Does it ever strike anyone as ironic...

[PaperclipGod]

...that capitalism elevated the US to levels of economic prosperity previously unheard of, yet today all the talk is about how "the system is broken" and how we need to "fix" things?

What exactly do you fix about a country whose 13 trillion dollar economy is 10 trillion greater than the country in second place?

 

[RightIsWrong]

Does it strike you as ironic that our system of economics is called a free market and yet every time that it has been deregulated so that it can be freer, it crashes in upon itself?

 

[Schadenfroh]

Well, Great Britain built the largest empire in history with a system that was more capitalistic than the modern US system and it was only broken up by two of the largest wars the world has ever seen.

 

[kyle xy]

Originally posted by: RightIsWrong
Does it strike you as ironic that our system of economics is called a free market and yet every time that it has been deregulated so that it can be freer, it crashes in upon itself?

Your logic is so simplistically wrong that I don't even know where to begin to counter so I will just say this.

Just like the stock market our economy as a whole will have its ups and downs...and yes there will be corrupt people that come out on top but eventually the market will drive these out as well.

The last thing we need is government involvement. For example, the government (both Clinton and W) wanted to see more "minorities owning homes" so they prodded mortgage lenders to make this happen. When someone tried to step in and regulate Fannie Mae and Freddie Mac congress jumped in and said it was a political move and saw nothing wrong with the two lenders' policies...fast forward to today and the mortgage crisis is probably one of the larger contributors to our current situation.

Now I believe we would still be in a slump if the government had kept its hand out of the cookie jar but we would recover far more quickly without all of this ridiculous spending.

 

[sandorski]

Originally posted by: kyle xy

Originally posted by: RightIsWrong
Does it strike you as ironic that our system of economics is called a free market and yet every time that it has been deregulated so that it can be freer, it crashes in upon itself?

Your logic is so simplistically wrong that I don't even know where to begin to counter so I will just say this.

Just like the stock market our economy as a whole will have its ups and downs...and yes there will be corrupt people that come out on top but eventually the market will drive these out as well.

The last thing we need is government involvement. For example, the government (both Clinton and W) wanted to see more "minorities owning homes" so they prodded mortgage lenders to make this happen. When someone tried to step in and regulate Fannie Mae and Freddie Mac congress jumped in and said it was a political move and saw nothing wrong with the two lenders' policies...fast forward to today and the mortgage crisis is probably one of the larger contributors to our current situation.

Now I believe we would still be in a slump if the government had kept its hand out of the cookie jar but we would recover far more quickly without all of this ridiculous spending.

Nah, he's correct.

 

[Craig234]

Originally posted by: kyle xy
For example, the government (both Clinton and W) wanted to see more "minorities owning homes" so they prodded mortgage lenders to make this happen.

You need to not be this simplistic, and consider that the government is being scapegoated here.

That was a tiny part of the situation. You had the Wall Street firms greatly desiring the extra mortgages to commodotize them and profit from them with their scams.

Did Washington make them use and abuse Credit Default swaps? Did Washington make them use 'liar's loans' and otherwize screw up the system to reward the mortgage sellers just for closing the deals for crap loans, far beyond the basic measures Washington itself took? Did Washington make Wall Street lobby for the deregulation that allowed this?

WHen you have a mess Wall Street created, and notice that Washington had taken some small measures in the same direction, it's very convenient to lay the blame on Washington.

As I've said repeatedly, what we have here is at its core a failure of the political system to represent the public interest over the Wall Street interests - a failure of the people to elect the right leaders, as they fell for the propaganda paid for in part by the Wall Street donations for the Republicans who represetned Wall Street and the 'deregulation' cult.

Edit: I'm going to post a quote I ran across from LegendKiller here, which I think supports the point I was making above (he's free to disagree if that's my error).

LegendKiller:

What lending encouraged by them? Actual CRA loans? They were relatively low LTV and largely to people who could afford them, I think they were also all conforming mortgages. That means they weren't Option Arms or Liar Loans or NINJAs. They were normal mortgages to normal people who wanted to buy a house and could afford to. By and large they have performed pretty damn well compared to "regular" prime mortgages from any data I have seen.

The idea that CRA caused this is laughable. It didn't even really contribute to it. If CRA contributed anything it might be 1% to the problem, at most.

 

[PaperclipGod]

Originally posted by: RightIsWrong
Does it strike you as ironic that our system of economics is called a free market and yet every time that it has been deregulated so that it can be freer, it crashes in upon itself?

This is actually an interesting topic I'd like to discuss if you'd be up for it.

Historically, when did economic regulation first begin? i.e., when did a government entity first say that there are certain things which businesses cannot do?

Historically, when did the free market first "crash in on itself"? i.e., when did a capitalist market first perform worse than a comparable planned economy?

I'm honestly interested in this, so I'm not going to try and prove a point by going "HA! Regulation was first, the crashes were second!", or vice versa.

What were the original shortcomings of capitalism, and what methods were used to correct them?

 

[StageLeft]

Originally posted by: PaperclipGod
...that capitalism elevated the US to levels of economic prosperity previously unheard of, yet today all the talk is about how "the system is broken" and how we need to "fix" things?

What exactly do you fix about a country whose 13 trillion dollar economy is 10 trillion greater than the country in second place?

I think it's hilarious. What we see is a broken arm. It needs to be fixed but not hacked off. A lot of people are unfortunately thinking in some idiotic way that this all proves capitalism sucks, so we should go toward socialism. They really, truly do. The US is still now the greatest economy and when this is said and done it's going to tolerate this recession/depression better than most other western economies. Not to mention, more socialist economies have screwed up, too, so I'm not precisely sure what capital-haters are really aspiring to. I'm sure they cannot bring up any meaningful examples of countries that are doing it better right now. Certainly there aren't many in Europe.

 

[Carmen813]

I don't think anyone is arguing that capitalism doesn't generate more money. I think what bothers some people is that much of that money is controlled by very few.

 

[miketheidiot]

Originally posted by: kyle xy

Originally posted by: RightIsWrong
Does it strike you as ironic that our system of economics is called a free market and yet every time that it has been deregulated so that it can be freer, it crashes in upon itself?

Your logic is so simplistically wrong that I don't even know where to begin to counter so I will just say this.

Just like the stock market our economy as a whole will have its ups and downs...and yes there will be corrupt people that come out on top but eventually the market will drive these out as well.

The last thing we need is government involvement. For example, the government (both Clinton and W) wanted to see more "minorities owning homes" so they prodded mortgage lenders to make this happen. When someone tried to step in and regulate Fannie Mae and Freddie Mac congress jumped in and said it was a political move and saw nothing wrong with the two lenders' policies...fast forward to today and the mortgage crisis is probably one of the larger contributors to our current situation.

Now I believe we would still be in a slump if the government had kept its hand out of the cookie jar but we would recover far more quickly without all of this ridiculous spending.

and ironically, neither fannie/freddie or the cra had anything to do with that.

as the mortgage bubble boomed, the share of mortgages held by fannie/freddie fell precipitously, and the mortgages that are causing problems are in the suburbs, not urban minority districts

 

[bamacre]

Originally posted by: Skoorb
I think it's hilarious. What we see is a broken arm. It needs to be fixed but not hacked off.

But unless we fix the root of the problem, we're always going to be trying to fix a broken limb.

Good listen...
http://www.youtube.com/watch?v=91OIBnrjzLU

 

[miketheidiot]

Originally posted by: PaperclipGod

Originally posted by: RightIsWrong
Does it strike you as ironic that our system of economics is called a free market and yet every time that it has been deregulated so that it can be freer, it crashes in upon itself?

This is actually an interesting topic I'd like to discuss if you'd be up for it.

Historically, when did economic regulation first begin? i.e., when did a government entity first say that there are certain things which businesses cannot do?

Historically, when did the free market first "crash in on itself"? i.e., when did a capitalist market first perform worse than a comparable planned economy?

I'm honestly interested in this, so I'm not going to try and prove a point by going "HA! Regulation was first, the crashes were second!", or vice versa.

What were the original shortcomings of capitalism, and what methods were used to correct them?

serious regulation, at least in the united states, started at the turn of the century, and particularly after the start of the great depression.

financial panics have been happening fairly frequently since as long as there was a financial system big enough to shock

 

[bamacre]

Originally posted by: Carmen813
I don't think anyone is arguing that capitalism doesn't generate more money. I think what bothers some people is that much of that money is controlled by very few.

We aren't, and haven't been, practicing capitalism.

 

[Stunt]

Originally posted by: PaperclipGod
...that capitalism elevated the US to levels of economic prosperity previously unheard of, yet today all the talk is about how "the system is broken" and how we need to "fix" things?

What exactly do you fix about a country whose 13 trillion dollar economy is 10 trillion greater than the country in second place?

US GDP = $14.6trillion
EU GDP = $15.0trillion
China GDP = $7.8trillion

I don't know where you are getting $10trillion more from...

 

[miketheidiot]

Originally posted by: Skoorb

Originally posted by: PaperclipGod
...that capitalism elevated the US to levels of economic prosperity previously unheard of, yet today all the talk is about how "the system is broken" and how we need to "fix" things?

What exactly do you fix about a country whose 13 trillion dollar economy is 10 trillion greater than the country in second place?

I think it's hilarious. What we see is a broken arm. It needs to be fixed but not hacked off. A lot of people are unfortunately thinking in some idiotic way that this all proves capitalism sucks, so we should go toward socialism. They really, truly do. The US is still now the greatest economy and when this is said and done it's going to tolerate this recession/depression better than most other western economies. Not to mention, more socialist economies have screwed up, too, so I'm not precisely sure what capital-haters are really aspiring to. I'm sure they cannot bring up any meaningful examples of countries that are doing it better right now. Certainly there aren't many in Europe.

they only reason we are going to survive this better than most is because we are larger, more diversified, and have a stronger government to stabilize markets and provide credibility on a national scale. The EU is close, but still lacks the central authority and isn't quite as diverse economically. China isn't even worth mentioning in the same sentence as the us and eu.

Anyways, pure reliance on free markets sucks (although not as much as pure central planning), since they don't really work as advertised outside of the basic college intro-econ classes, where the models are all centered around assumptions that cannot exist in the real world. The general concession in both the science and the actual real policy world is that significant government intervention can and does work to improve peoples lives and ensure better functioning markets.

 

[miketheidiot]

Originally posted by: Stunt

Originally posted by: PaperclipGod
...that capitalism elevated the US to levels of economic prosperity previously unheard of, yet today all the talk is about how "the system is broken" and how we need to "fix" things?

What exactly do you fix about a country whose 13 trillion dollar economy is 10 trillion greater than the country in second place?

US GDP = $14.6trillion
EU GDP = $15.0trillion
China GDP = $7.8trillion

I don't know where you are getting $10trillion more from...

most people don't consider the eu a single economy yet, and use raw gdp and not ppp

EU $18.85 trillion
us $14.33 trillion
japan 4.844 trillion
china $4.222 trillion
germany $3.818 trillion

 

[Modelworks]

Originally posted by: PaperclipGod
...that capitalism elevated the US to levels of economic prosperity previously unheard of, yet today all the talk is about how "the system is broken" and how we need to "fix" things?

What exactly do you fix about a country whose 13 trillion dollar economy is 10 trillion greater than the country in second place?

Pick up a history book and read about Rome and its rise and fall. We are paralleling that nicely. Especially the economy part.

http://www.mackinac.org/article.aspx?ID=3

 

[PaperclipGod]

Originally posted by: Modelworks

Originally posted by: PaperclipGod
...that capitalism elevated the US to levels of economic prosperity previously unheard of, yet today all the talk is about how "the system is broken" and how we need to "fix" things?

What exactly do you fix about a country whose 13 trillion dollar economy is 10 trillion greater than the country in second place?

Pick up a history book and read about Rome and its rise and fall. We are paralleling that nicely. Especially the economy part.

http://www.mackinac.org/article.aspx?ID=3

That was a well-written article, and I agree with many aspects of it, however it's lack of sources and oddly specific details of the Roman Republic/Empire take away from it's credibility somewhat.

Comparing Diocletian to Nixon is a big stretch, imo. :/

 

[blackangst1]

Originally posted by: Modelworks

Originally posted by: PaperclipGod
...that capitalism elevated the US to levels of economic prosperity previously unheard of, yet today all the talk is about how "the system is broken" and how we need to "fix" things?

What exactly do you fix about a country whose 13 trillion dollar economy is 10 trillion greater than the country in second place?

Pick up a history book and read about Rome and its rise and fall. We are paralleling that nicely. Especially the economy and morality part.

http://www.mackinac.org/article.aspx?ID=3

Bold added for accuracy

 

[fskimospy]

Originally posted by: PaperclipGod

Originally posted by: RightIsWrong
Does it strike you as ironic that our system of economics is called a free market and yet every time that it has been deregulated so that it can be freer, it crashes in upon itself?

This is actually an interesting topic I'd like to discuss if you'd be up for it.

Historically, when did economic regulation first begin? i.e., when did a government entity first say that there are certain things which businesses cannot do?

Historically, when did the free market first "crash in on itself"? i.e., when did a capitalist market first perform worse than a comparable planned economy?

I'm honestly interested in this, so I'm not going to try and prove a point by going "HA! Regulation was first, the crashes were second!", or vice versa.

What were the original shortcomings of capitalism, and what methods were used to correct them?

The 'free market' has never truly existed at any time in mankind's history. The boom and bust cycle of capitalism has been going on as long as capitalism has been around, as Skoorb said financial panics have a long and storied history.

The biggest problem with this entire discussion is the incredible dishonesty of the false dichotomy here. Things aren't either capitalist or socialist, it's a continuum. When the free market fails and we move to regulate it, we aren't all turning into raging commies, we're just rationally responding to a problem with our system.

The cries of 'socialism!' from the right have been going on with every Democratic presidency since socialism was invented. Seriously, go look up the history. They weren't socialists any more than Obama is, and this sort of hysteria occurs like clockwork. It's pure political theater.

 

[PaperclipGod]

Originally posted by: eskimospy

The 'free market' has never truly existed at any time in mankind's history. The boom and bust cycle of capitalism has been going on as long as capitalism has been around, as Skoorb said financial panics have a long and storied history.

The biggest problem with this entire discussion is the incredible dishonesty of the false dichotomy here. Things aren't either capitalist or socialist, it's a continuum. When the free market fails and we move to regulate it, we aren't all turning into raging commies, we're just rationally responding to a problem with our system.

The cries of 'socialism!' from the right have been going on with every Democratic presidency since socialism was invented. Seriously, go look up the history. They weren't socialists any more than Obama is, and this sort of hysteria occurs like clockwork. It's pure political theater.

Why are the booms and busts a bad thing, then? Why not just allow them to happen, since they've allowed us to reach these unprecedented economic heights? Why not consider them the price to pay for prosperity? The alternative is being 10 trillion poorer, right?

Also, don't you think the fear of socialism has some justification considering that the poorer classes are always more populous than the richer classes? i.e., a populist socialist movement could easily win elections by appealing to the people who have the most to gain - the poor. The poor outnumber the wealthy, but the poor have more voting power than the wealthy. A politician looking to get elected would have much greater odds of doing so if he appeals to the poor by promising them a fairer distribution of wealth.

The point being that the best economic path to take might not necessarily be the one chosen. It's often the "me too!" ideology that steers the country. It's not that I'm blaming poor people - their desire for more help from the government is rooted in the same mindset as the wealthy, who wanted more for themselves and simply got it via different methods. However, if you lean too far towards a welfare state the wealthy become incapable of supporting the state. Likewise, if you lean too far towards a capitalist state, the poor become a miserable mass of slaves.

The ideal place to be is somewhere in the middle of that continuum (as you said). However, the very nature of our government makes it far easier to create MORE government than to reduce it. I mean, look at all the laws that politicians pass every year on the federal, state, county, and local levels. When's the last time a legislative body said "we're pretty good, we don't need to make anything else illegal this year"? Do we honestly need thousands of new laws every year?

 

[bamacre]

Originally posted by: eskimospy
The 'free market' has never truly existed at any time in mankind's history.

When the free market fails

Care to fix your second statement?

 

[Lemon law]

In MHO, RightIsWrong nailed it with the best single sentence response to thread with" Does it strike you as ironic that our system of economics is called a free market and yet every time that it has been deregulated so that it can be freer, it crashes in upon itself?


But now that this thread is going off on a governmental tangent of where is the best place to position our self in the non existent free market vs. socialism redistribution of wealth question, I wish I could be as eloquent as RightIsWrong.

The point being, any society tends to operates by the golden rule, those that have the gold make the rules. So a free marketer like GWB and his huge tax cuts that benefit mostly the already rich redistribute wealth, and as a result, its hurt everyone but the already rich at the expense of everyone else. And its not a any different than an ultra socialist agenda that seeks to bias it the other way.

So a wise government looks at that relative distribution of wealth, and institutes the various reforms that keep the middle class and their spending power in tact, those governments that fail to do so end up with Haitian style governments that soon collapse. But anything a government does, does redistribute wealth.

 

[IGBT]

..most bottom feeder liberals are notoriously non competitive and are proponents of wealth distribution of achievers. so you can always expect the bottom feeder liberals to cry and complain about any volatile swing in the economy. It's what they do best.

 

[miketheidiot]

Originally posted by: PaperclipGod

Originally posted by: eskimospy

The 'free market' has never truly existed at any time in mankind's history. The boom and bust cycle of capitalism has been going on as long as capitalism has been around, as Skoorb said financial panics have a long and storied history.

The biggest problem with this entire discussion is the incredible dishonesty of the false dichotomy here. Things aren't either capitalist or socialist, it's a continuum. When the free market fails and we move to regulate it, we aren't all turning into raging commies, we're just rationally responding to a problem with our system.

The cries of 'socialism!' from the right have been going on with every Democratic presidency since socialism was invented. Seriously, go look up the history. They weren't socialists any more than Obama is, and this sort of hysteria occurs like clockwork. It's pure political theater.

Why are the booms and busts a bad thing, then? Why not just allow them to happen, since they've allowed us to reach these unprecedented economic heights? Why not consider them the price to pay for prosperity? The alternative is being 10 trillion poorer, right?

the point is that you can have the prosperity without the boom and bust cycles, and infact the boom and bust cycles likely hurt long run economic growth.