Conservative view of government.

[MSimon]

If you take the taxes out of the equation, you might see a lot more money lying in savings accounts than you do these days.

You will be surprised to learn that a savings account is a form of investment where the bank makes the decision of what to invest in.

And you probably thought that the bankers just piled the cash in vaults and swimming pools in order to enjoy being surrounded by money.

It still amazes me how many folks learned their economics from Scrooge McDuck comics.

[MSimon]

does the existence of natural "bubbles" discredit concern over artificial ones? Imagine if a similar relative amount of credit--available due to the fed--had been poured into the tulip mania, and the gov had bailed out the biggest actors only. Think it'd be better?

Letting the market set interest rates shortens your lag time, instead of self-adjusting, the system has to wait until the fed adjusts(should have been done early in the housing bubble, to keep the bursting small scale).

I agree. The Monetary Authorities can make the natural proclivities of the system worse.

[alexjrgreen]

a savings account is a form of investment where the bank makes the decision of what to invest in.

What's your opinion of banks investing in money, rather than in business?

[MSimon]

a savings account is a form of investment where the bank makes the decision of what to invest in.

What's your opinion of banks investing in money, rather than in business?

Investing in money keeps the system in balance. It has its uses.

Overdone? Perhaps. But so was investing in real estate. A more traditional bank investment.

The theory behind the Federal Reserve was that it would eliminate boom/bust cycles by regulating credit. It seems to have dampened small oscillations at the expense of creating a few big ones.

Interesting stuff about river meanders in the comments here:

http://wattsupwiththat.com/2009/12/27/t ... climate-2/

It may be that trying to keep the system balanced causes bigger unbalances. i.e. you clear out the deadwood less often.

Or maybe there is no way to prevent this sort of oscillation short of reducing economic productivity by limiting investment to cash on hand.

As I said earlier. I'll take 10% growth with boom/bust cycles over 3% growth with tamer cycles.

The deal is: current economics is based on equilibrium or quasi-equilibrium. Suppose that is the wrong basis? Perhaps we should be thinking quasi-linear or non-linear far from equilibrium. We may be fooling ourselves because any system can look linear on small enough scales. i.e. a plot of the log function can have a "constant" slope over a short enough interval.

We have all kinds of ways of fooling ourselves.

Humans comfort themselves by feeling in control. It is lack of control or the feeling of lack of control that causes unease.

[alexjrgreen]

It may be that trying to keep the system balanced causes bigger unbalances. i.e. you clear out the deadwood less often.

The problem with a hedging strategy is that you need something external to hedge against. An apparently "perfect" hedging strategy in fact keeps creating a larger and larger web of hedge transactions until it exceeds global liquidity, resulting in trillion dollar losses.

[Skipjack]

And you probably thought that the bankers just piled the cash in vaults and swimming pools in order to enjoy being surrounded by money

I am not dumb. Here at least most banks loan the money out to people, you know mordgages, etc, especially with saving accounts that have a certain amount of security they cant make risky investments.
Sure loans are not that secure either, but the last problem did not happen here in Austria, but started in the US.
Your opinions about how money and banks are scary. Are your palms itching yet?

[MSimon]

It may be that trying to keep the system balanced causes bigger unbalances. i.e. you clear out the deadwood less often.

The problem with a hedging strategy is that you need something external to hedge against. An apparently "perfect" hedging strategy in fact keeps creating a larger and larger web of hedge transactions until it exceeds global liquidity, resulting in trillion dollar losses.

Yes.

Another problem is conceptual. People confuse money capital with real capital - productive resources.

I like the Bucky Fuller analogy.

You are in the middle of an ocean. Your lifeboat is sinking. You have a 20 lb gold bar and 20 lbs of water in a steel container. You can only keep one due to flotation limits of your life jacket. If you keep the gold bar what is your net worth?

[JoeOh]

Msimon Writes: TAXATION IS THEFT

Wow dude, I didn't know you were such an extremist libertarian.

But claiming that taxes are imposed on the people willy-nilly by the goverment is bs and you know it. Taxes are either voted in or defeated at the polls by the people. It's a part of the democratic process.

If you don't like being part of the democratic process, move out of the country.

Wanna know a secret? I don't like taxes either, but I know they serve a purpose and I'd rather pay them and have the safety nets than to be without them.

[Jccarlton]

something to think about:
The Forgotten Man:
The type and formula of most schemes of philanthropy or
humanitarianism is this: A and B put their heads together to decide
what C shall be made to do for D. The radical vice of all these
schemes, from a sociological point of view, is that C is not allowed a
voice in the matter, and his position, characte...r, and interests, as
well as the ultimate effects on society through C's interests, are
entirely overlooked. I call C the Forgotten Man. For once let us look
him up and consider his case, for the characteristic of all social
doctors is, that they fix their minds on some man or group of men whose
case appeals to the sympathies and the imagination, and they plan
remedies addressed to the particular trouble; they do not understand
that all the parts of society hold together, and that forces which are
set in action act and react throughout the whole organism, until an
equilibrium is produced by a re-adjustment of all interests and rights.
They therefore ignore entirely the source from which they must draw all
the energy which they employ in their remedies, and they ignore all the
effects on other members of society than the ones they have in view.
They are always under the dominion of the superstition of government,
and, forgetting that a government produces nothing at all, they leave
out of sight the first fact to be remembered in all social discussion -
that the State cannot get a cent for any man without taking it from
some other man, and this latter must be a man who has produced and
saved it. This latter is the Forgotten Man.
http://www.blupete.com/Literature/Essay ... gotten.htm

Some books for Joe to read:
a conflict of visions:
long url
The Forgotten Man:
long url
Liberal Fascism:
long url
New Deal or Raw Deal:
long url
The Economy of Cities:
short url
Economics in one lesson:
http://jim.com/econ/contents.html
long url
Basic economics:
long url
Liberty and Tyranny:
long url
the black book of communism:
long url
the federalist papers:
http://www.foundingfathers.info/federalistpapers/

As to why we Conservatives talk about guns a lot? Because the Progressives like using them so much.

[Diogenes]

Msimon Writes: TAXATION IS THEFT

Wow dude, I didn't know you were such an extremist libertarian.

But claiming that taxes are imposed on the people willy-nilly by the goverment is bs and you know it. Taxes are either voted in or defeated at the polls by the people. It's a part of the democratic process.

If you don't like being part of the democratic process, move out of the country.

Wanna know a secret? I don't like taxes either, but I know they serve a purpose and I'd rather pay them and have the safety nets than to be without them.

If only people who pay taxes were allowed to vote, (the way it was before that idiotic 24th amendment was passed.) then you might have an argument. But what we have instead is the situation where a huge chunk of people who don't pay the taxes, are voting to increase OTHER people's taxes.

Again, it's like the 3 men and 2 women voting on whether the women are going to provide sex to the men. Those who aren't providing the service should have no say over those who do.

People who aren't pulling the wagon, should STFU.

[JoeOh]

Jccarlton, I guess I should read this books too, according to you:

"How to Help the Helpless Wealthy."
"Why Starving for Your Corporate Overlords is Good."
"Let The Invalids Go Hungry."
"Thank You Sir May I Work for Less Than the Minimum Wage?."

No thanks, I'll stay away from those right-wing propaganda books and think for myself.

[alexjrgreen]

something to think about:
The Forgotten Man:
The type and formula of most schemes of philanthropy or
humanitarianism is this: A and B put their heads together to decide
what C shall be made to do for D.

The usual style is for the most fortunate to be asked to support the least fortunate. This has merit, since neither good fortune nor bad fortune are unequivocally the consequence of individual action.

Asking anyone else to pay only causes trouble.

[seedload]

Taxes are either voted in or defeated at the polls by the people. It's a part of the democratic process.

It is the eventual end of the democratic process, at least that is what our founders believed. When money is taken from someone and given to another via taxes, then once 51% of the people are doing the getting - it's all over, man.

Taxes that take from some and give directly to others are fundamentally different than taxes that pave roads and build tanks. We all acknowledge the need for the latter. Certainly, you can distinguish which are being discussed.

It is not extremist to fear a society where the majority vote is receiving from the minority. We are just about there.

If you don't like being part of the democratic process, move out of the country.

From those on the receiving end, I always find the suggestion that the producing end should just get out to be pretty funny. Obviously, you got to keep a few people who aren't on the government dole.

Obviously, not liking something is also part of the democratic process. Suggesting that anyone who doesn't like something should get out is stupid. It is funny that someone who suggests that is calling someone else extremist or insisting that all of us extremist concervatives just love our guns. Apparently, you are a bit into generalizations.

Wanna know a secret? I don't like taxes either, but I know they serve a purpose and I'd rather pay them and have the safety nets than to be without them.

Look, you can't say you don't like taxes and that you do like taxes in the same breath.

I don't believe that you pay any substantial Federal Income Tax from the context of these discussions. You want a safety net, but you aren't really paying for it. I think you will also be surprised to find out that you don't even really have much of one.

regards

[seedload]

The usual style is for the most fortunate to be asked to support the least fortunate. This has merit, since neither good fortune nor bad fortune are unequivocally the consequence of individual action.

From each according their means, to each according their needs.

The term "asked" above was funny, I must say. So is "fortune" and "unequivocally". What if bad fortune is often but not unequivocally the consequence of individual action? Who determines need? Why them? When most need rather than have means, then what? Who then determines how this proceeds into the future when those receiving get the vote.

Look, this is already what we are doing, unfortunately, and the according to their needs part is being totally messed up. We are rewarding total non-production and screwing over the working poor. We are penalizing success by progressive taxes. We are taxing capital, the lifeblood of an economy. We are really doing it all wrong. If we are going to do re-distribution, which at this point I don't see much way around, then it has to be modified. My twist would be the following.

From each at a fixed capped percentage of income, to all equally.

There, done. Goodbye government social engineering. Let's get on with things.

[Jccarlton]

Jccarlton, I guess I should read this books too, according to you:

"How to Help the Helpless Wealthy."
"Why Starving for Your Corporate Overlords is Good."
"Let The Invalids Go Hungry."
"Thank You Sir May I Work for Less Than the Minimum Wage?."

No thanks, I'll stay away from those right-wing propaganda books and think for myself.

Amazing, the Federalist is a right wing propaganda book. Making up book titles is pointless. At the very least you could actually find real books with this point of view. Just check the Progressive/Communist section.
If you don't know anything you don't have anything to think about. If you don't read you don't know anything. If you only read one point of view, you don't have any way of know what the questions actually are and end up just mouthing what others want you to think.