The Noam Chomsky Thread

Off Topic Politics & World Issues
41

[quote]Ryan P. McCarter wrote:

[quote]orion wrote:

[quote]florelius wrote:

[quote]Beowolf wrote:

[quote]Spartiates wrote:
See, there is a point where Smith’s basic ideas about economics fall apart, and markets, driven by greed cease to work. And we’ve reached that point. Because if my company is “too big to fail”, my greed doesn’t drive me to make a better product, or create more jobs, it drives me to give me and my buddies big bonuses.[/quote]

…You are retarded.

Moral hazard. Go search that on Wikipedia please. Then think hard for like three hours, and it might come to you.[/quote]

instead of making personal insult, why not make some arguments against his.
[/quote]

Excuse me, but you are able to pack so many economic fallacies into one paragraph that it would take pages to adress them and then he could maybe tell you why you are wrong on this one.

Be that as it may:

http://www.cato.org/pubs/journal/cj29n1/cj29n1-12.pdf[/quote]

Since moral hazard is the last bastion for free marketers in response to this overwhelming failure of the free market, it’s not surprising to see it desperately thrown up as a shield here.

However, if there had been no moral hazard, and the banks had simply been allowed to fail, this would have negatively impacted millions of people. How does this look to Libertarians? That millions of people could, through no fault of their own, become unemployed and indigent?

Note: you’ll attempt to say that “without the implicit guarantee of government, they wouldn’t have engaged in risky specualtion.” Two things: one, you’d be wrong, as evidenced by the history of bank panics in the US, and two, these institutions thought they were managing risk. That had nothing whatsoever to do with the government.[/quote]

First of all those bank panics where the result of fractional reserve lending and as long as there is fractional reserve lending such runs can and will always occur. Lending out more money than you actually have is highly questionable and I will not defend that practice.

However, only fiat money and the federal reserve system has made it possible to be leveraged 30-40 times over because they flooded the market with cheap money and so speculators did what speculators do, speculate.

Second of all I would encourage you do show me a bubble that threathened to collapse the world finacial system without the issuing of a fiat currency. You cannot compare speculative bubbles like the railroads where people risked their own money with bubbles where they could borrow free money and were leveraged to the gills.

Finally yes, you are right, they would not have done this in the first place had they not know that they could turn these risks into default swaps and trade them, in part because of the implicit government garantuee to bail out Fanny May and Freddy Mac. In a free market greed is checked by fear of losing ones money.

You know that Ron Paul as well as people like Schiff and others have forecast as soom as 2002-2003 what would happen and why and yet you choose to ignore the exact same people who predicted it all and listen to those wo had, and still have, no idea.

42

[quote]Ryan P. McCarter wrote:

Yes, I’ve heard this popular refrain before, but it has nothing at all to do with the subject. Take working conditions, for instance. There is no “market” for better working conditions. You can’t go and buy them. And if no employer offers significantly better conditions than any other, you can’t escape them by going to work at another place. The unemployment generated by capitalism is effective at driving down wages and working conditions. I’m sorry, I meant to say it is effective at promoting “wage flexibility.”

To stay with the example of working conditions, in real world history, the “collective” (another dishonest red herring, but I digress) has been the only way to solve the problem, whether it was done through the ballot box or petitioning government, or by direct action on the part of unions. The market was unhelpful, and even hurtful.

I knew we had to fit in at least a little classic Austrian mysticism before we were finished.

How are products allocated now if people don’t do it? Through the magic of the market? It “just happens?”

True, but that doesn’t mean I’m in error here.

Well first of all, notice that I didn’t decry the materialism of capitalism. But you fail to make a convincing case that politicization of every aspect of life would be worse than the current commodification of every aspect of life.

No, but good news! That’s not what anybody is proposing.

This did not occur even in most of the parodical “socialism” of the 20th century. Why would the “collective” oppress itself? They wouldn’t, of course. The only way that would happen is if you had an elite controlling class, in which case you don’t have socialism. If you can tell me, with a straight face, that the US is not a capitalist country, then I am allowed to disown anything you talk about that I don’t like.

Besides, what if I said, “Why would you support capitalism? Do you like slavery? Do you like horribly destructive global war? Do you like to be owned as a commodity by a man who tells you when to wake up, when to go to work, how long to work, when you can stop for the day, who pays you (if you’re lucky) every six months, and who owns the shop you patronize and the room you retire to in the evening? Well, all this is inevitable when you allow private individuals to control society’s productive resoures for the purposes of personal gain.”

If I said that, you would immediately throw a fit, even though all of this actually happened, unlike your hackneyed attack.
[/quote]

Yeah well then we have the problem that the system you are proposing has never been tried before and with a revolution that profound you are bound to have unforseen and unintended conseuqences.

All I can imagine is you building a giant kibbuz, co-operative or whatever and are so enormously and spectacularily succesful that the world can no longer ignore your form of organization.

Good luck with that, my you grow rich beyond your wildest dreams.

Also, these billions of products are allocated via the price system which is a system of real time market signals signaling relative scarcity. That makes that system possible, that everyone can immediately determine what makes economic sense or not. However, instead of a bootum up approch like this you would necessarily have to implement a top down approch and no central authority, however democratically “legitimate” can actually do that.

Then, I would really like to know how you would want to organize who does what, for how long and for how much money when all the means of production are in the hands of a de facto government, because you do know that the only possible way to make people like me to agree to something like that is by force, right? And even then you might be able to make me work, but you cant make me think or take risks at gunpoint.

43

[quote]orion wrote:

[quote]Ryan P. McCarter wrote:

Yes, I’ve heard this popular refrain before, but it has nothing at all to do with the subject. Take working conditions, for instance. There is no “market” for better working conditions. You can’t go and buy them. And if no employer offers significantly better conditions than any other, you can’t escape them by going to work at another place. The unemployment generated by capitalism is effective at driving down wages and working conditions. I’m sorry, I meant to say it is effective at promoting “wage flexibility.”

To stay with the example of working conditions, in real world history, the “collective” (another dishonest red herring, but I digress) has been the only way to solve the problem, whether it was done through the ballot box or petitioning government, or by direct action on the part of unions. The market was unhelpful, and even hurtful.

I knew we had to fit in at least a little classic Austrian mysticism before we were finished.

How are products allocated now if people don’t do it? Through the magic of the market? It “just happens?”

True, but that doesn’t mean I’m in error here.

Well first of all, notice that I didn’t decry the materialism of capitalism. But you fail to make a convincing case that politicization of every aspect of life would be worse than the current commodification of every aspect of life.

No, but good news! That’s not what anybody is proposing.

This did not occur even in most of the parodical “socialism” of the 20th century. Why would the “collective” oppress itself? They wouldn’t, of course. The only way that would happen is if you had an elite controlling class, in which case you don’t have socialism. If you can tell me, with a straight face, that the US is not a capitalist country, then I am allowed to disown anything you talk about that I don’t like.

Besides, what if I said, “Why would you support capitalism? Do you like slavery? Do you like horribly destructive global war? Do you like to be owned as a commodity by a man who tells you when to wake up, when to go to work, how long to work, when you can stop for the day, who pays you (if you’re lucky) every six months, and who owns the shop you patronize and the room you retire to in the evening? Well, all this is inevitable when you allow private individuals to control society’s productive resoures for the purposes of personal gain.”

If I said that, you would immediately throw a fit, even though all of this actually happened, unlike your hackneyed attack.
[/quote]

Yeah well then we have the problem that the system you are proposing has never been tried before and with a revolution that profound you are bound to have unforseen and unintended conseuqences.

All I can imagine is you building a giant kibbuz, co-operative or whatever and are so enormously and spectacularily succesful that the world can no longer ignore your form of organization.

Good luck with that, my you grow rich beyond your wildest dreams.

Also, these billions of products are allocated via the price system which is a system of real time market signals signaling relative scarcity. That makes that system possible, that everyone can immediately determine what makes economic sense or not. However, instead of a bootum up approch like this you would necessarily have to implement a top down approch and no central authority, however democratically “legitimate” can actually do that.

Then, I would really like to know how you would want to organize who does what, for how long and for how much money when all the means of production are in the hands of a de facto government, because you do know that the only possible way to make people like me to agree to something like that is by force, right? And even then you might be able to make me work, but you cant make me think or take risks at gunpoint.
[/quote]

Amen and right on. I believe that the French found this out post WWI, when German mine workers refused to work under the conditions being imposed. Hard to dig coal with the bayonet of a rifle.

Nope, I’d rather work for ME, doing what I want, to support MY family. I’ll help someone else out if I can.

44

[quote]Ryan P. McCarter wrote:

Yes, I’ve heard this popular refrain before, but it has nothing at all to do with the subject. Take working conditions, for instance. There is no “market” for better working conditions. You can’t go and buy them. And if no employer offers significantly better conditions than any other, you can’t escape them by going to work at another place. The unemployment generated by capitalism is effective at driving down wages and working conditions. I’m sorry, I meant to say it is effective at promoting “wage flexibility.”[/quote]

Hence, the birth of the unions, which gave the workers a measure of control over their own resource; labor. Unions have a place in a capitalist free market system in this regard. However, as you can plainly see, many of the once great unions have become what they had once despised. During the high times, they had become just as greedy as their counterparts, yet when the good times hit the skids, they were set on inflexibility. The problem with any parasite, is that when it over consumes from it’s host, the host dies.

[quote]This did not occur even in most of the parodical “socialism” of the 20th century. Why would the “collective” oppress itself? They wouldn’t, of course. The only way that would happen is if you had an elite controlling class, in which case you don’t have socialism. If you can tell me, with a straight face, that the US is not a capitalist country, then I am allowed to disown anything you talk about that I don’t like.

Besides, what if I said, “Why would you support capitalism? Do you like slavery? Do you like horribly destructive global war? Do you like to be owned as a commodity by a man who tells you when to wake up, when to go to work, how long to work, when you can stop for the day, who pays you (if you’re lucky) every six months, and who owns the shop you patronize and the room you retire to in the evening? Well, all this is inevitable when you allow private individuals to control society’s productive resoures for the purposes of personal gain.”

If I said that, you would immediately throw a fit, even though all of this actually happened, unlike your hackneyed attack.
[/quote]

Ryan, I believe this is the same thing that we’ve discussed previously; you would simply trade in the “evil” corporations in which you despise so much for the political class, which most definitely would consider themselves to be “elite”. Sooner or later, somebody starts to think that they’re getting the shaft, whether it’s from a corporation or the political elites. This is just human nature. It seems to me that this is where collectiviss/statism goes wrong. It fails to consider in the human nature factor in all their big ideas; the deep desire for people to feel as individuals charting their own course.

45

[quote]florelius wrote:
I am not a moscow socialist or what most people call communist. I am a real communist, I follow the teachings of marx, bakunin etc. The ussr developed from early on away from socialism. The sovjets lost its power to the paryelite and to a policestate, mostly because of to factors. 1: tzar russia where a feudal society and without almost any democratic tradition. If you read marx he says that socialisme is only possible in societys with democracy and capitalist industry. 2: the democratic experimenting under the revolution with the sovjets was killed in the cradle because of the civilwar, and where britain and the us supported the whitearmy against the redarmy. So socialist russia did not become a militaryregime because of the ideas of socialisme but because of reel events in its early history.

[/quote]

So you’re now a Communist AND a fundamentalist? The plain, simple truth is that everyone who was alive at the time of the 1920’s on would have claimed that the SU was leading the world and the Communism was in its purest form there. The people saying this were the Communists and Socialists themselves, ok? That in every case the result was a massively failed dictatorship (which always happened, I might add, precisely because Marx himself stated that the divisions between executive, legislative and judicial branches were simply artifacts of bourgeois society – with no checks and balances, the executive branch always takes over).

I suspect that Marxism is now the Mac of the political world. That is to say, it is a fashion statement for people that do not understand wholly the inner workings, in this case, of ideas or history. If you really claim you are a Marxist (and Hell, if you are mentioning Bakunin I’m going to believe you are) then you’d darn well better be able to explain why we aren’t going to get more Ethiopias (remember the famines in the 1980’s??? These were caused precisely by the sort of state control you claim to support). Communists tried and massively failed in what is probably the major humanitarian tragedy of the last 100 years. The ball is in their court now and any suggestion they make must be greeted with enormous skepticism. The burden of proof that what they say is valid rests squarely with them.

So if you really want to do this right, go get a copy of Leszek Kolakowski’s “Main Currents of Marxism” and read it. Really read it:

Sure it’s 1200+ pages long and thickly footnoted. It is also the best single introduction to Marxism you will find and Kolakowski – who was a dedicated Marxist for much of his professional life – takes a meat ax to it. His claim is that the SU and other Communists did indeed follow what Marx said and that the routine horrors of such states are intrinsic to the system. Even Marxists admit his summaries of their doctrines are complete and quite fair. They do not like his criticisms, of course and especially take exception to his conclusions.

While we are at it, Chomsky is an excellent linguist but a lousy political theorist. He comes from a long line of professionals who are so sold on their own smarts that they think they can talk about anything and are right by virtue of being themselves. He also has a maddening tendency to waffle, dissimulate and pretty much fulfills Orwell’s comment about the Western intelligentsia as “Liberals who hate liberty and intellectuals who despise rational thought.”

And as always, I might just be full of shit…

–jj

46

[quote]orion wrote:

[quote]Ryan P. McCarter wrote:

[quote]orion wrote:

[quote]florelius wrote:

[quote]Beowolf wrote:

[quote]Spartiates wrote:
See, there is a point where Smith’s basic ideas about economics fall apart, and markets, driven by greed cease to work. And we’ve reached that point. Because if my company is “too big to fail”, my greed doesn’t drive me to make a better product, or create more jobs, it drives me to give me and my buddies big bonuses.[/quote]

…You are retarded.

Moral hazard. Go search that on Wikipedia please. Then think hard for like three hours, and it might come to you.[/quote]

instead of making personal insult, why not make some arguments against his.
[/quote]

Excuse me, but you are able to pack so many economic fallacies into one paragraph that it would take pages to adress them and then he could maybe tell you why you are wrong on this one.

Be that as it may:

http://www.cato.org/pubs/journal/cj29n1/cj29n1-12.pdf[/quote]

Since moral hazard is the last bastion for free marketers in response to this overwhelming failure of the free market, it’s not surprising to see it desperately thrown up as a shield here.

However, if there had been no moral hazard, and the banks had simply been allowed to fail, this would have negatively impacted millions of people. How does this look to Libertarians? That millions of people could, through no fault of their own, become unemployed and indigent?

Note: you’ll attempt to say that “without the implicit guarantee of government, they wouldn’t have engaged in risky specualtion.” Two things: one, you’d be wrong, as evidenced by the history of bank panics in the US, and two, these institutions thought they were managing risk. That had nothing whatsoever to do with the government.[/quote]

First of all those bank panics where the result of fractional reserve lending and as long as there is fractional reserve lending such runs can and will always occur. Lending out more money than you actually have is highly questionable and I will not defend that practice.

However, only fiat money and the federal reserve system has made it possible to be leveraged 30-40 times over because they flooded the market with cheap money and so speculators did what speculators do, speculate.

Second of all I would encourage you do show me a bubble that threathened to collapse the world finacial system without the issuing of a fiat currency. You cannot compare speculative bubbles like the railroads where people risked their own money with bubbles where they could borrow free money and were leveraged to the gills.

Finally yes, you are right, they would not have done this in the first place had they not know that they could turn these risks into default swaps and trade them, in part because of the implicit government garantuee to bail out Fanny May and Freddy Mac. In a free market greed is checked by fear of losing ones money.

You know that Ron Paul as well as people like Schiff and others have forecast as soom as 2002-2003 what would happen and why and yet you choose to ignore the exact same people who predicted it all and listen to those wo had, and still have, no idea.

[/quote]

Bank runs overwhelming occurred in states that restricted banks to a single location. Banks that had several branches were able to spread risk and were not submarined if a single community fell on hard times.

47

But how do you prevent it except through regulation?

People were specualting with fiat money long before the Federal Reserve has been in place. Furthermore, the panics have become far less common since the institution of the Fed.

Why? Were the results not devastating enough? You seem to mysteriously excuse any bubble or crisis that was not the result of fiat currency, yet they are common enough throughout history.

You didn’t answer the question. As I noted, banks have engaged in this kind of behavior for a long time before the government started bailing them out, yet you continue to try to sweep history under the rug. Your statement is flat untrue: not only would they, they repeatedly did.

Moreover, you ignore some very important dynamics that encourage speculative bubbles, and which contributed to this crisis that are not able to be checked by the fear of losing one’s money. For instance, even if a bank had correctly identified the bubble early on, they still wouldn’t have pulled out of the investments. For one, few people are willing to listen to naysayers, and so any individual at the bank would likely have been brushed aside. But even if a bank did pull out of the mortgages, their clients would have looked around and saw everybody else making money hand-over-fist on these mortgages and said “Hey! Why aren’t you putting my money in this?! These people are making a fortune!” and they would have either caved or the individual would have taken their money elsewhere, and the bubble continues. In addition, there is not nearly as much incentive for a banker to play it safe, even without government guarantees, as you imply. If the firm goes bankrupt, it’s not like that person is going to be on the hook for all that money, and bankruptcy isn’t the end of the world anyway. Contrast this remote possibility of loss with the ever-present reminder of the large profits to be made off the investments, and you virtually guarantee that the bubble will continue, government or no. If the Federal Reserve deserves to be criticized for anything, it is for not recognizing the bubble and taking steps to safely deflate it.

And you know that Nouriel Roubini, Paul Krugman, Robert Schiller, The Economist magazine, among others, all predicted it as well. In addition, their subsequent predictions have held up much better, yet you don’t listen to them. So why should I listen to Ron Paul?

48

[quote]orion wrote:Yeah well then we have the problem that the system you are proposing has never been tried before and with a revolution that profound you are bound to have unforseen and unintended conseuqences.

All I can imagine is you building a giant kibbuz, co-operative or whatever and are so enormously and spectacularily succesful that the world can no longer ignore your form of organization.[/quote]

Actually, that was more or less the platform of the Utopian Socialists, who have long since been debunked (if they really needed to be in the first place). So that would not at all be my approach. But, we don’t need to turn this into a debate on socialism, unless you want to. I just don’t want you to feel like I’m pulling the discussion that way.

Really? Where is the price system? Who built it?

I have no interest in making you do anything by force. If you don’t want to work, don’t work. You might starve, but that’s part of the Libertarian system.

49

Except for the Mensheviks, and the Socialist Revolutionaries, and various members of the Communist Party itself, Karl Kautsky, and Rosa Luxembourg…

So in short, your statement is not accurate.

Actually, the real defunct but fashionable ideology is neoliberalism. After failing to accomplish almost everything it set out to do, it’s still proudly promoted by its adherents. The problem was that we just didn’t follow their scriptures closely enough, it wasn’t pure enough. Sound familiar?

He says, after the neoliberal religion has died, ending in one of the most spectacular failures in recent history.

The Communist parties of Europe may have followed what Marx said, but this could have very little to do with their policies, since Marx gave precious few details about a socialist economy. One he did give, however, was that socialism must grow out of highly developed capitalism, so right away there’s one they didn’t follow.

So in short, you can’t really point out any errors, but you don’t like him? Duly noted.

50

Right, sone of the union officials became corrupt.

But seriously, what’s your point? Are you saying that we shouldn’t have anything that can be corrupted? I think the answer is to strive to make leaders more accountable. This doesn’t mean you’ll always be successful.

I really mean no offense, but it’s like a broken record here. First of all, there’s the constant reference (supposedly mine) to the “evil” corporations, when I have never said that corporations are evil (or even immoral). This is some type of projection, or something.

Also, it’s inconsistent with the rest of your argument. You’re equating these two things, government and private enterprise, while calling them evil, and so taking you at your word, they’re both evil, and so why bother? Yet in the rest of your arguments, you insist that capitalism is more desirable, and that private enterprise is more effective at promoting the general welfare. Well which is it?

Furthermore, the replacement of private exploiters with public ones by no means follows from the suggestion that socialism be implemented. To do so is, in my opinion, a dishonest attempt to simply gloss over an argument that you don’t want to have to defend against. What about the Paris Commune? That communistic experiment, far from replacing the Capitalists with the Party, failed because of a lack of centralized authority, which made it easy to crush.

To say it a different way, I don’t think you’d deny that it’s possible to have a capitalist economy in which economic and/or political power is very conentrated and centralized. Now, you would doubtless argue that the idea of capitalism should not be dismissed simply because this possibility exists, because it is equally possible to have a democratic, free version, and I would agree with you. Am I right? Well then is it really fair to do the same thing to socialists?

Again, I don’t mean to offend, but this is a very inaccurate usage of the term “human nature.” A false conception of human nature is frequently appealed to in a defense of capitalism, but human nature, in addition to being much more malleable than the Libertarians would have you think, has not been capitalistic throughout the far greater part of human history. Human nature as we conceive of it with respect to a market system is a very recent invention. When you read a little bit about primitive economies, the profit motive was nowhere to be found. Even trade, in the way we think of it, was generally very scarce. The concept of weighing alternatives with a mind toward maximizing personal gain did not appear in any significant instances until approximately the 16th century. So without trying to be an ass, your statement that “it’s just human nature” fails to account for the largest part of human history, when it was not human nature.

51

[quote]jj-dude wrote:

[quote]florelius wrote:
I am not a moscow socialist or what most people call communist. I am a real communist, I follow the teachings of marx, bakunin etc. The ussr developed from early on away from socialism. The sovjets lost its power to the paryelite and to a policestate, mostly because of to factors. 1: tzar russia where a feudal society and without almost any democratic tradition. If you read marx he says that socialisme is only possible in societys with democracy and capitalist industry. 2: the democratic experimenting under the revolution with the sovjets was killed in the cradle because of the civilwar, and where britain and the us supported the whitearmy against the redarmy. So socialist russia did not become a militaryregime because of the ideas of socialisme but because of reel events in its early history.

[/quote]

So you’re now a Communist AND a fundamentalist? The plain, simple truth is that everyone who was alive at the time of the 1920’s on would have claimed that the SU was leading the world and the Communism was in its purest form there. The people saying this were the Communists and Socialists themselves, ok? That in every case the result was a massively failed dictatorship (which always happened, I might add, precisely because Marx himself stated that the divisions between executive, legislative and judicial branches were simply artifacts of bourgeois society – with no checks and balances, the executive branch always takes over).

I suspect that Marxism is now the Mac of the political world. That is to say, it is a fashion statement for people that do not understand wholly the inner workings, in this case, of ideas or history. If you really claim you are a Marxist (and Hell, if you are mentioning Bakunin I’m going to believe you are) then you’d darn well better be able to explain why we aren’t going to get more Ethiopias (remember the famines in the 1980’s??? These were caused precisely by the sort of state control you claim to support). Communists tried and massively failed in what is probably the major humanitarian tragedy of the last 100 years. The ball is in their court now and any suggestion they make must be greeted with enormous skepticism. The burden of proof that what they say is valid rests squarely with them.

So if you really want to do this right, go get a copy of Leszek Kolakowski’s “Main Currents of Marxism” and read it. Really read it:

Sure it’s 1200+ pages long and thickly footnoted. It is also the best single introduction to Marxism you will find and Kolakowski – who was a dedicated Marxist for much of his professional life – takes a meat ax to it. His claim is that the SU and other Communists did indeed follow what Marx said and that the routine horrors of such states are intrinsic to the system. Even Marxists admit his summaries of their doctrines are complete and quite fair. They do not like his criticisms, of course and especially take exception to his conclusions.

While we are at it, Chomsky is an excellent linguist but a lousy political theorist. He comes from a long line of professionals who are so sold on their own smarts that they think they can talk about anything and are right by virtue of being themselves. He also has a maddening tendency to waffle, dissimulate and pretty much fulfills Orwell’s comment about the Western intelligentsia as “Liberals who hate liberty and intellectuals who despise rational thought.”

And as always, I might just be full of shit…

–jj[/quote]

I dont see why I am a fundamentalist?

if you see what I wrote before, I explain why socialist russia did go to hell. mcarthur also explains it.

yes I am a marxist and have been for 9 years. I have been active in the socialist movement since I was 15. I demonstrated against the iraq war in 2003. so I have not just read one book or seen some videos on youtube.

marxisme is not a fixed idea of hove the society should be. its more of a tool for wiewing the society. I dont care if the leaders in china calls themself communist, its still a shitty totalitarian state. I dont wote on the norwegian labour party, because they are a gang of corrupt elitist. a lot of folks in my country buy the horse shit the socialdemocrats sell because they talk a good game, but if you look at what they do. they are the same as the liberalists or conservative. So marxisme enables me to look past the bullshit and see whats really goes on. Actually you dont need marxisme, you just need common sence.

I like chomsky because he explains the bullshit of today in a clear and simple way. I dont care if he is not a proffesor in socialsience, he makes sence to me. maybe thats what its all about, we choose a point of wiew after whats makes sence to us. In that case marxisme and leftanarchisme makes sence to me, maybe conservatisme or liberalisme makes sence to you.

ps. after all maybe I also is full of shit.

cheers :slight_smile:

52

[quote]Ryan P. McCarter wrote:

But how do you prevent it except through regulation?

People were specualting with fiat money long before the Federal Reserve has been in place. Furthermore, the panics have become far less common since the institution of the Fed.

Why? Were the results not devastating enough? You seem to mysteriously excuse any bubble or crisis that was not the result of fiat currency, yet they are common enough throughout history.

You didn’t answer the question. As I noted, banks have engaged in this kind of behavior for a long time before the government started bailing them out, yet you continue to try to sweep history under the rug. Your statement is flat untrue: not only would they, they repeatedly did.

Moreover, you ignore some very important dynamics that encourage speculative bubbles, and which contributed to this crisis that are not able to be checked by the fear of losing one’s money. For instance, even if a bank had correctly identified the bubble early on, they still wouldn’t have pulled out of the investments. For one, few people are willing to listen to naysayers, and so any individual at the bank would likely have been brushed aside. But even if a bank did pull out of the mortgages, their clients would have looked around and saw everybody else making money hand-over-fist on these mortgages and said “Hey! Why aren’t you putting my money in this?! These people are making a fortune!” and they would have either caved or the individual would have taken their money elsewhere, and the bubble continues. In addition, there is not nearly as much incentive for a banker to play it safe, even without government guarantees, as you imply. If the firm goes bankrupt, it’s not like that person is going to be on the hook for all that money, and bankruptcy isn’t the end of the world anyway. Contrast this remote possibility of loss with the ever-present reminder of the large profits to be made off the investments, and you virtually guarantee that the bubble will continue, government or no. If the Federal Reserve deserves to be criticized for anything, it is for not recognizing the bubble and taking steps to safely deflate it.

And you know that Nouriel Roubini, Paul Krugman, Robert Schiller, The Economist magazine, among others, all predicted it as well. In addition, their subsequent predictions have held up much better, yet you don’t listen to them. So why should I listen to Ron Paul?
[/quote]

  • I have no problems with regulations when it comes to fraud. Fractional reserve banking also is a form of money creation, really THE form of money creation, which instantly makes all other monies worth less and this is one of the few areas where I support a role for the government.

  • “People were specualting with fiat money long before the Federal Reserve”. Really? How did the do that when there can be no fiat currency without a central bank?

  • No, the results were not “devastating”. The results of the railroad boom for example was a better infrastructure. To bad that some companies went belly up, but that is the price you pay for taking risks and fail. That is true capitalism, if you get in the ring you might get a bloody nose. The rails however were still firmly in place and are still used today.

  • Yeah well, there are bad bankers too. What else is new? As long as they risk their and their customers money, why would I care? Maybe we should accept that banks can fail and look more closely were we put our money?

However in a sound economy, banks fail from time to time. Great! One less shitty bank. When the problems involves all banks however, they are either all incompetent or someone has distorted the market signals. What is more likely?

  • Yeah well, here I agree with you. This is basically a principal-agent problem and the one who should adress this is the principal, i.e. shareholders. Which goes back to the problem of moral hazard, if the shareholders get bailed out in the end, why would they care? Let them fail, that will make them care next time.

  • Paul Krugman did no such thing. I can post videos of Schiff and Paul right now where they predicted it and I can also post videos and articles of Krugman where as late as 2008 he believed that the situation was fundamentally sound which makes me doubt that you even know what the other people you mentioned said or predicted.

53

[quote]orion wrote:

  • Paul Krugman did no such thing. I can post videos of Schiff and Paul right now where they predicted it and I can also post videos and articles of Krugman where as late as 2008 he believed that the situation was fundamentally sound which makes me doubt that you even know what the other people you mentioned said or predicted. [/quote]

I’m actually curious to see those videos, if you don’t mind. I would like to be able to use those for future references.

54

[quote]Dustin wrote:

[quote]orion wrote:

  • Paul Krugman did no such thing. I can post videos of Schiff and Paul right now where they predicted it and I can also post videos and articles of Krugman where as late as 2008 he believed that the situation was fundamentally sound which makes me doubt that you even know what the other people you mentioned said or predicted. [/quote]

I’m actually curious to see those videos, if you don’t mind. I would like to be able to use those for future references.[/quote]

The Schiff and the Paul ones?

55

[quote]orion wrote:

[quote]Dustin wrote:

[quote]orion wrote:

  • Paul Krugman did no such thing. I can post videos of Schiff and Paul right now where they predicted it and I can also post videos and articles of Krugman where as late as 2008 he believed that the situation was fundamentally sound which makes me doubt that you even know what the other people you mentioned said or predicted. [/quote]

I’m actually curious to see those videos, if you don’t mind. I would like to be able to use those for future references.[/quote]

The Schiff and the Paul ones?

[/quote]

Yes

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Ron Paul 2003:

57

This on the other hand is the Krugman of 2002-2003:

Later he turned around though and claimed that it was inevitable because of conservative deregulation:

58

Interesting, thanks.

They somehow managed it. A bank can issue whatever it wants.

Chronic depression and unemployment is not devastating? Why do you think they instituted the Fed in the first place? And I’m not talking about companies. That’s the problem with the Libertarian view, they think only of businesses. What about regular citizens and employees who are harmed in these crises? Not to mention all the workers that died in the construction of the railroads.

And if you want to praise the infrastructure that resulted, then high five for government planning.

[quote]- Yeah well, there are bad bankers too. What else is new? As long as they risk their and their customers money, why would I care? Maybe we should accept that banks can fail and look more closely were we put our money?

However in a sound economy, banks fail from time to time. Great! One less shitty bank. When the problems involves all banks however, they are either all incompetent or someone has distorted the market signals. What is more likely?[/quote]

That’s an assumption that simply doesn’t hold up. More likely everybody got carried away with the money they were making on a particular asset and the “bubble mentality” took over.

Furthermore, one of my points was, what do you do when these problems threaten ALL banks (or at least a large portion of them)? You try to explain it away with distorted market signals but that is by no means necessary.

  • Yeah well, here I agree with you. This is basically a principal-agent problem and the one who should adress this is the principal, i.e. shareholders. Which goes back to the problem of moral hazard, if the shareholders get bailed out in the end, why would they care? Let them fail, that will make them care next time.

Krugman:

http://www.nytimes.com/2005/05/27/opinion/27krugman.html?_r=1 (2005 column)

Roubini:

Economist magazine: (you can’t read the whole article unless you subscribe, though)

Shiller: he’s wishy-washy about it here
http://www.econ.yale.edu/~shiller/pubs/p1089.pdf

but strengthened his warning in 2005 in a revised edition of Irrational Exuberance.

So doubt away if you want.

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[quote]orion wrote:

Ron Paul 2003:

Right on. Thanks.

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[quote]Ryan P. McCarter wrote:

Right, sone of the union officials became corrupt.

But seriously, what’s your point? Are you saying that we shouldn’t have anything that can be corrupted? I think the answer is to strive to make leaders more accountable. This doesn’t mean you’ll always be successful.[/quote]

Some of the union officials became corrupt!? MANY, if not MOST of the union officials became corrupt. My point is that union officials, like that of government officials, always look to increase their power and dominate those they have control over. Hitler was the product of national socialism, was he not? Tell me, how would the people have made him more accountable. Stalin? Wasn’t he an avowed statist? They should’ve just strove to make him more accountable, right? Seems to me that the majority of the worlds shitty leaders rose to power under the banner of “the people”, while promoting socialism, statism, collectivism, etc.

I’ll have to respond to the rest later. I gots to gets to work.