Where Do We As A Country Go From Here?
A discussion in yesterdays comments is the subject of this post. One reader said, “Back in ‘05-’06 the fact that we were in the grips of a RE bubble seemed OBVIOUS to those of us who hung out here, but somehow invisible to many…Now, of course we have the satisfaction of being (mostly) right, but the question is “Where do we, as a country go from here.” Are there any other problems that most people are being willfully blind to, or did we just get lucky on one thing, and should now take off our tin-foil hats?”
I replied, “Ignoring the mania aspect of what is going on leads us in the wrong direction. Example; if you have a “crisis”, somebody (meaning the govt) HAS to do something, right? It’s really just how you frame the issue. If you look at it from affordability, what’s going on is ultimately good for the economy.”
“Back to your question; if we look at recent history and bubbles, the best comparison IMO is Japan’s twin stock and RE bubbles. What lessons are to be gained? Too big to fail and moral hazards were disastrous. We’ve made every mistake they made. The PTB tell us they saved us from a great depression. I’d suggest they’ve merely put off the inevitable (like Japan) and possibly set us up for a Japan like multi-decade recession.”
The first poster replied, “I think one lesson from Japan is that the short term has a way of completely upstaging the long term. Everybody points to the lost decade and the mistakes that the Japanese made that led to it. And yet many of the same people who were doing the pointing are now advocating or making exactly the same mistakes. Sadly, most people are so focused on the short term, or their own interests, that the long term good of the nation is ignored, or given the merest lip service. So we’re pursuing a series of bailouts and stimulus funded by ever increasing levels of government debt of the sort that did NOT do much to put Japan back a long term growth trend.”
(Note: PDF link) From the “Workshop on Japan’s Bubble, Deflation and Long-term Stagnation.” March 21 - 22, 2008, Organized by The Economic and Social Research Institute (ESRI), Cabinet Office, Government of Japan and The Center on Japanese Economy and Business (CJEB), Columbia Business School.
(NOTE PDF)” The Contribution of Bank Lending to the Long-Term Stagnation in Japan.” Joe Peek, “B. Post-Bubble Evidence: Much of the evidence from the 1990s has been interpreted in a way that is not necessarily complimentary of main bank and keiretsu affiliations benefiting firms, at least in the longer run, and certainly not benefiting the macroeconomy more generally. Rather, while possibly aiding individual distressed firms in the short run, the close affiliations of Japanese banks with their borrowers have been viewed by many as contributing to a decade (or more) of subpar economic growth. In particular, if the primary role of bank (and keiretsu) affiliations is to insulate management from market forces by enabling firms to avoid the discipline that can be provided by external creditors and investors, this limiting of outside corporate governance would manifest itself as a misallocation of credit that could delay needed restructuring of individual firms and the reallocation of valuable resources to their best uses.”
“Focusing on the immediate post-bubble period (1990-93), Kang and Stultz (2000) find that the stock return performance of firms that were more dependent on bank loans just prior to the bursting of the stock price and land price bubbles was worse than for firms that were less dependent on bank loans. They also find that keiretsu membership, defined to include both horizontal (bank-centered) and vertical keiretsus, is related to a worse stock return performance. This evidence suggests that, at least during the initial phase of the banking problems and prolonged malaise of the Japanese economy, those firms most closely tied to banks were adversely impacted by that relationship. While those firms that relied relatively more on bank loans had relatively better stock return performance during the good times of the bubble period, once the bubbles burst, those same firms contracted investment more and suffered worse stock return performance relative to those firms that relied less on bank loans…”
“Considering the subsequent period from 1993-99, Guo (2007) finds evidence consistent with that of Kang and Stultz (2000). While during the 1978-92 period, distressed firms with a greater reliance on main bank loans had higher sales growth, and that performance was not affected by the main bank’s health, during the subsequent 1993-99 period, a greater reliance on main bank loans was associated with slower sales growth, and that sales growth rate was lower the weaker was the main bank’s health. Similarly, for the 1993-99 period, a greater reliance on main bank loans and weaker main bank health also was associated with the firm having a lower return on assets. In addition, during this latter period, the duration of distress was longer for firms with a greater reliance on main bank loans…”
“…the fact that the performance of firms with close ties to their main bank suffered is somewhat puzzling, insofar as it appears that many firms increased their reliance on bank loans during the latter half of the 1990s, even as the bond market had been deregulated. This would suggest that many of the firms obtaining increased bank loans must have been among the weakest Japanese firms, so that the main bank assistance was either not sufficient or not used appropriately to enable the firms to recover from their financial distress. In fact, using data for the 1998 fiscal year, Hori and Osano (2002) find that firms with weaker prospects and a greater likelihood of suffering financial distress rely more on main bank loans. Similarly, Arikawa and Miyajima (2006) found that firms with low growth opportunities increased their reliance on bank loans in the 1990s.”
“Why would banks have increased loans to some of the weakest firms? Peek and Rosengren (2005) argue that banks did so in response to the perverse incentives they faced due to the way in which bank regulation and supervision was handled in Japan. Troubled Japanese banks had an incentive to allocate additional loans to their severely impaired borrowers in order to avoid the realization of losses on their own balance sheets. As a bank’s reported capital ratio approached the regulatory minimum, banks were more likely to increase loans to the weakest firms.”
“…Furthermore, this behavior was more pronounced for firms with strong bank and keiretsu ties. Caballero et al. (2006) investigate the implications of bank lending to these “zombie” firms for the Japanese macroeconomy. They argue that this evergreening of loans to zombie firms distorted competition and impaired needed restructuring of distressed firms, lowering productivity and increasing excess capacity in the economy. This evidence is consistent with the finding by Arikawa and Miyajima (2006) that the main bank system impeded needed creative destruction during the prolonged malaise of the 1990s when the Japanese banking sector was in crisis, insofar as greater reliance on main bank loans tended to delay the restructuring of poorly performing firms.”
“…Rather than focusing on the role of main banks and affiliated firms in impeding the financial restructuring of distressed firms in the post-bubble period, Arikawa and Miyajima (2006) investigate the operational restructuring of distressed firms by estimating on the employment adjustment function. While more leverage is associated with a greater shrinkage in employment, the composition of that debt mattered. In particular, a higher ratio of main bank debt to total assets delayed restructuring, again suggesting that the main bank system impeded the needed restructuring in Japan during the prolonged malaise following the bursting of the stock price and land price bubbles when the banking sector was in crisis.”
From Lessons of Japan’s Bubble Economy. “Looking back from today’s perspective, we can see that the Japanese government’s response to the collapse of the bubble created numerous problems. By 1998, eight years after the bubble started to deflate, several major financial institutions had gone bankrupt, including Yamaichi Securities, Hokkaido Takushoku Bank, and the Long-Term Credit Bank of Japan. This was a period when a mountain of bad debts cast a shadow over the economy. The government failed to come to grips with the problem, however, and the financial crisis of the late 1990s was the result. It was not until the 2002–3 period, during the administration of Prime Minister Koizumi Jun’ichirō, that work on clearing away the bad debts began to make substantial progress. More than 10 years had passed with little being done.”
“It was quite some time after the bubble began to deflate that the authorities worked out systems for using the power of the state to recover nonperforming assets (the Resolution and Collection Corporation) and support the reconstruction of companies buried under bad debts (the Industrial Revitalization Corporation of Japan). Furthermore, Japan was short of the human resources required for writing off bad debts, recovering assets, and putting companies back on their feet.”
“As I noted, the Japanese financial system continued to rely excessively on banks for collecting deposits and providing financing. Reforming this financial setup became a crucial task after the bubble burst, but struggling financial institutions were foundering, banks were engaged in realignment through mergers, and arranging a reform paving the way for the introduction of market-based financial methods, as symbolized by property-backed securities, took time. It is fair to say that because such changes and reforms were slow to make progress, the bad debts turned into a veritable quagmire.”
“To deal with the slump that ensued as the bubble lost air, the government relied on conventional fiscal and monetary tools. On the fiscal front, the authorities applied stimulus by cutting taxes and stepping up spending on public works, and on the monetary side, they made cuts in the policy interest rate. While such macroeconomic policies were needed, in themselves they were inadequate for getting to the root of the problems. Fundamental changes in financial markets and systems were also required. It was, in other words, a half-baked stimulus program, and it had a damaging effect. It persuaded financial institutions and debt-ridden firms to postpone radical restructuring. We should further note that the government debt ballooned as a result of the fiscal stimulation, and this placed a severe constraint on policy management over the ensuing years.”
The Daily Ticker. “More than two years after the financial crisis, Lee Farkas, the former Chairman of Taylor, Bean & Whitaker Mortgage Corp, is arguably the only major player in the mortgage industry to face criminal charges. William Black, professor of economics and law at the University of Missouri-Kansas City School of Law, calls the lack of prosecutions a disgrace, and he blames policymakers.”
“It’s a matter of ‘unofficial’ policy, he claims. ‘The de facto policy right now is elite frauds go free if they’re in banking because the whole sector is too fragile. That is significantly insane. It will produce the next crisis.’”
“In the accompanying interview with Aaron Task, he notes that Treasury or White House officials are fully aware of the fraud, citing FBI testimony as far back as 2004 about rampant fraud in the mortgage market. In fact, Black says the problems banks are now facing with foreclosure paperwork are simply a result of the foreclosure frauds that were never addressed. ‘Every time you fail to root out the frauds, the fraud simply migrates. It migrates from the lending process to the foreclosure and servicing process.’”
I put together the post to hopefully start or re-ignite a needed discussion. IMO, we don’t have to go down the road Japan did. It’s never too late to get on the right path.
We may not have to, but it feels so right.
Where do we as a country go from here?
Instead of class warfare, which is what most HBBers seem to want, I would like to see government spending drop 10% per year until the percentage is as low as in 1913. At that point, eliminate all the taxes that did not exist in 1912. For all the surpluses, use it to pay the debt.
The goose that lays the golden egg is the economic system that allows people with the freedom to achieve their dreams and become as rich as they want without the do nothing nutcases that drool with envy.
“Instead of class warfare, which is what most HBBers seem to want,…”
I personally don’t want class warfare. What I want is a level playing field, supported by a rule of law in the financial sector. For instance, why should banks qualify for zero-percent loans from the Fed, when consumers and small businesses do not? The playing field is unlevel, and big players in the financial sector are profiting handsomely from it at the expense of ordinary Americans.
a rule of law in the financial sector
Bingo. Class warfare won’t solve anything. I hope we never get to the point where we begrudge people who have legitimately-earned wealth. What’s needed is equality under the law and an end to the culture of impunity for the mega-swindlers on Wall Street.
Bingo. Class warfare won’t solve anything.
What are you talking about? There has been an intentional class warfare inflicted on us from the top for 30 years. They won.
Now they whine about us talking about “class warfare”. It’s part of the plan to cold-cock us hard with brass knuckles then complain when we try to slap back.
If the poor and the middle engage in class warfare they didn’t start it.
No, not at all. If we engage in class warfare now we are only joining a battle 30 years too late.
I hope we never get to the point where we begrudge people who have legitimately-earned wealth.
While I could also say this with snark, I am asking sincerely: do you not believe we’re already there - that there aren’t people in this country, and even on this blog, who feel that way?
Yes, we probably are already there. A lot of people aren’t just unhappy about their own lot in life; what they’re most incensed about is the good fortune of others.
I don’t begrudge pro athletes or entertainers their money. People are free to go to their movies or games or not. I have to problem with those that started tech companies with a great idea and hard work, but when wealth is obtained via manipulated compensation panels, and governments, via cornering markets monopolies and oligopolies, via inside information and government bailouts I say let the class warfare begin.
“…become as rich as they want without the do nothing nutcases that drool with envy.”
You are very fond of that turn of the phrase — it comes up here quite often! Not everyone who doesn’t dream of untold riches is a do-nothing nutcase drooling with envy. There are plenty of ordinary Americans who want to do good in their personal lives and communities but don’t aspire to become a real estate mogul or to manage an investment bank which profits by destroying the financial or personal security of others.
Above all, many of those who profited most handsomely from the recent financial crisis appear to have done nothing productive for society whatsoever. High-level, socially-destructive criminality, effectively immune from prosecution thanks to generating sufficient revenues to hire the best lawyers money can buy, may qualify as a legitimate path to riches in a twisted Ayn Randian alternative universe. In my preferred version of the world, such behavior would result in long prison terms.
I concur.
Yes, good post, PB.
“become as rich as they want without the do nothing nutcases that drool with envy”
This sounds like class warfare to me.
Spot on. Perhaps Bill was referring to himself.
I know when I do my ranting I’m hardly talking about the people w/a mere million or two. I hardly equate those people w/the billionaires? Gheesh, $1mil’s only $40k over 25 years before taxes. I’m sorry but that’s still BFD.
Well what gets me is the implication that it is impossible that anyone with a net worth over a certain amount, say $20,000,000 never ever earned it honestly.
I say the burden of proof is on those Ellsworth Tooheys.
People are emotional. I read that as hyperbole. But what I hear between the lines is they’re saying the legislation works against them and they need a break or the middle class is going to have a rough road. And they’re scared.
I always said one of my bosses, Sheldon Adelson, was a workaholic and had an incredible business sense. I think people still want to respect that kind of leader. Ya know the kind that actually rolls up his sleeves to ensure the company moves toward success and profits almost through their sheer willpower? I think what many bristle at is we’ve seen too many at the exec level that have said eff the company, eff the product and it’s reputation, eff the stockholders, even eff our own clients, what can I mine for myself? But when there are still respectable leaders out there they do still command respect.
I say the burden of proof is on those Ellsworth Tooheys
Ellsworth Tooheys? OMGosh.
I wonder if Bill has one original ideal in his head or if he frames every concept within the messed up parameters of Ayn Rand’s delusions. .
Who is Ellsworth Toohey?
Who is Ellsworth Toohey?
Just some poorly written, over-the-top, cartoon character villain in one of Ayn Rand’s sociopathic delusional books designed to inflame people’s hatred of the common man.
Bill, you seem to have justice confused with envy.
None of us here have anything against “the rich” per se, just when they abuse their power. Which is and always will be, a lot of the time.
I agree that the free enterpise system is the goose that laid the golden egg. I believe in limited government. However, the last couple decades has seen the rise of crony capitalism in this country and the transfer of wealth by use of the FED and policies such as open borders. Demanding that some of the looted wealth be returned to working people does not seem unfair to me. I diverge with Obama because he seems to want to promote his own crony capitalists with the taxes instead of truly returning it to the middle class.
Demanding that some of the looted wealth be returned to working people does not seem unfair to me. …instead of truly returning it to the middle class.
Who’s to say that the middle class is who the loot has come from?
Even millionaires suffer due to crony capitalism. Think about owners of small banks or private lenders. Think about people trying to start companies with entrenched corporations supported by the US government.
The middle class isn’t the only victim here - there are victims all across the income/wealth spectrum.
Who’s to say that the middle class is who the loot has come from?
You know drumminj, who cares if a few with vested interest in the status quo ask “who is to say”? WE are to say because it’s obvious. We’re talking about big picture blog stuff. You constantly want to distract with “what about this detail or another”.
You like to throw out these kinds of questions like “how can we tax the rich more when we can’t even come up with a definition of that “rich” is”?
And just because “millionaires (might) suffer due to crony capitalism” that does not mean that corrupt, crony capitalism does not benefit billionaires and hurt the rest of us.
I would like to see a trade surplus on par with what we had in 1913. That would generate enough tax revenue (at low tax rates) to fund the government services that are useful/good investments/etc.
I have a lot of respect for the wealthy who created wealth and lasting value, and with that, themselves became wealthy.
I have no respect, in fact I’d like to see prosecutions, for the likes of wealthy Mob bosses.
The “wealthy” is a very diverse group.
I like justice and fairness. It is a concept that exists in the human mind and not in nature. I remember watching a nature documentary in which a lion rushed up and killed a wildebeest giving birth. There was no right or wrong to it - it’s just the way the system works.
Anyone who victimizes others for his own benefit, be it simple sadism or material gain, also earns my antipathy.
Amen, Neuromance.
“It’s never too late to get on the right path.”
An image of my poor uncle (mom’s BIL) just popped into my head. After decades of alcoholism led to loss of career, family, home and self possession, he finally managed to stop drinking.
About a year later, he met an untimely demise due to lung cancer; seems he never did manage to quit smoking…
—————————————————————————–
That said, I agree with Ben; better to get on the right path from however far down the road to perdition you have already walked, than
to keep heading further down the road.
What can we do? Nothing! Our bought and paid for elected officials won’t listern to us. So what’s the point? They are going to do what their paymasters tell them to do.
I can recall as a child how shocked and outraged my parents and other adults in their circle were when it came out that Spiro Agnew was a tax cheat and that Richard Nixon had participated in the planning for the Watergate Burglaries.
I don’t know if our national leaders are any better or worse than they ever were — in fact, Machiavelli suggests that corrupt leaders have been around for centuries — but I believe the information age may have thrust more corruption into plain view. Further, I believe the Nixon-Agnew ordeal resulted in a collective loss of innocence for America as a nation. Before their time in office, there was a presumption that top officials in government upheld a rule of law as sacred or at least following. Nowadays, we are so cynical and jaded, and the semblance of any effective rule of law has become such a farce, that we tolerate law breakers (e.g. tax cheats) in high positions in government and corporate executives at firms charged with fraud who somehow manage to hold on to their posts.
‘The de facto policy right now is elite frauds go free if they’re in banking because the whole sector is too fragile. That is significantly insane. It will produce the next crisis.’
I’m SO on board with Black on this point! The situation at hand will indeed ‘produce’ the next crisis, by creating the moral hazard encouragement for monopolistic investment bankers to financially engineer their next break-it-and-get-bailed out disaster capitalism scheme to follow the financially-engineered subprime mortgage debacle.
What can we do? One thing we could do is raise awareness that we are making the exact same mistakes Japan did after their twin bubbles.
In Colorado:
Yeah, might as well just open an artery. Go ahead, what are you waiting for?
We are a house divided. (no pun intended)
Government must be out of the economy. No loans, no tax credits, no deductions. Then we will prosper.
That is it folks.
To Mr. Pres. O. Take a hike and get a job and see what it is really like down in the trenches.
J.
Government and economy is, was and always be, permanently entwined.
I am not optimistic (based on what I am seeing in FL and Pinellas County) that the shadow inventory will “suddenly” hit the market. Someone the other day said “at some point” they’d have to sell those… In my area we’re on three years and counting. And not to sound like an RE troll, but anything decent and decently priced is being “snatched” up.
I’m not sure we can avoid turning Japanese — I think we’re two to three years into it already.
I realize you are writing from the consumers viewpoint. Not to take away from your valid concerns, the purpose of this post is to look at the implications for the financial sector and the economy.
“It is fair to say that because such changes and reforms were slow to make progress, the bad debts turned into a veritable quagmire.”
We’ve seen 2 or 3 policy issues add to the shadow inventory. One, TARP. Two, the FDIC strategy of allowing insolvent banks to remain open. Then it could be added that loan modifications programs set up by the govt. were along the same lines. The questions I have are, is this delaying of liquidation helping or hurting the economy? Will the RE eventually be liquidated anyway? Is this creating a misallocation of resources, and therefore preventing credit from flowing to more productive areas? And are we wasting time that could be spent heading toward recovery?
“By 1998, eight years after the bubble started to deflate, several major financial institutions had gone bankrupt…This was a period when a mountain of bad debts cast a shadow over the economy. The government failed to come to grips with the problem, however, and the financial crisis of the late 1990s was the result. It was not until the 2002–3 period…that work on clearing away the bad debts began to make substantial progress. More than 10 years had passed with little being done.”
I get what you’re saying (I think): let them fail, round up the assets, RTC that stuff at MARKET value (i.e. not $300 sq. ft.), sell ‘em, get back to a “normal” existence.
I’m not so much saying as asking: what would be the best course of action, in light of the Japanese post-bubble experience.
BEST course:accelerate return to mean-aka normal market by shutting fannie and freddy.Without govt.financing the market would flounder,but will recover faster without gov.influence.If we must tolerate the fed,find a way to limit power.The adjustment,if not done by us,will soon be done by less friendly means.Very bad for joe6p.
An untreated disease does not cure itself. If recovery isn’t attempted when the opportunity opens, one is left an order of magnitude more vulnerable to the next inevitable kick in the behind.
RTC that stuff at MARKET value ??
Bundling the assets (RTC) just benefits the well to do because you limit competition for it…All that happens there is you get investors that gain all the benefit by selling the product later in individual units to joe-six who ends up paying full retail…
The solution is to let the market clear but don’t hold your breath…
That’s already being done.
As many have mentioned before, these foreclosures have been bundled up and sold to deep pockets. In the areas I track, there have been many homes that suddenly pop onto the market, with no public foreclosure sale, etc., and they’ve been given the typical “flipper upgrades” so that Joe Sixpack, with his 3.5% FHA loan can, once again, overpay so that some disgusting flipper makes a profit at the expense of regular buyers who are just looking for a home.
IMHO, the whole “robosigning” nonsense was also used as the means to gum up the foreclosure process. Funny how when the market starts to (finally!) head back down, the robosigning issue suddenly pops up.
Every time we’re about to see the market go to where it belongs, another “surprise” is found/created to prop things up even longer.
It is possible for a few J6Ps to get together and go in on a bulk deal, thereby setting themselves up to be J6Ts (Joe 6 Trumps). I’ve been saying this for years, but no one will listen.
‘…that the shadow inventory will “suddenly” hit the market.’
More likely scenario (based on what happened in CA during the last real estate bust, from 1989-1996):
1) Those holding shadow inventory will try to time its release for when the economy is picking up again, on the assumption that they will be able to sell for a higher price when jobs and consumer confidence are coming back.
2) The very large number of would-be sellers trying to play the above strategy will lead to a congestion effect on the supply side (already in evidence, but destined to grow when and if the labor market ever recovers). The rate at which supply floods the market will outweigh the speed of economic recovery, especially as regards financial position and credit-worthiness of would-be home buyers. Instead of seeing prices rebound to bubble-era levels, we will see ongoing gradual downward adjustment of comp prices to post-bubble reality.
3) You can expect the serial bottom callers to continue predicting housing will bottom out ‘by the end of the year,’ regardless of how many years from now the bottom actually arrives. For comparison, a few years back, a HBB poster linked in a series of LA Times articles from the 1990-1996 period which documented that the serial bottom calling phenomenon operated then exactly as it is currently. Whoever happens to make the bottom call within a year of the actual bottom will try to lay claim to superior forecasting skills. Regardless, by 2014 or so, prices in U.S. housing markets previously considered ‘a bit frothy’ are likely to be more affordable than expected.
Footnote: By 1996-1997, California home prices were quite reasonable compared to their levels as of the late-1980s; we bought in 1996 at under $100/sq ft, and my first cousin bought his SoCal home in 1997 for a song at a desirable location. There has never been a better time to delay a home purchase!
Fair enough PB, but during that bust was the Fed making TBTF banks whole?
I don’t believe they were, but how do you see that playing a role? If your point is that the banks have indefinite staying power to keep vacant homes off the market, thanks to zero-percent financing from the Fed, I may have to agree with you. So long as the Fed is loaning at zero percent, why not make zero percent loans to households who want to live in the homes, rather than to banks that want to sit indefinitely on empty REO? It is such a pathetic waste of national wealth which, so far as I am aware, nobody on high even discusses.
“If your point is that the banks have indefinite staying power to keep vacant homes off the market, thanks to zero-percent financing from the Fed”
Yes
‘power to keep vacant homes off the market, thanks to zero-percent financing from the Fed’
It didn’t work for Japan.
“It didn’t work for Japan.”
I guess it depends on what the definition of ‘work’ is. So far as I can tell, the low-interest financing in Japan helped their housing bust last for two straight decades; my guess is that this is an all-time record, though I would also guess that the U.S. is currently on track to match it, given how closely our post-bubble-collapse economic policies match the steps they took.
This is a subject for anthropologists to examine, IMHO, as economist assume rationality, and there is nothing whatsoever rational about making the same mistakes as the country whose economic policies you recently criticized.
Comment by Ben Jones
2011-04-23 19:04:27
‘power to keep vacant homes off the market, thanks to zero-percent financing from the Fed’
It didn’t work for Japan.
———————
But it IS working here. While prices in many areas have dropped, there is no doubt that prices are still well above where they *should* be, so…their plan is working.
The fact that thier plan will end up dragging out the recession/depression and will end up costing us even more than if we had let things fall, is what J6 needs to understand. Because the elite (who disproportionally benefit from rising asset prices) control the MSM, J6 does not hear this message, and that is the problem; J6 thinks the Fed has engineered a miraculous “recovery.” Seriously, people really believe this recovery myth.
“by then end of the year”
Well, they didn’t say what year, did they? As long as it’s by the end of a year, then they are right.
I’ve seen the Zillow chart for Florida. The whole dam state is leveled.
“Where do we as a country go from here?”
We go back to where we came from.
some of you may already be there (save me a seat, Im coming)
A place where people valued integrity so much, a look in the eye and handshake was all you needed to trust somebody.
A place where old people knew their job was to tell the truth, even if people didn’t want to hear it. (tell the truth and shame the devil)
A place…?
I agree and I will say I’m man enough to begin with me.
Today as I drove out to the gym for my treadmill run, I noted that just outside the gate there was a torn plastic bag of trash that must have fallen off a vehicle as they were trying to take it to the trash compactor. They did not bother to clean it up. Two hours later I drove back. The trash was still there.
I got two trash bags and some paper towels and cleaned up most of it.
We have “that element” here in these apartments that don’t mind trashing the place. Pigs.
I refuse to sanction a world of pigs. The cleanup starts with me. And that is part of civility.
“The cleanup starts with me.”
I appreciate that. Having not long ago participated in a San Diego River cleanup project which included picking up hundreds of cigarette butts, I can relate.
those filters last forever don’t they.
10-15 years, according to Wikipedia. Not great, but a lot better than plastic, which never biodegrades at all, but simply erodes into smaller bits over the decades.
Pigs, my feelings also. We live in the desert outside of Phoenix. I start carrying trash bags in my car to pick the trash on the road to my house. Many bags are used. Now, we walk the dogs in the desert with a lawn wagon and pick up bag after bag. I have yelled pig man a time!
Okay, had to correct the grammar. Old english major.
Pigs, my feelings also. We live in the desert outside of Phoenix. I started carrying trash bags in my car to pick the trash on the road to my house. Many bags are used. Now, we walk the dogs in the desert with a lawn wagon and pick up bag after bag. I have yelled pig many a time!
“I appreciate that”
LMAO. Stucco… please don’t tell me you actually believe this clown.
Today as I drove out to the gym for my treadmill run,
A hundred years from now some grad-student might base their thesis on explaining that sentence. And thanks for cleaning up the trash.
“A place where people valued integrity so much…a place where…”
When and where is/was such a place?
“Back to where we came from” has been well-documented in Dickens novels.
I met the mayor of my neighborhood yesterday. She’s a 98-year-old woman who says that I never lived during the good times. Her explanation was the same thing you just said.
But she does appreciate having ice in her drink these days.
For most of us the good times coincide with when we were young.
Financial prosecutions would lead to wealth changing hands, so the rule of law won’t apply for now. With the vast amount of household debt in the United States these days, the consummate fear is that a tidal wave of strategic defaults would destroy wealth too quickly, so Quantitative Easing appears to be the only solution to those at the controls. The next bubble to pop will be the private and public pension fund system, IMHO.
“Bubble” is maybe the wrong word to use.
It’s not like we’ve been seeing massive amounts of money going into pension plans. It’s that the money in the plans don’t necessarily match the promised payouts.
For some companies in the private sector, pension plans are a cash cow that helps the accounting. My former employer is a cyclical business. They hire a bunch of help, they work 3-4-5 years, there is a downturn in the economy, and those people get laid off. It might take you 30 years to qualify for a 20 year pension, assuming you get called back every time.
“The next bubble to pop will be the private and public pension fund system, IMHO.”
These are the systems that are easiest to fund because they are largely funded with promises of money rather than with actual money.
If an employer (or government entity) is allowed to play such games such as assuming an eight-plus-percent-return on their holdings of stored up pension money in a two-percent-return world then something has got to give. Either:
Door Number 1.The return has to go up to eight-plus-percent or
Door Number 2. A bunch of people are going to end up doing without.
If our economy is going to mirror Japan’s then my vote is for Door Number 2.
If it is indeed Door Number 2 then a lot of money that is forecasted to go into the economy will not be doing so - not a good thing in a consumer based economy.
Very astute, combo. My sentiment as well.
Which is one of the reasons that higher interest rates (take the power away from the Fed and let the market decide) is the answer to many of our problems.
Yes, we’ll see more defaults, but I honestly believe that this is the only way out of our predicament.
so the rule of law won’t apply for now ??
For now ?? The rule of law that we have in place today and have for some time is “selective”…Lindsey Lohan just had her felony Grand Theft Charge reduced to a misdemeanor and that while already on probation…
Door Number 3. “The Bond Market”…That door is going to solve it for us if we are not careful…
How exactly is that gonna work?
America’s credit rating
Wakey, wakey
Standard & Poor’s may not have said anything new. That’s no reason for American politicians to ignore it
Apr 20th 2011 | from the print edition
CREDIT-RATING agencies are notorious for announcing with great fanfare what has been obvious to financial markets for months. That may explain why investors were only briefly perturbed when Standard & Poor’s (S&P) issued its first warning in 70 years that America’s credit rating was in jeopardy because of its public debts. Share prices lurched downwards but soon stabilised. Bond yields actually declined.
It is easy to think of other reasons to shrug shoulders. S&P did not lower America’s top-tier AAA rating on April 18th; it assigned it a negative outlook—a threat that if debt remains on its present course, a downgrade will ensue. It puts the chances at one in three. Changes in ratings are usually lagging indicators, following rather than causing economic hardship. Moody’s stripped Japan of its AAA rating in 1998; S&P followed in 2001. Further downgrades have come since. But despite the rich world’s heaviest debt burden, Japan still borrows at rock-bottom rates, thanks to deflation and the loyalty of its savers.
…
S&P did not lower America’s top-tier AAA rating on April 18th; it assigned it a negative outlook—a threat that if debt remains on its present course, a downgrade will ensue. It puts the chances at one in three.
Probably means we’ll default next week.
Not gonna happen, unless the Tea Party nutcases somehow manage to take control of the playing field…
No bias here!
I always strive to be as fair and balanced as possible in my blog posts.
PB, what is more important the fact that we borrow 42 cents of every dollar we spend or whether the debt ceiling is raised a few days late? The Tea partiers may not have all the correct solutions but our present policies mean we will default since no country can run that kind of deficit. BTW, I wish we were Japan since at least they are running a large current account surplus and owe their debt to themselves. We are running large deficits in both. Of course, they are related large budget deficits tend to increase trade deficits and current account deficits. BTW, if you look at insider selling in the stock market, the fact that the government is rushing to sell GM at a loss and other signs, it sure doesn’t look like the present government spending is working.
PB is entitled to his bias. He writes his OpEds for free.
I cannot see a positive resolution to our problems given the level of corruption that appears pervasive in our political system of governance.
As a country some groups have formed factions which are well organized and capable of creating increased pressure on “elected” officials to get what they want at the expense of the “common good”, whatever the common good is. Big banks are bailed out and bonuses paid while small banks are allowed to fail, the AARP is certainly the driving force against the possibility inflation can bail us out and public unions drive higher taxes on the private sector.
IMO the over-sized elephant in the living room that everyone is ignoring is debt, and I mean the total gross debt held around the world including consumer, business and government. I can no more see this debt being repaid given current circumstances than I could see a person earning $30k a year paying off a $120,000 credit card debt.
As a small business owner, I have seen the business environment slowly degrade since early 2008 and continue to do so. I hear the same from other small business owners who like I do believe the “recovery” is some kind of joke, so IMO counting on the next generation of small businesses to grow and step up to the plate with employment will not happen.
The US does have one advantage shared by virtually no other country in the world, and that is that its debt is primarily in US dollars. This means that default is probably unlikely in the long term. That would seem to imply hyperinflation, but hyperinflation without jobs and pay increases would imply revolution!
Ben’s post is excellent and really does raise the question “where next?”
Where next…to me the only solution is total public financing of elections.
Where All parties on the ballot gets the same amount of money
And ALL parties will get at least 1 shot at presenting their views…Even like the rent is too damn high party.
The a few weeks later you whittle that to 5 then to 3…..and there will always be a minimum 3 viable candidates to choose from.
No pacs No asking for money on your website, NO $10,000 a plate luncheons…
a FAIR fight…….too radical an Idea i guess
I like this idea.
There will still be issue ads. When I was visiting in PA recently, there were issue ads on TV. Totally out of election season. Somebody sure wanted to own the budget conversation.
Yes, publicly-financed campaigns/elections would be one of the most important solutions to our long-term problems. I’d even like to see the elimination of political parties, and have candidates run on their own merits, not buzzwords and catch-phrases. Lobbyists need to be banned, and anyone receiving bribes for political favors should be automatically sentenced to a jail term of at least 15 years, if convicted.
How do you eliminate the parties constitutionally?
Not to go all Godwin on you, but that’s the first thing totalitarians do is get rid of (competing) parties because it’s just all so corrupt and confusing for us proles doncha know.
I don’t like parties because they tend to polarize people and turn them into unthinking zombies who repeat the propaganda that was preached to them.
If we had to vote for the individual people, we would be forced to do some actual research on them, and I think we would all benefit from that.
Yeah, I agree with that. Campaign financing should be public, not private.
PS
The Rent is Too Damned High, tee hee.
Yes I agree on the campaign financing issue. No bribery of ANY KIND. I would go further to say once an elected official is elected they would get a very cool “black” credit card with NO limit to use ANY way they want with the caveat that the information on how much they spend would be public.
We seem to live in a time where fraud is NECESSARY to become elected and expected?
Where next?
The lampreys (banksters) have sunk their teeth too far into the host. They won’t let go until the host is dead. When that happens, they will hop in their Gee-fives, and GTFOOD.
The people that could clean up the mess are out there. Too bad they won’t come within 50 miles of being nominated/hired to fix what needs fixed.
My suggestion? Next election, don’t “waste your vote” on the Republicans or Democrats. Vote for the Libertarians, or Nader’s socialists, or the Druids.
“They won’t let go until the host is dead.”
There are plenty more hosts where those dead ones came from.
Voting for Nader got us two fantastically expensive wars, a fantastically expensive version of prescription drug coverage for the elderly, and a fantastically expensive cut in tax rates- mostly for the wealthy.
Maybe the most expensive votes in history?
True only of Florida Nader voters.
That makes ‘em even more expensive!
But these are seniors who PAID for ANY amount of heath coverage. No matter how much coverage they PAID and DESERVE… yada yada yada.
Going against AARP is political suicide, so might as well throw the economy under the buss to get elected. If you don’t some other corrupt piece of garbage WILL!!!
I know seniors paid into etc etc etc. paid HOW much? and the answer is that based on current costs not nearly enough. Seniors SHOULD have been paying some 30% of their income into social security, and apparently I SHOULD be paying some 60% (to make up the difference)
‘the most expensive votes in history’
I don’t really care who goes to DC. But if we have a replay of what happened in Japan, we could still be in recession in 2021 or even later. That’s something to think about.
“we could still be in recession in 2021 or even later.”
Well, I survived Carter/Reagan, that was a long recession. I even had a good time during much of it, although there was some stress, to be sure. My point, and I do have one, is that I’ve been pretty used to lower expections over the years and have learned to live with it.
Could be worse. I could be living in a stinking slum in India or Pakistan. Or getting slaughtered in some tribal conflict in Africa. Or passing out from overwork in a Chinese factory. Or recovering from the Japanese tsunami/nuclear power disaster in Japan. Or not recovering. Or living in the shadow of some Mexican drug cartel on the border.
My greatest fear right now is that we become basically an extension of Mexico. I don’t think I could bear it.
No, not voting for Nader got us two wars etc. Had Nader even received the 5% he was polling prior to the MSM convincing people to abandon him, he might have been able to influence the country’s direction. He wouldn’t have been prevented from being in debates. If the left would show some guts and not vote for the corporate candidate maybe something would change. I voted for Nader (every election since 1996) and I remain proud of those votes. True conservatives, Tea partiers, are at least trying to prevent Goldman Sachs run goverment.
“True conservatives, Tea partiers, are at least trying to prevent Goldman Sachs run goverment.”
Link?
The tea partiers took out politicians such as Sen Bennett, who voted to bail out companies such as AIG, who were the counter party risk to Goldman Sachs. How did the left go after the Goldman Sachs cronies?
The tea partiers took out politicians such as Sen Bennett, who voted to bail out companies such as AIG, who were the counter party risk to Goldman Sachs. How did the left go after the Goldman Sachs cronies?
Sen. Russ Feingold voted against the AIG-TARP bailout.
The Tea Party promptly kicked him out.
U.S. Senator Russ Feingold (D) who voted against TARP (which greatly benefited Goldman Sachs) lost his re-election bid in Wisconsin to Tea-Party Republican Ron Johnson.
“Vote for the Libertarians, or Nader’s socialists, or the Druids.”
I don’t think we can afford this. Florida is currently paying the price for politically over-reacting (IMHO). I think we need a centered democrat or republican, but in either case, they HAVE to stand up to the FIRE industry and say “enough.”
Somehow along the way we went from for the people to for the corporation. Mostly banks…
We’re yielding to this vampire thingy and that only serves the vampire thingy. I don’t care what party the candidate comes from, but they need a silver bullet/wooden stake. We gotta kill this mofo.
Our society is far to polarized for there to ever be a centered anything again.
At least until the food riots start…
I believe it is killing itself. It feeds on debt. This cycle of debt expansion is over. The generation before mine lived in the aftermath of the last credit cycle crash and they led their lives debt averse. My generation had no sense of the dangers of debt and went on a binder. The one that follows mine will remember how ours got crushed and will try something different.
gees who will be the victim of the debt monster? The borrowers or the creditors? The new generation are the creditors and the old one seems to be the borrowers. I am told the new generation cannot borrow but must make good on the old generations debts.
Am I missing anything?
ALL DEBT IS BAD
Greed, aided by corruption, did this country in. All that was needed was for the big banks to fail, their assets taken over by smaller, more responsible banks, and the likes of Blankfein, Mozillo, Fuld, etc. to be arrested an prosecuted to the fullest extent of the law. At the same time, all of those borrowers who got in over their heads, needed to lose their homes in a timely manner, and become renters again as they rebuilt their lives. What happened was the opposite.
There’s really nowhere to go from here, but down. When you change the rules as the game goes along, you no longer have a game, and the crowd leaves. I’ve given up hope that anything good will come of this. What’s taken place thus far is that the most irresponsible have been rewarded, and in turn they’ve stripped even more wealth from the responsible.
Good job at summarizing the pessimistic take on where things stand.
Perhaps someone could rebut your summary with an optimistic perspective? But I don’t have my hopes up…
Nothing to rebut. Everything GrizzlyBear wrote is completely true.
Fine. Then how about a palliative fantasy version of reality where white criminals in the financial sector who screw over their fellow man serve long prison sentences. I’m up for anything to cheer me up at this point.
Meant to say “white collar criminals” (though I do believe most of them are Caucasian…).
Where’s the hope, for a country, when a guy like Trump is admired? there should be nothing but shame in bankruptcy. Lose other peoples money numerous times,walk away and run for President. It’s the American way!!! please don’t get started on medical bankruptcy, I’m for gov’t healthcare. And that’s the reason why. Morality must start with the leaders.
You have to wonder to what extent Trump’s widely-reported new found popularity is a fictional creation of the corporate-owned MSM. It’s all about increasing add revenues, and since Trump is a TV star with his own show, the sheeple will naturally gobble up MSM stories about his possible presidential run.
Wonder? Is this a trick question? The whole thing is a complete fabrication of spectacle.
And no, there is no hope for a society when someone like Trump is taken seriously for even a second. Or any of the other useless, POS, train wrecks of human beings who are glorified in MSM.
But divide, distract and conquer are tried and proven techniques since the dawn of time.
Trump’s moment will pass.
I volunteer. Look at the huge amount of venture capital now in the mix especially because of better-than-expected earnings. M&A on the way!
Yeah, it’s my birthday. Perhaps you missed it. There is no bad news on my birthday, so everything’s good, K?
Happy birthday!
“Greed, aided by corruption, did this country in.”
Exactly. Trickle down economics, coupled with deregulation. AKA the Reagan Revolution.
Where do we go from here? Back to meaningful regulation of Wall Street, and reasonable tax rates that restore wealth to the middle class- and reduce the ‘hot money’ that the wealthy are using to blow bubbles.
Back to the way it was, when it worked. We tried the trickle-down, deregulation model, and it failed miserably. As predicted.
Where do we go from here? Back to meaningful regulation of Wall Street, and reasonable tax rates that restore wealth to the middle class- and reduce the ‘hot money’ that the wealthy are using to blow bubbles.
But how are we going to make that happen? Remember what happened when we let Congress know we were overwhelmingly against TARP? Oh yeah, it passed. We let them know we were unhappy w/ inv. bankers getting record bonuses, their employers buoyed only by taxpayer dollars. Oh yeah, nothing. It appears we the common taxpayer, the voter, the 99%ers have been locked out of the process. And the dark side controls both parties. It’s not like you can vote out the “evil” ones. Through the Supreme Court they’re undermining our individual rights and buoying the rights of the corporations. We’re laying off teachers cause we’re “so broke” while purchasing empty lots for 9x their assessed value because we might want a parking lot one day all on the taxpayer dime. If there were any rays of sunshine believe me, I’d glom into it. But I don’t see any right now. There is no deus ex machina.
“There is no deus ex machina.”
Then what are you seeking for here in the machina? If it’s all pointless, then you’re missing Dancing With the Stars.
Well said, both Grizzly and CarrieAnn.
Unfortunately, this isn’t the optimistic outlook desired by PB, but it’s our reality. So many of us HAVE tried to do something — writing letters, faxing, calling, marching in protest, etc., all to no avail. What more can we do?
Duck when the SHTF.
+1
“Are there any other problems that most people are being willfully blind to, …”
The realization that we are not soon going to return to bubble-era home prices. Though the bubble popped, housing market euphoria (at least of the John Frum cargo cult variety) is alive and well.
We have structural problems that go beyond our current financial and housing mess.
1. Oil is becoming more difficult to extract and demand is increasing worldwide. We need to significantly reduce our dependence on oil. I listened to a former Shell Oil executive on NPR this morning who thinks we need to increase domestic production in the short term. If we do, we may not takes the steps necessary to develop other energy sources. If we don’t, we may not be able to develop other energy sources.
2. Student loans are a millstone to the generation now in its 20s. Many of our best and brightest are saddled with debt that will take them years to pay off. Some of them will find that they can never escape and decide to leave the country. At the same time, wages are decreasing and jobs are hard to find. Those now entering college will find tuitions increasing at a faster pace due to state budget cuts. They will find themselves competing against foreigners who have gotten free educations. Companies will complain about a lack of qualified applicants in this country and hire foreigners (either here or abroad) instead.
3. Medical costs continue to outpace inflation. This is the driver behind the unsustainability of Medicare and Medicaid. It is the driver behind increasing insurance premiums and decreasing coverage. We should consider setting up a medical compensation program similar to Workmens Compensation, instead of the medical malpractice and legal mess we have now. We should pay off student loans for doctors and nurses. We should have free clinics for basic care - prenatal, well baby, immunizations, yearly checkups. We should have free trauma centers. We should have free infectious disease clinics. Let the private market cover everything else.
4. Boomer retirements and pending retirements are going to impact the economy. Some of us will have no choice but to keep working until nobody will hire us. Then we will become freelancers.
Retirement savings may have been depleted by fluctuations in investments (including stock market and housing), medical bills, or premature unemployment. We face pension and social security promises that may not be kept. Companies that still have pensions are likely to unload them on the government or go bankrupt. Ryan’s plan calls for maintaining SS payments at current levels for folks over 55, but I don’t believe it. That is merely the first step. If such a plan passes, it will not take long before younger folks chafe at paying into a system that will not benefit them. Future Congresses may reduce payments to those now over 55. And almost certainly, SS will not keep up with real inflation. I have no faith that SS will provide meaningful income when I am 85 and really need it.
If we retire, we become a burden on society. If we don’t, we clog up the employment market and prevent the next generation from taking over.
5. Society is increasingly fractured. The cult of individualism is killing our social cohesiveness. Personal responsibility is the catchword. Not my problem is the attitude. To quote Ben Franklin: “We must all hang together, or assuredly we shall all hang separately.”
5. Society is increasingly fractured. The cult of individualism is killing our social cohesiveness. Personal responsibility is the catchword. Not my problem is the attitude. To quote Ben Franklin: “We must all hang together, or assuredly we shall all hang separately.”
I agree with everything but the above. We have a cult of “gimmie something for free” today in America.
I wish we would get back to individualism. As in, I work and pay for what is mine and not expect some else to cover it. This can be applied at both the welfare and corporate levels.
Ben Franklin’s quote was for those who wanted freedom and who were ready to fight (and die) for it. They were not for those who wanted a government to provide them with free housing, free food, free medical, etc.
I think we need a balance between individualism and society. IMHO, the balance has swung too far towards individualism. We have too many people at all levels of society who have a me first attitude.
We are much more interconnected today than when Ben Franklin was alive. The pioneers who settled this country expected to have to fend for themselves because there was no support system where they settled. If you want to get back to that, then most of us will have to die. Do you expect most of us to do that for you and to go quietly?
I still say that Ben Franklin’s aphorism applies today. If you think you can thrive while everyone else goes to hell, you are deluded. Wall Street masters of the universe have lost sight of this. They believe they are smarter than the masses and deserve their bonuses.
Individualism is also at the root of the disintegration of families. It is at the root of a something for nothing attitude - those who want free food, free housing, and free medical. It is at the root of those who will not pick up after themselves.
We achieve as a society through individuals, but to exalt individuals above family, community, and nation is a big part of our malaise.
“If you think you can thrive while everyone else goes to hell, you are deluded.”
If
If you can keep your head when all about you
Are losing theirs and blaming it on you;
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or, being lied about, don’t deal in lies,
Or, being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise;
…
IMHO, the balance has swung too far towards individualism. We have too many people at all levels of society who have a me first attitude.
Individualism as well as selfishness on a personal level, sure. However, in terms of public policy, it most certainly isn’t about individualism or self-reliance. In terms of public policy, it’s about “greater good”, no matter the cost, and “think of the children”.
However, in terms of public policy, it most certainly isn’t about individualism or self-reliance. In terms of public policy, it’s about “greater good”, no matter the cost, and “think of the children”.
No that is not correct. If it were about the “greater good” we would not have extreme downward mobility and the greatest concentration of wealth, income and power since the Great Depression.
Sometimes the obvious is obvious.
Rereading your post, we see some of the same problems. It appears we have different beliefs about what constitutes individualism.
We need for individuals to take care of themselves to the extent they are able. We also need for society (not necessarily government) to provide opportunity and for individuals to believe that they have opportunity. And we need for individuals to believe that they have a responsibility to society as well as to themselves.
It appears that we agree on the destination. We may at times disagree on the best way to get there.
We have a cult of “gimmie something for free” today in America.
We do not. Some yes. A culture of it? No.
Proof? Medicare and Soc Sec are not “free”. They have been paid for for years. And when there are jobs, almost all Americans want to work.
Proof? When there were jobs available, almost all American workers were working thus we had almost “full employment” from 97-2001.
There is a reason that certain elements on the right want to portray Americans as “gimmie something for free” people and the reason is a form of class warfare to enrich the rich at the expense of the rest of us.
They want more and they want it from us.
..and like all sociopaths, they blame the victims.
If we retire, we become a burden on society. If we don’t, we clog up the employment market and prevent the next generation from taking over.
It gets worse than that. As we retire in increasing numbers, we start pulling our savings out of the markets en masse and the kids that just filled the job openings we left get to watch the value of their savings in the markets begin to plummet.
OTOH, if they haven’t *invested* all that much yet, their *savings* (cash) will see an increase in purchasing power as asset prices fall. Personally, I think this is a favorable outcome. Those who would be most harmed by this “pulling out” of various asset classes are those who hold the most assets — the elderly and the rich. IMHO, the younger generations would actually benefit from a major decline in asset prices since their saved and earned dollars would be able to purchase more “wealth.”
What saved dollars?
True, they are unable to save because of all the debt and “investing” that has driven prices up so high.
Still, I believe that lower asset prices would be the greatest gift we could bestow on tomorrow’s generations.
This is why our Leaders should be demanding all Americans learn to read, write and speak English…
And hopefully it will kill the rap and hip hop market which would be a good thing.
Companies will complain about a lack of qualified applicants in this country and hire foreigners (either here or abroad) instead.
Excellent post, Happy2bHeard. Could not agree more.
Regarding health care costs, I found this article from 2008.
http://www.healthbeatblog.org/2008/03/will-boomers-ba.html
“Will Boomers Bankrupt Our Health Care System? Myths and Facts
“What will be the biggest factor pushing the tab so much higher? Innovation. “The health care industry will continue developing new stuff for every age group,” Reinhardt explains. Will that “new stuff”—in the form of new drugs, devices, tests and procedures—be worth it? Some of it will be. Some won’t. Indeed as this article from Health Affairs reveals, over the past twelve years, rising spending on new medical technologies designed to address heart disease has not meant that more patients survived. In many areas, we seem to have reached a point of diminishing returns. This also is true in the drug industry, where most new entries are “me too drugs”—little different from products already on the market.
As I have often discussed on this blog, it is usually suppliers, not “patient demand,” that drives health care inflation. The big ticket items are not the ones patients ask for; they’re the ones companies advertise—or that doctors and hospitals tell us we need. Few chronically ill patients ask to be hospitalized; not many cry out for dialysis, or the chance to spend thousands on cancer drugs; it’s the rare person who asks if he can die in an ICU.
The market is driving health care costs higher, not the increasing numbers of older folks.
Here is an NPR story about one technique used to market drugs to doctors.
http://www.npr.org/templates/story/story.php?storyId=130730104
“Today when a rep like Webb wants to get a doctor to write prescriptions for his drug, there’s still one almost foolproof way to get that task accomplished.
To get a doctor to write more prescriptions, Webb asks the doctor to become a speaker.
…
The fact is that the top 20 doctors in a representative’s territory prescribe the vast majority of the medication. According to Webb, the top 20 percent prescribe as much as the lower 80.
So if you want to sell more of your product, and every representative is required to sell more, those are the physicians to target.
Which brings us to the hard reality about doctor speaking: Although doctors believe that they are recruited to speak in order to persuade a room of their peers to consider a drug, one of the primary targets of speaking, if not the primary target, is the speaker himself.
That’s where reps look for a real increase in prescriptions — after a speech.
…
…a growing number of universities and hospitals no longer allow doctors who work on their staff to speak on behalf of drug companies. And under the new health law, by 2013, every doctor who takes money from a pharmaceutical company will be listed on a government website.”
So if you want to avoid over-prescribing, go to a doctor that doesn’t prescribe much and definitely avoid one of these doctor speakers.
There are also a number of articles about more care not necessarily being better.
Good find. But it seems the problem is being able to identify who those speakers are, because like so many others areas of society, when it become a full time job just to research everything little aspect of navigating the landmines of daily life, it becomes futile.
And then the system creates a destructive feedback loop.
Interestingly, reporting these payouts to doctors is part of the health care reform passed last year. And Eli Lilly is required to now as part of a consent decree.
https://www.kuow.org/program.php?id=21659
“In a statement emailed to KUOW, Eli Lilly spokesman Scott Macgregor said transparency is critical to rebuilding trust in the pharmaceutical industry. Macgregor called Lilly an industry leader in transparency. He pointed out that Lilly was the first pharmaceutical company to report its payments to physicians.
In fact, Lilly was required last year to start reporting its payments. In a settlement agreement with the U.S. Justice Department, the company also pled guilty to illegally marketing one of its drugs to doctors.
Most pharmaceutical companies have not yet disclosed their payments to doctors and other health care providers. But under the new federal healthcare law, all the companies will have to disclose their payments by the year 2013. I’m John Ryan, KUOW News.”
Oh ho! Now we get to the root of the real objections to the health reform!
I spoke to my cousin two days ago. As the leading backcountry ranger in Yosemite National Park for 20 years, he has developed some friendships with the top brass of the Democratic party.
In his opinion, Obama is the best we can possibly hope for at this stage. His opinion is that the Teaparty is merely a front for corporate money that has lobbied itself into a position to pay virtually no taxes. Unfortunately, he admits that a majority of both Republicans and Democrats are on the take. Thus, the current system has too much corruption to be functional in bringing back fiscal austerity and yet allowing government to operate where it is sorely needed in areas such as defense, schools, roads, and a fair tort system.
What we have is corporate capitalist communism. The corporations really answer to no one, were not voted into power and represent nobody but themselves and far too many people seem to think that corporate rule, the rule of money, is superior to the rule of truth and justice.
The wealthy are mostly firm believers in Calvinist, Social Darwinism, completely forgetting the lessons of imbalance in history and it always not-so-pretty end.
Don’t you think we should try for publicy funded campaigns?
We’ve been trying for 30 years.
What happened? It got worse.
I don’t think what was supposed to unwind was allowed to unwind. So have we really been proven right? No, I’d say not yet.
I don’t think we’re in any different place than we were in in 2007. There’s more awareness. The country is deeper in debt. There’s a few hbbers that have worried about inflation and bought their home. People have rearranged some deck chairs. We have less patience. Otherwise what was the plan in 2007? Other than realizing that this is going to take awhile but that that slow speed affords you more info on the way down I’m holding the steady course.
Since watching the last 2 years I think we’re just going to keep moving to the inevitable default. The people will increasingly have their class warfare battles, their ideologue battles, their race battles and it will be like the hot water going up on the frog in the pot until the day everyone wakes up and there’s no turning back.
‘moving to the inevitable default’
Maybe, but I don’t lose any sleep over that one. Mexico defaulted, twice. They’re still around. Look at Iceland. The PTB are telling them if they don’t pay back the banks, they will be in default. And they said go pound sand. It might not be a bad option. Anyway, what if we say take your Federal Reserve note system into default? Can Bernanke force you or me to do anything? We could just start over with a real US Dollar and issue new bonds.
It’s hard to say what will happen. Japan wasn’t issuing the worlds reserve currency in the 80s-90s. When Japan experienced their bubbles, there weren’t simultaneous bubbles all over the globe. In one way, the system that’s really at risk is the international central bank arrangement.
“And they said go pound sand.”
Good on Iceland’s citizenry, for choosing the right.
“It’s hard to say what will happen. Japan wasn’t issuing the worlds reserve currency in the 80s-90s.”
My guess is you only get about one chance to roil the world’s currency markets to the degree the Federal Reserve recently did before other major economic powers collectively say, ‘No mas.’
“In one way, the system that’s really at risk is the international central bank arrangement.”
Other than having more monopoly power vested in their oligopolistic structure, is there anything fundamentally different about having a bunch of colluding/competing national central banks and having a system of smaller, more regionally-oriented local banks as existed in the 19th century U.S.? I’m just trying to get my brain around the advantages of vesting SO much power and control in the Fed’s hands, aside from the benefits to those at the top of the Wall Street-K Street power pyramid.
andthan having…That’s right.
I am moving to Canada, I am done with the US. I will accept lower income and higher taxes for living in a country that does not allow its citizens to go bankrupt for health care expenses. This country is a toilet, you can fr*ckin keep it…
How are you so sure you’ll gain citizenship?
That’s cool man…you already live in a COLD state so moving a little farther north wont matter much at 20 below….
Or moving to Vancouver…but i heard there is a very Big housing bubble there…
When you go, take Sean Penn, Cher, Matt Damon, and who ever Hollywood lefties with you.
When you go, take Sean Penn, Cher, Matt Damon, and who ever Hollywood lefties with you.
Why would they need to go to Canada?
They already are rich and have SAG Union health insurance.
“I will accept lower income and higher taxes for living in a country that does not allow its citizens to go bankrupt for health care expenses.”
I am with you on accepting lower income and higher taxes for decent medical care. I would be very worried if I lived in a country where medical expenses were not dischargeable in bankruptcy. I think that is not what you meant, but I could see our Congress doing something really stupid like that.
Just let the prices fall and there will be no problem.
Ah yes. Prices are the crux of the problem.
As noted in the link I posted above, suppliers are at least part of the price problem.
“it is usually suppliers, not “patient demand,” that drives health care inflation. The big ticket items are not the ones patients ask for”
My GP once told me that if I went to an orthopedist for my bum ankle, the orthopedist would recommend surgery because that’s what they do. It’s what they know, so they see it as the solution.
Hospitals in big cities all buy the latest and greatest equipment so they can compete in the marketplace. Once they have it, they have to justify using it. Physicians are trained in using it and are excited about a new tool. It won’t be until several years later that they will find out if it really improves health. Patients are always participating in experiments, whether we know it or not.
In some cases, patients insist on the latest and greatest test thinking that that will mean the best care. I remember a story on NPR a few years ago where an emergency physician told about talking the father of a patient out of a CT scan. He said it would have been easier and less risky to order it, but it wouldn’t have been the right thing to do.
I finally found it - it was on This American Life.
http://www.thisamericanlife.org/radio-archives/episode/391/more-is-less
Best of luck, Left Ohio. I think a lot of people in this country would like to do the same thing. The financial elite have destroyed the U.S., and they seem intent on continuing down this path for as long as there is any blood left in US “consumers” (since we’re not “citizens,” anymore).
Bye.
Where Do We As A Country Go From Here?
It looks like we’re heading towards a nation of serfs for awhile. If, or when the troops come home things might get much worse, especially if history rhymes.
Many People say secession and nullification are the only sane paths to take as the system falls from its own lopsided weight.
“Are there any other problems that most people are being willfully blind to, …”
The historical end result of Collectivism and it’s various flavors.
The effects from using depleted uranium and the ongoing campaign of atmospheric aerosol injections via persistent contrails.
The cult of the state over the individual is killing our social cohesiveness, and People.
Many groups of People want their side to be the boss of me and you. Our prisons filled to the brim are evidence of that.
Individualism is Not at the root of the disintegration of families, government is.
Government is at the root of a something for nothing attitude - those who want free food, free housing, and free medical. Without government stealing from one group to give to another those freebies would not be there to break up families and encourage support for a system that is not sustainable.
The literacy rate and poverty levels of the black families in D.C. many decades ago as described by Walter Williams is a perfect illustration.
Affordable health care can be had without resorting to the thievery of Collectivism.
We achieve as a society through individuals freely interacting together. A society Must exalt individuals above community and nation because the individual is the family, the source of the factors of production for a nation or community.
There is no family without the individual.
Either we are a community and nation that respects and protects individual rights as paramount, or we are not. The path we are on now says we are not.
Confusion, envy, and lust for power are a big part of our malaise.
Many People used to talk about how things might be either a soft landing or a hard landing. It seems to be the same now only it appears that control is not in our hands, it’s not in anyone’s hands. The cake has already been baked.
If People want a different outcome, a different flavor of cake, they have to throw out the old one and make a new one, or several.
In the meantime, People are going to try and turn a banana cake into a strawberry cake by adding rocks.
“Affordable health care can be had without resorting to the thievery of Collectivism.”
How? The current trends will soon make it unaffordable for everyone except the super rich.
I laid out a plan to provide basic health care, trauma care, and infectious disease (public health threats) for everyone through free clinics and trauma centers.
What is your plan?
Here is the plan, Happy2bHeard
Healthcare in America: Some Free-Market Solutions
http://www.lewrockwell.com/bryan/bryan12.1.html
Classic Austrian School delusional thinking (from the article):
“To the student of Austrian economics, it is obvious that state control of medicine — as with state control of anything — can only lead to higher costs and shrinking quality. It is the free market that provides lower cost and higher quality, as providers compete for customers.”
Uh, could you give us a single example in the world where this is true concerning medicine, Lou? (Of course it’s true- it fits our theory! Standard Austrian School response.)
alpha-sloth, one answer of many:
Subsidizing Sickness
http://www.lewrockwell.com/rockwell/sickness.html
…the Soviet Union became host to one of the most backward, murderous, and coercive systems of medical provision ever concocted. The country trained more doctors than any in the world, but the vital statistics showed a more complete picture. Lifespans averaged 10 to 20 years less than in western countries. Infant mortality was twice as high. By the time of the collapse of socialism, 80 million people were said to have chronic illnesses, and up to 68 percent of the public was health-deficient by international standards…
It was impossible for ordinary people to have access to decent drugs. Stores carried only the most primitive medicines. However, the country was flooded with penicillin, as ordered in the central plan, a plan which was not altered even after the citizens became resistant to it…
Of course most real care went underground, where bribing for anaesthesia was common…
Clark - I agree not every national health care system has been great- the Soviet Union being a good example.
But I wanted an example of this:
“It is the free market that provides lower cost and higher quality, as providers compete for customers.”
alpha-sloth said, But I wanted an example of this:
“It is the free market that provides lower cost and higher quality, as providers compete for customers.”
You didn’t understand the significance and meaning of, “Of course most real care went underground…”?
Do you suppose Americans today flock to buy less regulated medicines and service from outside the U.S. because those products and services are more regulated or lower quality?
Aren’t you getting a lower cost and better quality on the HBB than from the MSM?
“You didn’t understand the significance and meaning of, “Of course most real care went underground…”?”
Oh. There’s an underground, less expensive, higher quality health care system? How do I access it?
alpha-sloth asked, Oh. There’s an underground, less expensive, higher quality health care system? How do I access it?
You have to figure out that on your own.
A stereotypical example is the person who hires a nurse on the side, goes abroad to purchase medicines or buys on the black market. There are also many non-FDA approved methods for pursuing health care.
Just yesterday someone was telling me how they had to train the not-so-bright nurses at a nursing home and tell them how to do their jobs, on a daily basis. Higher quality care can be found at a lower price but regulations might prevent you from finding it.
“Free market ” is bullcrap. “Free market” means one thing and one thing only… free to eff YOU up the butt without consequence.
As for wanting something for free, maybe you missed the recent story about GE paying NO income taxes. In fact, they got a 3 million REFUND. Even though they made a PROFIT. And they are not an anomaly.
Most people I know want to work, but nobody is going to hump it for min wage and no hope of advancement or job security.
ecofeco, your example of GE is Not an example of the free market.
Free Markets
http://thedailybell.com/1942/Free-Markets.html
The free market does Not mean, hump it for min wage and no hope of advancement or job security.
Ever heard of Henry Ford’s five-dollar workday?
Do you apply your definition of free market eff YOU with your approach to paying the neighbor kid to mow your lawn? I doubt many - if any - People do.
The free market wants to hurt an kill you.
http://www.consumerist.com/
http://www.saferproducts.gov/
http://www.cpsc.gov/
Do you seriously believe the free market will regulate itself? That would be dangerously naive. Fatal, even.
Do you apply your definition of free market eff YOU with your approach to paying the neighbor kid to mow your lawn? I doubt many - if any - People do.
Me? No. Do many others? Oh hell yes.
I run a business. I have more people trying to rip me off (want free or sub-market prices) than people who pay honestly.
My main customers? Other businesses.
No, the free market does not want to kill you.
The free market is self-correcting. It’s why we don’t still drive Pinto’s, but we should be able to buy lawn darts.
Should you be forced to do more business with those that want to rip you off, or do you prefer to make that choice yourself?
The free market is self-correcting.
Unless of course there’s a “flaw in your model”.
Greenspan admits flaw in hands-off approach, pity it’s a decade too late
http://www.telegraph.co.uk/finance/breakingviewscom/3249947/Greenspans-admits-flaw-in-hands-off-approach-pity-its-a-decade-too-late-financial-crisis.html
Alan Greenspan has found a flaw in his model. Too bad that he didn’t recognise it a decade ago.
The Federal Reserve’s former chairman says he’s in a state of “shocked disbelief” that self-regulation didn’t work in the banking sector.
He now admits regulatory changes must be made in the areas of fraud, settlement and securitisation, “as much as (he) would prefer it otherwise”. While this tepid mea culpa from the “maestro” was unexpected, he’s hardly the first to recognise the shortcomings of his hands-off approach.
The criticisms of Greenspan’s Fed are widespread and have merit. It was lax on monetary policy, argued against oversight of new financial instruments and took an extremely relaxed view of its regulatory responsibilities over banks. His overarching flaw, however, was his inability to entertain the idea that individual financial actors’ hubris and greed could hurt the system – and themselves.
This can be readily seen in the housing bust. Greenspan now admits that mortgage salesmen didn’t have incentives to evaluate the credit quality of the loans they originated and securitised. The risk management systems established by banks were flawed in their use of housing data from cheerful economic times. And investors didn’t want to face the risks they took.
Like I said, that is Not an example of the free market.
Clark,
You claim that the “free market” is self-correcting, and it is…to an extent. What you seem to discount is the fact that the damaging/fraudulent act can happen well before anything is “corrected.” It is during this time lag that so much damage can be done, that it becomes irreversible.
Personally, I favor *prevention* over a hopeful cure for something that is so dangerous. Regulations seek to *prevent* bad things from happening in the first place, or at least to catch them earlier than the “free market” would.
I think this marks one of the biggest differences between “free market” types, and those of us who favor strong regulation of things that can cause great harm.
Obviously, the regulations failed.
Regulations direct power and control or are a source of revenue making everyone worse off.
The biggest difference between the two is, those who want regulations want others to decide for them and others, to give an air of trying to look out for them while often times doing the opposite. Vs. those who favor the free market wish to decide for themselves. Which side has a greater incentive to look the best outcome? So far, regulations stop far short.
It was 30 years of GOP/Corporatist mantra of free-markets that brought us here.
Blind allegiance to a failed economic theory isn’t embarrassing to you? At all?
It might have been a mantra of free markets, but that wasn’t what they were promoting. See the definition of free markets above.
It was a fiat monetary system and the Collectivist mindset that got us to this point, Not the free market.
Wrong. It was and still is the corporatist plutocracy.
Now you can use the liberatarian buzz words to demonize all day long but it won’t change the fact that the corporatist plutocracy owns it all. And you are one of their apologists.
You are very mistaken all around.
Corporatism is Not the free market.
You can ignore definitions all you want, but the two are not the same.
There will NEVER be a “free market.”
It will ALWAYS be gamed and rigged without regulations.
Always.
As for “self-correcting” you obviously haven’t been on the wrong end of the “correcting part” yet.
And one more little fact: an ounce of prevention is worth a pound of cure.
A VERY old lesson in economics.
An ounce of prevention, psft, as if. I’ll take the free market any day over regulation.
Do you seriously believe the government will regulate anything without bias and in an altruistic way? That would be dangerously naive. Fatal, even.
CDC Stooge Indicted on Fraud
http://www.lewrockwell.com/blog/lewrw/archives/86439.html
“there is no justification for ever injecting in any living being the third most toxic element known to mankind.”
The wrong end of the “regulating part” (warning, graphic image):
When Will It Be “Enough”?
http://freedominourtime.blogspot.com/2011/04/when-will-it-be-enough.html
For reasons of institutional solidarity — or, what’s much the same thing, conformity achieved through the threat of retaliation — such worthy and decent police officers never seem to intervene in defense of innocent people being abused by their costumed comrades. In such instances, any effort made to de-escalate a situation involves admonitions to outraged Mundanes that they must “calm down” in the face of criminal violence being inflicted on a friend, loved one, or clearly inoffensive stranger.
the wrong end of the “regulating part”:
Nuclear Opponents Need to Get Their Facts Straight and Prove Them with Data
http://modernmarketingjapan.blogspot.com/2011/04/nuclear-opponents-need-to-get-their.html
Why we are still using 40-year-old technology in our current nuclear reactors is a testament to government interference and the confused - and constantly evolving - stand of the environmentalist movement.
A plan, look it up:
Healthcare in America: Some Free-Market Solutions
by J. L. Bryan
Please summarize.
Without government stealing from one group to give to another
Ahh, the old “taxes are theft” and “I’m a rugged individual who doesn’t need anybody” line.
(except maybe I might need my Soc. Sec………..oh yea and my Medicare……….but that’s all I need because I am a rugged individual, oh yea but I need my MID, oh yea and I forgot, my roads, that’s it. oh and my schools…. but that’s it. Except for my military, yea but that’s it. Period.
Oh and I need laws to protect my individual property, that’s important but that’s all I need, oh but I need someone to protect and enforce those laws but that’s all I need……..and beef that ain’t dogmeat but that’s all I need…..and I need citizens that ain’t starving that would want to kill me for my food. but that’s all I need…..
…that’s all I need:
http://www.youtube.com/watch?v=4VbI5zcB8Ac
Never said I didn’t need anybody, and you sure do jump to a lot of other conclusions. I never said I wanted those other things you listed either, in fact, many of those things such as schools and law enforcers are what contributes to the problems and strife we have today.
Ever see a high school test from before they had a public school system? They were much more difficult than most collage tests today.
Try learning about the free market and how it works.
I should add, college is purposefully misspelled. Think - pasting ideas and rote memorization vs. truly testing ideas and real learning.
It’s no wonder the thought of privatization of roads is impossible for many to conceive.
Tolls roads have been proven, long (LONG) before you were born, to be a detriment to cohesive and efficient commerce and an obstacle to the common good and benefit of society.
Yep. The so-called Public-Private Partnerships pushed by the Establishment GOP are nothing more than a means to turn over control of public infrastructure to their robber-baron Wall Street patrons, who can then loot the public at will.
ecofeco, according to Wiki, toll roads are at least 2700 years old, I suspect your example of toll roads in the past are Not an example of private roadways but instead qasi-governmental. There are many other ways a to get a r.o.i.
The Dulles Greenway is a private road.
Roads in the city of North Oaks, Michigan are private.
Private roads in malls seem to do just fine.
Sammy, The so-called Public-Private Partnerships are Not free market alternatives. See the rest of the Walter Block interview to answer your criticism.
The Road to Freedom: An Interview with Walter Block
http://mises.org/daily/3431
…I claim that the cost of street use would decrease. See the “rule of two” mentioned above. Congestion problems would decrease, as peak-load pricing (charging more during rush hours than at 3 a.m., which irons out the variations in demand during the day) would become the order of the day. Right now, the government engages in anti-peak-load pricing, which exacerbates the problem. They commonly sell monthly tickets to bridges, tunnels, etc., at a cheaper price per trip than otherwise. But who uses such tickets? Employees, not casual shoppers, visitors. And when do they use these tickets? Precisely during rush hours.
ISTM that every example given you about free markets failing are not examples of what you consider to be a free market. Do we have any free markets? Can you give me an example of a free market that satisfies the needs (not the same as wants) of all participants?
These utopian dreamers have been challenged many many times here to provide a single example of an actual free market. Not once have they succeeded in meeting that challenge because the truth is that a “free market” is purely a 20th century libertarian ideological hobgoblin…. a strawman. It doesn’t exist.
I’ll put it out there again…. Give us ONE example of a free market at any time in history….
“Roads in the city of North Oaks, Michigan are private.”
Where is North Oaks, Michigan? I can’t find it in Google Maps. It takes me to Rochester Hills, a suburb of Detroit. And the only reference to it is the Lew Rockwell site.
“Private roads in malls seem to do just fine.”
This does not surprise me. One of our city council members informed me that our neighborhoods are a net drain and our shopping centers net contributors to the public coffers. I wonder how well they would do if there were no public roads to get shoppers to the mall. Hmmm…. This might be a reason to support private roads.
BTW, the impetus for interstate highway system grew out of a desire to move troops across the country.
http://www.archives.gov/publications/prologue/2006/summer/interstates.html
“Anniversary of the Highway System Recalls Eisenhower’s Role as Catalyst
By David A. Pfeiffer
In the summer of 1919, just months after the end of World War I, an expedition of 81 Army vehicles—a truck convoy—set out from Washington, D.C., for a trip across the country to San Francisco.
The convoy’s purpose was to road-test various Army vehicles and to see how easy or how difficult it would be to move an entire army across the North American continent. The convoy assumed wartime conditions—damage or destruction to railroad facilities, bridges, tunnels, and the like—and imposed self-sufficiency on itself.
Averaging about 6 miles an hour, or 58 miles a day, the trucks snaked their way from Washington, up to Pennsylvania and into Ohio, then due west across the agricultural Midwest, the Rockies, and into California. Generally, it followed the “Lincoln Highway,” later known as U.S. 30, arriving in San Francisco 62 days and 3,251 miles later.
The convoy involved 24 Army officers and 258 enlisted men. One of those officers, a young lieutenant colonel, went along as a Tank Corps observer “partly for a lark and partly to learn,” he wrote decades later. “We were not sure it could be accomplished at all. Nothing of the sort had ever been attempted.”
The convoy made a lasting impression on the young officer and stoked in him an interest in good roads that would last for decades.”
“pasting ideas and rote memorization vs. truly testing ideas and real learning.”
Rote memorization was what they did in the schools 100 years ago, before the “progressive” reforms promulgated by John Dewey, the Columbia teachers’ school and Wm Heard Kilpatrick.
It worked damn well too. It’s the supposed “reforms” we have been suffering from all our lives.
Happy2bHeard asked, Do we have any free markets?
No, not on a large scale.
Happy2bHeard asked, Can you give me an example of a free market that satisfies the needs (not the same as wants) of all participants?
Only in small sections here and there where it can still flourish. The black-market is the biggest example, especially the example of the Soviet Union above. Farmers markets are another. Natural medicines is a third. There are more, but not a lot, the vampire squid works hard to eliminate them.
Realtors Are Liars said, These utopian dreamers have been challenged many many times here to provide a single example of an actual free market.
The free market is not Utopian, it is reality, what we have now is the attempt to be Utopian.
Realtors Are Liars asked, Give us ONE example of a free market at any time in history….
Do you not understand the function of the black-market? Have you never traded some labor to a neighbor for a batch of homemade food? You seem to be too resistant to the idea for the sake of it to seek the answers.
Happy2bHeard asked, I wonder how well they would do if there were no public roads to get shoppers to the mall.
One possibility is, the vendors will supply it. You need to read the interview with Walter Block.
“the vampire squid works hard to eliminate them”
Then the natural conclusion would be that we need regulation to control the vampire squid so that free markets can flourish.
No, the natural conclusion is to remove the supports that enable the vampire squid to have power over others. Something the regulation crowd seemingly fails to understand.
The vampire squid is bigger than all of the other players in any market, free or otherwise. In an unregulated environment, it will consume everyone else.
Anti-monopoly regulation was in response to monopolistic behavior. Regulation did not cause monopolies.
I don’t understand why you fail to understand this. Perhaps you need to study history before you doom us to repeat it.
Nahh, I think it is you who needs to study history a bit more. You have things all mixed up. The vampire squid depends on regulations to thrive.
The Truth About the “Robber Barons”
http://mises.org/daily/2317
a political entrepreneur succeeds primarily by influencing government to subsidize his business or industry, or to enact legislation or regulation that harms his competitors.
So political entrepreneurs will go away if they don’t have government regulations to exploit? I don’t think so. They will find some other entity or situation to manipulate.
Happy2bHeard said, They will find some other entity or situation to manipulate.
So what?
It will not be the same as manipulating government.
Try learning about the free market and how it works.
It’s obvious from what you write and where I sit that I know more about the “free markets” than you do…..Clark.
Well Rio, some new posters around don’t know you are an international business owner, so might want to cut them a little slack.
RioAmericanInBrasil, it does not seem like you know anything about free markets. I have read your stuff, your characterizations of the free market almost always describe corporatism or cronyism and the like. Contrary to what ecofeco says, I’m not new around here, I’ve noticed.
your characterizations of the free market almost always describe corporatism or cronyism and the like.
Now that just doesn’t make any sense….at least in the English language or within the realm of logic it doesn’t.
How can corporatism or cronyism ever be characterizations of free-markets?
I’m not new around here, I’ve noticed.
There is a lot you never notice, like nuance and subtle difference or distinction in expression and such. You’re missing a lot in what I’ve said.
I’ve noticed.
What you call free markets is in reality corporatism or cronyism and the like, Not free markets What’s so hard to understand about that?
When you see the phrase free market, you treat it as if it were corporatism or cronyism and the like. Not just in this thread, but in many.
“When you see the phrase free market, you treat it as if it were corporatism or cronyism and the like.”
I think this is because the free market mantra has been coopted by corporatists over the last 30 years.
You seem to believe that if we set up free markets, corporatism and cronyism will go away. Free markets will be allowed to exist by corporatists as long as they are tiny. As soon as they become large enough to attract interest, corporatists will move in. Unless you have laws that prevent it.
Happy2bHeard said, Free markets will be allowed to exist by corporatists … corporatists will move in
Not without the power structure of government supported by those who clamor for more regulation.
On their own, the corporation has no force to “move in”
The free market decides what happens via their individual choices.
I do Not believe that if we set up free markets, corporatism and cronyism will go away. It’s just the opposite.
“On their own, the corporation has no force to “move in” “
I would argue that money is a force in the marketplace. By virtue of having large amounts of it, large corporations will dominate any market.
“I do Not believe that if we set up free markets, corporatism and cronyism will go away. It’s just the opposite.”
I am not certain what you are saying, so let me restate and you can correct me if I have misunderstood. I think you are saying that when corporatism and cronyism go away, then free markets will arise. What will make corporatism and cronyism go away? What laws need to be repealed to make this happen? What regulations need to be rolled back?
You seem to believe that if we set up free markets, corporatism and cronyism will go away. Free markets will be allowed to exist by corporatists as long as they are tiny. As soon as they become large enough to attract interest, corporatists will move in. Unless you have laws that prevent it.
Bingo. That’s the deal.
No BINGO, Rio. Laws prevent nothing. See The Truth About the “Robber Barons” link above.
“Laws prevent nothing. “
So we should have no laws?
Happy2bHeard said, So we should have no laws?
No, some laws are ok. But as long as you have the power of government regulations to manipulate, the laws are ineffective and often pointless.
Corporatist can only “move in” if they have government to manipulate, otherwise it is competition, the People will decide via the market what is the best outcome.
http://www.dailytech.com/UPDATED+US+Police+Begin+Warrantless+Phone+Data+Grabs+ACLU+Fights+Back/article21443.htm
1984 just got a big step closer.
Luckily I just own a dumb phone (i.e. ordinary cell phone) and only discuss the most mundane topics (when should I take child X to function Y?, etc).
There was a time when Americans wouldn’t have put up with such unwarranted intrusions on their civil liberties. Now all the zombies are marching in lockstep toward whatever fate the globalist elites have prepared for them.
Your ordinary cell phone can be easily tracked at least to the cell level.
If the spooks want to know which kid needs to be delivered from point A to point B, then they can enjoy listening in to my cell phone calls.
Do not EVER think you are free from unwarranted scrutiny that can be used against you.
The price of freedom IS eternal vigilence.
Phfft. Where have you been for the last 30 years?
Seizure of property without due process
No-knock search warrants
“General purpose” search warrants
Vehicle searches without warrant
Drug testing without cause
Mandatory insurance
Mandatory sobriety testing
Mandatory ID
The list is long….
“It was, in other words, a half-baked stimulus program, and it had a damaging effect. It persuaded financial institutions and debt-ridden firms to postpone radical restructuring. We should further note that the government debt ballooned as a result of the fiscal stimulation, and this placed a severe constraint on policy management over the ensuing years.”
Sounds like an exact blueprint for the Summers-Geithner-Bernanke stimulus program.
Precisely!
Yes, it does.
Stimulus by Fed Is Disappointing, Economists Say
By BINYAMIN APPELBAUM
Published: April 24, 2011
WASHINGTON — The Federal Reserve’s experimental effort to spur a recovery by purchasing vast quantities of federal debt has pumped up the stock market, reduced the cost of American exports and allowed companies to borrow money at lower interest rates.
But most Americans are not feeling the difference, in part because those benefits have been surprisingly small. The latest estimates from economists, in fact, suggest that the pace of recovery from the global financial crisis has flagged since November, when the Fed started buying $600 billion in Treasury securities to push private dollars into investments that create jobs.
As the Fed’s policy-making board prepares to meet Tuesday and Wednesday — after which the Fed chairman, Ben S. Bernanke, will hold a news conference for the first time to explain its decisions to the public — a broad range of economists say that the disappointing results show the limits of the central bank’s ability to lift the nation from its economic malaise.
“It’s good for stopping the fall, but for actually turning things around and driving the recovery, I just don’t think monetary policy has that power,” said Mark Thoma, a professor of economics at the University of Oregon, referring specifically to the bond-buying program.
…
No, it’s only been good for one thing- wealth preservation for the upper crust. Everyone else got screwed via high food and energy prices, and a lower standard of living. Fu** the Fed, and fu** Ben Bernanke.
Yep. When the stimulus is focused on keeping asset prices artificially high, the primary beneficiaries of that stimulus are the very wealthy, who tend to own most of the assets.
Workers, whose “wealth” is determined by wages, are harmed by this stimulus, as the purchasing power of their wages is diminished over time.
Monica is correct. Monetary policy is not the tool to fix this problem. It’s trade policy. Trade.
Oops, I meant to say Mark Toma, not Monica. I’ll bet he gets that all the time.
“Are there any other problems that most people are being willfully blind to, …”
Peak oil.
“Are there any other problems that
most peoplethe peak oil crowd are being willfully blind to, …”The massive bubble in oil well drilling in North Dakota which will end in an epic bust, and the fact that current oil prices have nothing to do with supply and demand, and everything to do with speculation by Wall St.
Speculation and massive drilling due to price increases do not negate the effects of peak oil. There is a long term trend of decreasing supply and increasing demand that does not bode well for an oil based economy. We are beginning to feel the effects of these trends, of which increasing volatility in price and production is one. The hurricane is far offshore, surf’s up.
We are at a tenuous point.
Our institutions, public and private, are being sucked dry by older generations and those who run them. We need those institutions, but if we agree to contribute more to them, we run the risk of throwing good money after bad. But if people just look out for themselves, an institutional collapse will sink them anyway.
The question is, when will those younger start paying attention and do something about it? And will their attempt be diverted by those who manipulate them?
“The question is, when will those younger start paying attention and do something about it? And will their attempt be diverted by those who manipulate them?”
I’m a little skeptical that the heavily tattooed and pierced generation will be doing anything.
“do something about it… anything”
Sometimes the best solution is to do nothing.
If there is no support, things fall.
“Sometimes the best solution is to do nothing.”
I would agree with this. The hard part is knowing when that sometime is.
“I’m a little skeptical that the heavily tattooed and pierced generation will be doing anything.”
Me, too. I really feel for some of those younger folks. Heavy tattoos and piercings are pretty much a sign of someone extremely introverted with major body hang-ups. They depend on their tattoos and piercings to do their communicating for them, sort of like wearing a sandwich board.
I had to train someone like that recently. Their job depended upon being able to carry on a conversation with people. Couldn’t do it, dunno why they were hired in the first place. But I can tell you they were so delusional, they THOUGHT they were doing it. And I finally figured out that, in their mind, what they were doing was letting the tattoos and piercings do the communicating for them, so therefore they didn’t actually have to speak to anyone. Yup, it was that whacky. Needless to say, they didn’t last long.
On another note, there was recently a gushing article about the “hip” area of Tampa, Ybor City. All about the various shops, nightclubs, cafes, and budding tech businesses. One of the guys they profiled as a big success, touting the fact that he *gasp* owns his own tattoo parlor! I guess that’s the acme of small business entrepreneurship these days.
Grizzly:
I’m sure your parents and grandparents hated you just as much as you hate your own children and grandchildren.
Excuse me young lady, but where’s the hate in my post? Furthermore, I don’t think I’m much older than you, and I don’t have children, much less grandchildren.
WT, you are, again, wrong.
Your age discrimination will get your company into trouble one day.
And your willingness to kick old people to the curb is beyond the pale.
Eco, I get a bit conflicted when I read some of WT’s posts. On the one hand, I feel the way you do. On the other, after living for a couple of years as a younger member of an over-55 community, I can understand the sentiments to some degree. I’ve seen the good, the bad and the ugly. Some, if not most of the older folks are so completely oblivious to what’s going on it’s unbelievable. But I will say one thing, they’re not singing that “I’m on a fixed income” tune so much anymore, because the response to that these days is “You’re one of the lucky ones” or “Quit bragging”.
It’s a real show stopper.
I find the same characteristics at all ages. More people are clueless than not.
And I have to agree, the over fifty crowd really aren’t helping their cause some days.
But over 65 means that, good or bad, and for most of them, their days are numbered and their ability to do anything other than keep themselves alive is gone.
“over-55 community”
I can think of no reason why I would want to live in a place that limits itself to the over-55 set. It is self selected for the most isolationist, self-centered, and paranoid of the over-55s.
Note that I said “want to live”. There could be circumstances under which I would choose it as the best option available at the time. This is not a criticism of your choice, palmetto. Nor an inclusion of you in the description of the self-selected. I don’t know you well enough to make those judgments.
I want a place where my children can fall back if they need to regroup. Or where my grandchildren can come if, god forbid, something happens to their parents.
I enjoy having young people around - even those tattooed, pierced, green-haired, skateboarding teenagers. Some of them are interesting conversationalists. I recently met a delightful young man spray painting our town’s graffitti wall while I was there taking pictures. He is a graduate of an alternative high school program who now has 4 years experience as a proud union welder.
+1. The greed and fecklessness of the boomers knows no bounds. Fortunately for them the younger generation is too dumbed down and distracted by iGadgets to realize the full extent of how screwed they are.
For most of their lives, the boomers were ruled by the Greatest Generation, just as Gen x & Y are ruled by the boomers.
And the rules changed. When I hit the workforce at 16, every company had retirement. Every company had a straightforward plan for advancement. Follow it, and you could rise up pretty far. You could still count on the big companies being around for decades if not a lifetime. Inflation hadn’t hadn’t leaped lightyears ahead of raises. You weren’t nickled and dimed with fees on top of fees. Your savings account got decent interest. If one region went bust, you could move to another part of the country and get a job within a week. No, I mean ANYONE could.
None of these exist any longer. You can’t plan or insure against that kind of social upheaval.
eco- I was born in 1952. Wanted but never got a pension. A few small 401Ks. Typical of my sector of Boomers? I hit the workforce at 14 as a Fuller Brush Man, after being a newspaper deliverer at a younger age.
Agree with eco, though it’s through the lens of my parents (Greatest Generation) and other friends who are Boomers (I’m older Gen-X).
The days of stable employment and being able to “work your way up” are largely gone, IMHO. Now, we are like rats on a sinking ship, fighting one another for the very few scraps that are left by the corporatists who have long fled this country (they have houses in other countries where they can quickly move to via their private planes and yachts) and its currency.
China current holds more than $3 trillion in US dollar denominated holdings. This proposal would mean China is divesting itself of 2/3rds of that amount, which is unsurprising given their unhappiness over US fiscal policy and the Fed’s Weimar Republic-style money printing. The dollar’s role as the world’s reserve currency may be numbered, as the rest of the world wises up and starts refusing to trade their resources and manufactured goods for increasingly worthless greenbacks.
http://news.xinhuanet.com/english2010/china/2011-04/23/c_13842843.htm
China should cap forex reserves at 1.3 trillion U.S. dollars: China banker
BEIJING, April 23 (Xinhua) — China should reduce its excessive foreign exchange reserves and further diversify its holdings, Tang Shuangning, chairman of China Everbright Group, said on Saturday.
The amount of foreign exchange reserves should be restricted to between 800 billion to 1.3 trillion U.S. dollars, Tang told a forum in Beijing, saying that the current reserve amount is too high.
China’s foreign exchange reserves increased by 197.4 billion U.S. dollars in the first three months of this year to 3.04 trillion U.S. dollars by the end of March.
Tang’s remarks echoed the stance of Zhou Xiaochuan, governor of China’s central bank, who said on Monday that China’s foreign exchange reserves “exceed our reasonable requirement” and that the government should upgrade and diversify its foreign exchange management using the excessive reserves.
Meanwhile, Xia Bin, a member of the monetary policy committee of the central bank, said on Tuesday that 1 trillion U.S. dollars would be sufficient. He added that China should invest its foreign exchange reserves more strategically, using them to acquire resources and technology needed for the real economy.
Tang also said that China should further diversify its foreign exchange holdings. He suggested five channels for using the reserves, including replenishing state-owned capital in key sectors and enterprises, purchasing strategic resources, expanding overseas investment, issuing foreign bonds and improving national welfare in areas like education and health.
However, these strategies can only treat the symptoms but not the root cause, he said, noting that the key is to reform the mechanism of how the reserves are generated and managed.
Default now. And eff ‘em.
Yeah right.
The communist republic of bullchit is going to become the new overdog through cunning playmanship in currency games.
Not.
“Where do we go from here?” Good guestion. The sad reality is that 90% of the population are so dumbed down that they are incapable of making intelligent, rational, sound choices in either their own private spheres or, more significantly, in the public sphere - especially when it comes to elections. This guy’s rant sums it up quite succinctly:
http://www.youtube.com/watch?v=a1gMsLdVCu0
And he’s part of the problem. He’s completely deluded and distracted.
It’s Wall St. that has created our problems.
It’s GOOD to be the Banksta!
Gotta disagree with you there, ecofeo. The railing dude rocks. And it wasn’t just Wall Street that created our problems - as convenient as it is to blame it on them - it’s the culture of moral hazard and irresponsibility that has taken root in this country for at least a generation, compounded by the palpable IDIOCRACY that has overtaken our society. Wall Street just exploited these realities, and their comprehensive corruption of the political process, for its own ends. But millions of FBs willingly signed mortages they knew they couldn’t afford, even if the REIC, mortgage brokers, and crooked appraisers were in on the scam. Every single Obama voter, and every single McCain voter, sanctioned this fraud and corruption. Therein lies the real problem: the imbecility, irresponsibility, and moral bankruptcy of the American electorate and public.
Ever heard of the Business Roundtable?
The
most important development came in 1972, when Frederick Borch of
General Electric and John Harper of Alcoa spearheaded the formation of
the Business Roundtable, an organization made up exclusively of CEOs
from the top 200 financial, industrial, and service corporations.
Because of the composition of its membership, the Roundtable occupied
a position of unique prestige and leverage. It functioned as a sort
of Senate for the corporate elite, allowing big business as a whole to set
priorities and deploy its resources in a more effective way than ever
before.
- Gangs of Amercia
The sad reality is that 90% of the population are so dumbed down that they are incapable of making intelligent, rational, sound choices in either their own private spheres or, more significantly, in the public sphere - especially when it comes to elections.
Part of life is learning through mistakes. We don’t let people do that anymore - kids or adults. Most aren’t held accountable for their poor decisions, or aren’t even allowed to make them in the first place (we’ve outlawed many choices).
Our culture has set up an environment where people don’t have to think, and are discouraged from thinking, and from learning how difficult some things are. Should we really be surprised at this outcome?
+1 drumminj
Some mistakes are fatal.
As a parent, I always thought it was my responsibility to protect my children from the fatal mistakes and let them make the non-fatal ones.
Where do we go?
Crazy, that’s where. The same path we’ve been one for the last 30 years. It’s never to late to TRY and change, but we have too much momentum behind us to change soon.
In fact, take away the housing and tech boom of the last 20 years and we’ve already been in the 20 years slump. At least for J6P.
True dat, but I applaud Ben for thinking in terms of solutions. It’s just that we’re trying to think of solutions given the current framework. Within the current framework, maybe it’s just not possible.
But within a different framework, we’ve got a chance.
So the current framework needs to go, I guess. Sometimes it’s best to tear down an old wreck of a building and replace it with something better.
Hapy birthday to me, happy birthday to me, happy birthday to Big V, happy birthday to me
OK, but if you really want to impress us, you need to rise from the grave. Just sayin….
How about I just attempt to drink more alcohol than ever before? Would that be a good enough substitute?
Yes. And be sure to report back after doing so.
Video on YouTube or it didn’t happen.
Happy B-Day, Big V! One year ago, we had a big earthquake in your honor…
Happy birthday Big V.
Slappy birfday!
Happy Birthday, Big V!
“Where Do We As A Country Go From Here?”
Wrist slaps and spankings are not going to cut it. We need prison time for those in mortgage banking industry who committed felonies.
If their firms go out of business as a consequence, all the better: Out with the bad, to preserve what’s worth saving.
Mortgage lending banks spanked for foreclosure failures
* April 20th, 2011 2:21 am ET
Broderick Perkins
Uncle Sam has ordered mortgage lenders to pay back former homeowners who suffered questionable foreclosures, but not many former homeowners are likely to benefit.
In a settlement that reveals recession-spawning risky business in the mortgage industry is far from over, federal bank regulators recently ordered the nation’s largest mortgage servicers to put an end to dirty tricks in the foreclosure business.
Among the practices still springing up years after the mortgage industry helped topple the economy include “dual tracking” lenders effectively scuttling their own efforts to keep homeowners out of foreclosure.
The settlement comes, typically, without the companies admitting to any wrong doing. It requires servicers to correct problems in foreclosure processing, loan modification programs and corporate governance, among other areas.
Servicers must also identify and compensate borrowers who suffered unnecessary financial harm during foreclosures over the two year period between January 1, 2009, and December 31, 2010, due to “deficiencies in residential mortgage loan servicing and foreclosure practices.”
The eight mortgage servicing (lenders) culprits named in the settlement are Bank of America, Citibank, HSBC, JPMorgan Chase, MetLife Bank, PNC, U.S. Bank, and Wells Fargo. Two service providers were also named; Lender Processing Services (LPS) and its subsidiaries DocX, LLC, and LPD Default Solutions, Inc.; and MERSCORP and its wholly owned subsidiary, Mortgage Electronic Registration Systems, Inc. (MERS).
…
Has anyone in federal law enforcement thought to investigate the firms which perpetrated the robo-signing scandal, in order to establish whether the fraud was deliberate and whether top executives were involved in the planning?
Sometime around 2001-2002, the FBI reported an alarming and significant increase in mortgage fraud. They were directed by the DOJ to ignore it and focus on terra.
In a settlement that reveals recession-spawning risky business in the mortgage industry is far from over, federal bank regulators recently ordered the nation’s largest mortgage servicers to put an end to dirty tricks in the foreclosure business.
The banks committed criminal fraud, including wholesale forging of signatures, and got off with no indictments and slap-on-the-wrist fines without admission of cupability. Welcome to the Banana Republic.
Yep. It’s game over. This is why we’ll never see real progress within our lifetime.
I’m looking for a way out at this point. I’m not real big on fascism. It never ends well.
I’m having difficulty seeing what’s worth saving.
Police enforce San Fran ban on sidewalk sitting
http://news.yahoo.com/s/ap/us_san_francisco_sit_lie
“It is a valid law that has to be enforced. We can’t ignore it no more than if someone ran a stop sign or a red light.”
No real crimes with actual victims here.
Private courts, private roadways and sidewalks, and smaller or No government might be a better solution?
Restitution is what’s needed for the mortgage fraud cases.
How does prison time help those who were done wrong? Prison time does not stop People from attempting the types of crimes the big corporations committed, but removing the structure of the fiat money system that allows the fraud to happen in the first place might be beneficial.
To focus on more law enforcement and punishment in a broken system seems… trifle.
geez, as a former denizen I have to say nothing’s changed there in over 40 years.
April 21st, 2011
10:23 PM ET
Sheriff takes on banks over robo-signing
Steve Frank - Digital Producer
Cook Co., Illinois, Sheriff Tom Dart says he’s opened criminal investigations of “robo-signing” foreclosure documents.
…
The banks will pay him off, just like they did the State AGs.
…or back his opponent in the next election.
FRAUD!
Bank Mortgage Shortcuts Dodged $20 Billion in Costs, CFPB Says
By Carter Dougherty - Mar 29, 2011 8:36 AM PT
Signage stands outside the Wells Fargo corporate headquarters in San Francisco. Photographer: Noah Berger/Bloomberg
Bank of America Corp. (BAC) and Wells Fargo & Co. (WFC) led U.S. mortgage servicers that may have jointly avoided more than $20 billion in costs since 2007 by cutting corners on collections and foreclosures, confidential estimates by the Consumer Financial Protection Bureau show.
The bureau provided the analysis in a seven-page Feb. 14 presentation to state attorneys general led by Iowa’s Tom Miller, who are pressing banks to accept billions of dollars in fines and concessions, including principal reductions on home loans, after a probe of foreclosure practices. A $5 billion penalty would be “too low,” and banks can afford more, the agency found.
“Rough estimates suggest that the largest servicers may have saved more than $20 billion through under-investment in proper servicing during the crisis,” the bureau wrote in the document. “A penalty based on servicing costs avoided would have little effect on Tier 1 capital ratios,” a measure of financial strength, it said.
…
To help answer the question, Where Do We As A Country Go From Here?
You Know He’s Desperate Now
http://thedailybell.com/2136/Tibor-Machan-You-Know-He-Is-Desperate-Now.html
Why are these folks not getting it? I suppose the answer to this is manifold but one source is the late Mancur Olson’s theory that not until the bottom falls out will people and their lobbyists and politicians stop engaging in what economists call rent-seeking, urging that other people be ripped off so they can have an easier way in their lives. And for such a political climate to prevail one needs to come up with accusations against those whom one wishes to be ripped off.
These people are the ones you’re supporting?
From your link:
“Speculators, a perfectly decent bunch of people who try to take care of their and their clients’ economic welfare – part of the group of wealth care professionals in the land – will obviously try to buy oil futures now so as to escape the coming even higher prices. This is elementary economics and to be expected of people who choose to be prudent in their lives and economic affairs.”
——————
Perhaps YOU don’t have a problem with speculators who drive up prices of basic goods and commodities, but there is a significant number of us who do have a problem with it.
These are not “decent” people who care about the welfare of others. They don’t care if large numbers of people are starving because of their speculation…they only care about their profits. These filthy speculators are not investing in increased productivity, which is the only kind of good investment (IMHO), but are competing with those who are organic end-users of these goods — people who actually need these commodities in order to survive.
These are not “hard-working” individuals who deserve to make lots of money; they are the lowest scum of the earth, and deserve NOTHING from those who are the truly productive (workers) and/or needy people of this planet.
How do you know All of These are not “hard-working” individuals?
Don’t you suppose regular everyday People own oil socks and the like too?
Speculators drive up the price of goods All The Time, it is the nature of markets. The only way to try and avert such is what the Soviet Union did and others who have imposed price controls, and price controls Do Not work.
You want to control how People spend their money?
You want to decide what constitutes a “good” investment?
What kind of freedom do you want, none?
Would you be happy with an all-powerful tyrant?
There is No such thing as altruism, and that seems to be what you’re after. By each individual seeking what’s in their own best interest is the Only way the needs and wants of People are satisfied.
Have you ever heard of the tragedy of the commons?
Yes, very.
The Commons: What Tragedy?
http://www.lewrockwell.com/alston/alston57.1.html
“Why do these specific fish need to be preserved?”
If people are fishing for it, it is edible and desirable - more desirable than other fish species. If it is low on the food chain, like herring, it may initiate the collapse of other fish populations and precipitate the collapse of local human populations. This is a good thing?
“Consider the case of a natural disaster and the resultant need for generators. If the price of generators is allowed to rise uncontrolled in response to new demand, it is almost certain to reach a point high enough that the last few will sit in the store unsold, but they will be available. That is, the generators will not sell out. Further, at that resultant price point, suppliers will be falling all over themselves trying to find more! Conversely, if the price is held low, say with anti-price-gouging laws, it is inevitable that every generator for miles will sell out. The student of Austrian economics knows that none will show up to replace them. (If generators could be supplied at the lower price, there wouldn’t be a shortage!)”
He is leaving out that the anti-price gouging laws do not require suppliers to sell them at a loss. And that it may take longer to manufacture and distribute them than people can buy them. Or that suppliers will not increase capacity at their plants because they know that the emergency creating the extra demand for generators will be short-lived.
Consumers can live without generators. If he made the same argument about water, it would be easier to see the problem with this argument - let the price of bottled water rise to the point where there is bottled water left on the shelves. Now you have people dying of thirst or water-borne diseases.
Happy2bHeard said, Now you have people dying of thirst or water-borne diseases.
To avoid that is an incentive not to be wasteful beforehand, to have savings so you can afford to get the water.
Or, a charity steps in and provides the water.
In some circumstances consumers cannot live without generators.
Be it water or generators, the higher price means there is a supply there for those who really Need it.
By each individual seeking what’s in their own best interest is the Only way the needs and wants of People are satisfied.
—————-
Do you have ANY proof of this?
With all due respect, I think you are basing your opinions on unproven theories, rather than reality. In reality, people in power — either public or private — will seek to control every resource they can. At least with “public” control (by the people), we have some say and control over it. We do not control it if it’s in the hands of private entities.
BTW, it’s not the ownership of oil stocks that causes oil prices to rise; it’s the futures market (and related markets) that causes prices to rise.
I was wondering what oil socks were.
Proof
Charting the Course to $7 Gas
http://mises.org/daily/5223/Charting-the-Course-to-7-Gas
Make no mistake: it is not capitalism that got us here; it is government interventionism and central banking — the Federal Reserve.
CA renter said, At least with “public” control (by the people), we have some say and control over it. We do not control it if it’s in the hands of private entities.
What’s with this “We’ stuff? It’s just them and only them when there is “public” control.
If it’s in the hands of private entities then it is in Our hands and Not theirs.
The Business War Against Competition
http://www.lewrockwell.com/shaffer/shaffer234.html
… government regulation has generally served to further the very economic interests being regulated. The economist – and later United States senator – Paul Douglas was not the first to become aware of this fact when, in 1935, he observed with some bewilderment, “Public regulation has proved most ineffective. Instead of the regulatory commissions controlling the private utilities, the utilities have largely controlled the regulatory commissions.”[2]
… most political intervention into economic activity has been fostered by business leaders and trade associations desirous of restraining or eliminating those trade practices of their competitors that most threatened existing market positions or price structures.
CA renter asked, By each individual seeking what’s in their own best interest is the Only way the needs and wants of People are satisfied.
Do you have ANY proof of this?
Yes. It’s all around you, it’s what made America successful, for the most part, since its beginning.
Born to be Bad: Government as a Commons
http://www.lewrockwell.com/rozeff/rozeff174.html
William Bradford, in The History of Plymouth Colony confirms the negatives of a communism even of a small group of “godly and sober men,” writing
“All this while no supply was heard of, neither knew they when they might expect any. So they began to think how they might raise as much corn as they could, and obtain a better crop than they had done, that they might not still thus languish in misery. At length, after much debate of things, the Governor (with the advice of the chiefest amongst them) gave way that they should set corn every man for his own particular, and in that regard trust to themselves; in all other thing to go on in the general way as before. And so assigned to every family a parcel of land, according to the proportion of their number, for that end, only for present use (but made no division for inheritance) and ranged all boys and youth under some family. This had very good success, for it made all hands very industrious, so as much more corn was planted than otherwise would have been by any means the Governor or any other could use, and saved him a great deal of trouble, and gave far better content. The women now went willingly into the field, and took their little ones with them to set corn; which before would allege weakness and inability; whom to have compelled would have been thought great tyranny and oppression.”
“The experience that was had in this common course and condition, tried sundry years and that amongst godly and sober men, may well evince the vanity of that conceit of Plato’s and other ancients applauded by some of later times; and that the taking away of property and bringing in community into a commonwealth would make them happy and flourishing; as if they were wiser than God. For this community (so far as it was) was found to breed much confusion and discontent and retard much employment that would have been to their benefit and comfort. For the young men, that were most able and fit for labor and service, did repine that they should spend their time and strength to work for other men’s wives and children without any recompense. The strong, or man of parts, had no more in division of victuals and clothes than he that was weak and not able to do a quarter the other could; this was thought injustice. The aged and graver men to be ranked and equalized in labors and victuals, clothes etc., with the meaner and younger sort, thought it some indignity and disrespect unto them. And for men’s wives to be commanded to do service for other men, as dressing their meat, washing their clothes, etc., they deemed it a kind of slavery, neither could many husbands well brook it…Let none object this is men’s corruption, and nothing to the course itself. I answer, seeing all men have this corruption in them, God in His wisdom saw another course fitter for them.”
Bradford recognizes at the very end of this passage that the blame for the results is not “men’s corruption” for all men are corrupt, but “the course itself,” meaning the organizational arrangement they had at first selected, which was a commons.
“By each individual seeking what’s in their own best interest is the Only way the needs and wants of People are satisfied.”
What happens when my best interest is not in your best interest? What happens when my needs conflict with yours? Are you strong enough to satisfy your needs at my expense? Or are you altruistic enough to deny your needs in favor of mine?
Have you ever looked at the island of Hispanola? The Dominican Republic has tropical forests that run right up to the border with Haiti. On the Haitian side, the forests have been completely cut down - for firewood to satisfy the immediate needs of the people.
Haiti is a perfect example of The Commons: What Tragedy?
“By each individual seeking what’s in their own best interest is the Only way the needs and wants of People are satisfied.”
What happens when my best interest is not in your best interest? What happens when my needs conflict with yours? Are you strong enough to satisfy your needs at my expense? Or are you altruistic enough to deny your needs in favor of mine?
Happy2bHeard asked, What happens when my best interest is not in your best interest?
We part ways, or others decide to step in to provide, unlike today where government forces one to serve the other.
Happy2bHeard asked, What happens when my needs conflict with yours?
The free market provides for both or a private court could be utilized.
Happy2bHeard asked, Are you strong enough to satisfy your needs at my expense?
That is not a free market solution, that is what we have now.
Happy2bHeard asked, Or are you altruistic enough to deny your needs in favor of mine?
Again, there is no such thing as altruism. Read the link.
“Would you be happy with an all-powerful tyrant?”
There is a middle ground between tyranny and anarchy.
At one point in my youth I thought anarchy was a good thing. I had grown up in a safe environment and did not understand the evil that walks in the world. I also had some self control and a few ethical guidelines and expected that others were like me. After a few mildly painful experiences, I learned better. I was lucky that I did not run across anyone who was seriously bad before I learned to take reasonable precautions.
At one point in my youth I thought anarchy was a good thing. I had grown up in a safe environment and did not understand the evil that walks in the world. I also had some self control and a few ethical guidelines and expected that others were like me.
Nicely said.
Thank you, Carl!
And now you expect regulators and lawmakers to have this self control and a few ethical guidelines?
The system we have now is better at controlling the worst impulses of the worst people than anarchy.
And most regulators and politicians have better self control and ethical guidelines than amoral sociopaths.
Would you prefer a society in which warlords and gang leaders are given free rein? Or where the rule of law is enforced by kangaroo courts and lynch mobs?
Happy2bHeard said, The system we have now is better at controlling the worst impulses of the worst people than anarchy.
I don’t think that is a fact and it is Very debatable.
Happy2bHeard said, And most regulators and politicians have better self control and ethical guidelines than amoral sociopaths.
I don’t think that is a fact and it is Very debatable. Are you sure there’s a difference between the two?
Happy2bHeard said, Would you prefer a society in which warlords and gang leaders are given free rein? Or where the rule of law is enforced by kangaroo courts and lynch mobs?
Isn’t that what we have now?
warlords and gang leaders Are given free rein, there is No rule of law and we’re ruled by kangaroo courts and lynch mobs.
It seems like you don’t really understand what anarchy is and how People could function without expanding regulations and endless laws, not many People do.
What Is Anarchy?
http://www.lewrockwell.com/shaffer/shaffer60.html
“the map is not the territory”
I am often asked if anarchy has ever existed in our world, to which I answer: almost all of your daily behavior is an anarchistic expression. How you deal with your neighbors, coworkers, fellow customers in shopping malls or grocery stores, is often determined by subtle processes of negotiation and cooperation. Social pressures, unrelated to statutory enactments, influence our behavior on crowded freeways or grocery checkout lines. If we dealt with our colleagues at work in the same coercive and threatening manner by which the state insists on dealing with us, our employment would be immediately terminated. We would soon be without friends were we to demand that they adhere to specific behavioral standards that we had mandated for their lives.
There is No such thing as altruism, and that seems to be what you’re after. By each individual seeking what’s in their own best interest is the Only way the needs and wants of People are satisfied.
That is delusional Ayn Rand B.S. and flies in the face of the history of man and society.
Ayn Rand should have taken a few history and civics classes and Anthropology 101. She was a loon.
Sorry, but I don’t think you really know what you’re talking about.
The Common Good = Collectivism
http://www.lewrockwell.com/shaffer/shaffer198.html
The idea of altruism is grounded in the belief that values have an objective quality to them, a bit of nonsense perpetuated by Ayn Rand.
I always figured a truly altruistic act would not benefit the actor in any way - not even to make him feel good about himself. Common usage is a bit broader than that.
You seem to have an unshakeable belief that the free market will correct itself and make everything OK. I don’t know if we can wait that long. And I suspect it will not make everything OK for the great majority of people.
I suspect it will make for a healthy planet only when we have overpopulated ourselves into a population crash. This may also be true in an unfree market, but if we can slow the process down, we may be able to recover.
Should we let the Haitians fend for themselves and not interfere in their destiny?
Does everyone in the world have to participate in your free market economy? What happens if they don’t and we do?
Happy2bHeard asked, Should we let the Haitians fend for themselves and not interfere in their destiny?
Yes.
Happy2bHeard asked, Does everyone in the world have to participate in your free market economy? What happens if they don’t and we do?
That is called Panarchy.
“the bottom falls out”
What will be left when the bottom falls out?
Or perhaps the question is, As A Country, From Here, Where Are We Being Herded To?
IMF Austerity Is Headed to America – Watch Out!
http://www.thedailybell.com/2135/Anthony-Wile-IMF-Austerity-Is-Headed-to-America-Watch-Out.html
The current arguments – much in the news – about cutting spending in the US are not exactly what they seem. They are likely aimed at imposing an IMF-style austerity on the US of the sort that developing nations throughout the world have found both onerous and ineffective. If you want to understand what the IMF and Western powers-that-be have in mind for America, take a look at this interview we ran a few weeks ago with John Perkins, author of Confessions of an Economic Hit Man.
This is America’s future, one of government-induced privation and societal misery. Study the dominant social themes of the elite, its recent fear-based promotions, and one begins to get a sense more fully of what is being prepared.
… “This must involve cutting spending, reducing entitlements and raising taxes.” This language is directly out of the IMF playbook. Rather than question the fundamental alignment between the public and private sector – the basics of regulatory democracy – the IMF treats a country like a business and prescribes cost-cutting, privatization and other methodologies that address the symptoms instead of the cause.
“government-induced privation and societal misery”
“cutting spending, reducing entitlements and raising taxes”
So government should continue to spend at the current rate.
Happy2bHeard said, So government should continue to spend at the current rate.
It seems like you missed the point, address the cause, not the symptom. Do that and the symptom becomes less of a problem, or none at all.
This is where the country is now too, refusal to consider the cause.
Geithner Downgrades His Own Credibility to Junk: Jonathan Weil
By Jonathan Weil - Apr 20, 2011 4:00 PM PT
Bloomberg Opinion
Fox Business reporter Peter Barnes began his televised interview with Treasury Secretary Tim Geithner two days ago with this question: “Is there a risk that the United States could lose its AAA credit rating? Yes or no?”
Geithner’s response: “No risk of that.”
“No risk?” Barnes asked.
“No risk,” Geithner said.
It’s enough to make you wonder: How could Geithner know this to be true? The short answer is he couldn’t.
All you have to do is read the research report Standard & Poor’s published on April 18 about its sovereign-credit rating for the U.S., and you will see it estimated the risk of a downgrade quite succinctly. “We believe there is at least a one-in-three likelihood that we could lower our long-term rating on the U.S. within two years,” said S&P, which reduced its outlook on the government’s debt to “negative” from “stable.”
There you have it: Geithner says the chance of a downgrade is zero. S&P says the odds it will cut its rating might be greater than one out of three. So who are you going to believe? Geithner? Or the people at S&P who actually will be deciding what S&P will do about S&P’s own rating of U.S. sovereign debt?
It would be one thing to express the view that a downgrade would be unwarranted, or that the chance of it happening is remote. Either of these positions would be defensible. Geithner went beyond that and staked out an absolutist stance that reeks of raw arrogance: There is no risk a rating cut will occur. He left no room for a trace of a possibility, ever.
…
I’ve pondered this. One of the givens is that politicians will do what is politically expedient. Namely minimize the short term pain as much as possible, avoid angering big donors, and kick the can as far down the road as possible.
What this means is we will continue to slow leak. Our slow leak - bandaids and narcotics to treat gangrene instead of amputation and harsh antibiotics.
What does that mean for the economy? A slow decline and an increased financial stratification.
But, our population has a different temperament than the Japanese. And more of our debt is externally held.
So how does this translate into “Where do we go from here?” Can creditors hold us more accountable? Who holds the upper hand in this tango with creditor and debtor? If we debauch the currency too much, people won’t buy our debt. But, if creditors refuse to buy our debt, their existing debt may be subject to more degradation due to money printing.
I think the Fed will try to debauch the currency as much as possible without frightening lenders too much and talking tough on inflation.