News Any of you define yourselves as Libertarians?

[Al68]

Please cite his testimony and explain how Ivan has misrepresented it...No... every use of a quote or asessment isn't that... it's called a basis for an argument, an example. You should peruse http://en.wikipedia.org/wiki/Argument_from_authority and here's a hint as to where you went wrong: ...You don't take well to rhetorical points you're not in the process of making do you? Again, what you describe is really very distant from Libertarianism; ignorance of what you really want doesn't give you the right to give that a title...Not unregulated, by poorly regulated in theory and in practice. Would you agree, or disagree? In either case, why?...Your free market doesn't remain free when humans are involved... nothing will match your vision of a free market after a while. What is it that you believe is so fantastic about a truly free market, and how do you believe that it won't be exploited by cartels of various stripes? In short, why do you think the evolution of finance won't repeat again and again?...
Given the number of assets related to mortgages and other lending Frannie & Freddie (and oh yes... the one still standing...) were involved in, you're at least partly correct. If you're laying blame where these toxic assets werre bundled and sold, then you need to look elsewhere. ...Don't get me wrong... I get it... you mean that they allowed people not otherwise able to buy homes when they shouldn't have. True, but "started the problem"... you might as well just blame poor people for wanting to own a home... or maybe Goldman-Sachs, and others who so kindly made the whole thing a gamble and REALLY took out the economy?...True... changing subjects doesn't help you at all...You've offered nothing, but rhetoric... if you want more, offer more...Are you really missing his point, or being intentionally coy?

Too much delusional incoherent nonsense for me to go back and forth with you on. I already told you I will not help you destroy another thread with your nonsense.

 

[nismaratwork]

"Ninety Nine percent of people in the world - and the rest of us are in great danger of contagion." (William Whyte)

Too true.

I'd add, a bit of old wisdom from a modern source:

"In any agenda, political or otherwise, there is a cost to be borne. Always ask what it is, and who will be paying. If you don’t, then the agenda makers will pick up the perfume of your silence like panthers on the scent of blood, and the next thing you know, the person expected to bear the cost will be you. And you may not have what it takes to pay.” (Richard K. Morgan)

edit: I have to say, I feel that modern Libertarians don't appreciate that constant cost, and simply wish for it to be kept far away from them... minimized by supposedly even distribution. In short, I'd say that it's moral cowardice, insofar as there is anything else in politics. It's religion, a dream of a market that never existed, and people who will never allow it to comet to pass. It's foolhardy and a sign of political immaturity, and a stunted sense of the world beyond one's own backyard.

@Al68: For you... all I hear is, "Ceterum censeo Carthaginem esse delendam" (Therefore I conclude that Carthage must be destroyed) said by Cato the Elder... I doubt you understand the reference.

 

[BWV]

Yes, but a Hayekian rather than a Rothbardian one

(i.e. pragmatic & utilitarian arguments for free markets vs. rights-based ones)

with the caveat that leverage in the financial system does need to be monitored and regulated

The Austrian narrative of cheap credit distorting the price system leading to a misallocation of capital, followed by a painful adjustment is better IMO than the Keynesian animal spirits / demand story (not that psychology is not an issue). Both are better than the neoclassical / efficient markets model which has difficulty even admitting the existence of bubbles.

 

[nismaratwork]

Yes, but a Hayekian rather than a Rothbardian one

(i.e. pragmatic & utilitarian arguments for free markets vs. rights-based ones)

with the caveat that leverage in the financial system does need to be monitored and regulated

The Austrian narrative of cheap credit distorting the price system leading to a misallocation of capital, followed by a painful adjustment is better IMO than the Keynesian animal spirits / demand story (not that psychology is not an issue). Both are better than the neoclassical / efficient markets model which has difficulty even admitting the existence of bubbles.

Well... I think in practice those signals are lost in noise, so the vision of a better market isn't possible going this route. On the other hand, pragmatism can be spoken to... better than "rights", which are a crock.

Still, how do you prevent cartels from preventing market signals from working?

 

[BWV]

Well... I think in practice those signals are lost in noise, so the vision of a better market isn't possible going this route. On the other hand, pragmatism can be spoken to... better than "rights", which are a crock.

Still, how do you prevent cartels from preventing market signals from working?

rights are not a crock, the right to own property or the fruits of one's labor is as fundamental as freedom of speech or religion

according to Hayek, the information reflected in prices are primary reason why planned economies fail:

Today it is almost heresy to suggest that scientific knowledge is not the sum of all knowledge. But a little reflection will show that there is beyond question a body of very important but unorganized knowledge which cannot possibly be called scientific in the sense of knowledge of general rules; the knowledge of the particular circumstances of time and place. It is with respect to this that practically every individual has some advantage over all others in that he possesses unique information of which beneficial use might be made, but of which use can be made only if the decisions depending on it are left to him or are made with his active cooperation.

To know of and put to use a machine not fully employer or somebody's skill which could be better utilized, or to be aware of a surplus stock which can be drawn upon during an interruption of supplies is socially quite as useful as the knowledge of better alternative techniques...

Fundamentally, in a system where the knowledge of the relevant facts is dispersed among many people, prices can act to coordinate the separate actions of different people in the same way as subjective values help the individual to coordinate the parts of his plan.

http://www.sjsu.edu/faculty/watkins/hayek.htm

Conspiracies by firms to rig prices are, and should remain illegal (not withstanding the difficulty of maintaining a cartel - it is too profitable to cheat). The history of anti-trust actions is that they tend mechanisms for rent-seeking by competitors rather than protection of consumers. All the alleged monopolies - from Standard Oil to Wal Mart - got their size by aggressively lowering prices to consumers. The first action under the Sherman Act was brought against Swift by competing meat processors - Swift's refrigerated rail cars made delivery of meat much cheaper and safer. You would be hard pressed to find a single case in the history of anti-trust actions where consumers were actually harmed.

 

[nismaratwork]

rights are not a crock, the right to own property or the fruits of one's labor is as fundamental as freedom of speech or religion

I should be clear: Intrinsic rights, Divine rights... legal rights are not a crock.

according to Hayek, the information reflected in prices are primary reason why planned economies fail:


http://www.sjsu.edu/faculty/watkins/hayek.htm

Conspiracies by firms to rig prices are, and should remain illegal (not withstanding the difficulty of maintaining a cartel - it is too profitable to cheat). The history of anti-trust actions is that they tend mechanisms for rent-seeking by competitors rather than protection of consumers. All the alleged monopolies - from Standard Oil to Wal Mart - got their size by aggressively lowering prices to consumers. The first action under the Sherman Act was brought against Swift by competing meat processors - Swift's refrigerated rail cars made delivery of meat much cheaper and safer. You would be hard pressed to find a single case in the history of anti-trust actions where consumers were actually harmed.

...And in a Libertarian world, who is taking anti-trust actions, who writes the laws and enforces them? In short, how do you keep it Libertarian for more than the moment of its inception, when cartels are SO profitable, despite the maintenance. History shows that free markets just do not remain free, and I think your view of Standard Oil is only technically correct.

Once they lower prices and destroy competition, they're now free to treat workers like junk, and raise prices.

Comcast is a fine example, even if they're fighting a losing battle, they're retarding progress by trying to maintain exclusivity in lines that belong to all of us.

 

[BWV]

...And in a Libertarian world, who is taking anti-trust actions, who writes the laws and enforces them? In short, how do you keep it Libertarian for more than the moment of its inception, when cartels are SO profitable, despite the maintenance. History shows that free markets just do not remain free, and I think your view of Standard Oil is only technically correct.

Once they lower prices and destroy competition, they're now free to treat workers like junk, and raise prices.

Comcast is a fine example, even if they're fighting a losing battle, they're retarding progress by trying to maintain exclusivity in lines that belong to all of us.

Cartels are subject to the Prisoners Dilemma problem so they don't work for very long (OPEC is a great example)

the fallacy is that somehow firms in a competitive marketplace become so dominant they are immune from competition - the truth is otherwise. Usually by the time the government has gotten around to putting an anti-trust action together the firms are already on the decline. The DOJ case against IBM's computer monopoly was finally dropped in the 1990s, likewise Microsoft's decline coincided with several anti-trust suits.

In a libertarian world the same people write the laws as do now - which means that well-intended regulation becomes captive to rent-seeking by corporate interests. More government power over the economy increases the payoff to lobbying and provides bureaucrats and politicians with capital for patronage

 

[nismaratwork]

Cartels are subject to the Prisoners Dilemma problem so they don't work for very long (OPEC is a great example)

the fallacy is that somehow firms in a competitive marketplace become so dominant they are immune from competition - the truth is otherwise. Usually by the time the government has gotten around to putting an anti-trust action together the firms are already on the decline. The DOJ case against IBM's computer monopoly was finally dropped in the 1990s, likewise Microsoft's decline coincided with several anti-trust suits.

In a libertarian world the same people write the laws as do now - which means that well-intended regulation becomes captive to rent-seeking by corporate interests. More government power over the economy increases the payoff to lobbying and provides bureaucrats and politicians with capital for patronage

You may be right, but how long does an OPEC need to be around to do immense and lasting harm?

 

[Ivan Seeking]

In a libertarian world the same people write the laws as do now - which means that well-intended regulation becomes captive to rent-seeking by corporate interests. More government power over the economy increases the payoff to lobbying and provides bureaucrats and politicians with capital for patronage

As opposed to periodic global economic collapse through market fluctuations? Tough choice.

 

[Ivan Seeking]

I should be clear: Intrinsic rights, Divine rights...

Consider it a definition, not an appeal to authority.

 

[BWV]

As opposed to periodic global economic collapse through market fluctuations? Tough choice.

Oh, they are not opposed, you can have both (which we did)

The banking regulatory system in the US became totally captive to the interests of Wall Street and the Banking sector

 

[Gokul43201]

A free market can't fail to self-regulate because a free market by definition is a self-regulating market.

I think when people say things like "failure to self-regulate" they mean failure to prevent large-scale instabilities from existing. I have yet to see a paper that proves that large scale instabilities are incompatible with a free market (and this is not for lack of searching). In whatever papers I have read, they freely adopt models that do permit instability, the most common being the approximation of a damped, driven oscillator, which we know is unstable a large range of parameter space. If you have a reference for a proof of the above conjecture, I'd love to see it.

I like the philosophy of Libertarianism. It would be a pleasantly welcome surprise to find that it also produces high mathematical stability. I think it wouldn't be very nice to have socio-politico-economic systems that have a lot of unpredictable (or hard-to-predict - which they all are, unless you're a Hari Seldon) instabilities.

 

[nismaratwork]

Consider it a definition, not an appeal to authority.

Hmmm... I'm not sure what you mean?

 

[BWV]

I think when people say things like "failure to self-regulate" they mean failure to prevent large-scale instabilities from existing. I have yet to see a paper that proves that large scale instabilities are incompatible with a free market (and this is not for lack of searching). In whatever papers I have read, they freely adopt models that do permit instability, the most common being the approximation of a damped, driven oscillator, which we know is unstable a large range of parameter space. If you have a reference for a proof of the above conjecture, I'd love to see it.

I like the philosophy of Libertarianism. It would be a pleasantly welcome surprise to find that it also produces high mathematical stability. I think it wouldn't be very nice to have socio-politico-economic systems that have a lot of unpredictable (or hard-to-predict - which they all are, unless you're a Hari Seldon) instabilities.

the usual proof of the efficiency of unregulated markets is Pareto efficiency ( http://en.wikipedia.org/wiki/Fundamental_theorems_of_welfare_economics ) which is based upon assumptions that are challenged by critics - "perfect information" being one example.

But this approach suffers from its obsession with equilibrium and simplifying assumptions (usually done so closed-form equations can be constructed).

A more interesting example arguing against the stability of unregulated financial markets (and applicable to the financial crisis) is here:

ABSTRACT: Dr. Stefan Thurner’s report analyses the development, buildup and unfolding of financial market crashes using a dynamic agent based model. The model simulates relevant conditions under which agents behave in financial markets and allows one to see how excessive leverage (the use of credit for speculative investments) is a prime source of vulnerability and can act as the catalyst for a crash. The model demonstrates how crashes result as a consequence of synchronization effects of the different actors in financial markets. The report concludes with recommendations, most notably the need for radical improvements in the transparency of creditor- debtor relationships between financial market participants, which would reduce the chance of synchronization.

http://www.oecd.org/dataoecd/57/61/46890029.pdf

 

[Al68]

Yes, but a Hayekian rather than a Rothbardian one

(i.e. pragmatic & utilitarian arguments for free markets vs. rights-based ones)

with the caveat that leverage in the financial system does need to be monitored and regulated

rights are not a crock, the right to own property or the fruits of one's labor is as fundamental as freedom of speech or religion...

I'm sure you must realize that the caveat in your first post contradicts the right to own the fruits of one's labor in the next. The property being used as "leverage" is the fruit of a person's labor, presumably transferred via voluntary transactions, while the "regulator" is (presumably) a third party (government) that never received any ownership rights to the property from its owner(s).

 

[BWV]

I'm sure you must realize that the caveat in your first post contradicts the right to own the fruits of one's labor in the next. The property being used as "leverage" is the fruit of a person's labor, presumably transferred via voluntary transactions, while the "regulator" is (presumably) a third party (government) that never received any ownership rights to the property from its owner(s).

No, its a matter of degree. Hayek, for example, did not oppose reasonable social safety nets supported by taxes which a Rothbardian would as a matter of rights.

 

[Al68]

No, its a matter of degree. Hayek, for example, did not oppose reasonable social safety nets supported by taxes which a Rothbardian would as a matter of rights.

Of course it's a matter of degree, but perhaps I should have said that that caveat contradicts an absolute right to own the fruits of one's labor, not necessarily a partial right to it.

But the reason I pointed this out is that you seemed to take the Hayekian view in that first post, but the Rothbardian view in the other, where you said "the right to own property or the fruits of one's labor is as fundamental as freedom of speech or religion".

Did I misinterpret your post(s)?

 

[BWV]

Of course it's a matter of degree, but perhaps I should have said that that caveat contradicts an absolute right to own the fruits of one's labor, not necessarily a partial right to it.

But the reason I pointed this out is that you seemed to take the Hayekian view in that first post, but the Rothbardian view in the other, where you said "the right to own property or the fruits of one's labor is as fundamental as freedom of speech or religion".

Did I misinterpret your post(s)?

just as there is a range of interpretation of what the right to free speech includes, the same holds for property rights - reasonable levels of taxation (i.e. paying for the infrastructure that makes owning property possible - courts, police, armies etc) not being an infringement of them. Rothbard being an absolutist position

 

[nismaratwork]

I'm sure you must realize that the caveat in your first post contradicts the right to own the fruits of one's labor in the next. The property being used as "leverage" is the fruit of a person's labor, presumably transferred via voluntary transactions, while the "regulator" is (presumably) a third party (government) that never received any ownership rights to the property from its owner(s).

The practice of condemnation was transplanted into the American colonies with the common law. In the early years, unimproved land could be taken without compensation; this practice was accepted because land was so abundant that it could be cheaply replaced. When it came time to draft the United States Constitution, differing views on eminent domain were voiced. Thomas Jefferson favored eliminating all remnants of feudalism, and pushed for allodial ownership.[2] James Madison, who wrote the Fifth Amendment to the United States Constitution, had a more moderate view, and struck a compromise that sought to at least protect property rights somewhat by explicitly mandating compensation and using the term "public use" rather than "public purpose," "public interest," or "public benefit."[3]

The Fifth Amendment to the U.S. Constitution imposes limitations on the exercise of Eminent Domain; i.e., the taking must be for public use and just compensation must be paid. Some historians have suggested that these limitations on the taking power were inspired by the need to permit the army to secure mounts, fodder and provisions from local ranchers and the perceived need to assure them compensation for such takings. Similarly, soldiers forcibly sought housing in whatever homes were near their military assignments. To address the latter problem, the 3rd Amendment was enacted in 1791 as part of the US Constitution's Bill of Rights. It provided that the quartering of soldiers on private property could not take place in peacetime without the landowner's consent. It also required that, in wartime, established law had to be followed in housing troops on private property. Presumably, this would mandate "just compensation", a requirement for the exercise of eminent domain in general per the 4th Amendment to the Constitution [4] All US states have legislation specifying ED procedures within their respective territories.[5]

Your view is more of an emerging concept, but the reality is that with justification your land can be taken by the government. If that is abhorrant to you, then so are some of the founding principles of this country (which is fine IMO), much as we eschew slavery, and extend "equal creation" to all men, and women (in theory).

How does an absolutist perspective mesh with a gray world in any way? This is another example of what others have tried to point out; making a grand claim based on what you think SHOULD be, not what actually is legal or extant. Still, always a pleasure to see you backpedal from, "contradiction," to, "Of course it's a matter of degree." Where will you go next, if not away?

The idea that removing or diminishing centralized authority somehow increases individual freedom, much like the vision of a free market, is mostly absurdist in the face of history and human nature. IMHO.

 

[Newai]

A quick way to make a rough approximation: http://www.theadvocates.org/quiz

I scored P=70% & E=60%, putting me on the boundary between centrist and libertarian.

That's a good link.

I'm at Personal=80%, Economic=60%

 

[Ivan Seeking]

Oh, they are not opposed, you can have both (which we did)

The banking regulatory system in the US became totally captive to the interests of Wall Street and the Banking sector

But there is no way a free market can avoid the causes of the collapse. A regulated market could but may not. Again, tough choice.

Gokul, in Greenspan's Congressional testimomy, he states that large oscillations are unvoidable but rare. What shouldn't have been possible are the reasons for the collapse.

If I understand Taleb's argument [Black Swan], we should see increasing instability with oscillations of ever increasing magnitude in a "free" global economy.

 

[ThomasT]

The idea that removing or diminishing centralized authority somehow increases individual freedom, much like the vision of a free market, is mostly absurdist in the face of history and human nature. IMHO.

I agree, and as BWV has pointed out, it's a matter of degrees of regulation. Apparently, if investment firms are allowed to overleverage, with a few people benefitting from that and a lot of people being hurt, then they'll do it. I would think that a Libertarian would be for this sort of regulation, not against it.

 

[Ivan Seeking]

Hmmm... I'm not sure what you mean?

It is an axiom, not an appeal to God's authority. These rights are above the law, not derived from it. In other words, fundamentally, "the law" answers to the people, not the other way around. The law derives its power from the people.

Gingrich would argue that authority comes directly from God [he just did yesterday], but not all Libertarians are nuts.

 

[nismaratwork]

It is an axiom, not an appeal to God's authority. These right are above the law, not derived from it.

Ahhh, gotcha!

@ThomasT: Agreed.

 

[MECHster]

Secondly, denying the obvious doesn't make it go away.

Denying the obvious? Oh come on. Without the government policies which let those banks gamble with other people's money, they would have never acted as they did. The government was responsible to pay all of the "bets" the banks lost. The banks really had nothing to lose by taking advantage of the system. If they lost the bet, the government paid for it, if they won, they got paid, if the system collapses, they get bailed out. In all scenarios the government was a major player. Also, without the bail out, the banks would be MUCH more cautious in their "bets". Even if everything I just said is completely wrong, watch this video in which people who know more economics than you or I will ever know disagree with you. Even if you disagree with them, at least acknowledge the possibility of it NOT being a free-market collapse.

 

[turbo]

Denying the obvious? Oh come on. Without the government policies which let those banks gamble with other people's money, they would have never acted as they did. The government was responsible to pay all of the "bets" the banks lost. The banks really had nothing to lose by taking advantage of the system. If they lost the bet, the government paid for it, if they won, they got paid, if the system collapses, they get bailed out. In all scenarios the government was a major player. Also, without the bail out, the banks would be MUCH more cautious in their "bets". Even if everything I just said is completely wrong, watch this video in which people who know more economics than you or I will ever know disagree with you. Even if you disagree with them, at least acknowledge the possibility of it NOT being a free-market collapse.

It was not a free-market collapse. It was a confluence of crooks and gamblers gaming the system while regulators looked away, PLUS Fed officials making sure that the crooks and gamblers could get access to our money for next to nothing. In return, people like myself who have saved all our lives and wanted to use interest on our savings to supplement our retirement were and are still getting screwed. Banks, credit unions, and investment firms pay next-to-nothing in interest because they don't have to. Unless the Fed tightens up the money faucet by increasing interest rates, we will still get screwed. The Greenspan/Bernanke philosophy of keeping money free for Wall Street is responsible in part for the concentration of wealth at the top and the pressure on the middle-class, poor, and retirees. Lest anyone make any idealogical inferences regarding my identification of culprits, BOTH major political parties are complicit in this pandering to the wealthy and powerful.

 

[nismaratwork]

Denying the obvious? Oh come on. Without the government policies which let those banks gamble with other people's money, they would have never acted as they did. The government was responsible to pay all of the "bets" the banks lost. The banks really had nothing to lose by taking advantage of the system. If they lost the bet, the government paid for it, if they won, they got paid, if the system collapses, they get bailed out. In all scenarios the government was a major player. Also, without the bail out, the banks would be MUCH more cautious in their "bets". Even if everything I just said is completely wrong, watch this video in which people who know more economics than you or I will ever know disagree with you. Even if you disagree with them, at least acknowledge the possibility of it NOT being a free-market collapse.

Oooooh... so in other words, "she was asking for it".

 

[ParticleGrl]

Denying the obvious? Oh come on. Without the government policies which let those banks gamble with other people's money, they would have never acted as they did.

What government policy "let" the banks gamble with other people's money? Either the banks are free to loan out/invest money as they see fit, or they are regulated. It was a failure of regulation that allowed the banks to be leveraged to the hilt. Even doing away with fractional reserve banking (an Austrian favorite) would be a government regulation.

Pension plans/commercial banks/etc knowingly invested in CDOs, etc, mostly because the market makers knowingly mislead their clients. Again, a failure of regulation to prevent simple fraud.

The government was responsible to pay all of the "bets" the banks lost.

No, it wasn't. Fanny and Freddie bought up SOME of the subprime mortgages. However, Goldman, Bear Stearns and Lehman bought up FAR MORE. Why do you think Lehman collapsed? It was holding bad bets, and the government didn't pay. It was only when everyone realized how terribly precarious the position we were in that the government stepped in.

Keep in mind that the derivatives that blew up (mostly swaps) happened on the over-the-counter market. This market is neither regulated, nor government backed. It represents, to my knowledge, the free-est market in banking

Also, without the bail out, the banks would be MUCH more cautious in their "bets".

Without the bailout, the world economy would have ground to a halt. Yes, I'd like to see those bankers which engaged in fraud investigated and arrested, but I understand why the banks were bailed out.

Even if everything I just said is completely wrong, watch this video in which people who know more economics than you or I will ever know disagree with you.

Nothing is stopping you from sitting down with some books and learning some economics.

Also, not all pundits actually know what they are talking about (in fact, most don't). The Cato institute is loaded with proponents of the Austrian School of Economics. Even other more mainstream libertarian economists point out their underlying theory is empirically wrong. See, for instance, http://econfaculty.gmu.edu/bcaplan/whyaust.htm

 

[Ivan Seeking]

Denying the obvious? Oh come on. Without the government policies which let those banks gamble with other people's money, they would have never acted as they did. The government was responsible to pay all of the "bets" the banks lost. The banks really had nothing to lose by taking advantage of the system.

Not true. Paulson struggled terribly with the need to maintain market discipline. He most of all wanted to allow banks to fail. But after allowing one failure [Lehman Brothers] and then seeing the markets start to crash in response, he recognized that global economic collapse trumps market discipline. At that moment he recognized the depth of the problem - it was systemic.

Note that in his testimony during the time of the crisis, he explicity cites the need for market discipline and that regulation and access was needed to avert systemic risk. This is from not only the Treasury Secretary, but a former Wall Street giant and iconic free-marketeer.

In a presentation to the US House Committee on Financial Services last Thursday in Washington, Henry Paulson, the US Treasury Secretary, said that “For market discipline to effectively constrain risk, financial institutions must be allowed to fail.”
Paulson outlined his proposals for equipping the SEC and the Federal Reserve to be able to avert events that posed unacceptable levels of systemic risk but reminded the Committee that regulation alone was not the answer. The Fed needed the authority to access necessary information - whether from a commercial bank, investment bank, a hedge fund, or another type of financial institution - and it needed the tools to intervene to mitigate systemic risk in advance of a crisis. But financial institutions had to be encouraged to exercise market discipline...

http://www.chasecooper.com/News-Regulatory_Regulation-2008-07-14.php

 

[Ivan Seeking]

It was not a free-market collapse. It was a confluence of crooks and gamblers gaming the system while regulators looked away, PLUS Fed officials making sure that the crooks and gamblers could get access to our money for next to nothing.

So it was a failure of the market and a failure to properly regulate the market, which again means a failure of the free market. How exactly do you arrive at your conclusion based on your statement? All that you've done is to reenforce my point that the free market failed and regulation is needed. When left to run amok, the markets turned into one big casino. And we all lost as a result.

There is nothing in a free market to prevent "too big to fail". In my view, this is the now painfully obvious achilles heel of free-market puritanism. No doubt, in the abstract, the market will correct itself. In theory, on paper, as an academic exercise - a gedanken experiment - the free market probably works. The problem is that in the real world, we can't afford to live with the market corrections!

I still believe markets should be as free as possible, but the incessant smokescreening of clear market failures is destructive. The tea partiers have made a religion of denying objective reality here.

 

[Al68]

So it was a failure of the market and a failure to properly regulate the market, which again means a failure of the free market. How exactly do you arrive at your conclusion based on your statement? All that you've done is to reenforce my point that the free market failed and regulation is needed. When left to run amok, the markets turned into one big casino. And we all lost as a result.

There is nothing in a free market to prevent "too big to fail". In my view, this is the now painfully obvious achilles heel of free-market puritanism. No doubt, in the abstract, the market will correct itself. In theory, on paper, as an academic exercise - a gedanken experiment - the free market probably works. The problem is that in the real world, we can't afford to live with the market corrections!

I still believe markets should be as free as possible, but the incessant smokescreening of clear market failures is destructive. The tea partiers have made a religion of denying objective reality here.

What do you call the religion of constantly referring to a government regulated market as a free market? Over and over and over?

There's no point in arguing the semantics of what the words "free market" mean, but the market that you point to as having failed was not in fact the same type of market libertarians advocate. No use or misuse of economic phrases will change that fact.

 

[nismaratwork]

What do you call the religion of constantly referring to a government regulated market as a free market? Over and over and over?

There's no point in arguing the semantics of what the words "free market" mean, but the market that you point to as having failed was not in fact the same type of market libertarians advocate. No use or misuse of economic phrases will change that fact.

Your obsession with semantics is both annoying, and annoying... neither of which forwards the discussion. Anyway, to answer, if you tell me the name of your religion, I'd spell it backwards and say that's the answer.

 

[OmCheeto]

Then I would suggest that you are interpreting the items in that list very differently from the way libertarians do.

Obviously.

I don't have much spare time lately during the week(sleep-work-sleep-work-sleep-work), so maybe I'll break this down into subroutines:

The 10 core principles of the classical liberal & libertarian view of society and the proper role of government:
1) Liberty as the primary political value
2) Individualism
3) Skepticism about power
4) Rule of Law
5) Civil Society
6) Spontaneous Order
7) Free Markets
8) Toleration
9) Peace
10) Limited Government

#6 & #10

Spontaneous Order & Limited Government

In every society on the planet, due to spontaneous order, a government forms.

Since according to Forbes, America has one of the lowest tax burdens in the industrialized world, our government must be, in relation to the other industrialized nations, more limited.

Ergo, we are more Libertarian than the rest of the industrialized world.

Ok then, time for bed. I'll be back tomorrow.

 

[Al68]

Since according to Forbes, America has one of the lowest tax burdens in the industrialized world, our government must be, in relation to the other industrialized nations, more limited.

Ergo, we are more Libertarian than the rest of the industrialized world.

I'm not quite sure if you intended this, but I agree completely that the U.S. is more economically libertarian, on average, than the rest of the world.

And the http://en.wikipedia.org/wiki/Index_of_Economic_Freedom" backs that up, too. It lists the U.S currently as 9th.

 

[OmCheeto]

I'm not quite sure if you intended this, but I agree completely that the U.S. is more economically libertarian, on average, than the rest of the world.

And the http://en.wikipedia.org/wiki/Index_of_Economic_Freedom" backs that up, too. It lists the U.S currently as 9th.

I'm quite sure I intended it, but I don't see Forbes listed there in Wikipedia. I was referring to the http://www.forbes.com/global/2009/0413/034-tax-misery-reform-index.html" .

And I'm supposed to be asleep at the moment, so I'll let this foment for about 24 hours.

 

[edward]

Denying the obvious? Oh come on. Without the government policies which let those banks gamble with other people's money, they would have never acted as they did. The government was responsible to pay all of the "bets" the banks lost. The banks really had nothing to lose by taking advantage of the system. If they lost the bet, the government paid for it, if they won, they got paid, if the system collapses, they get bailed out. In all scenarios the government was a major player. Also, without the bail out, the banks would be MUCH more cautious in their "bets". Even if everything I just said is completely wrong, watch this video in which people who know more economics than you or I will ever know disagree with you. Even if you disagree with them, at least acknowledge the possibility of it NOT being a free-market collapse.

And yet these people who supposedly know so much never mentioned that CDO's or CDS's were totally unregulated and over the counter. The private mortgage companies wrote 80% of the sub prime loans. You can only blame fannie and freddie for 20%.

http://www.cnbc.com/id/15840232?play=1&video=1145392808

Link is Boring for the fist 15 minutes then it cuts to the chase.

Just exactly who pumped Fannie and Freddie to help people with down payments?? BRB Edit:

 

[nismaratwork]

I'm quite sure I intended it, but I don't see Forbes listed there in Wikipedia. I was referring to the http://www.forbes.com/global/2009/0413/034-tax-misery-reform-index.html" .

And I'm supposed to be asleep at the moment, so I'll let this foment for about 24 hours.

Sleep Cheeto... turn off the computer and sleep, and thank you for the excellent link.

 

[edward]

The Libertarians never could get enough of a following to garner any major progress.

Don't look now but they have hijacked the Tea Party. Now they can really do some damage.

Arizona just dropped MEDICADE for any childless adult. That is about 280,000 people and includes people in nursing homes. (supposedly for budgetary reasons)

They are busy working on a new bill allowing concealed weapons on college campuses. They already approved carrying concealed in any public place that does not have a metal detector and armed guard at the door..OOPS forgot, the first thing that they did was to allow anyone to carry concealed without a permit or any training. (apparently just for the hell of it)

 

[OmCheeto]

Sleep Cheeto... turn off the computer and sleep, and thank you for the excellent link.

Sorry. Can't. The music's too loud!

https://www.youtube.com/watch?v=TaG9SDxwPBg

 

[Ivan Seeking]

The Libertarians never could get enough of a following to garner any major progress.

I wouldn't say that. Alan Greenspan was a dedicated Libertarian and the guiding force behind the economy for twenty years. Libertarianism was also the basis for Reaganomics. But there is a huge difference between a genuine Libertarian like Greenspan, and your typical tea partier. For example, I am quite sure that Greenspan isn't a Birther.

Greenspan may have been wrong, but I still have tremendous respect for the man.

 

[Ivan Seeking]

And yet these people who supposedly know so much never mentioned that CDO's or CDS's were totally unregulated and over the counter. The private mortgage companies wrote 80% of the sub prime loans. You can only blame fannie and freddie for 20%.

The CDO's and CDS's may be the best examples of a failed market. It seems ever so clear now: Unregulated markets will self-destruct. Listen to the guys who were writing the contracts. Even they know it was nuts. Many describe the situation as a big party that no one wanted to end. They were drunk with greed and having a great time. Damn the consequences!
http://www.pbs.org/wgbh/pages/frontline/meltdown/view/

In the housing sector, the attitude was "If we don't do it, someone else will".

It also seems that as much as irresponsiblity and unethical behavior, arrogance was a huge factor.

 

[OmCheeto]

Lets look at 3 and 8 on the list:

The 10 core principles of the classical liberal & libertarian view of society and the proper role of government:
1) Liberty as the primary political value
2) Individualism
3) Skepticism about power
4) Rule of Law
5) Civil Society
6) Spontaneous Order
7) Free Markets
8) Toleration
9) Peace
10) Limited Government

Skepticism about power, and toleration.

Why does it seem that people on the right of the political spectrum are tolerant of power in the private sector, but intolerant of power in the public sector? Why is it ok for hedge fund managers in New York to spend half a million dollars in an attempt to unseat an elected official in Oregon? Where is the skepticism of financial power?

Ah! Late for work.

Bye.

 

[Al68]

Lets look at 3 and 8 on the list:
Skepticism about power, and toleration.

Why does it seem that people on the right of the political spectrum are tolerant of power in the private sector, but intolerant of power in the public sector? Why is it ok for hedge fund managers in New York to spend half a million dollars in an attempt to unseat an elected official in Oregon? Where is the skepticism of financial power?

Ah! Late for work.

Bye.

The "power" referred to in that list does not refer to buying power, spending power, or any other figurative sense. It refers to the ability to use force against others. Certainly voluntary private transactions don't constitute power in that relevant sense.

There simply is no power in the private sector in the sense relevant to that list, since government has a legal monopoly on the use of (non-defensive) force.

So the difference isn't private vs public power, it's the use of force vs voluntary associations. The private sector relies on voluntary associations while the public sector may use physical force.