real problem that they felt had a solution for when the regulations were put in place.

Regulations are not dreamed up in a vacuum.  Someone says, there must be some way to fix what is perceived to be a problem.  And then they try to fix it.  It is difficult to determine if the solution applied had any affect - good or bad.  After all, we have no way to run the experiment. 

This half of the economy runs under the Federal Reserve, this half doesn't.  This state is assessed a federal income tax, this one isn't.  Okay, so which section has the most robust economy?  No way to do that experiment, so there is no way we can tell whether the regulations had the desired effect or not.  Arguing about it will not get us any further to being able to run the experiment.  Pining blame will not get us any further.  Postulating what might have been is useless.  Personally, I don't believe all regulations are all bad - and some of the ones that were recently relaxed should perhaps get reinstated.

We can start with the banking regulations.

 

 

the free market doesnt produce boom and bust cycles, they are almsot always cause by some government intevention into the market, most notoriously by the federsal reserve and its artifical manipulation of interest rates, this is not a free market phenomenon

as for banking regulations, can you tell me a single banking regulation that was repealed that had it not been repealed would have saved us from the current crisis?

well i do know this, sections of the economy that are less heavily regulated tend to do far better, consumer electronics for instance, prices are always falling while quality goes up, same for certain parts of the medical industry, take lasik sugery for instance

 

Proof FDR was a tyrant and a POS: Executive Order 9066

Our country's founders cherished liberty, not democracy.
-Ron Paul


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atomicdogg34 wrote: well i

atomicdogg34 wrote:

well i think the federal govt should be doing alot less so im not worried about revenues, the states should be doing most of these programs if they wished, the federal govt has no authority for most of what it does

You and me both, although we no doubt disagree on what the feds shouldn't be doing. (When it comes to reduced govt, I don't think any two people agree word-for-word. Highly radical views -as in, more radical than mine- are not uncommon.)

Quote:
weve only had an income tax since 1916 and we did pretty well before that id venture to say

Well... that depends on how you define "pretty well". Most of the argument for more centralized, larger govt comes from the many shortcomings of society from before FICA. 20%+ illiteracy was quite common, sometimes higher in less urbanized areas. There were health and safety problems with perishable goods that have been thoroughly dealt with in other threads (like Coke-a-Cola putting cocaine in its drinks, but not telling buyers), basic items of public safety enabled by the feds (that we all-too-easily take for granted) were nonexistant.

Quote:
its easy to see congressional earmark abuse, but in a broken system they atleast allow the congress to do their job and decide the spending, earmarks come out of already appropriated funds so if you got rid of them all you wouldnt necessarily save a single penny, and all youd do if shift the control of spending to the executive branch 

So fix the bloody system instead of making retarded compromises. For starters, only allow Congress critters to only take home a % of the amount they bring to D.C. in FICA taxes.

Name one fiscal conservative congress critter that engages in this behavior. Also, aiming for efficient spending hardly has anything to do with saving money. It has more to do with making sure D.C. doesn't spend several 100s of dollars on a socket wrench, several thousand on a toilet seat.

 

 

“A meritocratic society is one in which inequalities of wealth and social position solely reflect the unequal distribution of merit or skills amongst human beings, or are based upon factors beyond human control, for example luck or chance. Such a society is socially just because individuals are judged not by their gender, the colour of their skin or their religion, but according to their talents and willingness to work, or on what Martin Luther King called 'the content of their character'. By extension, social equality is unjust because it treats unequal individuals equally.” "Political Ideologies" by Andrew Heywood (2003)


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atomicdogg34 wrote:the free

atomicdogg34 wrote:
the free market doesnt produce boom and bust cycles, they are almsot always cause by some government intevention into the market, most notoriously by the federsal reserve and its artifical manipulation of interest rates, this is not a free market phenomenon

The stupid fucking federal reserve (and it's present and previous chairpersons) are almost certainly the primary culprits behind much of the current crisis/crises. This doesn't render free market as perfect by any stretch, nor does this magically make the free market immune to speculation/investment bubbles (which almost always pop.)

Goverment regulations didn't force banks to make subprime mortgages.

Quote:
well i do know this, sections of the economy that are less heavily regulated tend to do far better, consumer electronics for instance, prices are always falling while quality goes up, same for certain parts of the medical industry, take lasik sugery for instance

The dot coms of the late 90s weren't all that heavily regulated, yet they were still overvaluated, and they still crashed by late 2000/2001. The interest in promoting one's business over the web was completely irrational; everyone thought their enterprise would be magically more prosperous by having a website... for some unfathomable reason.

“A meritocratic society is one in which inequalities of wealth and social position solely reflect the unequal distribution of merit or skills amongst human beings, or are based upon factors beyond human control, for example luck or chance. Such a society is socially just because individuals are judged not by their gender, the colour of their skin or their religion, but according to their talents and willingness to work, or on what Martin Luther King called 'the content of their character'. By extension, social equality is unjust because it treats unequal individuals equally.” "Political Ideologies" by Andrew Heywood (2003)


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cj wrote:We can start with

cj wrote:

We can start with the banking regulations.

 

Kind of ironic how the most regulated industries in the country are the ones that everyone is saying need more regulations. Banking, investments, mortgages, health insurance and energy are by far the most regulated industries, but also the source of all the problems. Coincidence? I don't think so. In case you didn't notice, the largest regulation overhaul of our financial industry was passed last year. You will probably notice when shit at the bank gets expensive especially if you use small banks or credit unions. Which will probably lead you to blame those "greedy bankers" when you really should be blaming Frank and Dodd. Maybe you are right, maybe Frank and Dodd really do think they are helping. The would have to be stupid to believe that, but it can be argued that they are idiots. I'm a bit more cynical. Most politicians I have known personally run for office because they want power and regulations give them power, so I tend to jaded when it comes to politicians.  

 

And the boom and bust cycle is not something that needs to be fixed. A healthy economy should have an ebb and flow to it as the needs/desires of people change and as the availability of resources change. The is how a free market economy knows to change. When government attempts to "smooth out" the bumps, more often than not it extends a boom farther than it should go and the longer you delay the crash, the worse it will be. A recession happens when an industry is producing more goods than are needed/wanted, demand drops off so the industry needs to cut back production. That means people get fired and they need to find something more useful to do. Recessions happen every year. Any given year, your going to have some industries that are in recession and others that are booming regardless of the big picture. Most people don't notice them unless several industries go into recession at the same time or they are personally involved in it. 

 

What keynesians attempt to do is keep those workers producing in industries where they aren't needed for the sake of having a job. They operate under the assumption that it doesn't matter what you are producing, as long as you are doing something. But it does matter. If all you are producing is junk that no one wants to buy, you might as well be doing nothing. It is like digging a hole and filling it back in over and over just to have a job. A recession tells investors to pull money out of an industry and put it somewhere else where production is in demand. It spurs innovation into new fields, invention and technology. In the meantime, workers might have to be retrained to work in a field that is completely different from what they did in the past. The process might be painful, especially if you are one of the people who loses their livelihood. But the result is an economy that produces more goods and more luxuries. When labor is adjusted to be more efficient, we all win in the long run. When the automobile was invented, a lot of horseshoe makers lost their jobs. I'm sure it sucked if you made horse shoes, but isn't it a lot better to have cars than to "save" the jobs of horseshoe makers? My point is that industry failure and people losing their jobs is not necessarily a bad thing and a "save jobs at any cost" approach will probably do more harm than good. Harm that our illustrious leaders will no doubt be surprised at. 


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atomicdogg34 wrote:the free

atomicdogg34 wrote:

the free market doesnt produce boom and bust cycles, they are almsot always cause by some government intevention into the market, most notoriously by the federsal reserve and its artifical manipulation of interest rates, this is not a free market phenomenon

 

Tell Milton Friedman that - his Free to Choose is one of my sources.  Also, Econ 101.

 

atomicdogg34 wrote:

as for banking regulations, can you tell me a single banking regulation that was repealed that had it not been repealed would have saved us from the current crisis?

well i do know this, sections of the economy that are less heavily regulated tend to do far better, consumer electronics for instance, prices are always falling while quality goes up, same for certain parts of the medical industry, take lasik sugery for instance

 

Airlines?  Many companies going out of business?  Lower fares, sure - for awhile.  And now you are charged for breathing.  And maintenance is being skipped.  And new planes are not being ordered as often - ask Boeing how they're doing.

Trucking industry?  My family owns a trucking.  I remember swapping out pages in the notebook we kept the regs in.  It did not go under after deregulation - though it was close.  And the main reason it didn't was because my uncle diversified.  They no longer just do trucking.

Banking - my understanding is changes were made during the GW years with the express purpose of making it easier to own your own home.  And so we had mortgages issued to people without credit checks, without proof of income, 100% financed.  (Ninja loans - "'No Money Down' Falls Flat", The Washington Post, March 14, 2007.)  Strawberry pickers had $750,000 homes in California.   ("Minorities are the emerging face of the subprime crisis", SF Gate, April 13, 2007.)  For a very good discussion of the ways we are fooled by our intuitions, see The Invisible Gorilla and other ways our intuitions deceive us by Christopher Chabris and Daniel Simons.  Especially chapter 4, "Should you be more like a weather forecaster or a hedge fund manager?"

 

-- I feel so much better since I stopped trying to believe.

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Kapkao wrote:Goverment

Kapkao wrote:

Goverment regulations didn't force banks to make subprime mortgages.

Not forced in the sense of pressing charges for not issuing loans but the government did create a lot of regulations to push subprime loans. Specifically the changes made to the Community Reinvestment Act in 1995 which forced banks to issue loans in communities that the banks deemed unprofitable. Politicians claimed that banks refused to issue loans because they were racist and many of the communities that people couldn't get loans in were minority communities. Faced with issuing loans or facing potential lawsuits and the PR nightmare of being called a racist company, banks started issuing subprime mortgages because in the communities they were told they had to make loans, everyone was poor. 

 

Enter Fannie & Freddie which bankers realized they could use to sell subprime mortgages to unwitting investors. Taking the government lemons, they made lemonade. They packaged the mortgages and sold them as safe investments because they were "government guaranteed". Since the housing market was booming, most subprime mortgages made a decent return because even when foreclosure happened, the house could often be sold for more than the loan, sometimes even at a profit. The larger pool of buyers who could get loans caused demand to increase and prices to rise even faster. Banks quickly realized they were making a good profit, so they expanded and became ever more aggressive at selling subprime mortgages.

 

So while I don't hold the banks free from blame, the government started it with their regulations forcing banks to do business in areas that were unprofitable. The banks simply did what companies do, they found a way to make a profit despite government regulations and found an effective vehicle in the GSE's of Fannie & Freddie.

 

Kapkao wrote:

The dot coms of the late 90s weren't all that heavily regulated, yet they were still overvaluated, and they still crashed by late 2000/2001. The interest in promoting one's business over the web was completely irrational; everyone thought their enterprise would be magically more prosperous by having a website... for some unfathomable reason.

And the dotcom bubble was minor. It grew quickly, competition was fierce and the most profitable companies came out on top, the rest shut down and found something useful to do. Exactly what you want to see in a healthy economy when a new innovation is discovered. Thanks to the dotcom boom we have Amazon, Ebay and Google. The internet evolved from a place for nerds to a tool used for most modern human endeavors. Exactly what I meant in my previous post to CJ about bubbles not always being a bad thing, as long as government doesn't try to drag them out.

 

In the housing market, government did everything it could to keep the boom going keeping interest rates low, regulations, subsidies etc. And the bubble took a long time building and is going to continue to take a long time bursting. The dotcom bubble got little to no government interference and nothing to stop it from bursting. No one tried to bail out failed internet companies. It ended and the best companies remained and the internet is one section of our economy that is strong. The free market found a balanced level of resources to be put into the internet. And yes I realize it isn't quite apples to apples because the housing market is substantially larger and affects more people than the dotcom bubble, but the economic argument remains the same.


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cj wrote:And new planes are

cj wrote:

And new planes are not being ordered as often - ask Boeing how they're doing.

Quite well actually. They are attempting to expand. Profits for Boeing have been higher than expected despite their continuing problems with building their Dreamliner plant. Boeing stock is a definite deal right now. I suspect that by next year it will be back over $80 and if the second dreamliner plant is approved and built in South Carolina profits next year will be huge for 2012 going into 2013. If it wasn't for all the government hoops, the plant would be half built by now. Regardless, with their generous dividend Boeing is a safe and potentially profitable company to put money into IMO.

 

Even if Bama's thugs are successful at destroying the South Carolina deal, Boeing will probably just build overseas. Good companies make profits despite government regulation and unions.  


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any problems that arise in

any problems that arise in the market, if allowed to correct, usually do so at a much faster pace than most people realize, take the depression of 1920-21 for example, the govt basically did nothing and it was over in a year, the market is very adept at adapting to changes, and usually very quickly and efficiently

the dotcom bubble and the current bubble that collapsed are basically one and the same, artificially low interest rates, caused the one and when that went boom they just inflated housing, people like paul krugman for instance were calling FOR a housing bubble as early as 2002

companies arent forced per se but the false signals sent to the market lead to a lot of malinvestment, then you have GSEs like fannie and freddie creating a market for subprime mortgages, you have things like the CRA thats already been mentioned, as well as things like FDIC insurance, as well as promises of bailouts, all things that take away from free market regulation (and yes there is free market regulation), none of this can be blamed on capitalism, and it should be pointed out that the only folks who saw this coming, and predicted how it would play out were the free market capitalists, the austrian school guys like ron paul, peter schiff, and others

Proof FDR was a tyrant and a POS: Executive Order 9066

Our country's founders cherished liberty, not democracy.
-Ron Paul


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Beyond Saving wrote:Kapkao

Beyond Saving wrote:

Kapkao wrote:

Goverment regulations didn't force banks to make subprime mortgages.

Not forced in the sense of pressing charges for not issuing loans but the government did create a lot of regulations to push subprime loans. Specifically the changes made to the Community Reinvestment Act in 1995 which forced banks to issue loans in communities that the banks deemed unprofitable. Politicians claimed that banks refused to issue loans because they were racist and many of the communities that people couldn't get loans in were minority communities. Faced with issuing loans or facing potential lawsuits and the PR nightmare of being called a racist company, banks started issuing subprime mortgages because in the communities they were told they had to make loans, everyone was poor. 

 

People in slums can't pay the same interest rates as everyone else, even though their property values have sunk through the floor? What are they going to use loans for? The subpar, 'hoodrich' cars they buy, their houses, a new business with the same minimal property values as everyone else, in a place that may or may not have high levels of theft?

I can't imagine many people here think the same "Act" you mentioned is a top notch example of goverment behavior at it's most effective level of functioning. The calls for this CRA, I imagine, came from the same group(s) that called pizza outlets "racist" (a few years back) simply because they decided to stop delivering to dangerous neighborhoods -places that tended to be inhabited by lower-class blacks. Unsurprisingly, in this example the socialist-founded NAACP came galloping to the call of battle, with fists wringing.

 

edit; well, apparently not the NAACP acted on anyone's behalf regarding CRA. Oh well...

 

 

“A meritocratic society is one in which inequalities of wealth and social position solely reflect the unequal distribution of merit or skills amongst human beings, or are based upon factors beyond human control, for example luck or chance. Such a society is socially just because individuals are judged not by their gender, the colour of their skin or their religion, but according to their talents and willingness to work, or on what Martin Luther King called 'the content of their character'. By extension, social equality is unjust because it treats unequal individuals equally.” "Political Ideologies" by Andrew Heywood (2003)


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atomicdogg34 wrote:none of

atomicdogg34 wrote:
none of this can be blamed on capitalism, and it should be pointed out that the only folks who saw this coming, and predicted how it would play out were the free market capitalists, the austrian school guys like ron paul, peter schiff, and others

Austrian School, you say?

Quote:
Critics have concluded that modern Austrian economics generally lacks scientific rigor

http://econfaculty.gmu.edu/bcaplan/whyaust.htm

Quote:
More than anything else, what prevents Austrian economists from getting more publications in mainstream journals is that their papers rarely use mathematics or econometrics, research tools that Austrians reject on principle...Mises and Rothbard however err when they say that economic history can only illustrate economic theory. In particular, empirical evidence is often necessary to determine whether a theoretical factor is quantitatively significant...Austrians reject econometrics on principle because economic theory is true a priori, so statistics or historical study cannot "test" theory.

Quote:
Austrian theories are not formulated in formal mathematical form, instead using mainly verbal arguments based on what proponents claim are self-evident axioms.

http://www.econlib.org/library/Enc1/AustrianEconomics.html

Apparently, Austrian School proponents don't seem to like the scientific method, namely empiricism. Ludwig von Mises has been described as the mid-20th century's archetypal 'unscientific' economist.

If I wanted to make a point in favor of free markets, I'd go with Milton Friedman personally.

“A meritocratic society is one in which inequalities of wealth and social position solely reflect the unequal distribution of merit or skills amongst human beings, or are based upon factors beyond human control, for example luck or chance. Such a society is socially just because individuals are judged not by their gender, the colour of their skin or their religion, but according to their talents and willingness to work, or on what Martin Luther King called 'the content of their character'. By extension, social equality is unjust because it treats unequal individuals equally.” "Political Ideologies" by Andrew Heywood (2003)


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Kapkao wrote:atomicdogg34

Kapkao wrote:

atomicdogg34 wrote:
none of this can be blamed on capitalism, and it should be pointed out that the only folks who saw this coming, and predicted how it would play out were the free market capitalists, the austrian school guys like ron paul, peter schiff, and others

Austrian School, you say?

Quote:
Critics have concluded that modern Austrian economics generally lacks scientific rigor

http://econfaculty.gmu.edu/bcaplan/whyaust.htm

Quote:
More than anything else, what prevents Austrian economists from getting more publications in mainstream journals is that their papers rarely use mathematics or econometrics, research tools that Austrians reject on principle...Mises and Rothbard however err when they say that economic history can only illustrate economic theory. In particular, empirical evidence is often necessary to determine whether a theoretical factor is quantitatively significant...Austrians reject econometrics on principle because economic theory is true a priori, so statistics or historical study cannot "test" theory.

Quote:
Austrian theories are not formulated in formal mathematical form, instead using mainly verbal arguments based on what proponents claim are self-evident axioms.

http://www.econlib.org/library/Enc1/AustrianEconomics.html

Apparently, Austrian School proponents don't seem to like the scientific method, namely empiricism. Ludwig von Mises has been described as the mid-20th century's archetypal 'unscientific' economist.

If I wanted to make a point in favor of free markets, I'd go with Milton Friedman personally.

 

robert murphy discussing econometrics, this is the guy paul krugman is absolutely terrified to debate

http://mises.org/daily/1001

 

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http://mises.org/daily/940 m

http://mises.org/daily/940

 

more on econometrics


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atomicdogg34

atomicdogg34 wrote:

http://mises.org/daily/940

 

more on econometrics

Ye, truly there are some bright opinion makers standing behind Austrian School. But my main issue isn't econometrics, it's the complete lack of science behind Ludwig's theories. Math has its uses, though I don't think anyone has developed any that hold any importance in modern economics (yet.)

My main contention remains that Austrian School apparently thinks science has no place in economics, only historical data. Again, I'd have gone with Friedman.

“A meritocratic society is one in which inequalities of wealth and social position solely reflect the unequal distribution of merit or skills amongst human beings, or are based upon factors beyond human control, for example luck or chance. Such a society is socially just because individuals are judged not by their gender, the colour of their skin or their religion, but according to their talents and willingness to work, or on what Martin Luther King called 'the content of their character'. By extension, social equality is unjust because it treats unequal individuals equally.” "Political Ideologies" by Andrew Heywood (2003)


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austrian economics uses a

austrian economics uses a priori facts and then deduces things from them, empirical data is useless in economics due to the complexity and individuality of human action

 

from the wiki page:

Austrian School principles advocate strict adherence to methodological individualism – analyzing human action exclusively from the perspective of an individual agent.[9] Austrian economists also argue that mathematical models and statistics are an unreliable means of analyzing and testing economic theory, and advocate deriving economic theory logically from basic principles of human action, a method they term 'praxeology'. Additionally, whereas experimental research and natural experiments are often used in mainstream economics, Austrian economists contend that testability in economics is virtually impossible since it relies on human actors who cannot be placed in a lab setting without altering their would-be actions. Mainstream economists are generally critical of methodologies used by modern Austrian economists;[10] in particular, a primary Austrian School method of deriving theories has been criticized by mainstream economists as a priori "non-empirical" analysis[5] and differing from the practices of scientific theorizing, as widely conducted in economics.[11][12][10]

Austrian School economists generally hold that the complexity of human behavior makes mathematical modeling of an evolving market extremely difficult (or undecidable).

 

 

Proof FDR was a tyrant and a POS: Executive Order 9066

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plus, scientific or not i

plus, scientific or not i think the predictions of the austrians should definently count in their favor, whether you agree with their methodology or not, the predictions made by that methodology have been basically spot on

Proof FDR was a tyrant and a POS: Executive Order 9066

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atomicdogg34 wrote: austrian

atomicdogg34 wrote:

austrian economics uses a priori facts and then deduces things from them, empirical data is useless in economics due to the complexity and individuality of human action

 

from the wiki page:

 (ed note: and so on and so forth)

So... individuality is important in determining the profitability of Japanese consumer goods makers who want to put their products (Tamagochis, various hello kitty merchandise, and an almost impossible dominance in the console market until Microsoft got involved) in American markets? The creation of the dvd consortium, the digital versatile disc patent, and the subsequent mountains of money made on both?

What about the "ebb and flow" that you think is a consequence of government meddling in markets -is this somehow a result of the individuality of human actions?

I can think of one portion of economics where complexity and individuality of action is completely immaterial -consumers themselves. A lot of money is used and a lot of effort put into the assumption that a significant portion of the populace will buy on impulse, will not put much thought into the practicality of their purchase, and will do so because said purchase comes in shiny wrapping (metaphorically speaking.)

atomicdogg34 wrote:

plus, scientific or not i think the predictions of the austrians should definently count in their favor, whether you agree with their methodology or not, the predictions made by that methodology have been basically spot on

According to whom, based on what information?

“A meritocratic society is one in which inequalities of wealth and social position solely reflect the unequal distribution of merit or skills amongst human beings, or are based upon factors beyond human control, for example luck or chance. Such a society is socially just because individuals are judged not by their gender, the colour of their skin or their religion, but according to their talents and willingness to work, or on what Martin Luther King called 'the content of their character'. By extension, social equality is unjust because it treats unequal individuals equally.” "Political Ideologies" by Andrew Heywood (2003)


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heres an article on

heres an article on methodological individualism:

http://mises.org/daily/3578

 

id rather leave it to the professionals to give a good explanation then try and muddle through myself

 

as for the predictions, i mean just look at guys like peter schiff who have basically been right on almost everything, as well as ron paul, the described in detail what the problems were, what was happening and so on and so forth, a simple youtube search will show they were warning of these things as far back as like 2004, maybe earlier, "peter schiff was right" is an excellent video

austrians were also predicting the breakdown of the bretton-woods agreement for instance

 

 

 

Proof FDR was a tyrant and a POS: Executive Order 9066

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Kapkao wrote:So...

Kapkao wrote:

So... individuality is important in determining the profitability of Japanese consumer goods makers who want to put their products (Tamagochis, various hello kitty merchandise, and an almost impossible dominance in the console market until Microsoft got involved) in American markets? The creation of the dvd consortium, the digital versatile disc patent, and the subsequent mountains of money made on both?

Yes. When you look at any specific product and want to explain why it was a huge success (or failure for that matter) the most logical way to approach the analysis is to examine why the individuals involved did what they did. You can create charts all day, but before the invention and the distribution of the console gaming systems, how could you declare with any certainty that it will be popular or successful? Marketing helps, but more than one product has fallen flat despite massive amounts of money being thrown at it. And most relevant to the Austrian's argument, before the gaming console was invented and distributed, nothing like it had ever been made or sold before. The gaming console completely changed an entire section of the economy and eventually became a significant portion of the economy. The root of the Austrian's argument is that the traditional approach fails because there is no continuity, IOW the economy today is different than it was yesterday and it will be different tomorrow. Since things will be different, experiments are not necessarily repeatable. You can get all sorts of data and draw several conclusions, but those conclusions are only true for this moment in time. When a new invention comes around, or culture changes, or powerful individuals make different decisions all your data means shit and you just wasted a lot of time.

 

Remember, what the Austrian School was initially arguing against was the idea of a centralized economy where most significant economic decisions were made at the federal level. The traditional schools of economic thought were (and still are) attempting to determine the effects of federal regulations by trying to create mathematical formulas to explain and predict when the government changed variable X, Y would happen. The Austrian's argued that this was absurd because there are so many variables involved that you couldn't explain or predict Y without understanding the variables and understanding that those variables are likely to change at any given time. For example, suppose you worked out a formula that x*y=z. The Austrians argue that at any given time, that formula could change and when you try to do the calculations next year x*y will not equal z. To the Austrians, it is far more important to understand the vehicle that changes the equations (roughly described as the "individual&quotEye-wink than to create the equations themselves because only by understanding how and why the equation is changing can you have a hope of predicting the future. If you simply rely on the equation to remain constant, your predictions may be wrong.

 

 

Kapkao wrote:

I can think of one portion of economics where complexity and individuality of action is completely immaterial -consumers themselves. A lot of money is used and a lot of effort put into the assumption that a significant portion of the populace will buy on impulse, will not put much thought into the practicality of their purchase, and will do so because said purchase comes in shiny wrapping (metaphorically speaking.)

And yet you point out exactly the microeconomics that are important. Consumers are fickle and their demand changes very frequently for a wide variety of reasons. The whole art of marketing is based on predicting what buttons you can push that will motivate your potential consumers to purchase. These might be emotional or rational, based on creating a desire or exploiting one that already exists. It might be presenting the product to be used in a way that it hasn't been used before or simply informing consumers of a new product. In what way is that anything OTHER than individuality of action? Why do you think that advertising has been using technology to try to personalize advertisements to the individual like the google ads on this site?

 

It also precisely highlights the Austrian's arguments. Do you know why you don't see the same commercials you saw 20 years ago? Because they don't work as well anymore. You can collect all the data you want to create the "perfect" advertising campaign, now the other schools of economic thought would look at that perfect advertising campaign and declare it a law that THIS is the best way to advertise, period. But no matter how good your advertising campaign is, its effectiveness will wear off. The consumers change and you have to change your advertising along with them. If you don't, you will find that sales will drop off. A good marketer does not rely solely on the success of previous campaigns to predict the success of future campaigns. They study the market and the consumers motivations and what variables might affect the consumers decision to purchase or not to purchase their product. IOW, they study the individual, just like the Austrians.

 

When I am considering investing in a new venture, the main thing I am looking for is the entrepreneur to provide me detailed descriptions of their potential customers. I want them to be able to tell me who will frequent the business, why they will spend their money and what factors might prevent them from doing so. You can throw supply and demand charts at me all the time, or show me that a similar store worked in a different town and it helps, but ultimately, success in one town doesn't mean success in another town because the people are different and they have the ultimate power to choose and they often make their decisions for emotional and impulsive reasons that are situational rather than well thought out rational decisions. If humans were rational and always made the economic choices that were best for purely economic reasons, it would be easy to create clean mathematical formulas to predict their behavior. But, people don't more often than they do. 

 

Now, the Austrian's argument has lost a little power because with modern technology it is much easier to collect the massive amounts of data that would be needed to accurately predict all the variables in play, but even with our current supercomputers I think it is unlikely that we could create a purely mathematical model to accurately predict supply and demand on a macro level. The economy is simply too big and too complex to imagine that everything in it could be efficiently controlled by a single central power. It is this recognition and belief that leads the Austrian's to the conclusion that the economy is best run when businessmen are left to their own devices to manage their own little section of the economy. It is much easier to understand all the variables involved in a single business that you work in every day than it is to understand every economic transaction in the world.

 


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 I just have a few further

 I just have a few further thoughts on why economics is not a science and shouldn't necessarily be treated like one. Fundamentally, science is the study of what is real. Is economics real? No. Economics is fundamentally a social construct. Things only have value because people believe and agree that they have value. Economics is inherently political and moral because when you get to the nuts and bolts, it is merely human interaction. The properties of our economic system is far more related to the form of political structure we choose, our morality and our concept of what is important than it is to any kind of physical reality. So to look for economic laws that exist in the same sense of the laws of physics is absurd. You can't change physical reality by simply collectively deciding it is different. You can radically change an economic system by collectively deciding to do so.

 

At the extremes you have such decisions such as society deciding not to recognize private property, which would completely demolish capitalism. As a less extreme example you have the confidence in the currency, which as people believe that a currency isn't worth much, they decide to trade it for things they believe are worth more, like gold. The value of a currency is completely in the minds of the people who use that currency to trade. If they believe it is extremely valuable, then it is, if they believe it is more worthless than toilet paper it is. (Which is also why I am not sold on the insistence from many in the Austrian school that we return to the gold standard, but that is another issue) 

 

Of course, to some extent economics does brush against science in that certain things are constrained by reality such as how much of an item can be produced at the current technology level and certain goods are inherently more necessary to people than others like food. But ultimately, the majority of our economic decisions are based far more on our belief of the value of our money, our personal desires/preferences and our financial morality (or lack of).

 

I would compare it to the thread we had not too long ago about the attractiveness of black women where a scientist attempted to use the scientific method to determine what is beautiful. I agree with those who said it was absurd to even attempt to do so because beauty is subjective and the study did little more than observe modern social preferences rather than some objective beauty.

 

It is useful to track economic trends and when used properly, it is possible to track and predict the effects of certain public policies. But it is a mistake to believe the statistics are anything more than a reflection of the current situation and preferences of the population. They may or may not be an accurate predictor of what would happen in the future or what might happen in a different population. To know whether or not it is an accurate predictor, you have to understand how the population will react to the policy on the micro level. Therefore, the best way to accurately analyze and make predictions in an economy is to look at it on the micro level and the influences on the actors there rather than draw conclusions from trends that can be seen on the macro level.  


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Damn browser ate my reply.

Damn browser ate my reply. So I'll fuss with it later.

“A meritocratic society is one in which inequalities of wealth and social position solely reflect the unequal distribution of merit or skills amongst human beings, or are based upon factors beyond human control, for example luck or chance. Such a society is socially just because individuals are judged not by their gender, the colour of their skin or their religion, but according to their talents and willingness to work, or on what Martin Luther King called 'the content of their character'. By extension, social equality is unjust because it treats unequal individuals equally.” "Political Ideologies" by Andrew Heywood (2003)


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peter schiff explaining such

peter schiff explaining such things as the corporate jet "subsidy"

http://www.youtube.com/watch?v=l-KsDLBj4dQ

 

then taking on warren buffet and other tax myths

 

http://www.youtube.com/watch?v=6drf0DsnHRw

 

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When the fuck did this forum

When the fuck did this forum become religious? I am reading through this massive body of 'free market' delusional bullshit, just tiering. Taxation is theft? You want to build and maintain your own private road and railway infrastructure perhaps? Build and maintain bridges on your own maybe? You want to hire private cops and firemen? No private actor will stand for the expense of that magnitude without breaking down and disappearing. How the fuck did atheists become this simplistic?

You think private money is private? No, governmnet vouches for it - you could wipe your ass with your money otherwise. You think corporations are private? Hell no, corporations are governmental institutions and would not exist if the government wasn't in place to guarantee their existence. You think free market would spring up all on its own if government wasn't there? Well, it just so happens that we have had endless historical experiments of the sort and guess what - we always end up in a centralized system. It is more likely that Jesus actually did come back to life three days after death, than that pure 'free market' can exist without massive governmental policing to ensure fair play. This level of stupidity is just staggering. Come on, guys, we have to be better than this.

Logic is a systematic method of coming to the wrong conclusion with confidence.


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ZuS wrote:When the fuck did

ZuS wrote:

When the fuck did this forum become religious? I am reading through this massive body of 'free market' delusional bullshit, just tiering. Taxation is theft? You want to build and maintain your own private road and railway infrastructure perhaps? Build and maintain bridges on your own maybe? You want to hire private cops and firemen? No private actor will stand for the expense of that magnitude without breaking down and disappearing. How the fuck did atheists become this simplistic?

You think private money is private? No, governmnet vouches for it - you could wipe your ass with your money otherwise. You think corporations are private? Hell no, corporations are governmental institutions and would not exist if the government wasn't in place to guarantee their existence. You think free market would spring up all on its own if government wasn't there? Well, it just so happens that we have had endless historical experiments of the sort and guess what - we always end up in a centralized system. It is more likely that Jesus actually did come back to life three days after death, than that pure 'free market' can exist without massive governmental policing to ensure fair play. This level of stupidity is just staggering. Come on, guys, we have to be better than this.

 

I love when people throw up a few unrelated strawmen and throw out a few vague talking points in response to several rather long and extensive posts... then call my opinion "simplistic"

 

You are right on one point though, the history of civilization has always demonstrated a move towards centralization, and historically that centralization has always meant tyranny which eventually becomes so bad that the oppressed overthrow the government which is sometimes followed by anarchy and sometimes by a less oppressive regime. Then repeated. I hope that maybe this new idea of elections might help us skip the violent overthrow part and just go straight to decentralization because war really sucks for everyone involved.

 

Human history is rife with miserable living conditions, government abuse, corruption, tyranny and a lack of freedom. Modern democracies have been the exception. So if your biggest argument for centralization is because it has always occurred in history, well I prefer not to repeat that particular bit of history. But I fear you are right, freedom will always have to be fought for, and the instant we let down our guard, others will seize power and never let it go without a fight. 


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Beyond Saving wrote:I love

Beyond Saving wrote:

I love when people throw up a few unrelated strawmen and throw out a few vague talking points in response to several rather long and extensive posts... then call my opinion "simplistic"

Sorry, its just massively tiering.

Beyond Saving wrote:

You are right on one point though, the history of civilization has always demonstrated a move towards centralization, and historically that centralization has always meant tyranny which eventually becomes so bad that the oppressed overthrow the government which is sometimes followed by anarchy and sometimes by a less oppressive regime. Then repeated. I hope that maybe this new idea of elections might help us skip the violent overthrow part and just go straight to decentralization because war really sucks for everyone involved.

They get better at controling the masses and postponing the inevitable every time around. This time around they have this make-it-yourself ideology hammered into American brains, including yours. Childish stuff, bravado and that kind of bullshit, but effective. Of course, their hybris will always push our hand eventually, the problem is that they get more physical damage done every time around. We can't afford another spin of this, we just don't have Earth enough to handle a nuclear holocaust and a complete destruction of our environment.

Beyond Saving wrote:

Human history is rife with miserable living conditions, government abuse, corruption, tyranny and a lack of freedom. Modern democracies have been the exception. So if your biggest argument for centralization is because it has always occurred in history, well I prefer not to repeat that particular bit of history. But I fear you are right, freedom will always have to be fought for, and the instant we let down our guard, others will seize power and never let it go without a fight. 

Modern democracies have not been the exception. Its just a new spin on the old story of exploitation. Empire is always trying to control the world and that will always be the case. I don't argue for centralization, but I do argue that it will always fight to spread like a cancer and that we have to fight it bottom-up.

Logic is a systematic method of coming to the wrong conclusion with confidence.


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ZuS wrote:This time around

ZuS wrote:

This time around they have this make-it-yourself ideology hammered into American brains, including yours. Childish stuff, bravado and that kind of bullshit, but effective.

I have made it myself, and know tons of other people who have as well. Why do you think it is bullshit?

 

ZuS wrote:

Modern democracies have not been the exception. Its just a new spin on the old story of exploitation. Empire is always trying to control the world and that will always be the case. I don't argue for centralization, but I do argue that it will always fight to spread like a cancer and that we have to fight it bottom-up.

I don't think there is any question that the modern developed world is a much more pleasant place to live for the population in general than any other time in history. Whatever problems, corruption and exploitation that is going on, even our poor live an extremely comfortable lifestyle in comparison to world history. In the US, our poor live better than what is average in most other countries. 

 

What I can't figure out is exactly why you are so critical of my arguments for a weaker and more decentralized government. I understand that you blame corporations as a major part of the problem, I blame the politicians instead because they have more power- corporations bribe politicians because politicians have and use power. However, either way it seems to me that the answer is to remove power from Washington D.C. Whether the power is primarily abused by politicians or abused by corporations that control politicians, why would you want them to have more power?  

 

Simplify the tax code, which is one of the biggest means politicians use to pass out favors by making loopholes for allies. Make whatever tax system that exists as straightforward as possible with no exceptions for any particular industry, corporation or any other group of people.

 

Take away the power of the federal government to regulate most everything and hold it to its Constitutionally specified duties. For some reason, people imagine that "regulation" is a term for laws passed to protect people from business, but anyone who pays attention ought to realize that regulation almost always consists of laws designed to give established corporations protection from upstarts or to get revenge on a corporation that has been unfriendly to the politicians in power. The regulations are usually written by, or at least supported by the corporations that you claim are the problem.

 

Put as many of the necessary government services as possible under local control. While this is no guarantee against corruption, it is much easier to fight corruption at a local level than the federal. At the local level, the politicians actually have to live near you and it is very possible to actually talk to a majority of voters on a personal level and try to persuade them to throw out a corrupt politician. The larger the level of government, the more difficult it is to hold them accountable or effect any real change.

 

So where exactly am I wrong?

 


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Beyond Saving wrote:ZuS

Beyond Saving wrote:

ZuS wrote:

This time around they have this make-it-yourself ideology hammered into American brains, including yours. Childish stuff, bravado and that kind of bullshit, but effective.

I have made it myself, and know tons of other people who have as well. Why do you think it is bullshit?

 

ZuS wrote:

Modern democracies have not been the exception. Its just a new spin on the old story of exploitation. Empire is always trying to control the world and that will always be the case. I don't argue for centralization, but I do argue that it will always fight to spread like a cancer and that we have to fight it bottom-up.

I don't think there is any question that the modern developed world is a much more pleasant place to live for the population in general than any other time in history. Whatever problems, corruption and exploitation that is going on, even our poor live an extremely comfortable lifestyle in comparison to world history. In the US, our poor live better than what is average in most other countries. 

 

What I can't figure out is exactly why you are so critical of my arguments for a weaker and more decentralized government. I understand that you blame corporations as a major part of the problem, I blame the politicians instead because they have more power- corporations bribe politicians because politicians have and use power. However, either way it seems to me that the answer is to remove power from Washington D.C. Whether the power is primarily abused by politicians or abused by corporations that control politicians, why would you want them to have more power?  

 

Simplify the tax code, which is one of the biggest means politicians use to pass out favors by making loopholes for allies. Make whatever tax system that exists as straightforward as possible with no exceptions for any particular industry, corporation or any other group of people.

 

Take away the power of the federal government to regulate most everything and hold it to its Constitutionally specified duties. For some reason, people imagine that "regulation" is a term for laws passed to protect people from business, but anyone who pays attention ought to realize that regulation almost always consists of laws designed to give established corporations protection from upstarts or to get revenge on a corporation that has been unfriendly to the politicians in power. The regulations are usually written by, or at least supported by the corporations that you claim are the problem.

 

Oh, so the modern democracies are rotten, just not from the average citizen's pov. (jk)

I think the deal with ZuS and those of similar mind isn't that we're somehow as equally bad or worse off than previous centuries, it's merely that the misdeeds of our leaders are much more visible and easy to discover with the help of literacy,  instant communication, and video recording, as opposed to centuries now long gone when kings and emperors could either be gods made flesh or mortal representatives of the god of the abrahamic faiths. Their actions were thus above doubt and suspicion.

 

“A meritocratic society is one in which inequalities of wealth and social position solely reflect the unequal distribution of merit or skills amongst human beings, or are based upon factors beyond human control, for example luck or chance. Such a society is socially just because individuals are judged not by their gender, the colour of their skin or their religion, but according to their talents and willingness to work, or on what Martin Luther King called 'the content of their character'. By extension, social equality is unjust because it treats unequal individuals equally.” "Political Ideologies" by Andrew Heywood (2003)


ZuS
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Beyond Saving wrote:I have

Beyond Saving wrote:

I have made it myself, and know tons of other people who have as well. Why do you think it is bullshit?

I appreciate your effort and don't want to undermine it, but you are not seeing your contribution clearly. US landed on the Moon by group effort. Same is the case with your educational system, civil rights, labour rights, women's rights, the journalistic profession, pretty much everything good around you is a product of either bottom-up fight against tyranny or huge public investment. MIT, the #1 source of innovative corporate equity, is 80% public funded straight out of Pentagon. You are a child of socialism, even if your father runs Lockheed Martin.

Beyond Saving wrote:

I don't think there is any question that the modern developed world is a much more pleasant place to live for the population in general than any other time in history. Whatever problems, corruption and exploitation that is going on, even our poor live an extremely comfortable lifestyle in comparison to world history. In the US, our poor live better than what is average in most other countries.

It doesn't matter what people have now compared to what they had before. People do not gauge their well-being by what they have, but how they compare to their peers and the rest of society. In this respect, we are in the worst shape in decades with inequality going through the roof and its tearing communities and whole nations apart. This is not ok and will have nothing but grief out of it.

Beyond Saving wrote:

What I can't figure out is exactly why you are so critical of my arguments for a weaker and more decentralized government. I understand that you blame corporations as a major part of the problem, I blame the politicians instead because they have more power- corporations bribe politicians because politicians have and use power. However, either way it seems to me that the answer is to remove power from Washington D.C. Whether the power is primarily abused by politicians or abused by corporations that control politicians, why would you want them to have more power?  

I will tell you what, we are not that far apart here. I view corporations as just a part of the government, only less accountable to the people. Hank Paulson went from Goldman Sachs to the Secretary of Treasury job for the Bush administration, gave massive bailout to AIG, which then paid GS their hedged bets. Right after that, Hank went back to the banking world. This is not a joke, we're in too deep. These guys will kill the USA and might damage the world irreparably. So in a sense I definitely want smaller government - get the corporate wing out of government.

I do not want politicians to have more power, I want the politicians in corporate clothes to have less power. I want corporate money out of politics today. I want politicians to fear the people, not the Jamie Dimons and Koch brothers of the world. I want politicians to treat the population that elected them as their employers, not their cattle.

Beyond Saving wrote:

Simplify the tax code, which is one of the biggest means politicians use to pass out favors by making loopholes for allies. Make whatever tax system that exists as straightforward as possible with no exceptions for any particular industry, corporation or any other group of people.

Take away the power of the federal government to regulate most everything and hold it to its Constitutionally specified duties. For some reason, people imagine that "regulation" is a term for laws passed to protect people from business, but anyone who pays attention ought to realize that regulation almost always consists of laws designed to give established corporations protection from upstarts or to get revenge on a corporation that has been unfriendly to the politicians in power. The regulations are usually written by, or at least supported by the corporations that you claim are the problem.

Read your last sentence in that part. That is exactly the problem. It doesn't have to be that way. You have some points and I will give you concessions from here to judgement day, as long as you get corporate $ out of politics first. Its our #1 priority. We have a part of government completely unaccountable to anyone and with the ability to start wars and move US capital out of the country as they see fit. This is not acceptable.

Beyond Saving wrote:

Put as many of the necessary government services as possible under local control. While this is no guarantee against corruption, it is much easier to fight corruption at a local level than the federal. At the local level, the politicians actually have to live near you and it is very possible to actually talk to a majority of voters on a personal level and try to persuade them to throw out a corrupt politician. The larger the level of government, the more difficult it is to hold them accountable or effect any real change.

So where exactly am I wrong?

Look, we must have these discussions only after we get the corporate $ out of politics. This would change everything. There are good arguments for why some legislations should be federal and other state level. It is a question of whether things are best dealt with locally or globally. But we will not have a propper discussion about this, until we get corporate CEOs out of both legislative houses. I actually appreciate a few Tea Party guys just for not being corporate lapdogs.

Logic is a systematic method of coming to the wrong conclusion with confidence.


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Kapkao wrote:Oh, so the

Kapkao wrote:

Oh, so the modern democracies are rotten, just not from the average citizen's pov. (jk)

I think the deal with ZuS and those of similar mind isn't that we're somehow as equally bad or worse off than previous centuries, it's merely that the misdeeds of our leaders are much more visible and easy to discover with the help of literacy,  instant communication, and video recording, as opposed to centuries now long gone when kings and emperors could either be gods made flesh or mortal representatives of the god of the abrahamic faiths. Their actions were thus above doubt and suspicion.

I think that some aspects of the modern information age obscure the truth more than the distant immunity of leaders before. I think these guys running the show today have gotten way too good at avoiding French Revolutions and are basically driving their hybris beyond anything we have seen before. They start wars in extremely sensitive places bringing us to the verge of nuclear world-ending events, they rip to shreds every inch of this planet for the profit imperative, inequality is soaring and there is no end in sight. We have to hit these guys hard and soon, otherwise the next crash might be too big to bail.

Logic is a systematic method of coming to the wrong conclusion with confidence.