The economic collapse of america is needed [Archive]

Penneywize9

09-25-2008, 09:42 PM

TLDR: Corporate greed = bad, but not the reason goods are overpriced. Economic downturn = bad for everyone.

Hey man, I don't mean to harp on you, but I've gotta disagree with just about everything you just said. I'm not an expert in finance or anything, but I've heard from some sources -- news agencies, and people smarter than I am in this field -- that corporate greed has indeed played a great part in setting up this financial turmoil we're now facing. So that point of your argument is valid.

However, to suggest that overpricing of goods is a reflection of anything other than market conditions is a bit of a stretch. Goods are largely priced according to what people are willing to pay for them. That's part of the beauty of the market system. If a good costs too much, fewer people will buy it (less quantity demanded) and the firm will be forced to lower prices -- or face decreased profits. Firms, theoretically speaking, are profit maximizers, and prices are set in such a way that would give them the greatest level of profit. It's bad business to overprice a good.

As for saying that an economic collapse is what America "needs", I doubt you'll find too many people on your side on that one. Everyone suffers in these types of situations. In the long run, you will be worse off having lived through one of these tough periods as compared to if you had not.

Fro

09-25-2008, 09:44 PM

lol i remember when you yanks were making threads claiming america had been saved. I'm happy again now.

stalwart

09-25-2008, 09:44 PM

Ughh, Ya Got me!

/Grabs side, and falls to knees...

My only regret, <gasp>

/cough cough

Is being killed...

<ugh>

By a vir

Bu bu by

/cough cough

By a virgin...

wtf? that was retarded.

also, OP = So Fuh King Wetod did.

Aragon

09-25-2008, 09:46 PM

it will reset the inflation rate.

No more 2 dollar cans of coke.

an economic collapse is what america needs badly.
Once all the greedy corporate nitwits realize they can't charge exorbant prices for thier shit. They will then just be happy making ANY profit. And that will drive down prices faster than the titanic.

WOOOT for american economic failure!

Seems the rules of the open market dont apply when it comes to wall street.

Then the taxpayers have to save their greedy asses.

So much for a free self regulating open market.:lmao:

United States of America - what a joke.

Justinian

09-25-2008, 09:47 PM

Unfortunately I have to agree with you on this one. Which really hurts to have to do as I don't like agreeing with people I consider less then intelligent.

I'm with this guy.

Justinian

09-25-2008, 09:48 PM

Seems the rules of the open market dont apply when it comes to wall street.

Then the taxpayers have to save their greedy asses.

So much for a free self regulating open market.:lmao:

United States of America - what a joke.

For about the forty-fifth time in the past few days, this was NOT the fault of a free market economy.

This is the fault of government over-regulation and over-intrusiveness. Also, price fixing the price of money is a bad idea (Federal Reserve).

Dwhap

09-25-2008, 09:49 PM

it will reset the inflation rate.

No more 2 dollar cans of coke.

an economic collapse is what america needs badly.
Once all the greedy corporate nitwits realize they can't charge exorbant prices for thier shit. They will then just be happy making ANY profit. And that will drive down prices faster than the titanic.

WOOOT for american economic failure!

/agreed - which again is why the bailout is a mistake.

Aragon

09-25-2008, 09:52 PM

For about the forty-fifth time in the past few days, this was NOT the fault of a free market economy.

This is the fault of government over-regulation and over-intrusiveness. Also, price fixing the price of money is a bad idea (Federal Reserve).

Sure it was. Noone controlled there greedy asses.

Banks did lend out money to people that shouldnt have gotten it.

Same happened in Sweden in the early 90-ies.

We, the taxpayers had to pay a very, very hard price for the swedish banks greediness.

Justinian

09-25-2008, 09:57 PM

Sure it was. Noone controlled there greedy asses.

How do people keep missing this?

Without a Federal Reserve System manipulating the price of money (price fixing), Wall Street cannot do what they did.

You're talking about the symptoms and not the underlying cause.

Mo0rbid

09-25-2008, 09:59 PM

in sweden we $1.5 for a can of coke

anywho, the bailout scheme is targeted towards stupid peo.. americans who took REALLY BIG loans to buy houses in hope of selling their property for a profit later (the only possible way of paying the debt). they somehow assumed the house-market would rise forever or smth

Agge

09-25-2008, 10:03 PM

in sweden we $1.5 for a heavely taxed can of coke

Had to fix that for ya.

elacourse

09-25-2008, 10:04 PM

For about the forty-fifth time in the past few days, this was NOT the fault of a free market economy.

This is the fault of government over-regulation and over-intrusiveness. Also, price fixing the price of money is a bad idea (Federal Reserve).

the fault is because there was NO gov regulation, not over regulation. If there was propper regulation, welfare moms would not have been given home loans they couldn't pay, which they then defaulted on, then foreclosed on.

this is all from the housing market, if you can't see that, keep your moth shut. clinton signed into law the ability for banks to give loans to almost anyone with a heartbeat. their intent was to give poor people home ownership. well guess what, if you are poor, and can't afford to buy and pay for a home, why should you be allowed to get a loan for one?

GREED in wall street and banks are the ain culprits. because of the above law, they scrambled to give away free mortgages to people who could not pay them back, then repacked those mortgages and sold them off to other investment firms. Home goes bust, investment package goes bust, that's where we are now.

if there was more regulation (i'm conservative and can't believe i am saying this) and oversight on wall street and the banking community, this never would have happened.

Bush actually tried to get regulators and oversight put in place back in 2003 and the Dems in congress shot him down, they didn't want to be seen as the party that stopped poor people from getting homes. so if you are going to place the blame, it starts with the dems, then wall st, then the banks. then to everyone else that has been covering this up until now where it seems everything is about to crash.:bang:

Justinian

09-25-2008, 10:05 PM

the fault is because there was NO gov regulation, not over regulation. If there was propper regulation, welfare moms would not have been given home loans they couldn't pay, which they then defaulted on, then foreclosed on.

this is all from the housing market, if you can't see that, keep your moth shut. clinton signed into law the ability for banks to give loans to almost anyone with a heartbeat. their intent was to give poor people home ownership. well guess what, if you are poor, and can't afford to buy and pay for a home, why should you be allowed to get a loan for one?

GREED in wall street and banks are the ain culprits. because of the above law, they scrambled to give away free mortgages to people who could not pay them back, then repacked those mortgages and sold them off to other investment firms. Home goes bust, investment package goes bust, that's where we are now.

if there was more regulation (i'm conservative and can't believe i am saying this) and oversight on wall street and the banking community, this never would have happened.

Bush actually tried to get regulators and oversight put in place back in 2003 and the Dems in congress shot him down, they didn't want to be seen as the party that stopped poor people from getting homes. so if you are going to place the blame, it starts with the dems, then wall st, then the banks. then to everyone else that has been covering this up until now where it seems everything is about to crash.:bang:

Please, for the love of all that is holy and good, read my last post.

The Federal Reserve System, along with the Federal Government, provided the impetus for this problem. It is not the fault of any particular market, it is the fault of government price fixing and collusion.

It happened in the 90s in tech stocks and the stock market in general. The housing market, this time around, is merely the newest symptom of our underlying disease.

DocGonzo

09-25-2008, 11:25 PM

Greenspan and the Fed have some culpability...by artificially keeping the rates too low for too long

but it was the whiz kids in the Wall Street investment banks, due to the regulation that kept commercial and investment banks separate being torn down under Bush as written by Gramm, who created the "derivatives" and applied them to mortgages

this removed the responsibility for the quality of those loans FROM the regulated commercial banks, since they now wrote mortgages regardless of qualification and instead of having to account for the risk, bundled and sold off the mortgages...thus passing off the risk to the buyers

the buyers then played the Market with these derivatives, driving the prices up and leveraging their own assets up to 30 to one ratios, and it was this leveraging which created not only the bubble...but caught up with the ponzi scheme of the derivatives and popped the bubble

holychicken

09-25-2008, 11:30 PM

Are there seriously people in this thread suggesting that the entire American economic system should collapse because they think a can of coke is too expensive?

What is REALLY needed is for you to get a better job and/or learn to live without coke.

Lindorn

09-25-2008, 11:32 PM

I live on an island. US economy going down only benefits me.

Actually most islands are pretty much in a net negative economic state when it comes to the economy being stripped down. So pretty much those who live in places that need constant imports to survive are among the most fucked.

Sorry to burst your bubble.

no-one

09-25-2008, 11:32 PM

I more or less agree with the OP. If this bailout goes through we will have capitalism with out risk. So the formula for getting rich is to start a business using other peoples money, pay yourself so much that you cant stay in business then get a bailout and repeat.

If there are companies that are so big "they can't fail" then those companies should not exist. The problem is self repairing.

DocGonzo

09-25-2008, 11:33 PM

Haart Maystorm

09-25-2008, 11:36 PM

You know what else America needs?

More cowbell (http://llamabutchers.mu.nu/archives/Cowbell2.gif)

Delthayre

09-25-2008, 11:43 PM

but it was the whiz kids in the Wall Street investment banks, due to the regulation that kept commercial and investment banks separate being torn down under Bush as written by Gramm...

You are wrong about the repeal of the Glass-Steagall Act, which legally separated commercial banks from investment banks. The act was repealed by the Gramm-Leach-Bliley Financial Services Modernization Act,, which was signed into law by President Clinton.

I also disagree with blaming what has happened upon the repeal of the Glass-Steagall Act. Were it yet in place, then Merrill Lynch & Co., Inc could not have been bought by Bank of America and thus would have had to either declare bankruptcy or be saved with public money. The crisis has chiefly afflicted independent investment banks, not commercial banks or unified commericial and investment banks.

Killuminati

09-25-2008, 11:43 PM

BladeSLicer

09-25-2008, 11:47 PM

...So, so dumb. I feel like stupidity as extreme as this case is must be taught or encouraged, as no one could naturally be this moronic.

If America suffers a complete economic collapse you'll be wishing you could have your $2 Coke back for the world you used to live in.

DocGonzo

09-25-2008, 11:51 PM

You are wrong about the repeal of the Glass-Steagall Act, which legally separated commercial banks from investment banks. The act was repealed by the Gramm-Leach-Bliley Financial Services Modernization Act,, which was signed into law by President Clinton.

I also disagree with blaming what has happened upon the repeal of the Glass-Steagall Act. Were it yet in place, then Merrill Lynch & Co., Inc could not have been bought by Bank of America and thus would have had to either declare bankruptcy or be saved with public money. The crisis has chiefly afflicted independent investment banks, not commercial banks or unified commericial and investment banks.

i stand corrected on the date of Gramm's bill becoming law...firing from the top of my head

however...i must also disagree, Merrill could have sought out capital to finance from traditional sources...no one wanted to because they had leveraged their assets so heavily...BoA scooped up a deal..since it is leagal now

my points about the derivatives stand firm as to root cause, imo

biggunsar

09-26-2008, 02:53 PM

Actually most islands are pretty much in a net negative economic state when it comes to the economy being stripped down. So pretty much those who live in places that need constant imports to survive are among the most fucked.

Sorry to burst your bubble.

Sorry to burst your bubble, but if the american economy fails. The prices of everything go down, and TRUST ME. Businesses will sell, sell sell.

SO because cayman is based on finance. And only the rich finance. We have no worries.

Justinian

09-26-2008, 03:11 PM

my points about the derivatives stand firm as to root cause, imo

Where'd the money come from to make these derivatives?

Carl Ragadamn

09-26-2008, 03:15 PM

Sorry to burst your bubble, but if the american economy fails. The prices of everything go down, and TRUST ME. Businesses will sell, sell sell.

SO because cayman is based on finance. And only the rich finance. We have no worries.

they will sell sell sell, only until they run out of products on hand. Then the magic starts and prices shoot thru the roof.

DocGonzo

09-26-2008, 03:22 PM

Where'd the money come from to make these derivatives?

you ask...and i say read more carefully...

Greenspan and the Fed have some culpability...by artificially keeping the rates too low for too long

but it was the whiz kids in the Wall Street investment banks, due to the regulation that kept commercial and investment banks separate being torn down under Bush as written by Gramm, who created the "derivatives" and applied them to mortgages

this removed the responsibility for the quality of those loans FROM the regulated commercial banks, since they now wrote mortgages regardless of qualification and instead of having to account for the risk, bundled and sold off the mortgages...thus passing off the risk to the buyers

the buyers then played the Market with these derivatives, driving the prices up and leveraging their own assets up to 30 to one ratios, and it was this leveraging which created not only the bubble...but caught up with the ponzi scheme of the derivatives and popped the bubble

just to help clarify...i'll repeat myself above

Badem

09-26-2008, 03:23 PM

also if the economies collapse, people will no longer splash out on luxuries,, shops sell less so start laying off staff to reduce massive wage bills, selling less means factories produces less, and start laying off people due to no work, factories produces less so suppliers find themselves supplying less, start going bust as they can no longer afford to operate with selling supplies.

The unemployment goes up adn so does the welfare bill to support these people, the goverment then has to slash public spending to pay this bill, taxes go up, and its a vicious circle......

What we really need is a damn good world war, I choose Iran and North Korea to attack first.....then accidently nuke china and India for Lulz

holychicken

09-26-2008, 03:26 PM

How do people keep missing this?

Without a Federal Reserve System manipulating the price of money (price fixing), Wall Street cannot do what they did.

You're talking about the symptoms and not the underlying cause.
Just because you keep repeating it over and over does not make it true.

It is true that an unregulated free-market economy will correct itself. However, sometimes that correction come in the form of an almost complete collapse of the system. And you know what? Unless you are in that top 1%, a collapse like that is going to mean your standard of living is pretty much going to go into the toilet for quite sometime.

Regulation is necessary for a stable economy. There is a fine balance. It is too idealistic to think that anything else will work.

Carl Ragadamn

09-26-2008, 03:27 PM

What I love is all the non US citizens cheering economic turmoil in the US without considering that we are the largest consumer in the world. If we fall, every economy tied to us will see a downturn.

holychicken

09-26-2008, 03:31 PM

Justinian

09-26-2008, 03:43 PM

Just because you keep repeating it over and over does not make it true.

It is true that an unregulated free-market economy will correct itself. However, sometimes that correction come in the form of an almost complete collapse of the system. And you know what? Unless you are in that top 1%, a collapse like that is going to mean your standard of living is pretty much going to go into the toilet for quite sometime.

Regulation is necessary for a stable economy. There is a fine balance. It is too idealistic to think that anything else will work.

You don't seem to understand just what it is that I am saying, so I'll say it again:

When the Fed is setting the price of money, unions the price of wages, and so forth right on down the line of price fixing, it is not a free market economy. You seem to think that corrections are always painful - check out the correction that took place after WWI. Without all the interference we have in today's market, it was relatively shallow and over within just a year or two.

Yes, if we allow the free market to fix this, it will be very painful for everyone, including the top 1%. However, once the dust settles, it will have cleared the way of the path to prosperity once again. What they're doing now is prolonging the agony - giving chemo to a terminal patient who has rejected it.

Justinian

09-26-2008, 03:44 PM

What I love is all the non US citizens cheering economic turmoil in the US without considering that we are the largest consumer in the world. If we fall, every economy tied to us will see a downturn.

Yes, they will. However, once they break the tether with our rotting corpse, they will be in for some very good times indeed - hell, maybe they'll even get to consume the goods and capital they've been producing for themselves instead of feeding the worthless American economy.

Justinian

09-26-2008, 03:46 PM

you ask...and i say read more carefully...

just to help clarify...i'll repeat myself above

My question is now: if there was no manipulation of the price of money, do you think these derivatives would have had nearly as big of an impact as they've had? If so, why? Where would the money have come from to make a bubble as large as has been created?

holychicken

09-26-2008, 03:50 PM

You don't seem to understand just what it is that I am saying, so I'll say it again:

When the Fed is setting the price of money, unions the price of wages, and so forth right on down the line of price fixing, it is not a free market economy. You seem to think that corrections are always painful - check out the correction that took place after WWI. Without all the interference we have in today's market, it was relatively shallow and over within just a year or two.
First, I understand what you are saying. Second, don't put words into my mouth. I didn't say nor imply that all corrections are painful. . .my point was that, and I made this very clear when I said SOMETIMES, SOMETIMES the correction comes at the price of the entire system.

A purely free-market economy is not stable. It may "work," as I said, because it will complete fall apart from time to time, but that is of no benefit to a nation of people. Human greed, the ability of big companies to influence the system and economic effects with terrible negative feedback mean that for a stable economy, regulation IS needed.

Yes, if we allow the free market to fix this, it will be very painful for everyone, including the top 1%. However, once the dust settles, it will have cleared the way of the path to prosperity once again. What they're doing now is prolonging the agony - giving chemo to a terminal patient who has rejected it.
Yeah, but by the time "the dust settles" the economy could be set back 5 years and we could be dealing with mass poverty and/or complete chaos. So sure, there is always a path to prosperity out of the darkness, but unless we want to totally weaken the nation, we should try our best to avoid that darkness.

Youknowho

09-26-2008, 03:51 PM

NO NO NO NO That is fucking stupid we need to delay it as long as possible and then dump it on our children and hurry up and fucking die.

Honest Bill

09-26-2008, 03:52 PM

@ the OP i fail to see your logic here. The fact that companies will charge less will only be because people won't be able to pay the inflated prices. They will still charge you as much as you can afford, or are willing to pay

Shaehl

09-26-2008, 04:42 PM

A purely free-market economy is not stable. It may "work," as I said, because it will complete fall apart from time to time, but that is of no benefit to a nation of people. Human greed, the ability of big companies to influence the system and economic effects with terrible negative feedback mean that for a stable economy, regulation IS needed.

Lol, greed and the ability of big companies to influence the system increase proportionally to the level of regulation. Just look at what is going on now. Wallstreet has the government by its balls. The more the government and businesses become intertwined the more America becomes their bitch.

Justinian

09-26-2008, 05:29 PM

holychicken

09-26-2008, 06:13 PM

Lol, greed and the ability of big companies to influence the system increase proportionally to the level of regulation. Just look at what is going on now. Wallstreet has the government by its balls. The more the government and businesses become intertwined the more America becomes their bitch.
Greed increases with government regulation? What? That is one of the most bizarre things I have ever read. "The government is regulating.. . SO I WANT MORE!" Give me a break.

And big companies increase WITH regulation. . . did you ever read about Sherman anti-trust act? Remember back in the days before regulation when companies used to freely be allowed to abuse and neglect their workers? We are much less business' bitch now than we were before we really started to regulate.

Don't get me wrong, we can certainly OVER regulate. . . but this nonsense that regulation = bad is just idealistic naivety.

Justinian

09-26-2008, 06:28 PM

Greed increases with government regulation? What? That is one of the most bizarre things I have ever read. "The government is regulating.. . SO I WANT MORE!" Give me a break.

And big companies increase WITH regulation. . . did you ever read about Sherman anti-trust act? Remember back in the days before regulation when companies used to freely be allowed to abuse and neglect their workers? We are much less business' bitch now than we were before we really started to regulate.

Regulation often means keeping out competition. See: Sarbanes-Oxley. More often than not, the regulation being written is being done by the lobbyists of the big companies who want special privileges. Regulation is a buzzword. It's meaningless.

Don't get me wrong, we can certainly OVER regulate. . . but this nonsense that regulation = bad is just idealistic naivety.

Believing that the government is acting in your best interests when it "regulates" an industry, or your right to abort/not abort a fetus, or your right to own a gun, or your right to fuck your girlfriend in the ass, is the pinnacle of naivety.

Parabola

09-26-2008, 06:31 PM

Jezrith

09-26-2008, 06:45 PM

This is an article drawing symmetry between the USSR and the US. Being that the USSR already collapsed it gives a few very interesting examples of what will happen if the US collapses.

http://madconomist.com/what-if-us-collapses-soviet-collapse-lessons-every-american-needs-to-know

Nice article... very interesting information, especially the economic similarities. The soviets showed what happened to an economy when you try to centrally manage it, it amazes me that so few people understand that the Federal Reserve is just another form of centralized economic management. All of these systems of market manipulation are doomed to fail. It's so sad that people really don't learn much from the mistakes of the past.

Killuminati

09-26-2008, 06:49 PM

Parabola

09-26-2008, 06:56 PM

qft

Justinian

09-26-2008, 06:58 PM

Peter Schiff wins again. (http://www.europac.net/externalframeset.asp?from=home&id=14136)

holychicken

09-26-2008, 07:25 PM

Regulation often means keeping out competition. See: Sarbanes-Oxley. More often than not, the regulation being written is being done by the lobbyists of the big companies who want special privileges. Regulation is a buzzword. It's meaningless.
You aren't arguing my point. I am pretty sure I have already said that regulation isn't always good. My point is this stance that regulation is bad no matter what is nonsense.

Believing that the government is acting in your best interests when it "regulates" an industry, or your right to abort/not abort a fetus, or your right to own a gun, or your right to fuck your girlfriend in the ass, is the pinnacle of naivety.
Don't be ridiculous, there has been plenty of regulation that has benefitted the common man. FLSA, anti-trust laws, anti-collusion laws, etc. . . not to mention the fact that keeping the economy from falling apart protects the middle class most of all.

You are stuck in black and white thinking. All or nothing. I am not arguing that the government is always benign, I know that they often are out to line the pockets of someone. . . but don't let that blind you to the fact that they are both necessary and sometimes beneficial to the common man.

DocGonzo

09-26-2008, 07:30 PM

My question is now: if there was no manipulation of the price of money, do you think these derivatives would have had nearly as big of an impact as they've had? If so, why? Where would the money have come from to make a bubble as large as has been created?

which part of those companies leveraging themselves at 30 to 1 escapes you?

no regulator did that, they were only able to do so because they were NOT regulated...commercial banks have limits on their ability to leverage their assets as well as rules for assessing risk...both of those were ignored by the investment banks and their cronies

as i stated, Greenspan holds some share of the responsibility...but no one twisted those companies arms to lie about the derivatives risk, or the extent that they leveraged their assets....and those two factors are directly responsible for the collapse

Justinian

09-26-2008, 07:32 PM

You aren't arguing my point. I am pretty sure I have already said that regulation isn't always good. My point is this stance that regulation is bad no matter what is nonsense.

Oh. Fair enough.

Don't be ridiculous, there has been plenty of regulation that has benefitted the common man. FLSA, anti-trust laws, anti-collusion laws, etc. . . not to mention the fact that keeping the economy from falling apart protects the middle class most of all.

Any of the regulations you cited is highly debatable as being beneficial. Anti-trust and anti-collusion laws, in particular. What makes you think anti-trust laws are more worthwhile than allowing the market to force out monopolies who overstep their bounds?

You are stuck in black and white thinking. All or nothing. I am not arguing that the government is always benign, I know that they often are out to line the pockets of someone. . . but don't let that blind you to the fact that they are both necessary and sometimes beneficial to the common man.

History has proven you wrong many, many times. Governments are more often than not the cause of the most heinous crimes in the history of mankind. I refuse to give one inch of ground to the criminal syndicate that is government.

Justinian

09-26-2008, 07:35 PM

which part of those companies leveraging themselves at 30 to 1 escapes you?

no regulator did that, they were only able to do so because they were NOT regulated...commercial banks have limits on their ability to leverage their assets as well as rules for assessing risk...both of those were ignored by the investment banks and their cronies

as i stated, Greenspan holds some share of the responsibility...but no one twisted those companies arms to lie about the derivatives risk, or the extent that they leveraged their assets....and those two factors are directly responsible for the collapse

Fine. They are directly responsible for the collapse - my argument is that they would have never existed had the cheap credit not been flowing like the salmon of Capistrano.

Nobody twisted their arms, fine, fair enough - but without the credit well overflowing, without this shot of drugs from the Fed, it would not have been as severe.

Which part of that escapes you? They needed the massive amounts of liquidity first, before leveraging themselves up 900 times by lobbying for deregulation.

sephff9

09-26-2008, 07:38 PM

Sure it was. Noone controlled there greedy asses.

Banks did lend out money to people that shouldnt have gotten it.

Same happened in Sweden in the early 90-ies.

We, the taxpayers had to pay a very, very hard price for the swedish banks greediness.

You do realize that Clinton created policies to get banks to loan people money for houses and cars that don't work and don't live with anyone who does?

holychicken

09-26-2008, 07:46 PM

Oh. Fair enough.
Yeah, I think you have gotten my position all wrong. (meant to add)I am not a socialist or in favor of big government. I am a capitalist at heart. My problem is that a pure capitalistic system is not stable and I believe that maintaining that stability, which benefits all of the citizens, is part of the government's duty.

Any of the regulations you cited is highly debatable as being beneficial. Anti-trust and anti-collusion laws, in particular. What makes you think anti-trust laws are more worthwhile than allowing the market to force out monopolies who overstep their bounds?
That's the whole thing, a market does not regulate a monopoly when it steps out of bounds. Once it has sufficient control, it can pretty much crush all the competition and screw the consumer. It is the same thing with collusion, when businesses get together to screw the consumer. . .that's what happens.

History has proven you wrong many, many times. Governments are more often than not the cause of the most heinous crimes in the history of mankind. I refuse to give one inch of ground to the criminal syndicate that is government.
I am not advocating giving the government more power because I completely agree with you that a powerful government is a scary thing. I am simply advocating that they have some say in stabilizing the economy.

Jezrith

09-26-2008, 08:13 PM

My problem is that a pure capitalistic system is not stable and

Says who? What proof of this do you have? (serious questions) Because currently just about every major problem we have had in our economy over the last 80 years that I can think of, can firmly rest it head on the Fed's shoulders.

Justinian

09-26-2008, 08:26 PM

Yeah, I think you have gotten my position all wrong. (meant to add)I am not a socialist or in favor of big government. I am a capitalist at heart. My problem is that a pure capitalistic system is not stable and I believe that maintaining that stability, which benefits all of the citizens, is part of the government's duty.

Why? Where's that in the Constitution?

That's the whole thing, a market does not regulate a monopoly when it steps out of bounds. Once it has sufficient control, it can pretty much crush all the competition and screw the consumer. It is the same thing with collusion, when businesses get together to screw the consumer. . .that's what happens.

A market regulates a monopoly by either accepting it because it truly is the best provider of the good at the best price, or it forces it out. Check out Herbert Dow's story (http://en.wikipedia.org/wiki/Herbert_Henry_Dow) as a perfect example. As long as the businesses don't resort to violence when the consumer stops paying their (what you seem to assume) high prices, then there's no problem. They lose business. If they resort to violence, that is where the government has a role to step in and protect the rights of the injured. It has no business regulating prices. It's not in the Constitution.

I am not advocating giving the government more power because I completely agree with you that a powerful government is a scary thing. I am simply advocating that they have some say in stabilizing the economy.

Where? How? What principle does this follow from, and is it in the Constitution?

holychicken

09-26-2008, 08:30 PM

Says who? What proof of this do you have? (serious questions)
Are you saying that you think capitalism is a perfect system?

Go out and search about the instability of capitalism. There is plenty of evidence and examples of how unfettered capitalism is not a stable economic system.

Because currently just about every major problem we have had in our economy over the last 80 years that I can think of, can firmly rest it head on the Fed's shoulders.
Could you back up this claim? Honestly, it is nonsense. Even if the fed set something up to fail, more often than not it would requires some form of greed to exploit the problem. So while the Fed may create some problems, it takes usually takes people to take advantage of it for the problem to manifest itself.

Vorrak

09-26-2008, 08:31 PM

its gonna collapse then it will collapse Europe then Russia then a war with russia then the plant Nibiru will kill us 2012 or some year XD

WhySoSerious

09-26-2008, 08:31 PM

Why? Where's that in the Constitution?

A market regulates a monopoly by either accepting it because it truly is the best provider of the good at the best price, or it forces it out. Check out Herbert Dow's story (http://en.wikipedia.org/wiki/Herbert_Henry_Dow) as a perfect example. As long as the businesses don't resort to violence when the consumer stops paying their (what you seem to assume) high prices, then there's no problem. They lose business. If they resort to violence, that is where the government has a role to step in and protect the rights of the injured. It has no business regulating prices. It's not in the Constitution.

Where? How? What principle does this follow from, and is it in the Constitution?

you from joisey? noo yawk dats the place ta be.

Justinian

09-26-2008, 08:33 PM

Could you back up this claim? Honestly, it is nonsense. Even if the fed set something up to fail, more often than not it would requires some form of greed to exploit the problem. So while the Fed may create some problems, it takes usually takes people to take advantage of it for the problem to manifest itself.

Are you serious? Aren't you the guy who has no faith in people because they're greedy? Why have a system like the Fed in place to set them up to fall?

The Federal Reserve System creates the incentive for the greed to blow out of proportion. What is so hard to understand? It takes people to take advantage of it, but it takes the it in that previous phrase to be taken advantage of. Without the it, there is nothing to take advantage of.

holychicken

09-26-2008, 08:41 PM

Why? Where's that in the Constitution?
"promote the general welfare."

A market regulates a monopoly by either accepting it because it truly is the best provider of the good at the best price, or it forces it out. Check out Herbert Dow's story (http://en.wikipedia.org/wiki/Herbert_Henry_Dow) as a perfect example. As long as the businesses don't resort to violence when the consumer stops paying their (what you seem to assume) high prices, then there's no problem. They lose business. If they resort to violence, that is where the government has a role to step in and protect the rights of the injured. It has no business regulating prices. It's not in the Constitution.
You keep putting words in my mouth. I did not assume high prices, but it is something that is common with monopolies. And the Dow thing is great for commodities that can be resold, but what about services?

Where? How? What principle does this follow from, and is it in the Constitution?
Let me turn that around, what in the constitution stops them from doing so?

As to the specifics, I don't know, I am no expert economist. I also believe the "how much" and "where" is constantly changing and the only way we can figure it out is by feeling it out.

holychicken

09-26-2008, 08:42 PM

Are you serious? Aren't you the guy who has no faith in people because they're greedy? Why have a system like the Fed in place to set them up to fall?
Jesus, man, drop the straw man. Who said I have no faith in man? The fact of the matter is that there are greedy people out there.

The Federal Reserve System creates the incentive for the greed to blow out of proportion. What is so hard to understand? It takes people to take advantage of it, but it takes the it in that previous phrase to be taken advantage of. Without the it, there is nothing to take advantage of.
You are just saying stuff, you aren't backing it up. This is the most vague thing you have said yet.

Jezrith

09-26-2008, 08:51 PM

Are you saying that you think capitalism is a perfect system?

When left to its own devices, yes.

Go out and search about the instability of capitalism. There is plenty of evidence and examples of how unfettered capitalism is not a stable economic system.

You made the assertion, I want to know if you are capable of backing it up. Most people who make this assertion generally don't have a clue about the subject and are just regurgitating what the heard from a random professor, their parents, the T.V. I'm curious where you fall in the bunch.

Could you back up this claim? Honestly, it is nonsense. Even if the fed set something up to fail, more often than not it would requires some form of greed to exploit the problem. So while the Fed may create some problems, it takes usually takes people to take advantage of it for the problem to manifest itself.

Its not that the Fed sets things up to fail, its just that artificial management of the economy is always doomed to fail. If you work backwards through recent economic history you see a very disturbing trend of the Fed trying to fix things but only making things worse in the long run. This current debacle is due to the Fed shitting out money like a monkey on a chocolate kick. They did this to stave off the effects of the last bubble, the tech crunch. The tech crunch has it roots in the Fed reaction to S&L debacle, the S&L debacle has its Roots in the FDIC and so on and so forth. Each problem gets worse in an escalating manner to be continuously more severe than the last because the market is never given the chance to correct itself.

Of course people are going to take advantage of this, they always will, this is a given. So does it really make sense to serve up a situation for people to take advantage of on a silver platter with no risk whatsoever? The market on the other hand by itself, will punish those who are too greedy. This is exactly what the market is trying to do right now, but the FED is trying to step in to stop the righteous reckoning that is going to place. The problem is you cannot stop the reckoning, market equilibrium will be achieved. You can only delay it, and in delaying it you are only going to make it worse when it finally does happen. Personally, I think this debacle could very well be the reckoning that cannot be avoided any longer. Time will only tell...

Justinian

09-26-2008, 08:53 PM

"promote the general welfare."

Bailing out badly invested markets is in the general welfare, is it? That's a pretty loose interpretation. I'm with whoever it was who said, "the moment you think of the Constitution as a living document, you have killed the Constitution." If it isn't explicitly in the US Constitution, it is not permitted.

You keep putting words in my mouth. I did not assume high prices, but it is something that is common with monopolies. And the Dow thing is great for commodities that can be resold, but what about services?

what services do you mean?

Let me turn that around, what in the constitution stops them from doing so?

As to the specifics, I don't know, I am no expert economist. I also believe the "how much" and "where" is constantly changing and the only way we can figure it out is by feeling it out.

Simply put, you have no idea. You have no theory. Your opinion is of no value. You sound just like the antagonists in Atlas Shrugged. There is nothing to argue against here because you constantly shift with whatever way the winds seem to be blowing. Feeling it out? What does that mean?

Jezrith

09-26-2008, 09:01 PM

Bailing out badly invested markets is in the general welfare, is it? That's a pretty loose interpretation.

He just forgets that Section 8 goes on to describe exactly what actions the government is allowed to perform to promote said general welfare; semi-colons do serve a purpose. Unless it concerns interstate commerce, commerce with foreign nations, or Indian tribes, maintaining economic stability is not on that list.

I'm with whoever it was who said, "the moment you think of the Constitution as a living document, you have killed the Constitution." If it isn't explicitly in the US Constitution, it is not permitted.

Actually it is a living document. But not because it can be interpreted in any far out manner that suits the day. It's a living document because it has an amendment process. More people should remember that.

holychicken

09-26-2008, 09:28 PM

When left to its own devices, yes.
I guess we have to define what perfect means. How do you think it is perfect?

You made the assertion, I want to know if you are capable of backing it up. Most people who make this assertion generally don't have a clue about the subject and are just regurgitating what the heard from a random professor, their parents, the T.V. I'm curious where you fall in the bunch.
I feel like other than myself and Justinian no one, especially you, has backed up their claims.

I could write you a paper on the instability of unfettered capitalism. However, I won't do this for two reasons. First and foremost, the information is all out there. Capitalism is not something that is new, it has been around for quite some time and has been practiced to varying degrees. There has never been a successful pure capitalistic economic system. All governments, led by true experts on economics, have come to the conclusion that at least SOME regulation is necessary. So I would just be rewriting that which has already been written by someone who knows a whole lot more about it than I do.

Second, if I were to write it, it would be long and involved. When you simplify economics, capitalism sounds pretty flawless. However, it is when you get into the specifics that the flaws start to really show. But as a basis for an economic system, it is by far the best, IMO.

Its not that the Fed sets things up to fail, its just that artificial management of the economy is always doomed to fail. If you work backwards through recent economic history you see a very disturbing trend of the Fed trying to fix things but only making things worse in the long run. This current debacle is due to the Fed shitting out money like a monkey on a chocolate kick. They did this to stave off the effects of the last bubble, the tech crunch. The tech crunch has it roots in the Fed reaction to S&L debacle, the S&L debacle has its Roots in the FDIC and so on and so forth. Each problem gets worse in an escalating manner to be continuously more severe than the last because the market is never given the chance to correct itself.
This is what I mean. All of your assertions are vague and unsupported. Shitting out money like a monkey on a chocolate kick? You call that an explanation? I have read and listened to a lot about the recent problem and not once has the fed creating too much money been mentioned. And the S&L was worse than the great depression?

Of course people are going to take advantage of this, they always will, this is a given. So does it really make sense to serve up a situation for people to take advantage of on a silver platter with no risk whatsoever? The market on the other hand by itself, will punish those who are too greedy.
Again, what do you mean by this? For the market to get these greedy people sometimes the WHOLE thing must break.

This is exactly what the market is trying to do right now, but the FED is trying to step in to stop the righteous reckoning that is going to place. The problem is you cannot stop the reckoning, market equilibrium will be achieved. You can only delay it, and in delaying it you are only going to make it worse when it finally does happen. Personally, I think this debacle could very well be the reckoning that cannot be avoided any longer. Time will only tell...
Now you are getting all religious on me? So sure, the market is trying to correct things. . . but at what expense? Are we willing to set ourselves back 5-10 years giving our enemies a ton of time to catch up to us? Are we willing to let tons of people plunge below the poverty line? Are we willing to let people starve and chaos to ensue?

I am not saying these things WILL happen if we don't bail out these companies, but it is a distinct possibility. We have seen what happens when economic systems collapse.

holychicken

09-26-2008, 09:38 PM

Bailing out badly invested markets is in the general welfare, is it? That's a pretty loose interpretation. I'm with whoever it was who said, "the moment you think of the Constitution as a living document, you have killed the Constitution." If it isn't explicitly in the US Constitution, it is not permitted.
I am going to have to stop debating with you soon. Please re-read what I have written and show me where I said we should bail out these companies. Honestly, I am torn on the idea. . . on the fence, you might say.

But yeah, it could be. If not doing so would end up sending the majority of the country below the poverty line and weaken us economically giving our enemies time to catch up to us, I do believe it would be the general welfare to bail them out.

Remember, if these companies go down, they won't be the only people to suffer.

what services do you mean?
When you buy something but you end up owning nothing. Like if I pay for a lap-dance, that's a service. Any number of services could fall under the control of monopolies.

Simply put, you have no idea. You have no theory. Your opinion is of no value. You sound just like the antagonists in Atlas Shrugged. There is nothing to argue against here because you constantly shift with whatever way the winds seem to be blowing.
No, I have made my position very clear. Capitalism with regulation as needed. I am just not arrogant enough to think I know the exact answer or naive enough to believe that ideal systems work in a very complex world.

Feeling it out? What does that mean?
The economy is a very complicated thing. You seem to think it is as simple as some supply and demand curve you saw in a text book in economics 101. It's not. There is no one who knows for sure what is going to happen when we tweak something here or tweak something there. If he did, he would probably be able to own the vast majority wealth of the world.

Feeling it out is pretty obvious. Like if you are trying to balance something on your finger you keep moving your finger back and forth until it feels right and that is where you balance from.

holychicken

09-26-2008, 09:41 PM

Unless it concerns interstate commerce, commerce with foreign nations, or Indian tribes, maintaining economic stability is not on that list.
And, what, you don't think our banking systems fall under international commerce? Let alone the blatantly obvious interstate aspect of them?

Jezrith

09-26-2008, 10:56 PM

I guess we have to define what perfect means. How do you think it is perfect?

It is perfect because it provides the most eloquent solution to efficiency, supply, trade and production.

I feel like other than myself and Justinian no one, especially you, has backed up their claims.

I have backed up my assertions with plenty of evidence. I just cataloged 30 years of the FED fucking up.

I could write you a paper on the instability of unfettered capitalism. However, I won't do this for two reasons.

Bullshit. If you could you would have written at least a few words about it. You won't do it for only one reason, you can't. You could have just spent the same two paragraphs cataloging just a few of the most common perceived shortcomings of capitalism, but you don't even know enough to do that.

This is what I mean. All of your assertions are vague and unsupported. Shitting out money like a monkey on a chocolate kick? You call that an explanation?

If you were even vaguely familiar with the situation, it explains it quite well. But obviously you aren't familiar with the situation so I'll draw it out for you. Shortly after the stock market crashed on the tech bubble the FED in the late 90's, in a misguided attempt to keep the economy rolling like nothing happened, decide to dump massive amounts of money onto the market for an insanely cheap price. Since the only real large growth area at the time was real estate, people started dumping money into real estate. The Fed created the real estate boom by interfering with the market's natural course. The boom the Fed created has know lead to the bust we are experiencing now. Got it now?

I have read and listened to a lot about the recent problem and not once has the fed creating too much money been mentioned.

Proving that you have read and listened to a lot of stuff that has target audience with an 8th grade reading level (not necessarily your fault though, the vast majority of news outlets are geared to this demographic). If you have bothered to read any of the stuff posted on even these boards alone you would have read about it several times over.

And the S&L was worse than the great depression?

No, I'm not saying it was. You do realize that the word "recent" means something right? The whole great depression was a Fed fuck up of a whole other order of magnitude.

Again, what do you mean by this?

Sorry, but the meaning is pretty damn obvious. I can't even begin to try and explain it any easier. If this part is going over your head, then you really don't have the tools to be having this discussion.

For the market to get these greedy people sometimes the WHOLE thing must break.

No it doesn't. In a market that has achieved equilibrium there is no need for it to break down to punish those who take undue risks for the sake of greed. They fail, while other more prudent individuals prosper. The only time markets will completely break down is when they have been terribly distorted by artificial manipulation. GG, Fed...

Now you are getting all religious on me?

So you can't even tell the difference between religion and economics now?

So sure, the market is trying to correct things. . . but at what expense? Are we willing to set ourselves back 5-10 years giving our enemies a ton of time to catch up to us?

Who says it would set us back 5-10 years? Do you have anything that even remotely passes as a basis for that number? Yes some people may lose their savings, they may lose their houses, they may even lose their jobs. But guess what, life is a gamble. The people who get hurt gambled and lost. But that is only some people, the alternative is to have everybody get screwed because the dollar is worthless due to the Fed driving it into the ground.

Are we willing to let tons of people plunge below the poverty line? Are we willing to let people starve and chaos to ensue?

I am not saying these things WILL happen if we don't bail out these companies, but it is a distinct possibility. We have seen what happens when economic systems collapse.

Oh sure, it will be mass chaos if we don't bail out the financial industry! Cats and dogs living together! Mass hysteria! I'll give you it's a possibility, however I find it much more plausible that a market correction would take a few months to a year. You have to understand that unlike government, markets react very very quickly.

While those things are a possibility, one thing that is a certainty though, if the FED continues to throw cheap money around created out of thin air, while removing any semblance of risk and moral hazard, the economy will crash and there really will be chaos.

And, what, you don't think our banking systems fall under international commerce? Let alone the blatantly obvious interstate aspect of them?

My bank doesn't fall into either one of those and thousands of others don't as well. Yet the FDIC applies to all banks.... hmmmmm....

biggunsar

09-26-2008, 11:28 PM

they will sell sell sell, only until they run out of products on hand. Then the magic starts and prices shoot thru the roof.

uhhh, if your not selling out of stuff now, how the heck are they going to sell out later?!

DocGonzo

09-27-2008, 07:52 AM

Fine. They are directly responsible for the collapse - my argument is that they would have never existed had the cheap credit not been flowing like the salmon of Capistrano.

Nobody twisted their arms, fine, fair enough - but without the credit well overflowing, without this shot of drugs from the Fed, it would not have been as severe.

Which part of that escapes you? They needed the massive amounts of liquidity first, before leveraging themselves up 900 times by lobbying for deregulation.

now i'm trying to figure out if you are being intentionally obtuse, or whether you are not acquainted with the full facts

over and over you keep saying the Fed is to blame, as if that organization was some socialist organization...did you miss my using the name of Greenspan...the Fed chair for how many years? you are aware that Greenspan was a disciple of Rand, a true believer in laissez faire capitalism and the Godfather of supply side "trickle down" economics as evangelized and practiced by the same fuckwads who we are now going to bail out for their greed and criminal negligence when it comes to that 30 to 1 leveraging and misstatement of risk in regards to those derivatives?

so the very man who you are blaming (the Federal Reserve), who is indeed in part responsible for a lot of this mess due to his policy of deregulation and cheap credit to business as well as his endorsement of borrow and spend governmental policy is also one of the main architects of the business model we are talking about having failed

and therein lies the rub... two differing viewpoints in contemporary economics

supply side, "trickle down" economics versus the "rising tide" model

one is setting conditions so the very top of the economic ladder gets the most, and their spending/investments will "trickle down" to everyone else...

the other follows that old Henry Ford model...when asked why he paid his auto workers so much, replied, "I want them to buy my cars, don't I?"

the "rising tide" theory sets condition aimed at raising and improving the majority into a growing middle class, thus "lifting all boats"

a very simplified overview, but i think it makes the point

say what you will,but for over 25 years, the "supply side" model has dominated our economy...and has directly lead to the bubbles in tech during the 90's and housing in the last 8 years

the objective facts of market data show just how bankrupt the "supply side" model actually is

the current challenge will be what do we, as a society, do about it