To Regulate or Not, That is the Question

[TASmith]

They've got the best ever debate going on now at the economist.com It's all about whether we need more or less regulation in banking/finance, and the pro regulation debater is mopping the floor with his opponent. It's a really good read:

http://www.economist.com/debate/index.cfm?source=hptextfeature&action=hall&debate_id=14

Feel free to join in and debate, here or there.

[jadefoodog]

i dont trust banks nowadays

[DeadlyFreeze]

The Keynesians have been fighting the Friedmans 'free markets' since the 1970's. This is just one more battle with the obvious outcome, unregulated markets don't work.

I still don't get why they teach Milton Friedman's economic policy after what happen in Chile.

[GhostValkyrie]

Unregulated markets do work. It worked for the for a very long time. Up until the government began creating a lot of red tape making it harder for people, we were doing fine. A lot of this mess is being 'cleaning up' by the same people who helped to create it.

People create jobs, not the government. People create healthcare, no the government. People create art, not the government.

In order to really fix this system we need sound money. That's something the government is supposed to control and provide to the people of America. One of the reason unregulated markets don't work for many countries is the lack of sound money and inflation/manipulation by central banks. Our own Central bank turned us down the wrong corner, and now everyone wants to put them in the driver's seat. This is crazy.

[DeadlyFreeze]

It did work? When was that exactly, care the throw some actual facts behind that statement?

[TASmith]

Ahem, anyone who wants to argue either side, please read the debator's text first.

[GhostValkyrie]

I guess I could do that. Little short for time, perhaps I can lay the groundwork and provide evidence later.

We create jobs
We create healthcare
We create cars, engines, construction, housing, produce food, etc.

We do these things. Involving the government is inviting catastrophes because in the past it didn't happen this way. The government didn't get involved in every little thing, and when it did it always performed terribly. People outdo the government programs like FEMA on a grand scale. Though this doesn't relate directly to the economy, it shows how slow, ineffective and overbearing the government is.

Banks created these problems, notably the FED. Creating artificially low interest rates that couldn't be backed, couldn't be paid after negotiations, debasing the currency with inflation caused by printing the money like crazy. And even that is only a part of it. People not doing their homework, not watching the economy or understanding the monetary system and what happens when you print money like crazy and just live a borrow and spend lifestyle contributed to this problem.

Healthcare is another example of how the government screws things up. Healthcare is bad because many programs require insurance for healthcare, and that's an expensive premium already. Yet everyone dwells on how many Americans have healthcare and don't. The problem isn't not having healthcare, it's requirements for treatment and all the red tape the government has put in place on many companies.

I can understand the argument that if there isn't regulation, the companies will do what they want. But usually, the cause effect relationship that spawns something cause Spontaneous Order come into play. People overcome their challenges and it makes them strong.

We're not even arguing about what we're going to do, instead we're going back and forth about who else should do it and how. This is another reason we got into this.

First people said no to the bailout because they didn't want their money to be stolen, then when others began telling them it's over if we don't do this and using scare tactics people began thinking with their wallets and not the issues. Another example of why I've lost confidence in this country. Our Let someone else do it attitude.

Ahem, anyone who wants to argue either side, please read the debator's text first.

K. I'll read it before I reply again.

CAN'T SOMEONE ELSE DO IT, with 1 Trillion+ in bailouts?

[DeadlyFreeze]

Short on time? You sure wrote a lot, all I want is the date these so called "unregulated markets" existed.

[GhostValkyrie]

The free markets have existed for a long time, but they've come under various forms of controls over time. Particularly free trade. If the country simply enforces it's laws and negotiates with others - many of the problems we have would be cured. Sure. There will always be problems that we need to fix and work out, but that's between the entities involved.

Time and time again throughout history we see these 'temporary' or 'necessary' alleviations. Time and time again, we see these things are nowhere near temporary.

If you want timelines let me know.

A apologize for misleading you. I'm not strapped for time, but I'd like to finish my course project soon. I'm stopping by here during breaks.

[_Mario]

Healthcare is another example of how the government screws things up. Healthcare is bad because many programs require insurance for healthcare, and that's an expensive premium already. Yet everyone dwells on how many Americans have healthcare and don't. The problem isn't not having healthcare, it's requirements for treatment and all the red tape the government has put in place on many companies.

I will just ask one thing: How much is your health worth to you?

You are probably willing to spend all your money and infinite more of it if it only allows you to survive a serious health problem. Now think about this and how is shifts the balance in a non-regulated health care system. You end up with people who are afraid of the health-case system because of possible bankruptcies. So they rather do not go to the doctor because the pain is not that bad (or whatever excuse they can find). This leads to a time shifted (and bigger) strain on the system. Instead of cheaper preventive care people end up in expensive emergency surgeries or with permanent damage that inhibits their productivity (and more sick days). That weakens the workforce that, as you wrote, creates things and is the motor of the economy. On the other hand you have the problem of people who can't afford or are denied insurance end up in bankruptcy because they had some generic disposition for some cancer or illness. Again this limits these people interaction in a mostly free capitalistic system (although they survived the illness they have no money to spend on anything anymore).
So these regulations help us balance the system. A non-free market health care system is part of a country's infrastructure. Your health should not be treated like a nonessential luxury good.

I won't even start on the problems of insurance companies in the "free" US system. There is nothing effective or optimised about them (compared to some "socialists" countries' systems they are vastly more bureaucratic and wasteful) even thought they are profit oriented. By purely capitalistic factors the system has failed at self-organising and optimising. It profits by creating misery and that is not a mutually beneficial transaction for both sides (that's how free trade is supposed to work).


I can understand the argument that if there isn't regulation, the companies will do what they want. But usually, the cause effect relationship that spawns something cause Spontaneous Order come into play. People overcome their challenges and it makes them strong.
There is no usually. Even with a restricted system people end up abusing it, with no restrictions the abuse is legitimatised. The hard part is manipulating the system so it functions better and this tends to be a free system with few but balancing regulations. Not the too free US system or the too bureaucratic EU system, Something new inspired by the best of both (but not based on any of them).

Spontaneous order happens if nobody fucks with the system but if you have a unbalanced system where the forces do not act in a way that creates the equilibrium you end up with an even more unbalanced system (think of what happens in an explosion on a molecular level).
That regulation, that you do not like, is what (hopefully) works to divert the flow on molecules and energy so we do not not end up with a situation where an explosion is too damaging or happens all the time.

Regulations should act as a catalyst for a reaction (make things be more balanced and go easier) not as an inhibitor (too defensive to get anything done).

In addition our system does not tend to balance itself as all the economic theories are optimised models and do not represent reality (reality is that you have trust fund kiddies and homeless people not some optimised economic human entity). They help us understand and improve the process of value and transactions they are not the process itself.

It would be nice to see a time line of free markets (and a description of how you exactly define free market; for ease of "talking about the same thing").
We had markets with varying ratios of freedom/regulation and the ones with less regulation tend to be less encumbered by these regulations until the managing entity gets over-protective and starts building walls that end up causing more harm than good. But really free markets as described by economist have never existed. They are just an optimised and simplified theoretical model to help us adjust the real process a bit into a less wasteful direction.
It is in essence the application of a psychological model for a very large scale instead of small groups or individuals.

You could, for example, take a formula like E = mc² and infer that if you gain a lot of weight you have a lot energy. But nobody would assume that this process works for all possible problem sets where you need a lot of energy. It might work great in hibernation but for humans there are other systems (stay healthy and eat a lot of small portions) that are not that optimised for energy but work much better in reality (you can still do stuff and move and use your time or something; a marathon?).

If the country simply enforces it's laws and negotiates with othersAnd you are joking here, aren't you? This is essentially regulation. Laws inhibit and regulate your freedom (for the greater good hopefully), that's their only job.

[GhostValkyrie]

You make some very good points, and I'm not saying everything will be ok. It's not going to be. We need to make a decision on what we're going to do with our national identity. We can't favor one system when it's good, and another when it's bad. This just shows how vicarious our citizens have become.

And I outlined that this problem wasn't simply the government's fault, but also the people's. We need to live within our own means in order to continue. We need to produce more and consume less. We need sound currency provided by the government and not a private institution that issues it at interest.

I understand laws are regulation, and they need to be upheld. But there certainly needs to be less red tape. I think a system applying more properties and crimes is appropriate(laws). Instead you have the government favoring this company over that one, giving grants here and there, getting involved and overstepping boundaries, etc.

In general I think the government should leave it alone outside of individuals or corporations being involved in crimes.

As for healthcare. I don't like the idea of nationalizing healthcare because I can honestly see it resulting in something very similar to the healthcare I receive now. Maybe a single payer health care system would be more suitable. I still think there should be private options and less government intervention in the system.

As for the economy. Bad decisions were made, we had a recession coming up just as Bush came into office. Instead letting the bubble come everyone lowered their rates, continue loaning/borrowing/spending money they never had, and inflated the currency and it's continuing. The credit market is shut mostly to people with bad credit. Those with good credit can still get a loan. I'm not going to because I don't want a debt, but I could get a loan if I want.

Something to not is that they're trying to free up the crunch by lowering rates even more, printing more money and debasing the currency further, and getting loans out. We can't sustain ourselves by doing this.

Technically though, in terms of legality the govt. can do this. Upon further research the UNITED STATES is a corporation as outlined in the UNITED STATES CODE and created in the CONSTITUTION OF THE UNITED STATES OF AMERICA in 1871 for the District of Columbia. As the country faced bankruptcy and internal turmoil the federal government drafted a constitution effectively making Washington DC it's own sovereign entity. Many of us know it's sovereign already(I would hope at least), but the thing I didn't know is a constitution was drafter specifically for DC.

Why I capitalize the letters is because it's done so in the constitution. In our legal system and many others, capitalizing certain/all letters has an effect on the legal terms and identification of the said entity,party, etc.

In all reality, they can do what they want. It's like a paradox. It contradicts the Constitution for the united states of America with the CONSTITUTION OF THE UNITED STATES OF AMERICA. While being a government entity established and ruled by the people, they've negated the original terms by establishing the country as a corporation.

I guess we can stop this argument and just go back to work then.

[kev ferrara]

I still don't get why they teach Milton Friedman's economic policy after what happen in Chile.

:frustrated:

What happened in Chile: Chile's economy was transformed by Chicago School economics into one of the most stable and prosperous Latin American nations. ZOMG!!

Jee whiz, why would anybody teach Milton Friedman's economic policy after such a horror?!

In the real world of real people who have real responsibilities, Naomi Klein's "shock doctrine" pontifications are regarded as easily falsifiable, mendacious, utterly politicized trash. And Milton Friedman's ideas result in jobs and stability.

But isn't Friedman responsible for Pinochet? I heard that somewhere!

Huh? What?

Aside from some Chilean students who were sent to the University of Chicago to be trained as "Chicago School" economists (which was before the Pinochet era), Milton Friedman's relations with Chile during Pinochet's brutal regime were as follows...
Milton Friedman was in Chile for 7 days giving speeches. That's it. Oh, and one of them was on the Fragility of Freedom "that dealt precisely with the threat to freedom from a centralized military government" which probably could have gotten him killed.

Aside from those seven days, Milton Friedman had no association with the Chilean government and was never an adviser to them.

I'd be interested to hear where you received your false information. Was it Naomi Klein?

[VulgarDragon]

I think that they should at least regulate interest rates that banks, loan and credit card companies charge...anything over 5% is just way too greedy.

[GhostValkyrie]

I think that they should at least regulate interest rates that banks, loan and credit card companies charge...anything over 5% is just way too greedy.

It was the low interest rates that caused this mess. Well, not the interest rates themselves but people's ignorance and greed. In part the fed's low interest rates helped promoting getting loans and people went bananas for monopoly money. The rates were slashed down as Bush came into office and fears began to mount for a recession. Low interest rates helped shore the system, promote massive lending and created more inflation along with a larger bubble.

As much as I don't like Bush, People can't just blame it on him. Although he did play an enormous roll in run away spending for the government. It's funny though people don't remember the recession fears in the late 90's early 2000, or the 2 trillion missing from the Defense Budget. Suddenly it got whisked away by 9/11 and the swift market crash that followed.

There are a lot of victims in the mess, particularly land lords who wasted their money and have jeopardized their tenants. The largest victim here is the economy and the American tax payer.

I keep getting hammered because I'm Laissez Faire guy. People don't understand Economic Theory in relation to gravity. What goes up must come down. With this intervention and prolongation of the inevitable, the 'coming down' will be that much worse.

How many times and years in a row do people have to state the fallacy of our living habits? Seriously, no one comes to your house and twists your arm to get a loan or use a credit card. If you think you're gonna get robbed then don't participate. People seem to neglect that the boycott is a very powerful tool at their disposal. Rather than doing anything people want to precipitate letting things begin controlled for them.

I guess it's too much of a hassle for people to not allow themselves to be taken advantage of.

[/rant]

[Ilaekae]

Non-regulated Capitalism is always right. Even those hundreds of thousands of children who worked in mines and steel mills at the age of eight will agree with that, because they're true free-market advocates. Rules always stifle creativity and ambition. Even the people who died in the Johnstown flood and the hundreds of thousands of 75¢-a-week workers who died in pre-control mining and industrial accidents will agree with that. Just ask the people who hired them--THEY'RE okay, so why argue nonsense about regulations that might limit our abilities to amass a fuckin' fortune at any cost so WE can be healthy and happy. :P

Just keep telling yourself that people who are stupid enough to die from asbestos and formaldahyde poisoning, and from preventable industrial death-traps are just too stupid to be allowed to breed.

Those who disagree are un-American, Socialists, Communist, and just plain pushy do-gooder bastards. Who the fuck needs more bald eagles anyway?

[GhostValkyrie]

Non-regulated Capitalism is always right. Even those hundreds of thousands of children who worked in mines and steel mills at the age of eight will agree with that, because they're true free-market advocates. Rules always stifle creativity and ambition. Even the people who died in the Johnstown flood and the hundreds of thousands of 75¢-a-week workers who died in pre-control mining and industrial accidents will agree with that. Just ask the people who hired them--THEY'RE okay, so why argue nonsense about regulations that might limit our abilities to amass a fuckin' fortune at any cost so WE can be healthy and happy. :P

Just keep telling yourself that people who are stupid enough to die from asbestos and formaldahyde poisoning, and from preventable industrial death-traps are just too stupid to be allowed to breed.

Those who disagree are un-American, Socialists, Communist, and just plain pushy do-gooder bastards. Who the fuck needs more bald eagles anyway?


As usual. You jump in the frying and try to throw everyone else into the fire.
Wouldn't your tactics be a lot more efficient if you just said I'm friends with Bill Ayers or want to raise taxes?

I didn't say it's infallible. I simple spread the blame for this crisis rather than just pointing fingers at people I don't like. I didn't defend the CEOs, I didn't defend corporate interest. I was defending the economy they're involved in. If they are part of illegal and involuntary user activities I certainly think they should be brought to justice. Funny you try to make me into the bad guy when you're the one that defended bailing them out in this thread earlier.

I didn't deny or defend predatory lending either, which got the best of this and helped create this mess.

Of course, you weren't defending them. You were defending the little people. The people who can't speak for themselves because they lost their job. Go you, Mr. Fairness.

But hey, let's let the government handle it. They always do a better job anyway.

vuL8teeuJD8

[Ilaekae]

...pissy, pissy... :P

[Peter Coene]

I think this problem is an offshoot of another problem that might take a little bit of thinking outside of the box to see. Usually I would say regulate the government, not the economy; to leave the businesses alone and let them do their thing. However, at this point Big Business has become the government in its own way. Our money is printed by what is basically a bank, distributed through banks, handled by corporations, and said money is used to control the country, to buy the polititians.

As long as the corporations call the shots then they are, for all intents and purposes, the government. You cannot regulate one and not the other when they are one and the same. However, the regulations that are made have to be the right ones in the right places. Bad regulations will hurt our situation more than to entirely deregulate. For example, telling banks to approve more loans to low income families as was done by Carter and Clinton is part of what put us in this situation in the 1st place. It was done out of benevolence, I don't doubt that at all, but it was short term thinking that caused long term problems. (Though the short term side of stuff like that was a great way of making Clinton's presidency look like an economic paradise)

So we are left with the question of how and what to regulate? Its easy to say what not to (unless you are a democrat, of course) but the opposite, what DOES need regulation, is a bit hard to pinpoint. I really have no answer for that though. We could try pulling an Andrew Jackson and beat back the banks again, but the popularity of whoever is doing so will suffer. Jackson himself said of the banks in a similar situation, "You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves." It may just be that we have to do as Jackson did, in our case ruining hundreds of thousands, but in doing so avoiding the ruination of tens of millions.

It may be though that the situation is beyond saving. The federal reserve is far more powerful than any central bank that Andrew Jackson faced. Trying to cure the nation of it may be like taking out a tumor, that when opperated on the sugeon may kill the individual they had been trying to cure, but to leave it in spells out certain death.

[evildisco]

On first person experience I need to clarify that the reason that Chile is so stable is mostly geography. They are cut off from the dysfunctional states that surround them, namely Argentina where my family comes from. They have a port to the Pacific which is a huge plus.

And to say that Chile is the most successful is a blatant lie, Brazil is the fastest growing economy in South America and pretty much the model it follows is of a socialist stamp (Lula). So please get your information right.

Argentina is fucked beyond repair thanks to free market reign, corruption is a fact of life accepted universally in the country and nobody expects it to go away, but I have to concede that is also partly because of the very 'italian' way of conducting business in general.

On another note it is easy to say that free market failed because of socialist red tape. So when it's working 'correctly' all credit goes to capitalism and when shit hits the fan blame the 'commies'.

Business as usual eh?

But the most salient point of the discussion is why are we still discussing, it's not like we are going to convince one another of right or wrong.



Added to the whole thing: I find funny how everyone compares the current recession to the great depression yet no one has mentioned the Oil Crisis of the 70s EVER not even once, during this whole debacle.

[kev ferrara]

Put out your hair, che.

I didn't say Chile was the "most" successful. Read the words as written, not as imagined through your hate fever.

Your assertion that geography is the whole cause of Chile's economic stability, besides being a spurious assertion, doesn't explain their lack of economic stability before Chicago School style market reforms came along, or all the correct predictions about how their economic rise would proceed. When Allende nationalized the place the usual shit happened, the currency destabilizes, the money becomes suspect, inflation goes through the roof, the workers strike, riots happen and the only way to hold it all together is by tyrrany. This is what is happening in slow motion in Venezuela right now.

(Don't get me wrong, I'm not a militant free market capitalist. I believe in checks and balances. But the free market system does have some fine results and its philosophy and analytic and results-based critique of socialist policies is well worth considering.)

The idea that Argentina is fucked beyond repair because of free markets is also crap. It's the very opposite... unrestrained government spending and corruption. First they printed money to save their irresponsible budgets, but that only caused inflation. Then they borrowed money. And we all know what happens when those markers come due and there's no capital to pay. The Swiss bankers withdraw credit and the place slides into the muck. And let's not forget that Argentina's so-called market liberalization itself was false. Its national industries were privatized based on back room deals, rather than open bidding. Argentina was not some wonderland of ethics leading into whatever reforms they attempted.

Which is all to say, hombre, that you should watch out when you call other people liars. Your character sucks.

Have a nice day.

:hatsoff:

[Peter Coene]

Added to the whole thing: I find funny how everyone compares the current recession to the great depression yet no one has mentioned the Oil Crisis of the 70s EVER not even once, during this whole debacle.
Actually, I've seen it mentioned a few times here and there. However, so far as I know the great depression is the hardest economic crises this nation has faced, so it makes sense that people when thinking of bad economic situations think of that.

[DeadlyFreeze]

I wasn't aware that overthrowing a democratically elected president, torturing and killing civilians and political opponents was consider a successful way to change the economy.

Thanks for pointing that out kev, we should totally try that here.

[evildisco]

Kev did I call you a liar? Don't think so, if I did underhandedly I apologize.

Accusing my character of "sucking" is a low blow.

Geography now doesn't play a part in economical success?Since when? It's not some spurious claim, I disagree. And besides don't twist my words I said MOSTLY not the whole reason. So unless you play by the same rules you preach, I won't either.
Some say Allende's rule was a horrible thing most of the detractors were the Nixon administration and US business interests, pity though because he was very popular with the people and a very intelligent and charismatic man. He is still regarded highly as an important historical figure in the Spanish speaking world.
You're entitled to your opinion of course but bear in mind that not everything is black and white as you paint it. And to compare or aliterate Allende to Chavez is a big stretch. Chavez is a borderline military dictator, Allende was democratically elected and held office with the support of the people, not to mention that he was assassinated in the coup because he wouldn't play ball like some other South American countries, *cough*Colombia*cough*.

Also another major factor that you failed to acknowledge is the access to the pacific which is another huge deal for the economy of any country.

Again with Argentina I did not make a blanket statement that it was solely free market the cause of the woes of the country. As I said before it was the hypocritical way they conduct business, hence the "italian" way of doing things which I should have explained in greater depth. Say one thing do another, basically. Yes the market liberalization was mostly a fluke and half-assed. But to be fair it is neither socialism nor capitalism, mostly greed and self-interest which plagues the continent since time immemorial.

Yes you did not say that Chile was the "most successful" but you did omit Brazil from the whole previous discussion which obviously discredits to some extent what you were saying about Milton Friedman's merit.

So, stop being condescending, stop trying to make straw man arguments and discredit me, because I was not trying to discredit you. I was merely pointing out that there were some things that as usual I disagree with you and if I came out as harsh, that's just the way I am, nothing personal and I apologize if it hurt your feelings.

[kev ferrara]

I wasn't aware that overthrowing a democratically elected president, torturing and killing civilians and political opponents was consider a successful way to change the economy.

Thanks for pointing that out kev, we should totally try that here.

You are spouting a 35-year old Soviet agit-prop line about what actually happened in Chile... utterly removed, as usual, from the context of the Cold War and the actual reality of U.S. involvement in the coup there.

But what else is new.

[evildisco]

You are spouting a 35-year old Soviet agit-prop line about what actually happened in Chile... utterly removed, as usual, from the context of the Cold War and the actual reality of U.S. involvement in the coup there.

But what else is new.

Yes of course anything against your point of view is Soviet propaganda.

It's pretty clear that intelligent discussion with you is impossible, if you come to the table with such preconceptions.

You are "starting" to sound more and more like demagogue and less like a voice of reason.

So how about we try and get back to a more fair and balanced discussion rather than label this or that to elevate ones' own personal view over the others.



Oh and I'll anticipate your depreciative adjectives to myself just in case. Yes I'm a horribly illiterate communist peasant, I don't know shit, I bow to your intellectual superiority.

[Blahm]

regulation would be all fine and dandy, but who you you think would be in charge of that? My guess is the fedaral reserve or some other foriegn entity. I mean our economy has been getting plundered by wall street raiders, dismantling our manufacutring base for 20 years. But all of a sudden its the housing market that brings us down. eh im so sick of talking about the economy. The whole thing is tanking now so everyone is an economist. The problem is more fundamental imo.

[kev ferrara]

Kev did I call you a liar? Don't think so, if I did underhandedly I apologize.

Accusing my character of "sucking" is a low blow.

One ad hominem causes another. Apology accepted. I apologize in return.

Geography now doesn't play a part in economical success?Since when? It's not some spurious claim, I disagree. And besides don't twist my words I said MOSTLY not the whole reason. So unless you play by the same rules you preach, I won't either.

Missed the "mostly". Apologies. However, I would still disagree with your "mostly" characterization. Especially given the earlier turmoil, a time in which their geography was just as good. Having said that, of course Geography surely plays a great part in a country's economy. But so do a lot of other things.


Some say Allende's rule was a horrible thing most of the detractors were the Nixon administration and US business interests, pity though because he was very popular with the people and a very intelligent and charismatic man. He is still regarded highly as an important historical figure in the Spanish speaking world.

"Most" of the detractors were in the U.S.? So all those riots, they were all faked? My reading puts the hatred of him in his own country at the time of his rule at about 50%. Of course, after he dies, the populism and propaganda take over, and children thereafter grow up with the political fantasy rather than the reality. And this was of course aided and abetted by the awe inspiring Soviet PR machine, as the Cold War played out in the Southern Hemisphere.

I mean, Che is still considered a hero too, even though he was pathetic psychopathic murderer who killed, what is it, over 10,000 people? Was willing to shoot a pregnant women in the stomach because her family opposed him? (Just to name one egregious incident) Hey great! Put him on a t-shirt! A lot of t-shirts!

Let's just face facts, "revolutionary" heroes, especially dead ones, get a lot more moral leeway than your average murderers. Allende included.

Allende was democratically elected and held office with the support of the people

You should research that statement a bit more. "The People" is a bit of a loaded phrase in revolutionary politics. The People tend to be the people who agree with the revolutionaries. Everybody else is "the enemy" who shall be demonized as a mindless fascistic capitalist horde of fools and knaves.

Not to mention that he was assassinated in the coup because he wouldn't play ball like some other South American countries, *cough*Colombia*cough*.

The economic collapse of his country due to collectivist policies had nothing to do with it, eh?

...and if I came out as harsh, that's just the way I am, nothing personal and I apologize if it hurt your feelings.

Strongly loaded words need to be met with strong rebukes, or else nobody learns anything about the difference between good and bad faith argumentation. Beyond that, I wasn't actually offended personally.

[evildisco]

Reasonable enough now we can start over.

Editing to respond to some of your points.

"Most" of the detractors were in the U.S.? So all those riots, they were all faked? My reading puts the hatred of him in his own country at the time of his rule at about 50%. Of course, after he dies, the populism and propaganda take over, and children thereafter grow up with the political fantasy rather than the reality. And this was of course aided and abetted by the awe inspiring Soviet PR machine, as the Cold War played out in the Southern Hemisphere.

I mean, Che is still considered a hero too, even though he was pathetic psychopathic murderer who killed, what is it, over 10,000 people? Was willing to shoot a pregnant women in the stomach because her family opposed him? (Just to name one egregious incident) Hey great! Put him on a t-shirt! A lot of t-shirts!

Let's just face facts, "revolutionary" heroes, especially dead ones, get a lot more moral leeway than your average murderers. Allende included.

No of course not, but it is recorded in history that the US meddled numerous times in the development of South and Central America. Bay of Pigs was just one of the most salient blunders of that sort of interference. And let's not forget people like Noriega, yes murderer and criminal but he was on the CIA payroll for a little while and he was just another example in how the US exerces influence on what happens down below the border. Not to mention the horribly destabilizing situation that has been going on for decades in Colombia with FARC battling against the US backed government. Yes FARC are not nice people, most of them are a bunch illiterate peons that have a penchant for cutting people to pieces with machetes but partially the conflict is fueled by the paternalistic involvement of the US in the country.

The problem I have with your reasoning is that you are citing the propaganda of only one side, there is plenty of spin from the side of the US as well. Usually the reality of things lies somewhere in between what two camps are claiming it to be. As for Che, I do not condone the idolization and commercialization of his image, I have respect for what he did and I do not think he was the monster you portray him to be, if he really was a monster like you say he would have been short listed with names like Pol Pot and the likes which is not the case (otherwise where are the t-shirts with Pol Pot's face on it).
The 10,000 people killed by him is a overshot figure and I want to know where you got it and the other statement that he was a pregnant woman killer sounds a lot like what people say of modern figures like Obama that he is a babykiller and a muslim (but that's beyond the point). The main idea is that the facts that you are reporting about Che Guevara sound like the other side of the coin of propaganda.

Also it is naive to think that only the Soviet power had an "awe inspiring" PR machine, the US has done plenty of that since its meteoric rise as a world power. Marshall Plan for instance was nothing than a PR stunt to show the Russians how benevolent they were in Europe (basically flexing economic muscle just to say that we can) and thus ensuring that Western Europe would remain free from Soviet influence.

You should research that statement a bit more. "The People" is a bit of a loaded phrase in revolutionary politics. The People tend to be the people who agree with the revolutionaries. Everybody else is "the enemy" who shall be demonized as a mindless fascistic capitalist horde of fools and knaves.


So according to your definition of elected by the people, we must live in a revolutionary country because obviously the other side that did not vote for Bush is the enemy(this might sound like an oversimplification but I personally think that as an analogy it works decently).

The economic collapse of his country due to collectivist policies had nothing to do with it, eh?

The discontent of few is catalyst of course, people will be pissed off, in a normal country what happens is that the opposing faction sucks it up until the term of the ruling party is over and they exert their right to vote. In South America, however, things are known to be explosive to say the least and there is a long history of American interference as I mentioned before. For instance, Peron in Argentina was praised by the US when convenient, same goes for Pinochet. The interference can be direct, like in Colombia were the US actively furnishes the government with American weapons and gear or it can be underhanded like the Bay of Pigs (bad example but it was not meant to be disclosed to the public). The bottom line is that it takes very little to create an explosive situation in South America, add gasoline to the fire and you have a full-blown revolution in your hands.
Now we know as a historic fact of the Domino theory that was very popular during the Cold War in the US, it is only natural that fear of such a scenario would warrant brash and often direct involvement in the business of other countries, especially so close to the United States.
The hatred (I'll use that word because I think it's relevant) that the US has for anything socialist and communist is well documented. The communist party is still banned in the United States of America and being called a socialist in this country equates to calling your mother a horrible expletive deleted pretty much.


And add one last thing, I am fond of Soviet things in general but I am in no way a communist, I have true european socialist tendencies. I found recently that I probably lean towards Technocratic ideology and for those who don't know what this is here's the wiki definition of a Technocracy.
And the only reason I am continuing this conversation is because I love debating, not because I think I will convince anyone.

Technocracy (bureaucratic), a governmental or organizational system where decision makers are selected based upon how highly skilled and qualified they are, rather than how much political capital they hold. A form of government in which scientists and technical experts are in control; "technocracy is described as that society in which those who govern justify themselves by appeal to technical experts who justify themselves by appeal to scientific forms of knowledge".

[TASmith]

Alright...

Kev and disco...

GET A ROOM!!!!!!!!

Seriously, private message each other if it's gonna be off topic. Or make a new thread. This one's for regulation of finance. Read the statements on the Economist and only discuss that.

THANK YOU!

[evildisco]

Sorry Smith haha got carried away.

[kev ferrara]

The Milton Friedman argument is the core question about regulating markets. It is entirely on topic to debate it.

As for the detour, the question of Chile naturally arises in Friedman debates because certain kinds of arguers, rather than address his ideas, simply attempt to link him to Pinochet's brutal regime and end the conversation before it has begun. Such attempts have to be addressed, often, in order that the debate continue on its merits alone.

And then there are those who "convert" the argument about Friedman and Chile into a more general critique of U.S. intervention in Latin America. And this leads into a discussions about Soviet intervention in Latin America as well as "revolutionary" movements in that region... which after all, are socialist or communist, i.e. highly "market regulating" political structures. And the effects thereof.

And all this is a natural outgrowth of the discussion of Free Markets. We need to look with a cold eye at the effects of Free Markets, and the effects of semi-controlled markets, and the effects of totally controlled markets. Otherwise, why bother with the whole thread?

So what's with the complaint, TA? Relax brother.

[Opilione]

If nothing else, the rhetoric being used in the debate is interesting. The anti-regulation side use terms like "freedom" and "innovation", ignoring the fact that deregulated industry of any kind usually leads to monopolisation by a few (usually one or two) major businesses, driving out all competition-driven creativity and real innovation.

On the flipside, putting the reigns back on the crazy horse of a deragulated US financial industry after how-many-decades in the US of their so-called financial libertarian "freedom" is going to be harder than getting blood from a stone, and I don't see how they could return the system to a regulated one even if they wanted to.

[TASmith]

One question I have: Is it too late to bring back the Glass Steagall act? If we did, but left current CDS as is (people would continue to own them, but couldn't sell them anymore), what would happen to the world economy?

[GhostValkyrie]

ji_G0MqAqq8
Roughly two years ago.

[Arshes Nei]

My point of contention to regulation is something of a small one. Our government offices can't get regulating social security numbers (so fraud is handled efficiently), can't get legal immigration done efficiently, so people who are trying to get here legally are getting screwed over by those who don't care and "cut in line" and to smaller offices where it takes forever to renew a damn driver's license.

I think regulation is needed but the problem is that our government is so heavy-fisted, cumbersome and outright downright slow and bloated it's like trying to trying to spread butter on toast with a meat tenderizer.

[GhostValkyrie]

As far as regulating the markets, I don't agree with it. That's not the problem though. The problem is the government not regulating and creating the currency. It's the government's job, the banks along with the fed create the money and credit out of nothing and top it off with interest.

That's not the only problem here though. People lending, spending and borrowing, perpetuating a seemingly endless practice constant consumption on top of the debt system that already exists. Our savings is below zero, we consume far more than we produce, and our standard of living is based upon a weak foundation that will get us in the end. With banks creating money on top of the fed, and some not reporting it, there's not telling how deep our debt really goes and how debased our currency really is.

These banksters certainly played a part in consolidating and stealing our wealth, and continue to do so with the bailout. I think we all share the blame of not educating ourselves on the real subject and understanding that the financial system itself is flawed as we have become a debtor nation.

I believe in the free market.
Regulation in the market is going to prevent people from making mistakes. Sound reasonable, but preventing people from making mistakes, or bailing them out when they do, will surely bring an end to making improvements.

To clear things up, however; I certainly feel the currency should be controlled and regulated by the government and hopefully backed by assets of value. Not doing so, along with our necessity for lending and spending money we don't have, and I really believe that to be the rotten core of this.


As crazy as it may sound, this is looking more and more like a Wiemar Republic scenario. My wife scolded me when I had the idea to exchange our money to yen months ago, and thought it was funny I had a savings in yen. Well, now look. (charts below)

People treat the founding fathers like they're idiots. Referring to the markets, the dollar, 9/11, etc. Like they don't understand principles of war and economic stability.

I think they knew a lot more than we give them credit for.

“I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."

I guess these men were so archaic they didn't understand what would happen. I think we need to focus more on the where our money should be coming from, and what our country should be doing. Rather than having a debate about the control and regulation of the markets themselves.

But, then again, I am a constitutionalist and believing in following it even when it may seem inconvenient. Unlike people who want to use it as their basis for an argument only when it suits their ends.

Just another dosage of my two cents. Which is roughly what the dollar's worth is now, thanks to both relinquishing control of our money to private interests and abolishing a hard asset standard to keep the system in check. Investing in the private sector can create great levels of production, but allowing the private sector to control money itself is a terrible problem. That's where there needs to be regulation.

[Black Spot]

Which country now has sufficient gold to buy up the all the IOUs and then own a couple of new countries like the US and the UK? Is there enough gold in the world? If not, who owns the world? Aliens? Is this where I say, “I for one welcome our new overlords.”?

The UK could of course say that any country is a terrorist country and then seize its assets. Why stop with Iceland? Maybe we could do it to Russia and China. Whoops! WWIII just started.

Building castles in the air should not be on the agenda for any country.

[Peter Coene]

Which country now has sufficient gold to buy up the all the IOUs and then own a couple of new countries like the US and the UK? Is there enough gold in the world? If not, who owns the world? Aliens? Is this where I say, “I for one welcome our new overlords.”?

The UK could of course say that any country is a terrorist country and then seize its assets. Why stop with Iceland? Maybe we could do it to Russia and China. Whoops! WWIII just started.

Building castles in the air should not be on the agenda for any country.

Buying up the IOUs is indeed a lost cause. I think though that it might be possible to slowly move back to printing silver money to help stabilize things. Granted, now-a-days a silver dollar would be little bigger than a dime and something the size of the old silver dollars would be a $10 piece if we were to use the current cost of silver. Interestingly, that could be read as out currency holding a tenth of the value it held back in the early 60's when we were still using silver. Under that standard, half dollars, quarters, and dimes need not be printed in silver, as the amount of silver it would take to print them is too small to bother with.

I strongly doubt that it would solve our current situation. Debt would still be debt. In fact, circulating the stuff may initially be little more than a gesture, considering how little of a percentage of our money is actually in the form of cash, and also how many paper dollars and sandwich coins are still on the market. But I think it would help to convince people of the currency's buying power once more and stabilize the dollar to keep it from dropping further.

[Craig D]

Compared to many major currencies the US dollar is RISING, not falling, right now.

[kev ferrara]

Compared to many major currencies the US dollar is RISING, not falling, right now.

The falling tide has lowered all boats, and we're still the most innovative yet stable boat on the water. The reason we've had so much access to credit (enough rope to hang ourselves) is that everybody in the world is betting on us. Even with the contraction, people are still going to want to make money with their money. And we're still the wildest casino going.

Anyhow, here's a cute polemical article from Reason.com, a libertarian site. This discusses all the wishful thinking that anti-capitalists put into the things they say (Everybody says what they want to be true, right?) as well as rejoinder to Naomi Klein's "Disaster Capitalism" thesis...

http://www.reason.com/news/show/129535.html

In other news, Russia continues to try to corner the natural gas market (T. Boone Pickens' pick for the bridge energy technology that will take us to the future's enzymatic engines and solar cells) This time, rather than barricading the caspian sea and colluding with Iran on the straight of Hormuz, the great bear is looking to create a natural gas cartel among itself, Iran and Qatar. (Another extension of their 40 year old OPEC strategy to remain a superpower by controlling world energy prices.)

Geopolitics is hardball. I hope Obama gets the picture by now.

[Black Spot]

We need to make things that people actually need which will not fall apart 2 days after the guarantee finishes. I’m fed up with the consumer based economy where the consumer comes last in any consideration. We’ve settled for second best for the last 20 years or so and enough is enough. I have a freezer over 40 years old that has seen 2 newcomers off. I even have a 1950s dryer that would put modern tumble dryers to shame. Why build shit, when building something that might be upgraded would be a better long term prospect? Chasing the market with bling products that don’t last is very short sighted. There doesn’t seem to be any pride in building something that will last any more.

Getting rid of the crap and having some pride in what you manufacture is the only solid way back. Economy is built on what people buy and when you sell crap don’t expect the customers back soon.

[kev ferrara]

You sound like a dissatisfied consumer. Maybe you should call up Frigidaire and complain. Myself, I've been pretty damn impressed with all the fridges and stoves I've seen around. I've been blown away by the quality of crispy chicken skin made by convection ovens and I'm very impressed with the ability of the new microwaves to reheat meat without turning it into leather. Convection microwaves are also pretty awesome. I wish I could afford a Segway. The computer technology is damn amazing.

Etc. etc. etc.

So we'll just agree to disagree.

[Craig D]

Getting rid of the crap and having some pride in what you manufacture is the only solid way back. Economy is built on what people buy and when you sell crap don’t expect the customers back soon.

American car makers took decades to figure that one out. Whether they have really put it into practice is still questionable.

[Black Spot]

And how long have you possessed such wonderful items? Couple of years? Maybe even 5.

I even expect computers to last within limits. Its all rush, rush, rush to get out the next new thing.

A stove reheats meat great, but it's old fashioned and not instant. Time cost money and money buys time without consideration.

[kev ferrara]

Time cost money and money buys time without consideration.

Time does not cost money, or else rich people would live to be 400. A microwave can be a force for good, as well as evil.

While I sympathize with some of what you say, your blanket statements of condemnation aren't very elucidative.

[Peter Coene]

Compared to many major currencies the US dollar is RISING, not falling, right now.

Yes, and if we could eat forreign currency or use it to fuel our cars that would be great. However, unless you are an investor in forreign currency, knowing that someone else is doing worse than you is little more than schadenfreude.

An airplane taking a nosedive at 500mph may seem to be going up when viewed from a jet diving at mach 3, but both will be a wreck if they aren't able to pull out of the dive before hitting the ground.

[Black Spot]

Time does not cost money, or else rich people would live to be 400. A microwave can be a force for good, as well as evil.

While I sympathize with some of what you say, your blanket statements of condemnation aren't very elucidative.

The whole idea of modern technology is to make life easier so that we can forget about mundane tasks. We take our washing machine that barely last five years for granted, when a lot of the world has never experienced one. If things were built to last, businesses would have to ensure that new markets could afford their wares. When everyone had a washing machine, it is then the time to redesign it.

The free access to credit has made the consumer chase after rainbows and irresponsible companies grow to fill that need. Goods are over engineered to make customers think that’s what they need, when most of the time the old model was perfectly adequate and did the job fine. Life is too rushed towards the next new shiny thing.

Is that elucidative enough?

[kev ferrara]

The whole idea of modern technology is to make life easier so that we can forget about mundane tasks. We take our washing machine that barely last five years for granted, when a lot of the world has never experienced one. If things were built to last, businesses would have to ensure that new markets could afford their wares. When everyone had a washing machine, it is then the time to redesign it.

The free access to credit has made the consumer chase after rainbows and irresponsible companies grow to fill that need. Goods are over engineered to make customers think that’s what they need, when most of the time the old model was perfectly adequate and did the job fine. Life is too rushed towards the next new shiny thing.

Is that elucidative enough?

Technology is created to scale up human effort. Some people take technology for granted, some do not. People charge money for the goods and services they supply. In a competitive marketplace small differences between products can result in a sale or a pass by any given consumer. (EDIT: Soon sustainability will be an important market differentiator -- all to the good.)So companies will try to differentiate their products to attract customers. New technologies are being created every day. And new consumers are being created everyday. New technologies are more fragile than old ones, but only because they are more technologically complex and made of more easily reproducible, inexpensive, transportable parts. So, over time, cast iron and vacuum tubes are often replaced by advanced plastics and chips because of the many costs associated with creating products out of iron and vacuum tubes, the cost and difficulty of shipping those products, and the problems of the consumer with such heavy items. New technologies are cheaper per capita than old/early ones. Cheap mass production makes it more likely that effective products will go to third world countries than the heavy expensive products from some false idyllic past. The existence of still-functioning old products does not mean all old products were all high quaility. That is a false induction. The existence of easy credit did not make anybody do anything. A lack of mental discipline makes people more susceptible to their own whims and fantasies. "Over-engineered" goods fail in the marketplace through Darwinistic principles. People like new stuff because its fun to have the latest gadgets. Life is not too rushed for everybody. If you find it to be so, move somewhere quieter and cheaper.

All to say, sorry to disagree.

[Peter Coene]

Technology is created to scale up human effort. Some people take technology for granted, some do not. People charge money for the goods and services they supply. In a competitive marketplace small differences between products can result in a sale or a pass by any given consumer. So companies will try to differentiate their products to attract customers. New technologies are being created every day. And new consumers are being created everyday. New technologies are more fragile than old ones, but only because they are more technologically complex and made of more easily reproducible, inexpensive, transportable parts. So, over time, cast iron and vacuum tubes are often replaced by advanced plastics and chips because of the many costs associated with creating products out of iron and vacuum tubes, the cost and difficulty of shipping those products, and the problems of the consumer with such heavy items. New technologies are cheaper per capita than old/early ones. Cheap mass production makes it more likely that effective products will go to third world countries than the heavy expensive products from some false idyllic past. The existence of still-functioning old products does not mean all old products were all high quaility. That is a false induction. The existence of easy credit did not make anybody do anything. A lack of mental discipline makes people more susceptible to their own whims and fantasies. "Over-engineered" goods fail in the marketplace through Darwinistic principles. People like new stuff because its fun to have the latest gadgets. Life is not too rushed for everybody. If you find it to be so, move somewhere quieter and cheaper.

All to say, sorry to disagree.
Not disagreeing with you here, but at a certain point people need to sit back and ask "so what is the advantage I gain out of this?" Other than being able to wave around the new gadget and making their friends jealous for the average American who hates his job but does it to put food on the table there really isn't that much of a gain, but instead he is faced with the option of becoming obsolite if he doesn't.

I mean, can you really blame people who are tired of trying to figure out the latest and greatest product and finally have it worked out just in time for the next model to come out? They aren't working any less hours but are expected to do more with that time.

The fact that you would say "if you find it to be so, move somewhere quieter and cheaper" is in and of itself the type of mentality that is so hard for people to accept. You are basically saying "keep up or get out of the way; you are no longer needed so we don't want you here."

[kev ferrara]

It is a choice to step off and on the high fructose 93 octane ultra high speed internet blackberry cell phone gadget driven whirlwind. As more people decide to step off, the more market pressure there will be to change that "lifestyle" or offer an alternative. There is a huge movement already underway among people who want a simpler, more honest, more sustainable life. And a political tidal wave can rush into the marketplace with good solid "new economy" ideas and supplant the wastefulness, economically, ecologically, and personally. And I'm all for that. (I was merely de-emotionalizing language and unpacking assumptions in my last post. Not advocating for one lifestyle over another.)