12
   

"The final verdict on an economic philosophy that has completely failed"

 
 
Reply Wed 17 Sep, 2008 10:07 pm
Obama comes out swinging

Quote:
Obama: "So let's be clear: what we've seen the last few days is nothing less than the final verdict on an economic philosophy that has completely failed."

There is a philosophy that says markets left to themselves perform best, and a philosophy that argues that well-regulated markets are the key to a strong economy. If the events of the last year and a half have achieved anything, they have at the very least profoundly weakened the argument that says Wall Street is best left to handle its own affairs without sensible supervision. When Obama refers to an economic philosophy that has "failed," this is what he is talking about: The theory that markets are perfectly self-correcting, that the best government is the government that lets the rich do as they please, and prosperity will trickle down to everyone else, has taken an enormous body blow.
 
cicerone imposter
 
  1  
Reply Wed 17 Sep, 2008 10:21 pm
If Wall Street worked well and is self-correcting, then something has drastically misfired. We should have learned that lesson long ago when the savings and loans went into receivership from the same sort of greedy, sloppy, money management. As they say, "history repeats itself," and we are bound to repeat the same mistake in the future irregardless of the current "lessons."
patiodog
 
  2  
Reply Wed 17 Sep, 2008 10:45 pm
You know, I haven't really been following the election. Given the available choices, I know how I'll vote, so I frankly don't feel the need to pay attention to either of the campaigns.

But that is a statement I really, really agree with. I mean, on a real values level, that speaks to me.

Dunno if he actually plans to do anything about it, but just to make the admission is a step in the right direction.



Given my take on the American political situation, I figure in a year that will mean "The corporate grab for money under the Republican flag. What we need is the corporate grab for money under the Democratic flag. Two ships, but the same crew, pirates all.

The Crimson Permanent Assurance, Part 1

0 Replies
 
OmSigDAVID
 
  -3  
Reply Wed 17 Sep, 2008 11:45 pm
A good headline for this woud be:
" OBAMA REJECTS CAPITALISM --
SAYS MARXISM NEVER GOT A FAIR CHANCE. "
Robert Gentel
 
  3  
Reply Wed 17 Sep, 2008 11:53 pm
@OmSigDAVID,
Regulation in a capitalist marketplace is very different from "Marxism" David.

If you really want free market then the government shouldn't bail them out. But if they are going to be backed by government guarantees they should at least accept risk-limiting regulation.

As it stands it's not a true free market for them to be able to take risks, and then not pay the price. Banks have to accept regulation to be insured by government and have been that way for years, the new financial markets are operating with the quid without the quo as Krugman so aptly put it:

Paul Krugman wrote:
America came out of the Great Depression with a pretty effective financial safety net, based on a fundamental quid pro quo: the government stood ready to rescue banks if they got in trouble, but only on the condition that those banks accept regulation of the risks they were allowed to take.

Over time, however, many of the roles traditionally filled by regulated banks were taken over by unregulated institutions " the “shadow banking system,” which relied on complex financial arrangements to bypass those safety regulations.

Now, the shadow banking system is facing the 21st-century equivalent of the wave of bank runs that swept America in the early 1930s. And the government is rushing in to help, with hundreds of billions from the Federal Reserve, and hundreds of billions more from government-sponsored institutions like Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

Given the risks to the economy if the financial system melts down, this rescue mission is justified. But you don’t have to be an economic radical, or even a vocal reformer like Representative Barney Frank, the chairman of the House Financial Services Committee, to see that what’s happening now is the quid without the quo.

http://www.nytimes.com/2008/03/24/opinion/24krugman.html?hp
rosborne979
 
  2  
Reply Thu 18 Sep, 2008 06:12 am
Too much regulation stifles growth and activity. Too little regulation leads to what we have now. There is no single right or wrong answer to all this, there is only a balance point where risk is allowed but controlled.

Uncontrolled markets are prone to explosive growth or mass extinction. But since we are not willing to endure the mass extinctions, we must give up the potential for explosive growth.

We need a system which allows risk to occur while preventing it from hitting extreme points where economic collapse can happen.

We also need rules in place which prevent people from scamming the system.

Woiyo9
 
  -3  
Reply Thu 18 Sep, 2008 07:12 am
ARLINGTON, VA -- U.S. Senator John McCain's presidential campaign today released a statement signed by over 300 professional economists in support of John McCain's Jobs for America economic plan. The list includes Nobel Prize winners, business economists with experience in the private sector, policy economists with experience in government and academic economists from major universities and state and community colleges.

Those signing the statement include Nobel Prize winners in Economics (Gary Becker, James Buchanan, Robert Lucas, Robert Mundell and Vernon Smith), former Presidents of the American Economic Association (Gary Becker, Martin Feldstein, Anne Krueger and Robert Lucas), economists who have served in the U.S. Treasury as Secretary or Under Secretaries (George Shultz, Beryl Sprinkel and John Taylor), former Chairs and other Members of the President's Council of Economic Advisers (Michael Boskin, Martin Feldstein, Glenn Hubbard, Paul MacAvoy, Burton Malkiel, Paul McCracken, William Poole, Harvey Rosen, Beryl Sprinkel, John Taylor and Murray Weidenbaum), former OMB Directors and other officials (John Cogan, James Miller, George Shultz and Amy Smith), former CBO Directors (Dan Crippen, Douglas Holtz-Eakin and June O'Neill), former Chair of the Commodity Futures Trading Commission (Wendy Gramm), former Chairs of the Federal Trade Commission (James Miller and T im Muris) and economists who have served as Under Secretary of Commerce (Kathleen Cooper and Tony Villamil).

Economists' Statement:

We enthusiastically support John McCain's economic plan. It is a comprehensive, pro-growth, reform agenda. The reform focuses on the real economic problems Americans face today and will face in the future. And it builds on the core economic principles that have made America great.

His plan would control government spending by vetoing every bill with earmarks, implementing a constitutionally valid line-item veto, pausing non-military discretionary government spending programs for one year to stop their explosive growth and place accountability on federal government agencies.

His plan would keep taxes from rising, because higher tax rates are exactly the wrong policy to restore economic growth, especially at this time.

His plan would reduce tax rates by cutting the tax that corporations pay to 25 percent in line with other countries, by completely phasing out the alternative minimum tax, by increasing the exemption for dependents, by permitting the first-year expensing of new equipment and technology, and by making permanent a reformed tax credit for R&D.

His plan would also create a new and much simpler tax system and give Americans a free choice of whether to pay taxes under that simple system or the current complex and burdensome income tax.

His plan would open new markets for American goods and services and thereby create additional jobs for Americans by supporting good free trade agreements, such as the one with Colombia, and working with leaders around the world to avoid isolationism and protectionism. His plan would also reform education, retraining, and other assistance programs so they better help those displaced by trade and other changes in the economy. His plan addresses problems in the financial markets and housing markets by calling for increased transparency and accountability, by targeted assistance to deserving homeowners to refinance their mortgages, and by opposing so-called reform plans which would raise the costs of home-ownership in the future.

The above actions, as well as plans to address entitlement programs -- especially Social Security, Medicare and other government health care programs -- and his regulatory reforms -- especially in the area of health care -- constitute a broad and powerful economic agenda. Because of John McCain's experience working with the American people in all walks of life, with members of Congress on both sides of the aisle, and with leaders around the world, we are optimistic that these plans will become a reality and will create jobs and restore confidence and strong economic growth.

Economists Who Have Signed The Statement:

http://www.johnmccain.com/Informing/News/PressReleases/c90681b9-5dfe-4de4-8057-ceedb30c228d.htm
gungasnake
 
  1  
Reply Thu 18 Sep, 2008 08:23 am
@Robert Gentel,
Isn't it all the heavily regulated and politicized stuff which is failing, or am I missing something?

nimh
 
  2  
Reply Thu 18 Sep, 2008 09:19 am
@Woiyo9,
Woiyo9 wrote:

ARLINGTON, VA -- U.S. Senator John McCain's presidential campaign today released a statement signed by over 300 professional economists in support of John McCain's Jobs for America economic plan.


"The endorsement could hardly have been stronger. On Monday, John McCain’s campaign released a statement signed by 300 economists who “enthusiastically support” his “Jobs for America” economic plan, providing a heavyweight testimonial to the presumptive Republican nominee’s “broad and powerful economic agenda.”

There’s just one problem. Upon closer inspection, it seems a good many of those economists don’t actually support the whole of McCain’s economic agenda. And at least one doesn’t even support McCain for president.

In interviews with more than a dozen of the signatories, Politico found that, far from embracing McCain’s economic plan, many were unfamiliar with " or downright opposed to " key details. While most of those contacted by Politico had warm feelings about McCain, many did not want to associate themselves too closely with his campaign and its policy prescriptions. "

Politico: In theory, economists support McCain
DrewDad
 
  2  
Reply Thu 18 Sep, 2008 09:31 am
@nimh,
http://www.cnn.com/2008/POLITICS/09/16/dilbert.economy/index.html

Quote:
At considerable personal expense, I commissioned a survey of over 500 economists, drawn from a subset of the members of the American Economic Association, a nonpolitical group, some of whose members had agreed in advance to be surveyed on economic questions.
http://i2.cdn.turner.com/cnn/2008/POLITICS/09/16/dilbert.economy/chart.jpg
cicerone imposter
 
  1  
Reply Thu 18 Sep, 2008 09:47 am
@DrewDad,
DrewDad, Great stats, but why is there such a huge gap between the reality and perception of voters? It would seem that with the current economy, Obama would be leading by double digits, but instead it's a dead heat. It doesn't make any sense. Most American's pocket books are running on empty, but half of the voters still want to continue the republican administration for four more years. Why?

The last stats, reducing waste in government; there's a huge disconnect between the reality and their rhetoric.
0 Replies
 
spendius
 
  0  
Reply Thu 18 Sep, 2008 10:00 am
@cicerone imposter,
ros wrote-

Quote:
We need a system which allows risk to occur while preventing it from hitting extreme points where economic collapse can happen.

We also need rules in place which prevent people from scamming the system.


c.i. wrote-

Quote:
If Wall Street worked well and is self-correcting, then something has drastically misfired. We should have learned that lesson long ago when the savings and loans went into receivership from the same sort of greedy, sloppy, money management. As they say, "history repeats itself," and we are bound to repeat the same mistake in the future irregardless of the current "lessons."


What utterly ridiculous pronouncements from two militant Darwinians.

Under Darwinian imperatives what happens is what happens. There is no possibility of anything "misfiring." There is nothing to be said.
cicerone imposter
 
  3  
Reply Thu 18 Sep, 2008 10:12 am
@spendius,
spendi, It's because you lack the understanding how even in free markets, government must set limits to guarantee the protection of the public's assets.
spendius
 
  0  
Reply Thu 18 Sep, 2008 12:18 pm
@cicerone imposter,
I lack no such understanding c.i.

I am at a loss to understand a militant Darwinist making the sort of statements you and ros made. I imagine everybody else is too.

It would seem that your pop-Darwinism is merely a stick to belabour people with and as soon as your personal interest is threatened, or you perceive it to be, you're yowling at the door of welfare and molly-coddling. Which suggests you enjoy belabouring people with infantile invective and that's your only reason for being an amateur Darwinian.
Robert Gentel
 
  3  
Reply Thu 18 Sep, 2008 12:20 pm
@spendius,
Isn't that rant better served on a topic about Darwinism instead of regulation of free markets though?
spendius
 
  -1  
Reply Thu 18 Sep, 2008 01:08 pm
@Robert Gentel,
I dispute that it was a rant Bob.

The economic philosophy which this thread is seeking to pass judgement on, I presume, is free-market capitalism. Not that we have ever experienced such a thing ourselves. Or I hope not.

My fictional namesake was trading in women when he was captured with a consignment of them heading for a port where prices were high. Not to release the women mind you. And I gather you could get all sorts of things done in Berlin in '45-6 with a can of coffee from the PX.

It's a syndicate now and we all have a share. Nothing like it in the whole of evolution. Most of the evolution of humans too.

When Darwinists start talking about real deregulation I might take them seriously. Until then I can't see what they have to say on this subject that bears scientific scrutiny.

I'm all for ladling hypocrisy. Not being too scientific I mean. But when these guys save their science for the service of insulting our intelligence and telling us how to run the schools and then switch it off when it comes to their home comforts beggars belief.

A Darwinian would say it's a joke discussing it.
0 Replies
 
cicerone imposter
 
  1  
Reply Thu 18 Sep, 2008 01:12 pm
@spendius,
spendi, That you continually confuse Darwinism with capitalism shows you have no understanding of either one.
spendius
 
  1  
Reply Thu 18 Sep, 2008 01:20 pm
@cicerone imposter,
Well enlighten me c.i. Able me to know. Don't keep it all to yourself.

What's capitalism? Now that the financial sector has been nationalised.

It's no good keep telling me I don't understand these things you mention so casually.
Wy
 
  4  
Reply Thu 18 Sep, 2008 01:30 pm
@gungasnake,
Robert G. quoted:
Quote:
Over time, however, many of the roles traditionally filled by regulated banks were taken over by unregulated institutions " the “shadow banking system,” which relied on complex financial arrangements to bypass those safety regulations.
(bolding mine)

It's those unregulated institutions that are failing now. Insurance companies, investment banks, that were not covered by the government regulations " which have been weakened recently by the current administration.
spendius
 
  0  
Reply Thu 18 Sep, 2008 01:48 pm
@Wy,
No it isn't. It's the desire to borrow money. The desire to live better than you have deserved the right to do. Without that desire these "unregulated institutions" (which I doubt are unregulated) wouldn't exist. Once you can improve your lot by borrowing, which you can when property prices are rising and rising, you unleash the desire. But not in everybody. There is a significant section of the population which wouldn't borrow money on principle.

The American public are to blame. They could have voted for strict regulation.

If it's "The Government of the People" who the hell else can possibly be to blame? These institutions are scapegoats. And what is leading the charge?

That's easy. Media. Which whipped the desire into a frenzy.

It's the same here. But you do everything bigtime.
 

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