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Libertarian Thread # 3: Liberty will never die

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JJLehto View Drop Down
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    Posted: 1 hour 25 minutes ago at 21:09
My question is, what is the role of deposits then, if they are not loaned out? Simply to earn interest?
And what is thus the role of fractional reserve? I guess I just am struggling with this, esp not being versed in this double book accounting thing, I am trying to sort out these asset/liability movements and following the moneyWacko

Also if this is simply a more detailed explanation of reality, why the difference? Is this simply too confusing?LOL
And to the original point, which was the claim the money supply is endogenous and the CB cant do much...do you feel this is accurate? That paper at least claims the CB, indirectly, is a major limit/creator on the money supply, even though banks and consumers seem to play a large role as well. 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote rogerthat Quote  Post ReplyReply Direct Link To This Post Posted: 20 hours 49 minutes ago at 01:45
Having read the article carefully, I can make sense of it now. Deposit here is simply an accounting signifier. As said in the article, the bank doesn't actually move cash when it lends a loan. It simply passes an accounting entry crediting the borrower's bank account with the amount. If it's a mortgage then the 'entry' will move from the borrower's account to the seller's. Let's get back to the original entry in my earlier comment. I can't make a credit to cash/bank because no actual cash has moved. Hence, I will credit a matching deposit to square off the asset. When an asset is created in the books, it must be against real resources expended, i.e consideration paid in cash or kind. Or it must be matched by a liability. The deposit liability is thus created to square off the loan asset created without parting with cash. It is actually consistent with what I learnt in the textbook, except the textbook didn't use the accounting concept of a matching liability.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote JJLehto Quote  Post ReplyReply Direct Link To This Post Posted: Yesterday at 11:12
Yeah that's what thrown me for a loop too. 
Just to add to the mystery, people such as Merv King from the BoE, as well as others from the Fed, IMF and even BIS have said similar things. Adair Turner, if you know who that is  I dont says "“Banks do not, as too many textbooks still suggest,take deposits of existing money from savers and lend it out to borrowers: they create credit and money ex nihilo [out of nothing] – extending a loan to the borrower and simultaneously crediting the borrower’s money account” Wacko



As for Keynes, I've not actually read his work so I'm not fully sure either, and I do hate relying on interpretations, especially since his run from "Be there to prevent crises" to he had a hatred of Capitalism sooooo LOL
As for econ history, of course govs started stepping in to stem crises more and more in recent history, you know spurred on from WWI, and of course the New Deal preceded Keynes' big work. It sounds like he really broke the mold by advocating for deficit spending at the time, while FDR still kept taxes high and tried to maintain some amount of balance. Like they accepted the gov could take actions but it had to be "paid for" and Keynes differed in that regard. Again I've heard different interpretations but I'm inclined to say Keynes did feel the state should have a direct, permanent role and bucked the old "equillibrium" notions. Seems he basically felt capitalism never ran "perfectly, with occasional hiccup/slide" as was taught but it's more or less permanently out of whack and needs gov there, in some form, to keep it from falling apart. Is what I take from it. 

Personally, I am more inclined to the latter strategy you mentioned, investment in capital, human or physical, social and physical infrastructure, perhaps environmental concerns. I see this as longer term better than simply welfare though I have no issue with that per se, and it may be better than these various demand boosting tactics or stimulii packages that at least in the US seemed to be a very'leaky bucket' though better than nothing. 



Edited by JJLehto - Yesterday at 11:22
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Post Options Post Options   Thanks (0) Thanks(0)   Quote rogerthat Quote  Post ReplyReply Direct Link To This Post Posted: Yesterday at 04:33
Double entry is the bedrock of accounting.  If the term is used in any other sense in an accounting context, I am not aware of it.  Basically, every transaction creates a debit and a credit and thus always affects two ledger accounts at the same time.  The transaction of money going out of the bank to a customer's account would be represented by a credit to "cash/bank account" as it involves an outgo of cash for the bank and a debit to the "customer's account" or a general "mortgages" account as it creates a debtor/receivable asset.  Perhaps, the proposition is that the very act of the bank giving out money as mortgage to the customer is treated as creation of money.  This much I can follow.  What I cannot yet follow is how it creates a deposit. A deposit received by the bank would involve an inflow of money and a liability on their part to the depositor.  They are basically on opposite sides of the balance sheet so how a bank may treat a mortgage loaned out as a deposit beats me.  I shall keep an open mind and read the BoE article in detail, though.  

I think Keynes did very meaningful work in defining an economic role for the state.  I am not really well versed in the history of economics so I cannot say if it was done before.  But it is certainly far removed from neo classical theory.  He tackled the question of how the state might mobilise savings to raise public investment which in turn would create jobs and thereby more demand, leading to more production and more jobs, etc.  The best application of Keynesianism was probably observed in East Asian economies.  I don't support their repression of household savings as well as taking away several civil liberties  as a means to the end.  But they have been far more successful than say India in propelling economic development through investment.  It took far too long for India's economic think tanks to appreciate the importance of high savings to push investment.  And even thereafter, nothing much has been done to deepen the reach of its financial sector to tap into savings locked in hard assets like gold and landholdings.  It would appear that, especially since the 60s, Keynesian theory was used to fund welfare in the Western economies and welfare can stimulate demand by putting money in the hands of customers but does not by itself create productive assets. The East Asian economies created both productive assets as well as physical and social infrastructure.  I am not saying their strategy did not have its own set of adverse consequences, but if the ultimate aim of government is the alleviation of poverty and providing a reasonable level of prosperity to many of its citizens, they were far more successful at that than India.  
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Post Options Post Options   Thanks (0) Thanks(0)   Quote JJLehto Quote  Post ReplyReply Direct Link To This Post Posted: Yesterday at 02:52
Originally posted by rogerthat rogerthat wrote:

I will have to read that in detail.  Don't think I can manage it on a computer, will have to take a print LOL and read it at leisure.  It's a very new concept, which I haven't heard of before.  Both from cash flow and accounting perspective, it doesn't resonate with me.  It is when customers park deposits with the bank that they get funds, which can be lent out. Likewise, I get that a deposit is just a liability and not an asset.  So how does money mortgaged out to a customer become a matching deposit?!  I will have to read it carefully to get to terms with the implications of it.

Yeah, it's bizarre to me and I am not really sure I grasp it. I came across this idea from more obscure guys like Steve Keen who cited the "monetary circuit theory" claiming that the banking sector itself creates money, and  (I think) creates/destroys money by making and paying back loans. I really have no idea honestly! 
But the BoE did put that out which is what really intrigued me. 

I asked you as well since you have accounting experience, and they seem to claim it involves double entry accounting or something. 


Wow very funny you say that, I've been reading more and more about people saying just that: Keynes has been hijacked and "Keynesianism" really has moved from what he said, and especially more recent merges with the neoclassical ideals, and that debate these days has become pretty limited. There is variety between conservative Keynesians like Mankiw and liberals Krugman and Stiglitz, and of course the Chicago school and Harvard are pretty neo classical, but yeah...maybe there needs to be more debate including from heterodox ideas, and older/left behind economists that have some very intriguing ideas.  



Edited by JJLehto - Yesterday at 03:00
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Post Options Post Options   Thanks (0) Thanks(0)   Quote rogerthat Quote  Post ReplyReply Direct Link To This Post Posted: Yesterday at 01:56
About your other post, it has to be nuanced, right?  Which is why I think it is important that at least in the 21st century, economics breaks out of the shackles of ideology.  It's goods being exchanged for consideration, it's money changing hands.  These are hard transactions.  Where's the room for sharp, polarizing ideological differences here unless both sides willfully focus on only one set of facts and ignore the other?  There's no point theorizing about an imaginary scenario where the state has no role; the way politics has evolved over the last several years that is unlikely to happen.  There is a role for the state and there is also a role for business too.  To be fair, Keynes did break out of ideological dogma with his original proposition. The problem is more with the way it was hijacked later on as a purely demand-boosting steroid. 

Edited by rogerthat - Yesterday at 01:58
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Post Options Post Options   Thanks (0) Thanks(0)   Quote rogerthat Quote  Post ReplyReply Direct Link To This Post Posted: Yesterday at 01:48
I will have to read that in detail.  Don't think I can manage it on a computer, will have to take a print LOL and read it at leisure.  It's a very new concept, which I haven't heard of before.  Both from cash flow and accounting perspective, it doesn't resonate with me.  It is when customers park deposits with the bank that they get funds, which can be lent out. Likewise, I get that a deposit is just a liability and not an asset.  So how does money mortgaged out to a customer become a matching deposit?!  I will have to read it carefully to get to terms with the implications of it.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote JJLehto Quote  Post ReplyReply Direct Link To This Post Posted: March 28 2015 at 14:42
Oh god, once that last wall of text is digested, I have a question for you Roger (or anyone) but I think you may be well inclined to know this answer. 

What have you heard/know about "endogenous money"?
I recently have read about a theory (fact?) that the classic: "Deposits are given out by the bank as loans", and "the central bank controls the money supply" notions are false. 
Supposedly, banks simply give out loans as they feel like, "creating the money out of thin air" and this creates some double entries, like the assets and liabilities of a consumer become the flip of the bank, I'm not quite sure to be honest. Anyway it means the system itself controls the money supply, and the Central  Bank cant do much about it. As banks create this money, they go to the CB so make up the difference, discount window I believe. 

I know CBs dont "control" the money supply but this notion seems difficult for me to grasp. You have any input? 
I can "get it" but I just am curious to the proof this is how things operate, and why does nearly everyone stick with the "banks are just intermediaries" notion? Supposedly the Bank of England has put out a paper saying things do work exactly as that, and other people have said the same. 

So, why the vast difference in mainstream opinion? Even in my money and baking class, it was how you deposit, a fraction kept, rest loaned out, that banks simply move money from patient to impatient and etc
Do deposits do nothing then? What even is the point of "fractional reserve banking " then? I'm confusedLOL 


Edited by JJLehto - March 28 2015 at 15:10
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Post Options Post Options   Thanks (0) Thanks(0)   Quote JJLehto Quote  Post ReplyReply Direct Link To This Post Posted: March 28 2015 at 14:32
You would know better, I know little of Thacter other than she was the British Female Reagan, a lot of talk, but didn't really do much to "curb the state" though her words/influence trickled down through both parties and the populace. 
In fact I thought most of the welfare state was largely kept intact, same with Reagan, just taxes came down for wealthy, unions were busted up (which I am not super upset about) and mainly they pushed for deregulation which at least partly led to our last crisis. 


I know, just wanted to post that lil jab since supply side/trickle down is still put out there. 
The most recent "experiment" (as Governor Brownback called it) was in Kansas where supply side ideas just led to big deficits, which a state can't hold like the fed, and no spurring of growth. I just find it humorous some, or many?, still adhere to this whackiness: If we give businesses more money, they will create jobs that they have no need for, or if the we give more to the wealthy they will spend more...not save it or stash it in speculationsLOL or maybe buy yachts and houses and luxury cars from overseas, stuff that really helps the domestic economy! 

Indeed my friend, socialism for the rich, capitalism for the poor as they say. We all compete, in the US and over seas now, and even up the ladder competition is getting fierce with MNCs moving about and engineers/tech/health people coming more from over seas...but certain sectors and industries continue to be protected from the competition capitalists hate so muchErmm Same here...businesses need protecting from those same things: environmentalists, foreigners, their own workers and the poor. 

I think I mentioned here my shift from more libertarian to my current views were the realization if market capitalism needs some amount of permanent unemployment/lower class it's a little, misinformed or cruel, to "cut em off" and even guys like Greenspan have stated more or less that. His comments on "unemployment being good" and "the insecurity of workers" being good, since it dampens wages. And if you think about, the phillips curve and NAIRU and all this is basically saying just that: we need unemployed and low paid to keep things stable. More I think about it, I think in some, (SOME) ways Marx still has some validity. Labor vs capital, even today. Esp with guys like Piketty becoming superstars and lots of middle class college educated folk taking part in Occupy Wall Street...and even US politics, it's not been the lowly masses stepping up, its been the top progressively entrenching themselves and trying to shred the buffers we have. It may be ideological but I think this limited gov/unrestraining capitalism mentality has just unleashed the olden have vs have nots trouble. 

Those who fail to learn from history, or something like that...
BTW I recently picked up and have been attempting to read Piketty's book. Not what I expected, surprised it became a best seller. I like the rigor but wish a "simplified" version could be put out. Lots of great history though, I appreciate he points out how the US used to be more egalitarian than Europe, and proud of it, and was actually a leader in taxing wealth and estates to try and prevent the rigid class structure and aristocracy, that we now have forming...Cry

Anyway, a lot to digest still but I hope the conversation can be opened more about how, even today, it's become a capital vs the rest struggle and new ideas needed (or some old) to prevent this. IDK if Piketty hits on this in his book, but I know wealth was often wiped out via financial crashes, depressions, plus philanthropy and some taxation/social distribution policies. I'm not sure we can bank on the 19th century "earn alot give it all way" mentality, and stability policies seems to keep wealth afloat despite disasters. (QE alone has been an amazing boon for wealth holding) I just think some new ideas are needed in todays world. Or perhaps some old ideas, like those of Irving Fisher and Hyman Minsky, that just never got any traction until very recently. 


Edited by JJLehto - March 28 2015 at 14:44
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Post Options Post Options   Thanks (0) Thanks(0)   Quote rogerthat Quote  Post ReplyReply Direct Link To This Post Posted: March 28 2015 at 05:08
Trickle down theory was just a populist concoction to sell the idea of capitalism to the masses.  Even Thatcher mentioned popular capitalism in her third term, I think.  Its limited utility is in terms of pulling govt out when govt crowds out the market and weighs down business.  Otherwise, in a democratic set up, voters are not remiss to expect sound economic management by the govt and chronically anemic job creation is bound to give rise to the suspicion that govt is shirking its responsibility and colluding with big business.  There was recently much consternation in India when the so-called Central Statistical Organisation released a new set of GDP numbers calculated at market prices instead of factor cost and also enlarged its measurement to include smaller businesses that had hitherto not tracked.  Consternation because the numbers indicated faster economic growth, belying the trend of waning profits of the big guys, the ones listed on the stock exchange and whose head honchos regularly appear on CNBC.  Because if GDP growth was better than previously thought to be, govt may not find the need to help out the big guys to be so urgent. LOL  The response, predictably, was to insinuate that the numbers had damaged India's credibility when in fact they had aligned them more closely with the way GDP is already being measured in many countries.  

There seems to be a long list of societal entities that big business needs protection from, especially in India: foreign competition, ecommerce players, NGOs and activists, the poor LOL.  Makes one wonder whether perhaps they are the real needy ones that govt has been ignoring all the time. Wink
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Post Options Post Options   Thanks (0) Thanks(0)   Quote JJLehto Quote  Post ReplyReply Direct Link To This Post Posted: March 26 2015 at 00:10
Since I am sometimes told I make things too complicated, here is a simple picture Smile






And I even agree, the gov is probably at fault to a large extent. Without it's tampering, maybe some of it would spill into that first layer of glasses LOL


Edited by JJLehto - March 26 2015 at 00:11
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Padraic Quote  Post ReplyReply Direct Link To This Post Posted: March 11 2015 at 11:45
Originally posted by Equality 7-2521 Equality 7-2521 wrote:

Originally posted by Padraic Padraic wrote:

Originally posted by Equality 7-2521 Equality 7-2521 wrote:

For example, the integral that you learn in Calc, the Riemann integral, is incredibly deficient and almost worthless for real applications.


I think "incredibly" deficient and "almost worthless" is probably taking it too far.


Well I mean specifically for applications in economics. I mean since it was sufficient for both Newton's and Maxwell's synthesis in physics I guess I would be pretty crazy to say that in general.


Oh gotcha.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Equality 7-2521 Quote  Post ReplyReply Direct Link To This Post Posted: March 11 2015 at 11:22
Originally posted by JJLehto JJLehto wrote:

Well that is interesting and makes sense Pat. 
Though part of the reason I wondered that is there does seem to be more mathematical requirements as you "go up the ladder" of program prestige so I just wondered how much was useful, or just there to act as a signal or prove the rigor of the program. Some programs for example ask for only Calc II and linear algebra, while some say Real Analysis is pretty much essential as well as a slew of other courses, I was like...what exactly is the difference in what they teach? And are "lesser" programs maybe more stats/data based rather than theory and math?

Just for curiosity, thanks a bunch. As stated I can only get to Diffe Q/level IV anyway by the time I apply so oh wellLOL


I don't really know enough about the day to day research of an economist, but I would think part of it being a focus on stats/analysis of data and the other part being more focused on working in a classical frame work with its simplifying assumptions.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Equality 7-2521 Quote  Post ReplyReply Direct Link To This Post Posted: March 11 2015 at 11:18
Originally posted by Padraic Padraic wrote:

Originally posted by Equality 7-2521 Equality 7-2521 wrote:

For example, the integral that you learn in Calc, the Riemann integral, is incredibly deficient and almost worthless for real applications.


I think "incredibly" deficient and "almost worthless" is probably taking it too far.


Well I mean specifically for applications in economics. I mean since it was sufficient for both Newton's and Maxwell's synthesis in physics I guess I would be pretty crazy to say that in general.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote JJLehto Quote  Post ReplyReply Direct Link To This Post Posted: March 09 2015 at 15:50
Well that is interesting and makes sense Pat. 
Though part of the reason I wondered that is there does seem to be more mathematical requirements as you "go up the ladder" of program prestige so I just wondered how much was useful, or just there to act as a signal or prove the rigor of the program. Some programs for example ask for only Calc II and linear algebra, while some say Real Analysis is pretty much essential as well as a slew of other courses, I was like...what exactly is the difference in what they teach? And are "lesser" programs maybe more stats/data based rather than theory and math?

Just for curiosity, thanks a bunch. As stated I can only get to Diffe Q/level IV anyway by the time I apply so oh wellLOL
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Padraic Quote  Post ReplyReply Direct Link To This Post Posted: March 08 2015 at 06:28
Originally posted by Equality 7-2521 Equality 7-2521 wrote:

For example, the integral that you learn in Calc, the Riemann integral, is incredibly deficient and almost worthless for real applications.


I think "incredibly" deficient and "almost worthless" is probably taking it too far.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Equality 7-2521 Quote  Post ReplyReply Direct Link To This Post Posted: March 07 2015 at 13:26
Originally posted by JJLehto JJLehto wrote:

I did wonder at the PhD level is there anything "new" or simply more of that...more concrete, rigorous and technical in depth of what you've done. Or as you said the language and reasoning becomes more rigorous is all.


Rigor or careful proof was something that came up in the 18-19th century. All the holes were retroactively filled in then. Nowadays without proof you're not doing math. So yes we do new things.

Originally posted by JJLehto JJLehto wrote:


Just curious is all. I intend to stop at 4/diffe q  for both time and sanity reasons. 
To spiral back to econ I find it a little insane that top tier programs require real analysis, I have to believe this is just a "signal" to try and make some applications stand out, since 800+ superb ones are applying for 15 spots. I can't imagine how proof based math is really essential for econ, and if it is for those programs no wonder those that create our leaders and econ gurus are so out of touch. I understand the need for models. theory and even higher levels of calc but do you know, what exactly goes on with those top tier econ programs and is it realistically tied to real life anymore? Still wondering if maybe stats or something like that is more up my ally... Since clearly the programs at The Ivys, U Cal, and Chicago are out of my league so guess I'll never get any major say in econ or teach at a good level schoolLOL 


I suspect some of it is just a form of selection as you suggest. However, with the caveat that I think some of this mathematicizing of econ is misguided, I do think that some of what goes on in economics really needs people fluent in real analysis. For example, the integral that you learn in Calc, the Riemann integral, is incredibly deficient and almost worthless for real applications. Other integrals are necessary and to even define them you would need to be fluent in technical mathematics. Also, when you go through proving all this calc business, you gain a familiarity with the workings of the machinery that I don't think you can quite get through another means. This is necessary for lots of things done in econ. Knowledge of topology would also seem to be essential.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote rogerthat Quote  Post ReplyReply Direct Link To This Post Posted: March 07 2015 at 03:33
Originally posted by JJLehto JJLehto wrote:

Seriously, I have many objections to how the Fed has operated, and the sad state of "Keynesian Economics" and mainstream economics. I even think the role of gov is not to be active, shouldn't try to intervene at every moment and hell no the CB shouldn't be given the role of monarch as some want. In an ideal world (which is not realistic) I think there should be more rules rather than laws about policy, so we can keep bought off politicians and their BS games out of it.

Gov should be there to buffer, the free market is good and does what it does. It is competitive, sometimes it behaves irrationally, sometimes it operates not with finding the best price or product or service, but by force and fraud. And the point of gov should be: to try and crack down on fraud and ensure a true free market, and ensure some universals like decent education and healthcare, basically to ensure each individual has the freedom to maximize their happiness, in a world of other individuals. 
If these gov buffers were better designed, they could actually stabilize and strengthen the private sector you know.  

Like I said, unrestrained market capitalism led to people abandoning it entirely, along with democracy. Be it socialism, fascism or communism. Market capitalism triumphed, but learned its lesson that it needs to protect people a little bit, to save itself. The nords, Europe and US all chose different routes there's no one answer. None are socialist, not even Sweden. The other alternative is China, and we don't want that right? Well, if these decades of stagnation continue it may look more appealing, I'd rather the gov provide jobs at a decent wage to those who can't find one, spend on R&D, education and health, invest in the US and its people so we don't say "Well sh*t, China has been doing well let's just set up a politburo to guide us" And people will accept lesser degrees of freedom, if they feel they need to. This is not what I want, this is what I think can happen when hope is abandoned about our system. It's happened before. 



Well said and agree more or less entirely.  The hard truth is hope and prosperity are the insurance cover that keep democracy from failing.  And that is why it has failed in so many Asian countries.  It would have failed in India too but for the peculiar circumstances in which the nation achieved its independence as well as the passive temperament of the people who accept a lot of suffering quietly.  I remember well the number of times fund managers, 'analysts' would glibly mouth the adage "The market will take care of itself" during 2006 thereabouts when faith in neo liberal policies reached its apex.  Well, the market didn't take care of itself.  It is dishonest to turn around and argue now that state intervention distorted the market.  That is indeed what happened but the idea that was sold during the boom days was that the market would take care of itself no matter what.  If businesses truly believe so fervently in the free market, they ought to also help uphold the system by not indulging in fraud and preferring ethics to a whatever-it-takes mindset.  Fraud and the cost it ultimately imposes on the average low and middle class citizen is the biggest threat to the free market.  If Deutsche Bank were covering their risk with credit default swaps, then they knew the risk inherent in the securitised asset packages they were selling.  So they shouldn't have been selling them to their customers.  That may be driven by profit motive, but it was wrong.  And if they lose some of their god given rights for doing so, fair dinkum.


Edited by rogerthat - March 07 2015 at 05:22
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Post Options Post Options   Thanks (0) Thanks(0)   Quote rogerthat Quote  Post ReplyReply Direct Link To This Post Posted: March 07 2015 at 03:17
Originally posted by JJLehto JJLehto wrote:

Originally posted by manofmystery manofmystery wrote:

Utopian, me?  Feh *spits*
This world is a sh*thole that we all eventually leave, with nothing to look forward but eternal darkness.  I shouldn't let the chains make me so angry, I guess, should learn to be a good little drone till the end.  Would be happier, maybe.

C'mon you don't wanna descend into techniques to avoid the topic, this thread is better than that. 
Guess, I'm a government brainwashed drone working until the end, that's why I've only worked at companies and am pursuing graduate school so I can get a higher paying job that I enjoy more. Anyway:

The reason I feel you are uptopian is while you admit all the the negatives that will come with life, you seem to believe markets are some magical entity. Like yeah there's sh*t in the world but if gov was minimal and left markets be, all will work out, it doesn't break as you say. I just think this is Utopian, even with little gov and no CB the system broke alot, sometimes seriously. 

The reason I asked if you've ever worked at a private company is because they really are inefficient nightmares, that sometimes aren't even about work...I consider myself a pretty quiet hard working guy, I don't even want to play the game of office politics and etc but you have to sometimes, not to get ahead but just...work, especially at the lower end of things I'm sure all the way up the ladder. So yeah, I accept government which can be corrupt, wasteful and inefficient but so can the private sector. I also think you're kind of Utopian because no real arguments are ever made about improving things, most libertarians refuse to moderate at all, it's all about waiting for some ideal scenario that never really existed. The joke is "oh they want to take us back to the 1880s" but we also had protectionism back then, gov building infrastructure and choosing winners, there's always patents and copyrights...not to mention back then it was local gov that was so highly corrupt...ya know exchanging votes for jobs and city bosses. So I just think mainstream libertarians tend to harbor a utopian view of things that have never really existed in reality. 



I know that private companies here are inefficient so it's interesting to hear that said of the US too, which for those of us looking outside in is the mecca of capitalism.  I recently had the opportunity to visit the Indian countryside and through long road trips, I noticed that only govt owned banks had installed ATMs along the highways.  I am talking about Kerala which is a tourist hub so there are lots of road travellers in need of cash  and I'd have thought an ATM would at least go some way to promoting a bank's presence.  Private banks are lazy and content to bank in the metropolises. To be fair, that is actually a symptom of big government.  If our central bank handed out licences more quickly and regularly, there would be more banks and they would be forced to work harder for growth.  But that is basically the role the govt can and should play, create rules that foster competition, not restrict it.  Yeah, agreed that private companies are hardly islands of meritocracy.  And the bigger they get, the more politics-infested they are.  In fact, politicians are at least capable of temporarily and very occasionally burying political and ideological differences to act in the nation's interest.  Our politicians did that in 1991 when the country faced a BoP crisis.  But corporate fat cats won't sacrifice their ego even if the ship is sinking.  In fact they will simply jump ship and move to a competitor (and probably proceed to run it down to the ground as well).  


Edited by rogerthat - March 07 2015 at 05:24
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Post Options Post Options   Thanks (0) Thanks(0)   Quote JJLehto Quote  Post ReplyReply Direct Link To This Post Posted: March 06 2015 at 19:06
Last flood for now,  I promise. 

Despite strong job growth, and unemployment falling to 5.5% wages are still stagnant. 

Reason being so many have left the labor force, all this job growth isn't even filling the hole left by those who left. Even if robust growth was to continue, people flocking back to work would find lots of applicants for each job, there's lots of "slack" in the market still, so much so there's 0 pressure to increase wages, plenty out there would be willing to look for any work. 

Ever since the temporary, and small, stimulus package there has been nothing...in fact gov deficits have been coming down, unemployment benefits were reduced, I find it hard to say gov has been meddling with the economy. I take this, and longer term trends, as some proof "hands off" is a poor idea. It's like leaving an engine alone, the oil has gotten old and sludgy now the engine is sputtering and weak. We need an overhaul (large gov spending) and long term...just like an engine gotta keep the oil fresh to keep it all running smooth. Instead of more welfare, or these small "stimulus" packages we need something big to get things going, and long term to keep it fresh. If not...real wages have been stagnant or declining for over a decade for most, unemployment is tending up, recoveries weaker, underemployment and part time work really shot up as has long term unemployment. I don't see how these processes are sustainable. 
"It's fine, luckily we're all English so no one will ask any questions. Thank you centuries of emotional repression."
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