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Thread: Capitalism vs. Socialism: Which is the better economy? [elfdude vs. Legio Italica]

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    Default Capitalism vs. Socialism: Which is the better economy? [elfdude vs. Legio Italica]

    Socialism vs. Capitalism: Which Economy is Better

    *Note - The verbage of the debate has changed from socialism vs capitalism to differing degrees of mixed market economy and debating how planned an economy should be with legio taking the position of a lesser planned economy towards the ideal of a market economy and elfdude taking the position of a mixed market economy pressing for more planning on a macroeconomic level.

    Legio_Italica - Pro Market Economy (Market self regulation)
    Elfdude - Anti market economy (Increased emphasis on planning for the betterment of society)

    Quote Originally Posted by Legio_Italica View Post
    I would probably take you up on that last one, if you would be willing, and if you would synthesize what exactly you mean by "socialism" and "capitalism." My problem with a debate like that is that the sheer breadth and depth of the subject may make it impossible to discuss without very specific parameters.
    Indeed, socialism and capitalism are rather hard to define. You'd probably loose ipso facto if we used technical definitions because there exists no capitalistic system. In essence the debate would have to focus around a gradient of how communist versus how capitalist you were with my argued ideal laying center middle. This in turn might be difficult to properly argue without a third participant taking the position of communism. I'm not entirely sure... suggestions?

    In the end we would have to look at proven links as well. I've had economic debates with you before and you've been more than willing to rewrite what an economic policy is or does with bogus claims which turned out to be unfounded.
    Last edited by Elfdude; February 08, 2013 at 02:18 PM.

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    Default Re: CHALLENGE THREAD -- Issue a challenge here

    Quote Originally Posted by elfdude View Post
    Indeed, socialism and capitalism are rather hard to define. You'd probably loose ipso facto if we used technical definitions because there exists no capitalistic system. In essence the debate would have to focus around a gradient of how communist versus how capitalist you were with my argued ideal laying center middle. This in turn might be difficult to properly argue without a third participant taking the position of communism. I'm not entirely sure... suggestions?

    In the end we would have to look at proven links as well. I've had economic debates with you before and you've been more than willing to rewrite what an economic policy is or does with bogus claims which turned out to be unfounded.
    I never "rewrite" terms. When given a term like "capitalism," for example, I define what particular parameters I would personally wish to give to "capitalism" for what I perceive to be the best results. Similarly, you define "socialism" in your political profile as "capitalism without as much corporate corruption." Of course, that is probably the least socialistic and most vague definition of socialism I've ever heard, as it could certainly describe my ideal version of capitalism. The devil is in the details. In fact, given the verbatim of your various issues mentioned on your profile, I'd say our only major divergence of ideology is the relationship of the individual to the state or "community."

    The fact is, having a debate between "socialism" and "capitalism" in their pure forms is very difficult, because neither has existed. If one wanted to advocate pure socialism, which I consider the public ownership of the means of production and the state-mandated equalization of all social and economic outcomes for every individual in society, this person would be very hard-pressed to specify how exactly a central authority can possibly maintain and control all the variables in that scenario; especially when similar attempts, like the Soviet Union, failed, primarily because of an inability to control economic distribution effectively. The only difference I see between socialism and communism is that socialism preserves the state and monetary mechanisms whereas communism dissolves these completely into an anarcho-syndicalist dream world where everyone owns everything and therefore nothing, and a body politic that somehow is not a state distributes according to need and taxes according to ability.

    If one wanted to advocate pure capitalism, I could very easily ask how this person intends to avoid either anarchy or the rise of a strong-man, for one thing. If the state exists merely to enforce contracts, how would one construct society so that every single aspect of society involves contracts? What would the social contract look like? What is the age of competence? How would that be determined? Etc etc

    In reality, no government on earth, and certainly very few people, are true socialists. The vast majority of westerners simply want a capitalist engine with varying degrees of social and ideological constraints. I say less, you say more. That's not a debatable issue. If we were to be members of an effective government, we'd argue for a while and probably end up compromising; because no one's talking about altering the means of production, only how much he or she thinks capitalism ought to be regulated. Unless I've misinterpreted your position, and you do in fact wish to argue for a form of socialism that involves public ownership of the means of production, please do correct me. Otherwise, I think we'd just end up having the same kinds of social and political debates that happen 24/7 on TWC.

    Now, suggestions......If we were to have a debate, I think each of us would have to describe, in general, what his "ideal state" looks like (or perhaps a historical example) with regard to general economic regulatory situation, banking system, and public sector, as well as what general social programs would look like. Either that, or we would have to do something similar to that in describing what exactly each of us means by "socialism" and "capitalism."
    Last edited by Lord Thesaurian; February 06, 2013 at 09:28 AM.
    Of these facts there cannot be any shadow of doubt: for instance, that civil society was renovated in every part by Christian institutions; that in the strength of that renewal the human race was lifted up to better things-nay, that it was brought back from death to life, and to so excellent a life that nothing more perfect had been known before, or will come to be known in the ages that have yet to be. - Pope Leo XIII

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    Default Re: CHALLENGE THREAD -- Issue a challenge here

    Quote Originally Posted by Legio_Italica View Post
    I never "rewrite" terms. When given a term like "capitalism," for example, I define what particular parameters I would personally wish to give to "capitalism" for what I perceive to be the best results. Similarly, you define "socialism" in your political profile as "capitalism without as much corporate corruption." Of course, that is probably the least socialistic and most vague definition of socialism I've ever heard, as it could certainly describe my ideal version of capitalism. The devil is in the details. In fact, given the verbatim of your various issues mentioned on your profile, I'd say our only major divergence of ideology is the relationship of the individual to the state or "community."
    You definitely rewrite the definitions of things to suit your argument. Indeed, while we differ on economic policy quite drastically I believe the best types of economic policies right now are demand side solutions, you've pushed for increased supply side solutions in our previous arguments. Demand side solutions are things like social programs, minimum wage, etc. To give you a rough estimate of how I see capitalism, socialism and communism. Perhaps this could become the crux of our argument?

    Capitalism is no oversight, completely beholden to the bottom line. If it's not a commodity that can be packaged and sold it has no value to society.

    Socialism is a natural mid point between capitalism and communism. It does not include complete ownership by the state although the state is not opposed to ownership if such things become necessary or to end stagnant corporate competition. For example the post office offers corporate competition where corporations must develop a method cheaper and more profitable than a system which runs at a deliberate loss. They have done so marvelously but you would wonder what the cost of shipping would be if the government had not set the bar standard. Socialism closes the gap between the rich and the poor but not entirely. Usually there's a income gap of about 1 to 10. Todays income gap in the US is 1 to 42.

    Communism includes complete ownership of all private property within a community. Essentially speaking there communism turns the government into everyone's board of directors and CEO. The government may even go further in social programs and controlling smaller and smaller details of everyday life.

    Quote Originally Posted by Legio_Italica View Post
    The fact is, having a debate between "socialism" and "capitalism" in their pure forms is very difficult, because neither has existed. If one wanted to advocate pure socialism, which I consider the public ownership of the means of production and the state-mandated equalization of all social and economic outcomes for every individual in society, this person would be very hard-pressed to specify how exactly a central authority can possibly maintain and control all the variables in that scenario; especially when similar attempts, like the Soviet Union, failed, primarily because of an inability to control economic distribution effectively.
    Socialism is not the public ownership of the means of production exclusively. This is one of my issues with debating with you is the constant redefining of terms which are subtly different than the understood term. Socialism is the social control of the means of production. Social control includes private enterprise, public ownership and state ownership. The variance here is quite vast and includes more or less every country on the face of the earth today.

    Communism on the other hand is a form of revolutionary socialism, in which absolute ownership by the public is mandated into a classless, moneyless, stateless society. However this viewpoint seems rather incompatible with the fascist states that introduced this concept leading to the idea that communism if it was ever intended by the people was immediately hijacked by a new generation of plutocrats.

    Quote Originally Posted by Legio_Italica View Post
    The only difference I see between socialism and communism is that socialism preserves the state and monetary mechanisms whereas communism dissolves these completely into an anarcho-syndicalist dream world where everyone owns everything and therefore nothing, and a body politic that somehow is not a state distributes according to need and taxes according to ability.
    Socialism typically maintains an economic gap and private enterprise to a certain extent it merely heavily regulates the two. My conception of socialism is a direct middle point between absolute capitalism and absolute communism.

    Quote Originally Posted by Legio_Italica View Post
    If one wanted to advocate pure capitalism, I could very easily ask how this person intends to avoid either anarchy or the rise of a strong-man, for one thing. If the state exists merely to enforce contracts, how would one construct society so that every single aspect of society involves contracts? What would the social contract look like? What is the age of competence? How would that be determined? Etc etc
    Indeed though the contractual obligations would impose a social construct which would be socialist in nature. It seems we view purist capitalism and purist communism as really the same thing. We're honestly both in the socialist realm of economic policy if you were to be technical though you're certainly at a different part of the gradient to I.

    Quote Originally Posted by Legio_Italica View Post
    In reality, no government on earth, and certainly very few people, are true socialists. The vast majority of westerners simply want a capitalist engine with varying degrees of social and ideological constraints. I say less, you say more. That's not a debatable issue. If we were to be members of an effective government, we'd argue for a while and probably end up compromising; because no one's talking about altering the means of production, only how much he or she thinks capitalism ought to be regulated. Unless I've misinterpreted your position, and you do in fact wish to argue for a form of socialism that involves public ownership of the means of production, please do correct me. Otherwise, I think we'd just end up having the same kinds of social and political debates that happen 24/7 on TWC.
    I agree. I do not support complete public ownership but I can see instances where it is indeed a good thing.

    Quote Originally Posted by Legio_Italica View Post
    Now, suggestions......If we were to have a debate, I think each of us would have to describe, in general, what his "ideal state" looks like (or perhaps a historical example) with regard to general economic regulatory situation, banking system, and public sector, as well as what general social programs would look like. Either that, or we would have to do something similar to that in describing what exactly each of us means by "socialism" and "capitalism."
    Indeed. I don't suppose this debate is really easy to be had. While our definitions aren't very different the subtle differences lead to small differences of interpretations which build up into our final output. We could instead argue a specific economic policy or a specific type of economics but even this I fear we differ on levels of a few degrees. I utilize kenysian economics and it's descendants to drive my economic theory which I doubt you would disagree with. I was more hoping that someone like BWB, Phier, OCwife or etc would take up the challenge because defeating an imaginary ideal of capitalism is much easier than defining degrees of socialism.

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    Default Re: CHALLENGE THREAD -- Issue a challenge here

    Quote Originally Posted by elfdude View Post
    You definitely rewrite the definitions of things to suit your argument. Indeed, while we differ on economic policy quite drastically I believe the best types of economic policies right now are demand side solutions, you've pushed for increased supply side solutions in our previous arguments. Demand side solutions are things like social programs, minimum wage, etc. To give you a rough estimate of how I see capitalism, socialism and communism. Perhaps this could become the crux of our argument?
    I think that would be a fun discussion to have; or rather to watch. I'd rather watch two economists debate details like that, because I haven't the knowledge to do so effectively. Of course, arguments like this are old, and central to the kinds of systems that Keynes challenged; the debate between, for example, raising real wages by wealth redistribution to counter economic downturns vs allowing the Market to reset the balance, etc.

    Capitalism is no oversight, completely beholden to the bottom line. If it's not a commodity that can be packaged and sold it has no value to society.
    Unfettered capitalism, maybe. Not everything is a commodity; like ideas, for example (though, in an age where ideas can be property, this is changing). Are you saying social and political ideas have no value to society?

    Socialism is a natural mid point between capitalism and communism. It does not include complete ownership by the state although the state is not opposed to ownership if such things become necessary or to end stagnant corporate competition. For example the post office offers corporate competition where corporations must develop a method cheaper and more profitable than a system which runs at a deliberate loss. They have done so marvelously but you would wonder what the cost of shipping would be if the government had not set the bar standard. Socialism closes the gap between the rich and the poor but not entirely. Usually there's a income gap of about 1 to 10. Todays income gap in the US is 1 to 42.
    To me, that sounds like social democracy. If one wishes to preserve the capitalist engine but merely redistribute liquid capital to achieve social goals, I don't think that's socialism. Maybe that's where we differ the most. I have ethical concerns about social democracy, and worry about its distortion of the markets and whether this will lead to economic instability. For example, if a government wants to prop up a car industry by offering tax breaks and/or cash to encourage people to invest in, buy, and sell cars, this creates a false market that will only last as long as the government supports it with perpetual cash infusion. The longer it lasts, the bigger the bubble gets. This is a favorite tactic of Keynesian economics to support faltering industries and maintain employment and production; if not through a direct bailout through the central banking system.

    Which brings me to the other point. You, like so many today, seem to want to blame "capitalism" for the excesses of corporatism and plutocracy. I will forever point out that the fault lies with the very kinds of state capitalism popularized in modern form by men like Keynes. A central bank centralizes an economy around the faucet of interest rates. Powerful men, usually ex-Wall Street execs, become board members of these central banks to arbitrarily try to control the ebb and flow of capital. These central banks are inevitably beholden to those who hold the most capital. In the case of the Federal Reserve, the bank was founded by the most powerful men on Wall Street, like Morgan, Warburg, Rockefeller, Vanderlip, etc. to centralize the American economy in their hands.

    By 1910, industry and capital were moving to the developing western US, carried by thousands of start-up companies, banks, and S&Ls. The East Coast titans were losing loan market share as the Market began to diversify the economy. So, Wall Street, lusting after the central banking systems of Europe, set up their own money machine right here in the US. Control the money, gamble with hundreds of billions of dollars, and if all else fails, the taxpayer will pick up the tab. All this was billed as the very kinds of "social, public, common good" rhetoric you mention. In fact, I'd say a careful examination of even the most far-left, socialist legislation will reveal a powerful interest standing to profit from the arrangement.

    Even if the Fed is not of such an insidious nature, the fact remains that, as Bernanke and others have mentioned, it is simply not humanly possible to play "god" with the economy of an entire nation without suffering major mistakes. I say the Fed deliberately contracted the US economy in 1929 by playing with interest rates in concert with Wall Street insiders to pull the bottom out of the markets. The Fed says it simply failed to pour enough liquid capital into the economy to save it from collapse. Either through human error or conspiracy, this was but one of many erroneous Fed policies implicit in every boom-bust cycle for the last century.

    My position is that the Market facilitates the most efficient allocation of resources. Everyone generally agrees on that. We all have different views and ideas on how the government ought to regulate the Market and for what reasons. For instance, its fine if you want to raise the minimum wage, but then don't be surprised when low-skilled jobs are sent overseas. (This is actually of mutual benefit in some cases. I detail it briefly here and here, as well as imply the importance of human capital in determining personal wealth distribution. Perhaps we could talk about that?). There are examples of heavily taxed and regulated capitalist systems being very successful, like the Nordic System. I would very much like a referral to a good book on the subject, because it puzzles me that ideas that have failed elsewhere have succeeded there, like heavy unionization and protectionism. My point is, there will be drawbacks to any regulatory code. The trick is in determining which regulations provide the most benefit at the least cost to the universally accepted capitalist engine, and that is a perpetual debate.

    Socialism is not the public ownership of the means of production exclusively. This is one of my issues with debating with you is the constant redefining of terms which are subtly different than the understood term. Socialism is the social control of the means of production. Social control includes private enterprise, public ownership and state ownership. The variance here is quite vast and includes more or less every country on the face of the earth today.
    The IFCI, Trotsky's brainchild, publishes under the name World Socialist Movement. They of course organize and promote the "struggle" for world socialism and revolution; basically what Marx wanted.

    The Socialist Party USA advocates the near-abolition of private property and the creation of democratic workers' soviets.

    The Democratic Socialists of America don't really have a platform, other than the gradual dissolution of the capitalist engine through more universal and "radical" wealth redistribution and economic and social equalization of outcomes.

    Basically, I merely define "socialism" as socialists define it. Most socialists will call other, less extreme socialists "capitalists," and those more extreme, "communists" or "radicals." My point is, if you preserve the capitalist means of production, ie the Market mechanism, you're a capitalist. More specifically, if you want to preserve the Market mechanism, but think the latter should be controlled and subservient to social goals, you're a state capitalist. If you want minimal government intrusion in the Market, economically limited to enforcement of universal regulations, from which no person or party within the target subject is exempt, I don't really know what you are; but you're probably me. I would call it traditional "laissez-faire" capitalism, but since the latter has never existed, its difficult to define.

    Economic stagnation, distortion, and monopoly usually arises from politically motivated and serpentine government regulation; commonly promoted by one interest or another to harm or destroy a rival. For example, a politically influential chicken farmer forwards a bill heavily taxing chickens but exempting said farmer. His competition goes out of business, the chicken farmer becomes a wealthy monopoly owner, and the politician(s) who organized and supported the bill are rewarded with wealth, position, and power. Moreoever, the chicken farmer has also now become "too big to fail," which means he has persuaded the government to bail him out should he ever experience financial trouble. Corruption is the problem, not "capitalism."

    Socialism typically maintains an economic gap and private enterprise to a certain extent it merely heavily regulates the two. My conception of socialism is a direct middle point between absolute capitalism and absolute communism.
    I don't consider "heavily regulated" capitalism to be socialism, but, OK. My inevitable response is that, depending on the substance and consequence of these "regulations," severe market artificialities will be created, inevitably fostering corruption and instability. But, that's why we have nation states and elections. I just hope we don't leverage away our capital before we figure out what works (in fact, I'd say we already know what works, but I'm sure you know what that means ).

    Indeed though the contractual obligations would impose a social construct which would be socialist in nature. It seems we view purist capitalism and purist communism as really the same thing. We're honestly both in the socialist realm of economic policy if you were to be technical though you're certainly at a different part of the gradient to I.
    I'd say our primary static difference is in monetary policy and the role of government in controlling/interfering with economic and social outcomes.

    I agree. I do not support complete public ownership but I can see instances where it is indeed a good thing.
    General examples?

    Indeed. I don't suppose this debate is really easy to be had. While our definitions aren't very different the subtle differences lead to small differences of interpretations which build up into our final output. We could instead argue a specific economic policy or a specific type of economics but even this I fear we differ on levels of a few degrees. I utilize kenysian economics and it's descendants to drive my economic theory which I doubt you would disagree with. I was more hoping that someone like BWB, Phier, OCwife or etc would take up the challenge because defeating an imaginary ideal of capitalism is much easier than defining degrees of socialism.
    If by those particular users, you mean "GOP" types, they are pretty fun to play with. "I want small government and freedom....except when it comes to the implementation and support of my particular pet projects and social platforms." The problem with Democrats and Republicans is that they both have virtually identical governing philosophies (in my opinion, unsustainable ones), they just have different priorities. The truth is, they both both belong to the same interests; Wall Street and the military-industrial complex, and the furthering of these interests around the world at any cost. Those will always be priority number one.
    Last edited by Lord Thesaurian; February 06, 2013 at 06:13 PM.
    Of these facts there cannot be any shadow of doubt: for instance, that civil society was renovated in every part by Christian institutions; that in the strength of that renewal the human race was lifted up to better things-nay, that it was brought back from death to life, and to so excellent a life that nothing more perfect had been known before, or will come to be known in the ages that have yet to be. - Pope Leo XIII

  5. #5
    Elfdude's Avatar Tribunus
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    Default Re: CHALLENGE THREAD -- Issue a challenge here

    Quote Originally Posted by Legio_Italica View Post
    I think that would be a fun discussion to have; or rather to watch. I'd rather watch two economists debate details like that, because I haven't the knowledge to do so effectively. Of course, arguments like this are old, and central to the kinds of systems that Keynes challenged; the debate between, for example, raising real wages by wealth redistribution to counter economic downturns vs allowing the Market to reset the balance, etc.
    I think you're looking at Kenyesian economics a bit off of what they're really saying further the critiques on Kenysian economics don't really apply to modern day conceptions of his theory. His theories are supported by statistical regression and probabilistic wave functions which is to say, science. Now Kenysian economics did fail a bit in certain aspects and was reformatted.

    What you seem to be speaking of is real business cycle theory which is a rather silly economic theory alone. Hell the data from Prescott's own research for the last hundred years rather definitively prove RBC to be wrong. I don't rely specifically upon Kenysian economics but rather what they became which drives modern economic theory. This includes both the new neoclassical synthesis and Post Kenysian Economics and New Kenysian Economics.

    http://en.wikipedia.org/wiki/New_neo...ical_synthesis

    Essentially there's four central principles to the Neo-classical-synethsis:

    Intertemporal Optimization - the personal behaviors of saving and spending amongst people

    Rational Expectation - the prediction of the future economic activity - however this theory changes the definition slightly to include sticky prices and other economic rigidity not recognized by previous theories furthermore, unlike Kenysian economics which which focus mostly on demand side solutions and monetarist policies which assume the variability of the value money NNCS includes supply-side solutions, demand-side solutions and monetarist solutions as viable and supported by the data. However economists recommend that different strategies are used at different times, while a monetarist solution can prop up a failing economy and minimize the damage associated with a major collapse doing so should only be done as a last resort when the costs of allowing something to fail exceed the value in allowing a failing business to fail. Which is to say some business die, other businesses are supported because not doing so causes fallout. This includes using scientifically validated montarist policies such as specifying interest rates, taylor rules etc only when the data supports their usage.

    Menu Costs - the cost of information, implementation etc.

    Imperfect Competition - that economic activity take place which does not support infinite competition (Reaganomics which drove policy with RBC caused the global financial crisis because they assume infinite competition which does not occur)

    These principles in turn are supported by utilizing real data both observed and empirical to support the assertions. Essentially appealing to science to validate the claims it makes. Essentially I'm saying your understanding of Kenysian economics and what they have become is a bit outdated. Furthermore your offhanded rejection of monetarist policies and favor of supply side solutions are demonstrably poor economic policies from the data.

    Quote Originally Posted by Legio_Italica View Post
    Unfettered capitalism, maybe. Not everything is a commodity; like ideas, for example (though, in an age where ideas can be property, this is changing). Are you saying social and political ideas have no value to society?
    That's a mighty socialist question to ask. You're right that not everything is a commodity, capitalism simply doesn't invest into anything that isn't a commodity. Now the issue here is the definition of commodity. In capitalism, ethical, social, aesthetic and political ideals are either worthless or nearly so. A capitalist society could perhaps flourish if the society embraced game theory. Unfortunately without doing so the result as you've mentioned is the reality of imperfect competition, sticky prices and demand side solutions which render capitalism as a economic policy horrible ineffective.

    Quote Originally Posted by Legio_Italica View Post
    To me, that sounds like social democracy.
    It's not. http://en.wikipedia.org/wiki/Socialism

    Socialism is not simply public ownership of everything etc. You're confusing radical socialism or communism with socialism which is a concept that engenders the idea that both money and social, political, aesthetic, ethical policy become important rather than solely money. This means that a socialist camp may support consumer rights, minimum wages, but also may support lowered taxes, and oppressive regulations, simultaneously supporting private enterprise and etc. Technically speaking. Every country on the face of the earth fits on this gradient. Which is to say:

    Communism = social only matters
    Socialism = money, social etc matters
    Capitalism = money only matters

    or if we set communism at 0 and capitalism at 100, every number between from 1-99 is socialism.

    Quote Originally Posted by Legio_Italica View Post
    If one wishes to preserve the capitalist engine
    You mean private enterprise, calling it a capitalist engine engenders ideas that it's tied to capitalism which it is not.

    Quote Originally Posted by Legio_Italica View Post
    but merely redistribute liquid capital to achieve social goals, I don't think that's socialism.
    It is by definition.

    Quote Originally Posted by Legio_Italica View Post
    Maybe that's where we differ the most. I have ethical concerns about social democracy, and worry about its distortion of the markets and whether this will lead to economic instability. For example, if a government wants to prop up a car industry by offering tax breaks and/or cash to encourage people to invest in, buy, and sell cars, this creates a false market that will only last as long as the government supports it with perpetual cash infusion. The longer it lasts, the bigger the bubble gets.
    Unfortunately the offhanded rejection of montarist policies and demand-side solutions is demonstrably wrong to do. There's many economic theories which do this and most of them are outdated severely. Monetarist policies have scientific backing as do demand-side solutions. Who really knows why they work, there's a lot of theories but it's moot. We know from the data that they do work in certain circumstances, we can also see in the data times where overuse has lead to other problems.

    One great example is the process of qualitative easing which we last had our extensive debate about. Data does not support your rejection of the process entirely but does support the idea that it's easy to overuse. Another example is welfare. When a society over emphasizes welfare of a social nature the economics required to support said welfare fall apart. Similarly if welfare is neglected society itself falls apart taking the economy with it.

    Quote Originally Posted by Legio_Italica View Post
    This is a favorite tactic of Keynesian economics to support faltering industries and maintain employment and production; if not through a direct bailout through the central banking system.
    Yes Kenysian economics focused on demand-side and montarist solutions. This lead to massive growth in the postwar era where economic growth truly was astonishing. Unfortunately this was an artifact of the fact we had just had a war which massively biased our economy towards supply side, thus initially Kenysian economics were wonderful and did great. In the 1970's however the Kenysian solutions ceased to encourage growth.

    The resulting shifts in economic policy driven by the GOP resulted in the rejection of Kenysian solutions and another theory called infinite market theory which postulated perfect competition and favored supply solutions was created. This in turn also lead to a period of booming activity. Unfortunately the idea of perfect competition is demonstrably false and focusing on supply side solutions alone results in a massive formation of bubbles due to corruptions amongst the supply side. Essentially the supply exceeds the demand thus the suppliers create a way to artificially eliminate the excess supply, this in turn results in the formation of the bubble. When combined with heavily lobbying like banks lobbying to give increasingly risky loans. These serve as a way of artificially satisfying the need of demand in the economy but the long term results are the same as overused monetarist policies.

    Quote Originally Posted by Legio_Italica View Post
    Which brings me to the other point. You, like so many today, seem to want to blame "capitalism" for the excesses of corporatism and plutocracy.
    I do.

    Quote Originally Posted by Legio_Italica View Post
    I will forever point out that the fault lies with the very kinds of state capitalism popularized in modern form by men like Keynes.
    That's an interesting theory. Kenyesian policy lead to a stagnation in economic activity in the 1970's where despite government policy employment was rather unaffected. This was the end of Kenysian policy until post 2008 finacial crisis which utterly destroyed the supply-side solution economics that had been proposed since. To quote alan greenspan "I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms,"

    Quote Originally Posted by Legio_Italica View Post
    A central bank centralizes an economy around the faucet of interest rates. Powerful men, usually ex-Wall Street execs, become board members of these central banks to arbitrarily try to control the ebb and flow of capital. These central banks are inevitably beholden to those who hold the most capital. In the case of the Federal Reserve, the bank was founded by the most powerful men on Wall Street, like Morgan, Warburg, Rockefeller, Vanderlip, etc. to centralize the American economy in their hands.
    Yes, I'm aware of the excesses of monetarist policy. However I do not believe that it would become so corrupt if the demand side of things were keeping up with the supply side of things. When no growth can occur due to a bottlenecking of demand/supply-side solutions corruption is the inevitable result. Growth or at least the appearance of growth must be maintained.

    For example in the financial crisis most recently the agents involved were subject to congressional inquiry, after asking the business men if they knew what they were doing would cause this they said yes. In fact they had known about building bubble for years. However I do have to give them some benefit of doubt as they were caught between a rock and hard place of expectations and a government unwilling to utilize an economic policy which was scientifically sensible rather than just the opposite of what had previously ceased to work.

    Quote Originally Posted by Legio_Italica View Post
    By 1910, industry and capital were moving to the developing western US, carried by thousands of start-up companies, banks, and S&Ls. The East Coast titans were losing loan market share as the Market began to diversify the economy. So, Wall Street, lusting after the central banking systems of Europe, set up their own money machine right here in the US. Control the money, gamble with hundreds of billions of dollars, and if all else fails, the taxpayer will pick up the tab. All this was billed as the very kinds of "social, public, common good" rhetoric you mention. In fact, I'd say a careful examination of even the most far-left, socialist legislation will reveal a powerful interest standing to profit from the arrangement.
    I see this more as conspiracy theory nonsense to be honest. Both of wall-street and the left-socialist legislation as you put it. While I know a lot of things are billed as 'for the good of the people' this doesn't mean when they're examined that they really are social programs or demand-side solutions. Many developments were doing the exact opposite and specifically lead to break down of many demand-side solutions which were working wonderfully. This again created a break down.

    Quote Originally Posted by Legio_Italica View Post
    Even if the Fed is not of such an insidious nature, the fact remains that, as Bernanke and others have mentioned, it is simply not humanly possible to play "god" with the economy of an entire nation without suffering major mistakes.
    I'm not entirely sure about that, but I would of course err on the side of caution with the implementation of policies because this possibility does exist. However, I do trust in the guiding hands of science to steer us towards good economic policy.

    Quote Originally Posted by Legio_Italica View Post
    I say the Fed deliberately contracted the US economy in 1929 by playing with interest rates in concert with Wall Street insiders to pull the bottom out of the markets. The Fed says it simply failed to pour enough liquid capital into the economy to save it from collapse. Either through human error or conspiracy, this was but one of many erroneous Fed policies implicit in every boom-bust cycle for the last century.
    The issue in the 1929 depression when analysed with my economic theory was that the fed and bankers utilized monetary policies but failed to create demand side and supply side solutions in time to prevent a collapse. After hoover massively restricted demand and inflated supply what was needed was demand side innovations. Honestly it's surprising to me that our economy managed to hobble along as far as it did without an opposing wheel to balance it and how many demand-side solutions could be implemented to reverse this gap.

    Quote Originally Posted by Legio_Italica View Post
    My position is that the Market facilitates the most efficient allocation of resources. Everyone generally agrees on that.
    I do not. Neither do the economic theories I mentioned which are the currently considered most valid school economic theories. In fact I'm at a loss at how your opinion could be so extreme and yet you still consider it centrist.

    Quote Originally Posted by Legio_Italica View Post
    We all have different views and ideas on how the government ought to regulate the Market and for what reasons. For instance, its fine if you want to raise the minimum wage, but then don't be surprised when low-skilled jobs are sent overseas. (This is actually of mutual benefit in some cases. I detail it briefly here and here, as well as imply the importance of human capital in determining personal wealth distribution. Perhaps we could talk about that?).
    I do have some issues with the posts you linked there but overall I agree with a lot of what you said there. I do not agree that increasing minimum wage sends jobs overseas however. Many minimum wage jobs cannot ever be sent overseas due to thier nature. Your gas station attendant isn't going to pump your gas from india.

    A lot of jobs sent overseas however are SKILLED labor. For example, manufacturing is not unskilled labor for the most part and requires a relatively advanced populace to properly do. Manufacturing was of huge importance in the US durring the 1950's-1970's because the demand side of things was able to keep up (and eventually exceed) the supply side. Companies did not have to send jobs overseas until they reached a point where supply simply wasn't resulting in the growth or profits desired. Thus the companies externalized their costs of supply to society. This artificially drove down prices and increased demand. However the long term effect of this is simply delaying the inevitable.

    Frankly I highly doubt that the outsourced labor will ever contribute towards truly industrializing a nation. Corporations from our country simply have too much power relative to most governing bodies in the world besides our own. The result of this is that the corporate jobs actually result in a loss to the country in question due to manipulation by the corporate entity. Corporations similarly rarely established infrastructure or produce products which can be utilized in the cultures manufacturing them. For example, I doubt any ipod manufacturers in foxconn will ever purchase an ipod. Simply put they do not make enough money to do so. Now particularly good examples of outsourcing do exist where corporate oversight was maintained, and the corporation contributed to society as it would had it been a domestic establishment but far more examples exist of no net benefit or loss or worse horrible loss to teh country in question. The US is rather infamous for enforcing corporate interests.

    Water riots, food riots are very common in these countries where corporations can cause things like simply a daily amount of water costing upwards of a fourth of the salary of an individual. You must wonder why if our city can pump us thousands of gallons each month for pennies and we're in the first world.

    Quote Originally Posted by Legio_Italica View Post
    There are examples of heavily taxed and regulated capitalist systems being very successful, like the Nordic System.
    I consider the nordic system the quintessential example of the economic policies described above.

    Quote Originally Posted by Legio_Italica View Post
    I would very much like a referral to a good book on the subject, because it puzzles me that ideas that have failed elsewhere have succeeded there, like heavy unionization and protectionism. My point is, there will be drawbacks to any regulatory code. The trick is in determining which regulations provide the most benefit at the least cost to the universally accepted capitalist engine, and that is a perpetual debate.
    Quite simply I think it works because it doesn't reject monetarist policy, demand-side solutions or supply-side solutions. I don't know about a good book on the subject but this paper was extremely formative on my current conception of economics:

    http://www.arhiv.svrez.gov.si/filead...rdic_Model.PDF

    Quote Originally Posted by Legio_Italica View Post
    The IFCI, Trotsky's brainchild, publishes under the name World Socialist Movement. They of course organize and promote the "struggle" for world socialism and revolution; basically what Marx wanted. The Socialist Party USA advocates the near-abolition of private property and the creation of democratic workers' soviets. The Democratic Socialists of America don't really have a platform, other than the gradual dissolution of the capitalist engine through more universal and "radical" wealth redistribution and economic and social equalization of outcomes.
    I would hesitate to allow the name of a party to dictate the meaning of the word the party uses. We might be lead to think that the democrats are interested in direct democracy and the republicans are only interested in representation. That is not the case and with most parties the name is not necessarily indicative of their actual policy.

    Quote Originally Posted by Legio_Italica View Post
    Basically, I merely define "socialism" as socialists define it.
    You define it as politicans do, but politicans define it anyway they really want so I would encourage you to appeal to a technical definition instead.

    Quote Originally Posted by Legio_Italica View Post
    Most socialists will call other, less extreme socialists "capitalists," and those more extreme, "communists" or "radicals." My point is, if you preserve the capitalist means of production, ie the Market mechanism, you're a capitalist.
    This is not true. The Nordic model for example is extremely socialist. As far as I go, I take socialist to mean simply that you believe that money has value as well as societal development which may or may not have anything to do with money. I reject the claim that a market mechanism is indicative of capitalism. I would point out the fact that the nordic model was a heavily refined version of the kenyesian economics utilized in the US to rebuild after the great depression. This version is very close to my idea of economics. Essentially the US was the prototype for a large amount of social policies and monetarist policies, our advisors took those lessons and utilized them in rebuilding europe improving on the necessary areas. Specifically they realized that in a large amount of areas supply had been completely eliminated necessitating the inclusion of supply side solutions into Keynesian theory.

    Quote Originally Posted by Legio_Italica View Post
    More specifically, if you want to preserve the Market mechanism, but think the latter should be controlled and subservient to social goals, you're a state capitalist.
    State capitalism is also known as nominal socialism. I do not agree with the a predominantly state run economy.

    Quote Originally Posted by Legio_Italica View Post
    If you want minimal government intrusion in the Market, economically limited to enforcement of universal regulations, from which no person or party within the target subject is exempt, I don't really know what you are; but you're probably me. I would call it traditional "laissez-faire" capitalism, but since the latter has never existed, its difficult to define.
    I would say this is far closer to true capitalism in it's conception but is still socialist in nature. However I can also say it's folly to dismiss monetarism, demand-side solutions.

    Quote Originally Posted by Legio_Italica View Post
    Economic stagnation, distortion, and monopoly usually arises from politically motivated and serpentine government regulation; commonly promoted by one interest or another to harm or destroy a rival.
    I do see political motivation as possibly causing these things but I deny that it always does. It seems silly the way economists have done things for a last hundred years taking an economic theory that fails to explain 1 factor and dismissing it entirely rather than adapting it as a scientific theory to account for the new information and thus produce a more complete theory. Corporations may contribute to monopolies with no government involvement at all and have done so. Similiarly economic stagnation, distortion etc may be in part caused by political intervention but they may also be fixed by the same intervention. Which is to say the knife cuts both ways.

    Quote Originally Posted by Legio_Italica View Post
    For example, a politically influential chicken farmer forwards a bill heavily taxing chickens but exempting said farmer. His competition goes out of business, the chicken farmer becomes a wealthy monopoly owner, and the politician(s) who organized and supported the bill are rewarded with wealth, position, and power. Moreoever, the chicken farmer has also now become "too big to fail," which means he has persuaded the government to bail him out should he ever experience financial trouble. Corruption is the problem, not "capitalism."
    This is a nice theory craft you've put together. But what you fail to mention is that at any time the government could just as easily take away the chicken farmer's advantage. For example what happens when Intel has so much market shares for processors that it can sit back and release inferior steps in technology simply to artifically inflate it's gains. The result of this was the government stepping in. After the government stepped in AMD was able to obtain roughly 10% of the market share allowing them to finally actively compete with intel and began absorbing more and more market share. With this new threat intel quickly released dual cores and quad cores which had already been developed for years. This drastic increase in processing power had allowed scientific advancement the like really no one can actively comprehend.

    Modern Genomics would be a decade plus behind without the new processing power, medicine, materials manufacturer, chemistry, physical understanding, interpretation of etc etc etc have all seen massive benefit from this simple government interaction forcing intel to split it's interests.

    Quote Originally Posted by Legio_Italica View Post
    I don't consider "heavily regulated" capitalism to be socialism, but, OK. My inevitable response is that, depending on the substance and consequence of these "regulations," severe market artificialities will be created, inevitably fostering corruption and instability. But, that's why we have nation states and elections. I just hope we don't leverage away our capital before we figure out what works (in fact, I'd say we already know what works, but I'm sure you know what that means ).
    Personally I'm quite satisfied with the current democratic party's opinion on economic policy. It compliments my own very nicely and has proven so far to be effective. Assuming they can manage to prevent mis-balancing it I do believe we're on the way up. Still it'll be awhile before we see the growth created by the 91% marginal income tax on the rich that we saw post WWII.

    Quote Originally Posted by Legio_Italica View Post
    I'd say our primary static difference is in monetary policy and the role of government in controlling/interfering with economic and social outcomes.
    Indeed.

    Quote Originally Posted by Legio_Italica View Post
    General examples?
    The post office, public education, public services, etc etc. The government doesn't compete with many industries here but in other countries for example the government may compete with auto manufacturers to encourage development and to establish a standard of competition that the market simply does not.

    Quote Originally Posted by Legio_Italica View Post
    If by those particular users, you mean "GOP" types, they are pretty fun to play with. "I want small government and freedom....except when it comes to the implementation and support of my particular pet projects and social platforms." The problem with Democrats and Republicans is that they both have virtually identical governing philosophies (in my opinion, unsustainable ones), they just have different priorities. The truth is, they both both belong to the same interests; Wall Street and the military-industrial complex, and the furthering of these interests around the world at any cost. Those will always be priority number one.
    I don't particularly agree with your conception of the democrats obviously and I don't think they share the same policies especially when it comes to economics. I can appreciate what you said about the GOP however even I don't agree with your opinion of the dems.

    Considering this has turned into a bit of a discussion perhaps it would be best to have a mod cut these into their own separate thread?

  6. #6

    Default Re: CHALLENGE THREAD -- Issue a challenge here

    Quote Originally Posted by elfdude View Post
    I think you're looking at Kenyesian economics a bit off of what they're really saying further the critiques on Kenysian economics don't really apply to modern day conceptions of his theory. His theories are supported by statistical regression and probabilistic wave functions which is to say, science. Now Kenysian economics did fail a bit in certain aspects and was reformatted.

    What you seem to be speaking of is real business cycle theory which is a rather silly economic theory alone. Hell the data from Prescott's own research for the last hundred years rather definitively prove RBC to be wrong. I don't rely specifically upon Kenysian economics but rather what they became which drives modern economic theory. This includes both the new neoclassical synthesis and Post Kenysian Economics and New Kenysian Economics.
    Actually, I was generally referring to the Keynesian idea of maintaining or raising real wages by masking the effects of economic downturn with government intervention; that is, various forms of bailouts coupled with using the central banking system to try and maintain the flow of capital by facilitating "cheap money" via interest rates. When that fails, one option executed by the Federal Reserve is quantitative easing; the policy of exchanging real assets for liquid assets through government purchase, dumping more water in the river to keep it flowing. What I meant was, maintaining the status quo so that people's real wages are affected as little as possible. It was more or less a rhetorical example, but your information was good. Thanks.
    That's a mighty socialist question to ask. You're right that not everything is a commodity, capitalism simply doesn't invest into anything that isn't a commodity. Now the issue here is the definition of commodity. In capitalism, ethical, social, aesthetic and political ideals are either worthless or nearly so. A capitalist society could perhaps flourish if the society embraced game theory. Unfortunately without doing so the result as you've mentioned is the reality of imperfect competition, sticky prices and demand side solutions which render capitalism as a economic policy horrible ineffective.
    Actually, basic aspects of game theory are employed all the time by, say, advertising firms, for example; but that's neither here nor there. Anyway, if you're saying capitalism is flawed because, for one thing, there is no inherent contingency to invest in social ideas, I guess I need clarification. By its nature, the capitalist "free market" functions on basic supply and demand. If you mean to say that there is no general parameters to promote social "fairness," I would point out that such cognitive functions as that are inherently political and therefore beyond the scope of the raw economics of a "free market." The social aspects of the "free market" are determined by consumers, hence my comment on the "cognitive" bit. If people, for example, think some product or some company is "immoral," they can effect the change they seek by boycotting said company or product. Beyond that, I'm not sure what you mean.
    It's not. http://en.wikipedia.org/wiki/Socialism

    Socialism is not simply public ownership of everything etc. You're confusing radical socialism or communism with socialism which is a concept that engenders the idea that both money and social, political, aesthetic, ethical policy become important rather than solely money. This means that a socialist camp may support consumer rights, minimum wages, but also may support lowered taxes, and oppressive regulations, simultaneously supporting private enterprise and etc. Technically speaking. Every country on the face of the earth fits on this gradient. Which is to say:

    Communism = social only matters
    Socialism = money, social etc matters
    Capitalism = money only matters

    or if we set communism at 0 and capitalism at 100, every number between from 1-99 is socialism.
    That's your definition. I'm not saying there's anything objectively flawed with that fact, I just disagree. Even the wiki article there says socialism is "an economic system characterised by social ownership of the means of production and co-operative management of the economy. "Social ownership" may refer to cooperative enterprises, common ownership, state ownership, or citizen ownership of equity.

    So, if one follows the links, "cooperative enterprises, common ownership," refer to what amounts to workers' soviets. "state ownership, or citizen ownership of equity" refers to a couple varied concepts; the former to public administrative control, and the latter, to partial or complete public ownership through equity/stock purchase. Hence, many, especially European, economies have elements of socialism in them; especially through the "citizen ownership of equity" idea. This does not mean they are "socialist." Again, I would argue that one must look to the means of production if he or she wants to label an economic system as "socialist" or "capitalist."

    Now, this brings us to the problem of "1-99 is socialism." By that definition, every economy ever to exist since the feudal ages has been socialist. This is, of course, not true, especially when one considers the right/left spectrum within socialism itself, namely, fascism vs communism as the absolute end points. Most of the elements of socialism in the world's economies of today involve right wing or "conservative" socialism; the preservation of the appearance of private industry through corporatism, and economic planning through monetarism. Example, rather than nationalize the banking system, establish a "private" central bank with full access to both public and private capital, and the arbitrary regulation and exchange of the two. Rather than mandate public administration of industry, control desired aspects of industry with subsidies and complex tax codes.
    You mean private enterprise, calling it a capitalist engine engenders ideas that it's tied to capitalism which it is not.
    Wait, what? Are you saying private enterprise is not tied to capitalism? The concept of private property and the resulting economic enterprise is essential to the capitalist structure.
    It is by definition.
    I suppose that if an economy revolves around the complete equalization of all forms of wealth, that would be socialist; and probably conservative socialist if the appearances of private enterprise and markets were maintained. However, a heavily progressive taxation and policy, like the general structure of European social democracy, does not socialism make. The means of production is key. While most European economic structures have strong elements of conservative socialist economics, the existence of genuinely free markets, at any level, means that the economy cannot be called "socialist;" though perhaps, "socialistic."
    Unfortunately the offhanded rejection of montarist policies and demand-side solutions is demonstrably wrong to do. There's many economic theories which do this and most of them are outdated severely. Monetarist policies have scientific backing as do demand-side solutions. Who really knows why they work, there's a lot of theories but it's moot. We know from the data that they do work in certain circumstances, we can also see in the data times where overuse has lead to other problems.
    I reject "monetarism," the idea of the monetary control by a central authority, because this concept subsequent policies inevitably benefit those with the most "money" to the detriment of the rest of the economy, and places the now-centralized economy directly upon the whims of arbitrary control by some central authority. This is not a moral stance, only an observation that the ideas of "elastic money" and the control of entire economies through money and market manipulation is horrifically unsustainable. It concentrates economic wealth in the hands of those who have the greatest control over money, making the economy as a whole extremely unstable. We've seen this in every modern economy since the chartering the Bank of England in 1694.
    One great example is the process of qualitative easing which we last had our extensive debate about. Data does not support your rejection of the process entirely but does support the idea that it's easy to overuse.
    Actually, our debate started when you apparently misspoke ad called the Fed's policy of quantitative easing qualitative. Just sayin. Anyway, my problem with QE, as I said, is that its just another short-term band-aid fix that will create more bubbles, not to mention massive debt and potentially serious inflationary problems in the future. Money is a means of exchange that is only worth what people say it is. If one moves from trading gold coins to gold-coin certificates, the gold certificates are only worth as much as people's faith in them. Printing gold certificates and mandating their value does not increase the amount of gold, no matter how loudly the government mandates their value.

    A government can maintain the appearance of capital flow and economic growth by pouring money into an economy, but this is obviously a dangerous game. The Fed, relying on legal tender laws and the status of the dollar as the world's primary reserve currency, has been masking deflation with monetary inflation through fractional reserve banking for decades. Its a neat trick, but its also like Russian Roulette, in that the Fed can only leverage investment in the American economy for so long. We're running out of empty chambers, as evidenced by the increasing polarity of each proceeding boom-bust cycle.
    Another example is welfare. When a society over emphasizes welfare of a social nature the economics required to support said welfare fall apart. Similarly if welfare is neglected society itself falls apart taking the economy with it.
    The social safety net is not a means of production; it is a tax placed on the, in this case, the capitalist, means of production. Don't see how the anatomy of a superstructure can define an economic system.
    Yes Kenysian economics focused on demand-side and montarist solutions. This lead to massive growth in the postwar era where economic growth truly was astonishing. Unfortunately this was an artifact of the fact we had just had a war which massively biased our economy towards supply side, thus initially Kenysian economics were wonderful and did great. In the 1970's however the Kenysian solutions ceased to encourage growth.
    By the 1970s, Bretton Woods had been determined to be too inflexible to meet the ambitions of the monetarists, who had previously been able to maintain inflation on the wave of the post-war economic boom. Once Bretton Woods was abandoned, the monetarists moved to fiat currencies and "petro dollars" as the media of choice. We'll see how long that lasts, and how many more tricks they have up their sleeve before the boat becomes leveraged to the point of capsizing.
    The resulting shifts in economic policy driven by the GOP resulted in the rejection of Kenysian solutions and another theory called infinite market theory which postulated perfect competition and favored supply solutions was created. This in turn also lead to a period of booming activity. Unfortunately the idea of perfect competition is demonstrably false and focusing on supply side solutions alone results in a massive formation of bubbles due to corruptions amongst the supply side. Essentially the supply exceeds the demand thus the suppliers create a way to artificially eliminate the excess supply, this in turn results in the formation of the bubble. When combined with heavily lobbying like banks lobbying to give increasingly risky loans. These serve as a way of artificially satisfying the need of demand in the economy but the long term results are the same as overused monetarist policies.

    That's an interesting theory. Kenyesian policy lead to a stagnation in economic activity in the 1970's where despite government policy employment was rather unaffected. This was the end of Kenysian policy until post 2008 finacial crisis which utterly destroyed the supply-side solution economics that had been proposed since. To quote alan greenspan "I made a mistake in presuming that the self-interests of organisations, specifically banks and others, were such that they were best capable of protecting their own shareholders and their equity in the firms,"
    What? The monetarists and Keynesians didn't exactly fall from favor. The US, for example, would conduct numerous, massive bailout and "rescue" programs throughout the 70s and 80s. The protest to these policies is what created icons like Ron Paul.
    Yes, I'm aware of the excesses of monetarist policy. However I do not believe that it would become so corrupt if the demand side of things were keeping up with the supply side of things. When no growth can occur due to a bottlenecking of demand/supply-side solutions corruption is the inevitable result. Growth or at least the appearance of growth must be maintained.
    Monetarism creates pyramid economies. No government is going to bite the hand that feeds it by attacking the pyramid.
    For example in the financial crisis most recently the agents involved were subject to congressional inquiry, after asking the business men if they knew what they were doing would cause this they said yes. In fact they had known about building bubble for years. However I do have to give them some benefit of doubt as they were caught between a rock and hard place of expectations and a government unwilling to utilize an economic policy which was scientifically sensible rather than just the opposite of what had previously ceased to work.
    Its how the system is supposed to work, or perhaps, how it "accidentally" ends up working. Artificially cheap money creates a false boom, the boom goes bust, those on the "inside" get bailed out and everyone else is thrown under the bus. Then, these bailed out institutions, flushed with cash, buy up the assets of faltering outsiders for pennies on the dollar and start the cycle again. TARP was/is a classic example of this.
    I see this more as conspiracy theory nonsense to be honest. Both of wall-street and the left-socialist legislation as you put it. While I know a lot of things are billed as 'for the good of the people' this doesn't mean when they're examined that they really are social programs or demand-side solutions. Many developments were doing the exact opposite and specifically lead to break down of many demand-side solutions which were working wonderfully. This again created a break down.
    I'm beginning to wonder what you mean by "demand-side solutions." High progressive taxes, "trust busting," and openly orchestrated wealth redistribution is not popular, and its not how business is done anyway. Inflation taxes and wars are much more profitable and effective.
    I'm not entirely sure about that, but I would of course err on the side of caution with the implementation of policies because this possibility does exist. However, I do trust in the guiding hands of science to steer us towards good economic policy.
    I'm all for cost-benefit analyses and technocracy. Here is a brief, humorous read on just a few ways those ideas are useful. However, I will always trust the basics of the capital "M" Market over the ramblings of some empty suit who promises economic prosperity based off of some fancy model. Regulate the market, fine. Plan the market, and you're asking for trouble.
    The issue in the 1929 depression when analysed with my economic theory was that the fed and bankers utilized monetary policies but failed to create demand side and supply side solutions in time to prevent a collapse. After hoover massively restricted demand and inflated supply what was needed was demand side innovations. Honestly it's surprising to me that our economy managed to hobble along as far as it did without an opposing wheel to balance it and how many demand-side solutions could be implemented to reverse this gap.
    Throughout the 1920s, the Fed conducted a policy of artificially cheap money. This caused a boom. When the drunken orgy began to spiral out of control in 1928, the Fed did the opposite of what it does today. It steadily raised the Federal Funds Rate for several consecutive years, causing capital to dry up and exacerbating deflation. The Fed's comment years later? "Oops." I say it was deliberate; I mean, nobody's that stupid. Nobody creates a mechanism with direct power over the flow of capital in an economy and then "accidentally" turns off the faucet. But whatever, either the Fed is a house of demons or a house of dunces. I prefer to either massively strengthen government oversight into this house, or disband it and let banks decide for themselves what they will charge for money. Sure, the economy will grow slower, but it won't crash as hard either. Fluctuations will reflect real value, not the whims of some "board."

    Corporate America wouldn't have a lender of last resort, and will therefore have to find other ways to stay on top, like, I dunno, offer products and services that people want instead of establishing themselves as the only salesman on the block. Maybe the dreaded "competition" will begin to dismantle their hegemony. Who knows. The Market will decide, provided we don't have too much of the usual horse-trading in Congress.
    I do not. Neither do the economic theories I mentioned which are the currently considered most valid school economic theories. In fact I'm at a loss at how your opinion could be so extreme and yet you still consider it centrist.
    Well, by capital-"M" Market mechanism, I mean the basic idea of private enterprise. That is certainly a "centrist" concept and the foundation of modern economics. Sure, some might want the government to set rules like who can buy and sell what and for how much, but the Market is still there. Its all capitalism, and until the government becomes the sole buyer or seller of goods, it will stay that way. Even then, any restrictions the government places on the Market will only drive the target underground. No government can truly kill the Market. Its a cornerstone of human interaction. I might have strong opinions about what "capitalism" and the "Market" ought to look like, but that doesn't define these things.
    I do have some issues with the posts you linked there but overall I agree with a lot of what you said there. I do not agree that increasing minimum wage sends jobs overseas however. Many minimum wage jobs cannot ever be sent overseas due to thier nature. Your gas station attendant isn't going to pump your gas from india.
    I'm not saying that increasing minimum wage automatically or solely causes outsourcing, or that any kind of job can be outsourced. Obviously, if the gas station attendant's wages are raised, the cost is passed on to the consumer; or the job of "gas station attendant" is removed, or is replaced by robots, pay at the pump, self-service, etc.
    A lot of jobs sent overseas however are SKILLED labor. For example, manufacturing is not unskilled labor for the most part and requires a relatively advanced populace to properly do. Manufacturing was of huge importance in the US durring the 1950's-1970's because the demand side of things was able to keep up (and eventually exceed) the supply side. Companies did not have to send jobs overseas until they reached a point where supply simply wasn't resulting in the growth or profits desired. Thus the companies externalized their costs of supply to society. This artificially drove down prices and increased demand. However the long term effect of this is simply delaying the inevitable.
    Obviously the demand for human capital knows no political boundaries in a "free trade" economy. The idea I was referring to in the linked post was that of "poor, downtrodden sweatshop workers" of the Third World, or immigrant labor, respectively. As far as skilled labor goes, as I said, human capital is human capital. If India produces engineers and scientists who will work and produce just as well as Western workers and/or for a fraction of the cost, the job market for scientists and engineers will be more active there than in the West. Supply and demand.
    Frankly I highly doubt that the outsourced labor will ever contribute towards truly industrializing a nation. Corporations from our country simply have too much power relative to most governing bodies in the world besides our own. The result of this is that the corporate jobs actually result in a loss to the country in question due to manipulation by the corporate entity. Corporations similarly rarely established infrastructure or produce products which can be utilized in the cultures manufacturing them. For example, I doubt any ipod manufacturers in foxconn will ever purchase an ipod. Simply put they do not make enough money to do so. Now particularly good examples of outsourcing do exist where corporate oversight was maintained, and the corporation contributed to society as it would had it been a domestic establishment but far more examples exist of no net benefit or loss or worse horrible loss to teh country in question. The US is rather infamous for enforcing corporate interests.
    This depends on the political climate of the region in question. With the exception of China or some classic example, I highly doubt people are "forced" to work for "evil corporations." People choose to work there because of perceived opportunity for betterment. If nominal wages are cancelled or marginalized by external factors like domestic strife, that is an external problem unrelated to the fact that the job is an "outsourced" one. This book contains a good summary of how "outsourcing" and human capital function in the global economy, and the tremendous net benefits associated with it.
    Water riots, food riots are very common in these countries where corporations can cause things like simply a daily amount of water costing upwards of a fourth of the salary of an individual. You must wonder why if our city can pump us thousands of gallons each month for pennies and we're in the first world.
    Again, that's a political problem, not an inherently economic one. Ideally, the cost of water is determined by supply vs ease/cost of access and demand. Obviously, if some commercial interest is cooperating with local authorities (or vice versa) to exploit a local population, that's a different problem entirely.
    I consider the nordic system the quintessential example of the economic policies described above.
    The Nordic System, in the most general of terms, is a system that fosters a strong private sector, which allows it then to "tax" this private sector with things like very progressive taxation, social safety net, unions, and protectionism. My quest is to discover what about the capitalist economy of the Scandinavian countries makes it strong enough to easily withstand these typically very heavy social burdens.
    Quite simply I think it works because it doesn't reject monetarist policy, demand-side solutions or supply-side solutions. I don't know about a good book on the subject but this paper was extremely formative on my current conception of economics:

    http://www.arhiv.svrez.gov.si/filead...rdic_Model.PDF
    I'm in the process of read it. Thanks.
    I would hesitate to allow the name of a party to dictate the meaning of the word the party uses. We might be lead to think that the democrats are interested in direct democracy and the republicans are only interested in representation. That is not the case and with most parties the name is not necessarily indicative of their actual policy.
    I'd say the complete equalization of economic and social outcomes, if not the establishment of workers' soviets, is as "socialist" as it gets. How is that "political rhetoric?"
    You define it as politicans do, but politicans define it anyway they really want so I would encourage you to appeal to a technical definition instead.
    I have outlined definitions of different kinds of socialism and communism that are far more technical and specific than your "1-99" idea. Just sayin. Again, its about the means and relations of production. That's where "labels" ought to come from.
    This is not true. The Nordic model for example is extremely socialist. As far as I go, I take socialist to mean simply that you believe that money has value as well as societal development which may or may not have anything to do with money. I reject the claim that a market mechanism is indicative of capitalism. I would point out the fact that the nordic model was a heavily refined version of the kenyesian economics utilized in the US to rebuild after the great depression. This version is very close to my idea of economics. Essentially the US was the prototype for a large amount of social policies and monetarist policies, our advisors took those lessons and utilized them in rebuilding europe improving on the necessary areas. Specifically they realized that in a large amount of areas supply had been completely eliminated necessitating the inclusion of supply side solutions into Keynesian theory.
    The regulation and manipulation of the ends and/or means of the capitalist mode of production is not socialism. You can call it "state capitalism," "nominal socialism," "social democracy....." these things are not socialism. Even the softest form of socialism, democratic socialism, is expressed thusly:

    "At the root of our socialism is a profound commitment to democracy, as means and end. As we are unlikely to see an immediate end to capitalism tomorrow, DSA fights for reforms today that will weaken the power of corporations and increase the power of working people."

    .....ie the gradual end to capitalism and the complete democratization of the distribution of resources. That's as soft as socialism gets, and it still means an end to markets, an end to private property, an end to capitalism. Socialists typically want a violent end to capitalism; democratic socialists want to smother it with a pillow. If you're not at least a little interested in that vision, you're not a socialist; European social democracy certainly isn't, though one could argue that the latter is a transitional phase, from the Marxist perspective.
    State capitalism is also known as nominal socialism. I do not agree with the a predominantly state run economy.
    This is where it gets interesting. and would further depend on what the public sector looked like. Perhaps it would be an entirely different mode of production in competition with capitalism; say, the nationalization of 50% of the XYZ industry, then it would depend on the restrictions placed on the remaining private 50% as to which side wins. If you would facilitate this through government-owned corporations to operate said industries in a corporate fashion, then it would depend on what external advantages were afforded to the government corporation as to whether it would win or lose to the private sector. If the two simply coexisted, then this would be an example of a state capitalist economy. If you would control the economy through monetarism, taxes, and subsidies, this gets into the "third way" endorsed by fascist ideology. How much of your economy is public? In what way? Etc.

    So I guess it depends on how thoroughly you want to plan your economy. In any case, only with the abolition of capitalism can you have socialism. Pure state capitalism would be where only government-sanctioned enterprises are allowed to operate to varying degrees; ie where the government owns the means of production and entrusts it to vassals, who are then told how, when, and where they can do business - similar to China. Any economy where a government wishes to manipulate rather than own an economy is still a capitalist economy. The existence of truly private property, regardless of capacity, defines the basic existence of capitalism.
    I do see political motivation as possibly causing these things but I deny that it always does. It seems silly the way economists have done things for a last hundred years taking an economic theory that fails to explain 1 factor and dismissing it entirely rather than adapting it as a scientific theory to account for the new information and thus produce a more complete theory. Corporations may contribute to monopolies with no government involvement at all and have done so. Similiarly economic stagnation, distortion etc may be in part caused by political intervention but they may also be fixed by the same intervention. Which is to say the knife cuts both ways.
    Indeed, there are winners and losers in every economy. So far, capitalism produces the most winners and has consistently raised per capita standard of living in the world for centuries. I see no reason to change that.
    This is a nice theory craft you've put together. But what you fail to mention is that at any time the government could just as easily take away the chicken farmer's advantage. For example what happens when Intel has so much market shares for processors that it can sit back and release inferior steps in technology simply to artifically inflate it's gains. The result of this was the government stepping in. After the government stepped in AMD was able to obtain roughly 10% of the market share allowing them to finally actively compete with intel and began absorbing more and more market share. With this new threat intel quickly released dual cores and quad cores which had already been developed for years. This drastic increase in processing power had allowed scientific advancement the like really no one can actively comprehend.

    Modern Genomics would be a decade plus behind without the new processing power, medicine, materials manufacturer, chemistry, physical understanding, interpretation of etc etc etc have all seen massive benefit from this simple government interaction forcing intel to split it's interests.
    Why would a government financed by the chicken farmer with leaders put in power by the chicken farmer attack the chicken farmer? Have they found a more desirable pimp? Anyway, monopolies stagnate markets, squash competition, and kill growth and diversification. I don't see how the destruction of a monopoly is "socialism." If anything, its radiating a tumor out of capitalism so that the latter can function as intended.
    Personally I'm quite satisfied with the current democratic party's opinion on economic policy. It compliments my own very nicely and has proven so far to be effective. Assuming they can manage to prevent mis-balancing it I do believe we're on the way up. Still it'll be awhile before we see the growth created by the 91% marginal income tax on the rich that we saw post WWII.
    So....you support everything the GOP supports, with the exception of the Judeo-Christian social platform? All the Democrats want is a more liberal social program, increased funding for entitlements, new entitlements, and heavy investment in "green tech." The military-industrial complex isn't going anywhere. They'll still get a cool half-trillion a year and a nice bump to their "foreign contingency fund." We'll still be chasing terrorists around the globe, installing and deposing regimes, and concocting global divide and conquer schemes that always backfire hilariously and horrifically. We'll still be catering to the Money Power, getting "free healthcare" from the insurance monopolies who have 320 million government-backed customers and throwing billions of dollars at slightly different pet projects and crony kickbacks. Not seeing much of a difference, other than the possibility of the Democrats bankrupting the country even faster than the Republicans.
    The post office, public education, public services, etc etc. The government doesn't compete with many industries here but in other countries for example the government may compete with auto manufacturers to encourage development and to establish a standard of competition that the market simply does not.
    These are elements of the superstructure. They do not require, nor even imply, government control of the means of production.
    Considering this has turned into a bit of a discussion perhaps it would be best to have a mod cut these into their own separate thread?
    Phew. Something like that.
    Last edited by Lord Thesaurian; February 07, 2013 at 07:26 PM.
    Of these facts there cannot be any shadow of doubt: for instance, that civil society was renovated in every part by Christian institutions; that in the strength of that renewal the human race was lifted up to better things-nay, that it was brought back from death to life, and to so excellent a life that nothing more perfect had been known before, or will come to be known in the ages that have yet to be. - Pope Leo XIII

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    Default Re: CHALLENGE THREAD -- Issue a challenge here

    Quote Originally Posted by Legio_Italica View Post
    Actually, I was generally referring to the Keynesian idea of maintaining or raising real wages by masking the effects of economic downturn with government intervention; that is, various forms of bailouts coupled with using the central banking system to try and maintain the flow of capital by facilitating "cheap money" via interest rates. When that fails, one option executed by the Federal Reserve is quantitative easing; the policy of exchanging real assets for liquid assets through government purchase, dumping more water in the river to keep it flowing. What I meant was, maintaining the status quo so that people's real wages are affected as little as possible. It was more or less a rhetorical example, but your information was good. Thanks.
    I know what you were referring to, I was saying that it was moot. All of the information I posted there was specifically designed to describe to you exactly what I was referring to. Further I feel perhaps we've gotten onto a moot tangent with the entire socialist versus capitalist thing. Let's refer to economies as thus: Mix-market, Market and Planned. My macroeconomics classes taught the system as synonymous (capitalism, socialism, communism) but it's arbitrary to our debate and I'd rather not get stuck in semantics. For all intents and purposes we're both talking of a mixed market economy which I'm sure we can agree upon and move on. Now the question from there is how much do we want the economy planned and how much do we not want it planned.

    http://en.wikipedia.org/wiki/Mixed_market

    Spoiler Alert, click show to read: 
    The notion of a mixed economy is not inclusive to capitalist economies - that is, economies structured upon capital accumulation and privately owned profit-seeking enterprises. Many different proposals for socialist economic systems call for a type of mixed economy, where multiple forms of ownership over the means of production co-exist with one another. For example, Alec Nove's conception of feasible socialism provides an outline for an economic system based on a combination of state-enterprises for large industries, worker and consumer cooperatives, private enterprises for small-scale operations, and individually owned enterprises


    Quote Originally Posted by Legio_Italica View Post
    Actually, basic aspects of game theory are employed all the time by, say, advertising firms, for example; but that's neither here nor there.
    Game theory however does not describe society hence why economics employing it fail, notably capitalism. Which is to say though we could definitely explain everything if everyone acted perfectly independently that is not how the world works. Society is lumpy not individualistic.

    Quote Originally Posted by Legio_Italica View Post
    Anyway, if you're saying capitalism is flawed because, for one thing, there is no inherent contingency to invest in social ideas, I guess I need clarification. By its nature, the capitalist "free market" functions on basic supply and demand.
    All markets function on supply and demand. The issues arise in measuring supply and demand. This is what economic theory is for and why science supports the modern http://en.wikipedia.org/wiki/New_neo...ical_synthesis in it's principles. Namely in that it is able to predict demand, it is able to predict supply, and the effects on either via a monetarist policy.

    Quote Originally Posted by Legio_Italica View Post
    If you mean to say that there is no general parameters to promote social "fairness," I would point out that such cognitive functions as that are inherently political and therefore beyond the scope of the raw economics of a "free market." The social aspects of the "free market" are determined by consumers, hence my comment on the "cognitive" bit. If people, for example, think some product or some company is "immoral," they can effect the change they seek by boycotting said company or product. Beyond that, I'm not sure what you mean.
    Indeed, this is why consumers had such glorious success managing corporation's actions. No what happens when no base standard is set is a slippery slope towards fewer and fewer consumer rights. For example, how do you choose not to eat food improperly prepared when it's not simply one corporation accomplishing that. This statement you made is one of someone who believes in infinite competition which is simply ridiculous. Consumer activity has small influences corporate ethics policy because at the end of the day the consumer doesn't really have a choice. Further corporations are more than willing to play politically with their pricing to drive home a point. For example it's not uncommon for corporations to arbitrarily raise their prices or lower them in response to political rulings to create a false sense of costs to policies. Further what a company does in another country in most cases seems to be entirely meaningless to people. The only good example I can think of boycotting working is when a company is employed or contracted by the government. Otherwise corporations are rather free to act with impunity. Simply put there's not enough people who care to do anything about it.

    Quote Originally Posted by Legio_Italica View Post
    Wait, what? Are you saying private enterprise is not tied to capitalism? The concept of private property and the resulting economic enterprise is essential to the capitalist structure.
    To put it differently, Private enterprise is not tied exclusively to market economies but exists in mixed market economies as well.

    Quote Originally Posted by Legio_Italica View Post
    I reject "monetarism," the idea of the monetary control by a central authority, because this concept subsequent policies inevitably benefit those with the most "money" to the detriment of the rest of the economy, and places the now-centralized economy directly upon the whims of arbitrary control by some central authority.
    I really see zero evidence of what you're claiming and it sounds like conspiracy nonsense to me. You're aware I'm not talking of purist monetarism merely monetarist policies?

    Quote Originally Posted by Legio_Italica View Post
    This is not a moral stance, only an observation that the ideas of "elastic money" and the control of entire economies through money and market manipulation is horrifically unsustainable.
    So you don't reject monetarist policies you reject purist monetarism. Fine, I wasn't arguing for purist monetarism.

    Quote Originally Posted by Legio_Italica View Post
    It concentrates economic wealth in the hands of those who have the greatest control over money, making the economy as a whole extremely unstable. We've seen this in every modern economy since the chartering the Bank of England in 1694.
    Yes we've seen the woes of overused monetarism and just about every policy known to man in just about every culture/society/economy. This isn't an argument it's a statement of the obvious. Montarism isn't a vorpal blade that can cut the head off of any stagnation or recession. However it is something which can help treat symptoms. As a doctor its important to realize that sometimes the symptoms of a problem are worse than the problem itself and necessitate being treated before the issue can be resolved. Namely in the 2008 financial crisis. Without monetarist policy intervention the symptoms of the recession would have been further exacerbated which has long reaching effects. For example, if a sickness nearly kills you but you recover there's going to be a large amount of time where you're severely weakened. This is not something that you want to have happen in an economy because the implications aren't just economically undesirable but also societally undesirable as well.

    Beyond explaining it to you like that we're going to have to rely upon data supported examples I suppose of monetarist policies failing and monetarist policies succeeding. My issue with monetarism is when the symptom is burried and the cause forgotten. Which admittedly does happen.

    Quote Originally Posted by Legio_Italica View Post
    Actually, our debate started when you apparently misspoke ad called the Fed's policy of quantitative easing qualitative. Just sayin.
    Yes, I have severe dyslexia. However I have little doubt you understood what I meant. Furthermore I did use scientifically validated data to show examples of QE working.

    Quote Originally Posted by Legio_Italica View Post
    Anyway, my problem with QE, as I said, is that its just another short-term band-aid fix that will create more bubbles, not to mention massive debt and potentially serious inflationary problems in the future.
    Which it has always done of course /sarcasm

    Willfully ignoring examples of reality which don't support your ideal. I don't really remember what your response to my examples of QE successes was.

    Quote Originally Posted by Legio_Italica View Post
    Money is a means of exchange that is only worth what people say it is. If one moves from trading gold coins to gold-coin certificates, the gold certificates are only worth as much as people's faith in them. Printing gold certificates and mandating their value does not increase the amount of gold, no matter how loudly the government mandates their value.
    This is because you believe fiat currency has no value beyond faith. This is not how the value of fiat is calculated however. Not to mention how our currency has value in places with no faith in our money. Yes we do have to have a certain amount of faith that all of the goods and services in this country total up to represent the value that fiat is matched against and this can be subtley altered artificially. However there's no direct link to the manipulation and the evils you speak of, merely the possibility. The opposite possibility however is far worse which you seem to ignore. Case in point the nordic system which despite working wonderfully you still assume would not work. The nordic system again utilizes the system of economy I'm describing to you.

    Quote Originally Posted by Legio_Italica View Post
    A government can maintain the appearance of capital flow and economic growth by pouring money into an economy, but this is obviously a dangerous game.
    Correct, dangerous does not mean inevitably bad.

    Quote Originally Posted by Legio_Italica View Post
    The Fed, relying on legal tender laws and the status of the dollar as the world's primary reserve currency, has been masking deflation with monetary inflation through fractional reserve banking for decades. Its a neat trick, but its also like Russian Roulette, in that the Fed can only leverage investment in the American economy for so long. We're running out of empty chambers, as evidenced by the increasing polarity of each proceeding boom-bust cycle.
    I'm not sure I understand your last sentence. Fractional reserve banking is not really an issue if it doesn't get out of hand. Greed can be a potent incentive to continue to reduce the amount of money banks must keep on hand however if properly managed it's not an issue. You reject it offhandedly I understand I just don't see the reasoning for why as valid.

    Quote Originally Posted by Legio_Italica View Post
    The social safety net is not a means of production; it is a tax placed on the, in this case, means of production.
    However to deny that the social safety net impacts the means of production is folly.

    Quote Originally Posted by Legio_Italica View Post
    By the 1970s, Bretton Woods had been determined to be too inflexible to meet the ambitions of the monetarists, who had previously been able to maintain inflation on the wave of the post-war economic boom. Once Bretton Woods was abandoned, the monetarists moved to fiat currencies and "petro dollars" as the media of choice. We'll see how long that lasts, and how many more tricks they have up their sleeve before the boat becomes leveraged to the point of capsizing.
    I don't see the relevance here, it sounds like conspiracy theory again to me.

    Quote Originally Posted by Legio_Italica View Post
    What? The monetarists and Keynesians didn't exactly fall from favor. The US, for example, would conduct numerous, massive bailout and "rescue" programs throughout the 70s and 80s. The protest to these policies is what created icons like Ron Paul.
    They both fell in preference relative to the utilization of supply side solutions.

    Quote Originally Posted by Legio_Italica View Post
    Monetarism creates pyramid economies. No government is going to bite the hand that feeds it by attacking the pyramid.
    The market creates pyramid economies. Monetarism can only distort that pyramid either beneficially or not.

    Quote Originally Posted by Legio_Italica View Post
    Its how the system is supposed to work, or perhaps, how it "accidentally" ends up working. Artificially cheap money creates a false boom, the boom goes bust, those on the "inside" get bailed out and everyone else is thrown under the bus. Then, these bailed out institutions, flushed with cash, buy up the assets of faltering outsiders for pennies on the dollar and start the cycle again. TARP was/is a classic example of this.
    Sounds like conspiracy nonsense again.

    Quote Originally Posted by Legio_Italica View Post
    I'm beginning to wonder what you mean by "demand-side solutions." High progressive taxes, "trust busting," and openly orchestrated wealth redistribution is not popular, and its not how business is done anyway. Inflation taxes and wars are much more profitable and effective.
    I'm not sure what your point is about not how business is done nor do I see your last sentence as valid. High progressive taxes, trust busting and openly orchestrated wealth redistribution is exactly what the nordic system has.

    Quote Originally Posted by Legio_Italica View Post
    I'm all for cost-benefit analyses and technocracy. Here is a brief, humorous read on just a few ways those ideas are useful. However, I will always trust the basics of the capital "M" Market over the ramblings of some empty suit who promises economic prosperity based off of some fancy model. Regulate the market, fine. Plan the market, and you're asking for trouble.
    Your discount of planning the market is macroeconomically irresponsible and is willfully blind of the purpose of an economy which is the society it sustains.

    Quote Originally Posted by Legio_Italica View Post
    Throughout the 1920s, the Fed conducted a policy of artificially cheap money. This caused a boom. When the drunken orgy began to spiral out of control in 1928, the Fed did the opposite of what it does today.
    I'm not sure I understand exactly what you're describing here you're going to need to be more specific. From what I saw the federal government massively deregulated the economy and canceled social programs pushing for people to support themselves by giving them larger access to capital. Unfortunately this has the effect of artificially burying the excess of supply in artificially inspired demand. It is exactly what the GOP pushed for most recently and while similar to QE with the democrats was not partnered with the policies that have made our QE effective.

    Quote Originally Posted by Legio_Italica View Post
    It steadily raised the Federal Funds Rate for several consecutive years, causing capital to dry up and exacerbating deflation. The Fed's comment years later? "Oops." I say it was deliberate; I mean, nobody's that stupid.
    I don't know that I agree it was deliberate. Sounds like a conspiracy. Determining when to raise the federal fund rates up is a difficult thing to identify and the federal government has to decide how and when to do this today as well. It's not an easy thing to do but there are numerous advantages to having a higher federal fund rate notably on the supply side of things.

    Quote Originally Posted by Legio_Italica View Post
    Nobody creates a mechanism with direct power over the flow of capital in an economy and then "accidentally" turns off the faucet.
    I can't help but feel you're being overly harsh on them for doing something too soon. It would have been a good idea to do it eventually, the issue was that that government at the time had no interest in establishing social programs or anything else which could legitimately lead to increased demand.

    Quote Originally Posted by Legio_Italica View Post
    But whatever, either the Fed is a house of demons or a house of dunces. I prefer to either massively strengthen government oversight into this house, or disband it and let banks decide for themselves what they will charge for money. Sure, the economy will grow slower, but it won't crash as hard either. Fluctuations will reflect real value, not the whims of some "board."
    I would increase oversight.

    Quote Originally Posted by Legio_Italica View Post
    Corporate America wouldn't have a lender of last resort, and will therefore have to find other ways to stay on top, like, I dunno, offer products and services that people want instead of establishing themselves as the only salesman on the block. Maybe the dreaded "competition" will begin to dismantle their hegemony. Who knows. The Market will decide, provided we don't have too much of the usual horse-trading in Congress.
    I fail to see how removing the Federal Funds Rate would accomplish any of this.

    Quote Originally Posted by Legio_Italica View Post
    Well, by capital-"M" Market mechanism, I mean the basic idea of private enterprise. That is certainly a "centrist" concept and the foundation of modern economics.
    This is not a centrist concept but an extremest capitalist concept. The centrist concept is that the market mechanism can be more effective than the planned mechanism or visa versa. I.E. that the blade cuts both ways. Hence why mixed-market economies are the standard type of economy.

    Quote Originally Posted by Legio_Italica View Post
    Sure, some might want the government to set rules like who can buy and sell what and for how much, but the Market is still there. Its all capitalism, and until the government becomes the sole buyer or seller of goods, it will stay that way. Even then, any restrictions the government places on the Market will only drive the target underground. No government can truly kill the Market. Its a cornerstone of human interaction. I might have strong opinions about what "capitalism" and the "Market" ought to look like, but that doesn't define these things.
    I'm not sure what the relevance here is. I've never suggested killing the market. I really wish you would learn to see shades of grey.

    Quote Originally Posted by Legio_Italica View Post
    I'm not saying that increasing minimum wage automatically or solely causes outsourcing, or that any kind of job can be outsourced. Obviously, if the gas station attendant's wages are raised, the cost is passed on to the consumer; or the job of "gas station attendant" is removed, or is replaced by robots, pay at the pump, self-service, etc.
    Granted.

    Quote Originally Posted by Legio_Italica View Post
    Obviously the demand for human capital knows no political boundaries in a "free trade" economy. The idea I was referring to in the linked post was that of "poor, downtrodden sweatshop workers" of the Third World, or immigrant labor, respectively.
    This was exaclty what I was referring to as outsourcing not improving the local situation. I don't include outsourcing as the same thing as immigrant labor. Immigrant labor to me is still domestic production. However it would be rather funny to think that the illegal immigrant production of this country somehow contributes to the betterment of the illegal's life. The betterment is not in their life but usually in their progeny who benefit as citizens. I grew up on a farm which utilized illegal labor (I wouldn't take offense at this I've yet to meet a farmer of any size who doesn't). The immigrants who came spent their entire lives in poor conditions, even poorer than those they had fled. I highly doubt that these immigrants will ever improve their standing in society without becoming naturalized citizens.

    Similarly I do not see sweatshop labor or third world etc labors as generating betterment to the countries that utilize them. In order for outsourcing to generate benefits I believe the outsourced country and the new domestic home both must be capable of benefiting from the production generated. If you're not contributing to the supply of your own nation then you're not building your economy. While I know this sounds off to my previous statements, in an economy with little to no production/infrastructure the best solutions are not demand side solutions but rather supply side solutions. Generally speaking a country with millions of extremely impoverished people is going to have extremely high demand and likely no supply to meet that demand. Thus third world outsourcing merely increases demand. In some cases it allows people to afford the supply that they couldn't otherwise which either results in them elevating themselves over their peers or in a societal shift which inflates to adjust to the new availability of funds (increased prices) but this is a rather silly thing to do. We should be exporting supply to these countries, not importing from them.

    Quote Originally Posted by Legio_Italica View Post
    As far as skilled labor goes, as I said, human capital is human capital. If India produces engineers and scientists who will work and produce just as well as Western workers and/or for a fraction of the cost, the job market for scientists and engineers will be more active there than in the West. Supply and demand.
    Agreed. However again this is only serving to artificially increase demand by lowering costs of supply. It certainly benefits those countries with skilled labor who can work cheaper etc than we do. The problem is that it definitely harms us.

    Quote Originally Posted by Legio_Italica View Post
    This depends on the political climate of the region in question. With the exception of China or some classic example, I highly doubt people are "forced" to work for "evil corporations." People choose to work there because of perceived opportunity for betterment. If nominal wages are cancelled or marginalized by external factors like domestic strife, that is an external problem unrelated to the fact that the job is an "outsourced" one. This book contains a good summary of how "outsourcing" and human capital function in the global economy, and the tremendous net benefits associated with it.
    I'll have to take a look at it. Outsourcing may have global benefits in the extraordinarily long term but I can't help but feel the only way we would really feel those benefits is if we weren't at the top of the ladder.

    Quote Originally Posted by Legio_Italica View Post
    Again, that's a political problem, not an inherently economic one. Ideally, the cost of water is determined by supply vs ease/cost of access and demand. Obviously, if some commercial interest is cooperating with local authorities (or vice versa) to exploit a local population, that's a different problem entirely.
    Perhaps. One must wonder then if the corporations we all know and love are simply inherently evil then. I don't really believe they are, though I believe they are ultimately pragmatic. In dealing with a corporation society should implement game theory and do away with concepts of trust etc as we're not dealing with someone who pays attention to anything other than gain except for the rare exception. Often these companies are seen as saving graces for the countries they come into. However if there's no safeguards to prevent a company from sucking a country dry I do not have any doubt that most will do so.

    Quote Originally Posted by Legio_Italica View Post
    The Nordic System, in the most general of terms, is a system that fosters a strong private sector, which allows it then to "tax" this private sector with things like very progressive taxation, social safety net, unions, and protectionism. My quest is to discover what about the capitalist economy of the Scandinavian countries makes it strong enough to easily withstand these typically very heavy social burdens.
    See my above description of modern economic theory, that is a nutshell explantion of the nordic system as well.

    Quote Originally Posted by Legio_Italica View Post
    I'd say the complete equalization of economic and social outcomes, if not the establishment of workers' soviets, is as "socialist" as it gets. How is that "political rhetoric?"
    I don't agree with the terminology so I'll snip the rest of the definitionitional debate out. Let's return to discussing our differing conceptions of mix market economies.

    Quote Originally Posted by Legio_Italica View Post
    This is where it gets interesting. and would further depend on what the public sector looked like. Perhaps it would be an entirely different mode of production in competition with capitalism; say, the nationalization of 50% of the XYZ industry, then it would depend on the restrictions placed on the remaining private 50% as to which side wins.
    This is the issue with your conception. Ideally neither side wins. If the government quashes corporate innovation then it pulls back, if corporations are quashing the government options the government runs its businesses at a deliberate loss to tighten up the corporate contribution to society. This is the same in market economies except that in a market economy we hope that corporations (pragmatic above all else) will somehow indefinitely compete with one another. Simply put they don't. Furthermore I should note I don't support the nationalization of 50% of a corporation or the government competing as a corporation. Case in point the post office. (which is now the third time I've mentioned it) You don't need to nationalize private holdings to compete with the private sector. The government or rather the public has its own holdings which can be utilized to set a standard of service and care for which corporations can compete within. It's the difference between playing football in space and playing it on a marked field.

    Quote Originally Posted by Legio_Italica View Post
    If you would facilitate this through government-owned corporations to operate said industries in a corporate fashion, then it would depend on what external advantages were afforded to the government corporation as to whether it would win or lose to the private sector.
    I'm not entirely sure I follow this tangent.

    Quote Originally Posted by Legio_Italica View Post
    If the two simply coexisted, then this would be an example of a state capitalist economy. If you would control the economy through monetarism, taxes, and subsidies, this gets into the "third way" endorsed by fascist ideology. How much of your economy is public? In what way? Etc.
    I'm still not following this tangent you're on and fear you've completely missed the point.

    Quote Originally Posted by Legio_Italica View Post
    So I guess it depends on how thoroughly you want to plan your economy.
    Exactly.

    Quote Originally Posted by Legio_Italica View Post
    Indeed, there are winners and losers in every economy. So far, capitalism produces the most winners and has consistently raised per capita standard of living in the world for centuries. I see no reason to change that.
    Gross oversimplification.

    Quote Originally Posted by Legio_Italica View Post
    Why would a government financed by the chicken farmer with leaders put in power by the chicken farmer attack the chicken farmer?
    I'm really not sure what you're getting at here. Any number of reasons not to mention the simple fact that the chicken farmer has limited profits to contribute to the government. No chicken farmer will ever make enough money to dominate the government. However you're correct some companies do. The pharmaceuticals and the oil industries both regularly do. Still who has imposed regulation on both? Oh yes, the democrats. Frankly a healthy relationship engenders far more benefits than a short term parasitism. On the other hand, who also forces open competition and imposes lobbying limits? Also the democrats. Jee.

    Quote Originally Posted by Legio_Italica View Post
    Anyway, monopolies stagnate markets, squash competition, and kill growth and diversification. I don't see how the destruction of a monopoly is "socialism." If anything, its radiating a tumor out of capitalism so that the latter can function as intended.
    It's a good idea no? Glad you agree, ignoring the other irrelevance.

    Quote Originally Posted by Legio_Italica View Post
    So....you support everything the GOP supports, with the exception of the Judeo-Christian social platform?
    I'm extremely familiar with both party platforms, the policies they've supported, who has voted on what and who is lobbied by whom etc etc etc. So no I do not support the GOP platform in the least. Their economic policy is utterly stupid and values nothing but supply side solutions. Beyond that their social policies are abhorent.

    Quote Originally Posted by Legio_Italica View Post
    All the Democrats want is a more liberal social program, increased funding for entitlements, new entitlements, and heavy investment in "green tech."
    No more tax cuts for the rich, a progressive sliding tax rate, welfare in a variety of ways, a higher maximum marginal tax rate. More tax breaks for the poor and middle class.

    Quote Originally Posted by Legio_Italica View Post
    The military-industrial complex isn't going anywhere.
    Of course the $550,000,000,000 of defense cuts going into effect over the next decade is just foreplay, after that we're giving them back all of the money and then some!

    Quote Originally Posted by Legio_Italica View Post
    They'll still get a cool half-trillion a year and a nice bump to their "foreign contingency fund."
    I would never suggest eliminating our military. Do I see it needing cuts? Yes.

    Quote Originally Posted by Legio_Italica View Post
    We'll still be chasing terrorists around the globe
    Which I support.

    Quote Originally Posted by Legio_Italica View Post
    installing and deposing regimes
    Which I support.

    Quote Originally Posted by Legio_Italica View Post
    and concocting global divide and conquer schemes that always backfire hilariously and horrifically
    Not sure what you mean.

    Quote Originally Posted by Legio_Italica View Post
    We'll still be catering to the Money Power, getting "free healthcare" from the insurance monopolies who have 320 million government-backed customers and throwing billions of dollars at slightly different pet projects and crony kickbacks. Not seeing much of a difference, other than the possibility of the Democrats bankrupting the country even faster than the Republicans.




    The democrats spend slightly less than the republicans do. The difference is they spend it on those who need it. The republicans spend it on white corporate high wage earners.
    Last edited by Elfdude; February 08, 2013 at 01:57 PM.

  8. #8

    Default Re: CHALLENGE THREAD -- Issue a challenge here

    Quote Originally Posted by elfdude View Post
    I know what you were referring to, I was saying that it was moot. All of the information I posted there was specifically designed to describe to you exactly what I was referring to. Further I feel perhaps we've gotten onto a moot tangent with the entire socialist versus capitalist thing. Let's refer to economies as thus: Mix-market, Market and Planned. My macroeconomics classes taught the system as synonymous (capitalism, socialism, communism) but it's arbitrary to our debate and I'd rather not get stuck in semantics. For all intents and purposes we're both talking of a mixed market economy which I'm sure we can agree upon and move on. Now the question from there is how much do we want the economy planned and how much do we not want it planned.
    Right, this is what I was saying. No one serious about economics is arguing for pure capitalism, nor for pure socialism. The "mix" is the foundation of what has become an increasingly homogeneous modern political and economic system loosely defined as "pluralism." All "civilized" governments have pretty much agreed that the market mechanism is a good concept and should be maintained, if only because we're all trading with each other on....the global markets. At the national level, the eternal debate is centered not on socialism vs capitalism, but rather, how much socialism we ought to tax our capitalism with to satisfy social and economic concerns. The argument of "how much" to plan and how much to leave to the Market is an eternal debate, one I do not wish to engage in; certainly not here or now. That is why I did not think that debate on the issue was possible, and regret that this has become one.

    The advocates of pure capitalism were swept from the limelight in the wake of the global Great Depression. While millions around the world began to eye socialism and communism as the "solution," men like Keynes came forward with ideas to "fix" capitalism and make it last indefinitely. Now, liberals like myself may be forever wary of any economic planning or wealth redistribution, but that doesn't mean I'm demanding anarcho-capitalism. My most basic concerns have to do with market and regulatory transparency, because in my opinion, state capitalism, the end result of these "mixed" economies, facilitates massive corruption amidst the union of public and private money and interest.
    Spoiler Alert, click show to read: 
    Essentially there's four central principles to the Neo-classical-synethsis:

    Intertemporal Optimization - the personal behaviors of saving and spending amongst people

    Rational Expectation - the prediction of the future economic activity - however this theory changes the definition slightly to include sticky prices and other economic rigidity not recognized by previous theories furthermore, unlike Kenysian economics which which focus mostly on demand side solutions and monetarist policies which assume the variability of the value money NNCS includes supply-side solutions, demand-side solutions and monetarist solutions as viable and supported by the data. However economists recommend that different strategies are used at different times, while a monetarist solution can prop up a failing economy and minimize the damage associated with a major collapse doing so should only be done as a last resort when the costs of allowing something to fail exceed the value in allowing a failing business to fail. Which is to say some business die, other businesses are supported because not doing so causes fallout. This includes using scientifically validated montarist policies such as specifying interest rates, taylor rules etc only when the data supports their usage.

    Menu Costs - the cost of information, implementation etc.

    Imperfect Competition - that economic activity take place which does not support infinite competition (Reaganomics which drove policy with RBC caused the global financial crisis because they assume infinite competition which does not occur)
    These variables you mention are important ones, to be sure. However, I will always be skeptical of those who claim there is a "plan" that mathematically takes all variables into account and "solves" them. The problem with "planned" economies is that there is no sure-fire way to "plan" human choice. Therefore, the most "stable" models of planned economy involve the removal of human choice from as many factors as possible, facilitating if not guaranteeing what liberals like me like to call "tyranny."
    The notion of a mixed economy is not inclusive to capitalist economies - that is, economies structured upon capital accumulation and privately owned profit-seeking enterprises. Many different proposals for socialist economic systems call for a type of mixed economy, where multiple forms of ownership over the means of production co-exist with one another. For example, Alec Nove's conception of feasible socialism provides an outline for an economic system based on a combination of state-enterprises for large industries, worker and consumer cooperatives, private enterprises for small-scale operations, and individually owned enterprises
    The kind of "socialist mixed" economy you are talking about would essentially ask how much capitalist fuel one would need to power a socialist machine, or, in reference to the current state of affairs in the world, how much socialism our capitalism can withstand. If the means of production is privately owned, meaning any industry or sector not directly administered by the government, then the public sector does not produce capital; rather, it controls it and taxes it to varying degrees. In a case of pluralist coexistence between the public and private, if capital exists to be traded and created by new market activity, then the model is inherently capitalist, regardless of whether the CEO is a proprietor or government employee.

    In a world where pluralism has blurred the lines between classical conceptions of socialism and capitalism, neither truly exist in the original sense. Unless one advocates the abolition of capital, he/she is a capitalist to some degree. No modern economic system demands the abolition of capital, only its manipulation, redistribution, and control to varying degrees. Therefore, socialism does not really exist, only different kinds of capitalism as the defining word of the utilization of capital as a means of production. The world's largest commercial interests are an immensely powerful governing body. The bourgeois will never surrender their capital to a central authority, therefore the existence of a foundationally socialist system is impossible. Any existence of independent capital and the trade thereof is capitalist by definition. The private accumulation of capital does not define capitalism, nor does public interference in the degree to which an individual may accumulate capital define socialism.
    Game theory however does not describe society hence why economics employing it fail, notably capitalism. Which is to say though we could definitely explain everything if everyone acted perfectly independently that is not how the world works. Society is lumpy not individualistic.
    The dialectic relationship with which individuals act and react to each other does not indicate the existence of some a priori "hand" or "class." This really gets into pure philosophy more than economics. Unless the human mind is merely a subsidiary to some higher abstraction, then the Individual is naturally sovereign, meaning an independent variable. These independent variables become dependent on one another by reaction to each other, and in my opinion, it is to the study and acknowledgement of trends within these reactions that the study of economics is best suited; rather than the attempt to control or prevent said reactions.
    All markets function on supply and demand. The issues arise in measuring supply and demand. This is what economic theory is for and why science supports the modern http://en.wikipedia.org/wiki/New_neo...ical_synthesis in it's principles. Namely in that it is able to predict demand, it is able to predict supply, and the effects on either via a monetarist policy.
    Right. That's not socialism, that's a kind(s) of capitalism. As any Federal Reserve Board member will tell you, however, the prediction and manipulation of supply and demand is an extremely difficult and hazardous process. Not only do I consider such manipulation unethical, but more importantly, destructive and untenable; if only because the inevitable margins of error in these manipulations is composed of waste and scarcity. The system is especially volatile by the necessity of perpetual debt and interest accumulation. As Keynes said, the perceived problem of "classical" capitalism is the accumulation of capital. Therefore, the modern model, utilizing monetarist policies, demands that every individual spend as much capital as possible and borrow continuously on the value of existing capital in the hope that the economic growth and real wages achieved by this mechanism will match or outpace the growth of debt. Said debt is then converted to quasi-capital by fractional reserve banking inherent to monetarist policies, which compounds the process. I call the glaring drawbacks to this system inherent flaws. You seem to think them simple miscalculations that can be solved with more of the same policies.
    Indeed, this is why consumers had such glorious success managing corporation's actions. No what happens when no base standard is set is a slippery slope towards fewer and fewer consumer rights. For example, how do you choose not to eat food improperly prepared when it's not simply one corporation accomplishing that. This statement you made is one of someone who believes in infinite competition which is simply ridiculous. Consumer activity has small influences corporate ethics policy because at the end of the day the consumer doesn't really have a choice.
    Right, and that's why a function of government is to maintain choices, not simply force the "evil corporations" to improve their behavior. Transparency is key, not planned outcomes. If the largest corporations in the carrot industry have somehow come to a cartel agreement to produce more carrots at lower cost by growing low-quality carrots that harm people's health, the role of the government is to break the cartel, not simply force it to provide better carrots. This seems another primary difference between us.
    Further corporations are more than willing to play politically with their pricing to drive home a point. For example it's not uncommon for corporations to arbitrarily raise their prices or lower them in response to political rulings to create a false sense of costs to policies. Further what a company does in another country in most cases seems to be entirely meaningless to people. The only good example I can think of boycotting working is when a company is employed or contracted by the government. Otherwise corporations are rather free to act with impunity.
    Hence my point. When the government enacts duplicitous and opaque regulatory legislation, those who have the resources to gain a regulatory edge over their competitors will do so. This is a problem, for the reasons you mention. This is a political problem, not "evil capitalism."
    Simply put there's not enough people who care to do anything about it.
    Exactly. Take Walmart, for example. Supposedly, they're the bane of humanity. I love Walmart. Ever been there when you're hungry or played Walmart tag? Its ing awesome My point is, if Walmart were so terrible, then enough people would stop shopping there, and Walmart's wallet would start to hurt; the company would do anything necessary to maintain profits. As it is, the parking lot of my local Walmart is full 24/7. Apparently people don't hate it as much as they say they do. So why should the government "punish" Walmart based on your subjective conceptions of social justice? If "there's not enough people who care to do anything about it," then apparently there's not a big enough problem. Any demand-side issues Walmart has would be legal, like, say, strong-arming competition with physical intimidation, tax evasion, lying to stock holders or government regulators, etc. Otherwise, hiring people at minimum wage and importing toys from China does not seem sufficient to warrant your "demand side solutions."
    To put it differently, Private enterprise is not tied exclusively to market economies but exists in mixed market economies as well.
    Market, mixed market, call it what you will. As I've explained above, its all capitalism.
    Yes we've seen the woes of overused monetarism and just about every policy known to man in just about every culture/society/economy. This isn't an argument it's a statement of the obvious. Montarism isn't a vorpal blade that can cut the head off of any stagnation or recession. However it is something which can help treat symptoms. As a doctor its important to realize that sometimes the symptoms of a problem are worse than the problem itself and necessitate being treated before the issue can be resolved. Namely in the 2008 financial crisis. Without monetarist policy intervention the symptoms of the recession would have been further exacerbated which has long reaching effects. For example, if a sickness nearly kills you but you recover there's going to be a large amount of time where you're severely weakened. This is not something that you want to have happen in an economy because the implications aren't just economically undesirable but also societally undesirable as well.
    I haven't the necessary information to decide whether central banking itself is an inherently bad idea. There is certainly evidence to suggest that having some kind of central monetary guidelines is beneficial. However, controlling entire economies by manipulating interest rates is almost universally destructive, if only because, as I elaborated above, it is impossible to consider every possible variable, let alone control it via a single "valve." Moreover, when the unfailing priority of "monetarist policy" for the last century has been to maintain the interest and position of those with the most capital at all costs, and often to the detriment of everyone else, it doesn't seem too conspiratorial to say there is a systemic problem.
    Willfully ignoring examples of reality which don't support your ideal. I don't really remember what your response to my examples of QE successes was.
    Nor do I remember what your examples were, unfortunately.
    This is because you believe fiat currency has no value beyond faith. This is not how the value of fiat is calculated however. Not to mention how our currency has value in places with no faith in our money. Yes we do have to have a certain amount of faith that all of the goods and services in this country total up to represent the value that fiat is matched against and this can be subtley altered artificially. However there's no direct link to the manipulation and the evils you speak of, merely the possibility.
    The basic nature of fiat currency is tied to monetarism and fractional reserve banking. In a fiat economy, the sum of a nation's total assets and potential value is expressed in units of currency, which have value based on the value of other currencies. In this way, everything considered to be of any possible value in a country is considered capital to be borrowed against, and in turn, the borrowed amount is then considered to be more capital to be borrowed against, and so on and so on. Supposedly, the central bank is charged with ensuring this process does not continue ad infinitum through reserve requirements and control of interest rates. For the last century, we've watched the Federal Reserve exhaust more and more of its bag of tricks, until recently, when the Fed squeezed interest rates and reserve requirements to zero and began the forced conversion of private assets to liquid capital, basically announcing that the ad infinitum of fractional reserve banking, debt, and interest accumulation would continue unrestricted "until we start seeing positive results." If you don't see the horrific implications of the very system that would permit such madness, then I guess we have very little to discuss.
    The opposite possibility however is far worse which you seem to ignore. Case in point the nordic system which despite working wonderfully you still assume would not work. The nordic system again utilizes the system of economy I'm describing to you.
    Nobody's talking in terms of extremes, so there is no "opposite." If you're going to install a bank with supreme power over the economy, then only a fool would make this power arbitrary, as in the case of the Federal Reserve. Oversight is key. The justification behind allowing the Fed its secretive and closed-door status is of course the idea of an apolitical, independent regulatory institution; but this is of course nonsense, as Fed Chairman Arthur Burns admitted. Allowing more federal oversight into the Fed would undoubtedly fix transparency issues, but then open the possibility of manipulating the entire US economy for political purposes. There is no easy solution, but the problems are undeniably systemic.
    Correct, dangerous does not mean inevitably bad.
    Power corrupts. That's why a republican system of checks and balances is key. The economic and political centralization of the United States has perfectly illustrated the dangers of the concentration of unchecked power. The more one plans an economy, the the greater the incidence of human error, incompetence, and corruption of the planners rippling across the social, economic, and political spectra.
    I'm not sure I understand your last sentence. Fractional reserve banking is not really an issue if it doesn't get out of hand. Greed can be a potent incentive to continue to reduce the amount of money banks must keep on hand however if properly managed it's not an issue. You reject it offhandedly I understand I just don't see the reasoning for why as valid.
    When human beings control the system of intrinsic economic value upon which a society functions as opposed to an objective commodity value, the inevitable result is corruption, error, and incompetence that ricochets across said society . If I have the power to dictate the value of the dollar and the total number of dollars, my personal biases, desires, and prejudices, along with those of the parties I interact with, will inevitably influence policy. Not only that, but my reasoning behind said policy will inevitably fail on some level due to the sheer magnitude of the number of variables involved. Capital, like any commodity, can function as a resource. When human beings control the composition, amount, and value of capital, waste and scarcity will inevitably result to some degree. Now, you might say we can control capital to net benefit in spite of this, and maybe you're right. However, that doesn't make me any less skeptical of the idea, especially since the latter ultimately relies on the moral character, intellect, and the assumed herculean management skills of a few powerful men.
    However to deny that the social safety net impacts the means of production is folly.
    Of course. My point was that a large social safety net does not indicate a socialist economy.
    I don't see the relevance here, it sounds like conspiracy theory again to me.
    ......Part of my point that the foundations of Keynesian economic theory have never fallen from favor or practice since their first applications in the wake of the Great Depression.
    They both fell in preference relative to the utilization of supply side solutions.
    Perhaps, but then this would indicate two sides of the same coin. If you consider bailouts and rescue packages supply side solutions, then I don't really recall a time when these were not on the front page of the monetarist and Keynesian playbook. In other words, I don't recall when or if, after about 1920, market manipulations in the forms of both supply and demand manipulation were ever not utilized.
    The market creates pyramid economies. Monetarism can only distort that pyramid either beneficially or not.
    Again, the accumulation of capital is not a necessary feature of capitalism, so to blame capitalism for stark income inequality is, frankly, a childish way of looking at things, especially when the particular function of monetarist policies for their entire modern existence has expressly facilitated this "pyramid" condition.
    I'm not sure what your point is about not how business is done nor do I see your last sentence as valid. High progressive taxes, trust busting and openly orchestrated wealth redistribution is exactly what the nordic system has.
    My point was that central banking has released the governments of the world from the constraints of tax revenue and accountability to the taxpayers. A central bank gives the host government access to potentially unlimited sums of money; the cost of which is arbitrarily passed to the citizenry via inflation. I certainly do not support this idea; I was merely pointing out that modern governments will and have chosen this method of fiscal function over such "outdated" means as taxation. Therefore, modern taxation, under present conditions, functions primarily as a social and political tool and little else. Notice that the discussion of tax policy in the US, for example, has little or no impact on government fiscal policy. Instead, taxes are almost always discussed from their only relevant aspect; the social. Politicians always talk of "tax cuts for the middle class" and, lately, "fair share taxes" on the wealthy. Rarely is it ever discussed that virtually any tax increase or decrease will have a nominal effect on the massive spending and debt obligations the country currently has and will always have.
    Your discount of planning the market is macroeconomically irresponsible and is willfully blind of the purpose of an economy which is the society it sustains.
    You assume two things:

    1. It is possible to successfully plan an economy; or at least aspects of it.

    That may be true on a limited scale, but as I've said, the greater the role of planning has in a market, the greater incidence of the errors of a few negatively impacting the outcomes of many.

    2. An "economy" is a finite and tangible mechanism that should be utilized to that great and ancient abstraction, "the public good."

    Firstly, an economy exists in any interactive human community. Trade and the desire for personal economic success, be it profit or mere comfort, will exist, legally or otherwise. Therefore, an economy is not a condition that a public creates, but rather, an environment in which a public interacts. Persuading the people in this environment to abide by some manner of economic action and/or forbearance is the basic function of any central regulatory entity. Hence, a belief that the economy ought to function for some arbitrary "public" goal influences how people interact in an economy and therefore the inputs and outputs associated with it; not the existence of the economy itself. You cannot "command" nature, only manipulate it.
    I'm not sure I understand exactly what you're describing here you're going to need to be more specific. From what I saw the federal government massively deregulated the economy and canceled social programs pushing for people to support themselves by giving them larger access to capital. Unfortunately this has the effect of artificially burying the excess of supply in artificially inspired demand. It is exactly what the GOP pushed for most recently and while similar to QE with the democrats was not partnered with the policies that have made our QE effective.
    Close. The Fed instituted a policy of low interest rates and easy lending (I talked about the Fed funds rate and the mechanisms associated with it in some earlier post, I believe). This is what I mean by "cheap money." The easy credit created the illusion of prosperity; the "false boom" I talked about. This had little to do with federal regulatory policy and everything to do with the Fed's manipulation of money and interest rates. When excessive debt and inflation resulted, investors grew panicky by the late 20s. The Fed responded by raising interest rates and tightening credit, but this only exacerbated the wholesale flight from the markets that, by then, was taking place.
    I don't know that I agree it was deliberate. Sounds like a conspiracy. Determining when to raise the federal fund rates up is a difficult thing to identify and the federal government has to decide how and when to do this today as well. It's not an easy thing to do but there are numerous advantages to having a higher federal fund rate notably on the supply side of things.
    Either this lends credit to a conspiracy, or to my assertion of the unsustainable dangers associated with allowing a few human beings to control an entire economy.
    I can't help but feel you're being overly harsh on them for doing something too soon. It would have been a good idea to do it eventually, the issue was that that government at the time had no interest in establishing social programs or anything else which could legitimately lead to increased demand.
    You mean more artificial demand. Simply opening the public treasury to give people more capital to spend would have compounded the situation by the very nature of the flaws themselves. Again, the social safety net is an artificial construct. It does not create value or wealth; it redistributes it. The discussion of how much wealth to redistribute and to whom to prevent the idle accumulation of capital is ongoing.

    The essential problem, as I said, was artificially cheap credit due to the Fed's arbitrary policy of low interest rates. The Fed, having no risk of liability or loss, does a notoriously poor job of analyzing risk. The basic function of charging interest on money is a desire for profit to compensate the lender for the risk undertaken in parting with his money. When there is no risk of loss on the part of the lender, he no longer has a way to gauge the cost/benefit in determining an effective interest rate. Now, he must operate based upon assumptions of what the borrower will do with the money. This is, obviously, a much more ambiguous system and therefore hopelessly prone to error. By lending without risk of loss, the lender is now assuming the borrower will invest this capital to the mutual benefit of "everyone." As we've seen time and time again, the banks and institutions who've received money from the Fed commonly use them to secure for the borrower a more stable position that will facilitate the accumulation of capital in the future, creating a situation exactly opposite of what the Fed had claimed to desire. You say this is an unfortunate accident; I say it is the express purpose of the system itself. Either way, the situation is increasingly untenable.
    I would increase oversight.
    An easy solution to a problem that has no easy solution. More oversight has political implications, as I discussed above.
    I fail to see how removing the Federal Funds Rate would accomplish any of this.
    It has little to do with the Fed Funds Rate and everything to do with the role of the Fed and central banking itself. The express goal of the Fed was economic moderation; to scientifically control markets to linearize the "boom bust" cycles of the 19th century. The result has been the exact opposite. More frantic boom bust cycles enabled by huge amounts of debt and "capital," courtesy of fractional reserve banking, all with equal if not increased frequency. Hence, either the Fed has failed utterly, or succeeded in placing the checkbook of an entire nation at the disposal of an elite few.
    This is not a centrist concept but an extremest capitalist concept. The centrist concept is that the market mechanism can be more effective than the planned mechanism or visa versa. I.E. that the blade cuts both ways. Hence why mixed-market economies are the standard type of economy.
    Notice you keep using the word "market," acknowledging the market exists on a fundamental level, be it mixed or whatever, acknowledging that what I said about the Market is inherently true.
    I'm not sure what the relevance here is. I've never suggested killing the market. I really wish you would learn to see shades of grey.
    The relevance is that we're both talking variations on the same theme of capitalism, but you want to call your version socialism. It has been my endeavor to point out that it is all capitalism.
    This was exaclty what I was referring to as outsourcing not improving the local situation. I don't include outsourcing as the same thing as immigrant labor. Immigrant labor to me is still domestic production. However it would be rather funny to think that the illegal immigrant production of this country somehow contributes to the betterment of the illegal's life. The betterment is not in their life but usually in their progeny who benefit as citizens. I grew up on a farm which utilized illegal labor (I wouldn't take offense at this I've yet to meet a farmer of any size who doesn't). The immigrants who came spent their entire lives in poor conditions, even poorer than those they had fled. I highly doubt that these immigrants will ever improve their standing in society without becoming naturalized citizens.
    I'm not sure what you're talking about. I realize outsourcing is different from immigrant labor. I spoke of them respectively and in a past tense. Anyway, obviously the "exploitation" of immigrant labor is a problem that would need to be dealt with in any discussion of immigration reform. Claiming the issue is systemic, however, is quite a stretch, and an unfounded one. I am personal friends and coworkers with many immigrants, as my father owns a construction company. Oftentimes, these "immigrants" are paid very good wages, and the ablest among them are appointed foremen who make upwards of $1200 in a typical week (keep in mind this is in an area with a median household income of 25-30k per year). My father often jokes that "I wish I knew where all this 'cheap immigrant labor' is, 'cause I'd certainly like to buy some." Again, it has to do with human capital. The supply and ability of labor is matched with the demand for it; short of political considerations. The immigrants in my community are among the hardest working and most economically active members, and, in my case, they are well-paid for their abilities; especially the "illegal" ones, who escape taxation by claiming numerous dependents and exemptions under a false identity.
    Similarly I do not see sweatshop labor or third world etc labors as generating betterment to the countries that utilize them. In order for outsourcing to generate benefits I believe the outsourced country and the new domestic home both must be capable of benefiting from the production generated. If you're not contributing to the supply of your own nation then you're not building your economy. While I know this sounds off to my previous statements, in an economy with little to no production/infrastructure the best solutions are not demand side solutions but rather supply side solutions. Generally speaking a country with millions of extremely impoverished people is going to have extremely high demand and likely no supply to meet that demand. Thus third world outsourcing merely increases demand. In some cases it allows people to afford the supply that they couldn't otherwise which either results in them elevating themselves over their peers or in a societal shift which inflates to adjust to the new availability of funds (increased prices) but this is a rather silly thing to do. We should be exporting supply to these countries, not importing from them.
    This represents a few fundamentally flawed ideas about how the global economy works. More basically put, the Third World has a tremendous supply of labor, but relatively few markets. The developed world utilizes the labor, providing a market, providing wages to the laborers and tax revenue and exports to the local governments. The trade of capital for goods in this scenario is what helps the host region to develop. The linked book does a much better and more detailed job of explaining exactly how this works. Any real-world problems with the application of this model represent independent problems not associated with the practice itself; a practice that has provided huge net benefits historically, despite "fair trade" propaganda.
    Agreed. However again this is only serving to artificially increase demand by lowering costs of supply. It certainly benefits those countries with skilled labor who can work cheaper etc than we do. The problem is that it definitely harms us.
    So wait, you claim the social safety net is an engine of wealth creation, but somehow, actual trade of value for value is artificial? If I understand you correctly, you have it backwards. When a demand exists, it will utilize any supply where the latter exists. When faced with foreign labor competition, domestic labor has a few choices; one, work for less, two, improve the quality of work, or three, institute protectionist policies. The latter has historically rippled across markets with a net negative effect, for the classic reason that, if you raise your prices, so will everyone else, to the detriment of the consumer. Of course, the Nordic model has found how to turn this to benefit, which is one reason it greatly interests me. In any case, the "problem" of cheap labor is not an artificial one, nor are there linear solutions for domestic labor. When the man down the road is selling more human capital for less money, you had better figure out a way to either compete, or turn the situation to your advantage by making yourself of use to said man through trade - or would you have a global authority restrict India's access to the market?
    Perhaps. One must wonder then if the corporations we all know and love are simply inherently evil then. I don't really believe they are, though I believe they are ultimately pragmatic. In dealing with a corporation society should implement game theory and do away with concepts of trust etc as we're not dealing with someone who pays attention to anything other than gain except for the rare exception. Often these companies are seen as saving graces for the countries they come into. However if there's no safeguards to prevent a company from sucking a country dry I do not have any doubt that most will do so.
    It seems your alternative would be to place "trust" in the objectivity and fortitude of a central regulatory authority to manage outcomes. I fail to see how this is preferable, let alone successful. Also, it appears you claim these same actions which make a corporation "evil" are not evil, though an inherently "pragmatic" tendency. I too would say there are few or no inherently "evil" corporations, but rather, some who take advantage of political imperfections; however, this is a political problem, as I said. Managing outcomes will not repair the systemic issues that produced the negative outcomes in the first place.
    This is the issue with your conception. Ideally neither side wins. If the government quashes corporate innovation then it pulls back, if corporations are quashing the government options the government runs its businesses at a deliberate loss to tighten up the corporate contribution to society. This is the same in market economies except that in a market economy we hope that corporations (pragmatic above all else) will somehow indefinitely compete with one another. Simply put they don't. Furthermore I should note I don't support the nationalization of 50% of a corporation or the government competing as a corporation. Case in point the post office. (which is now the third time I've mentioned it) You don't need to nationalize private holdings to compete with the private sector. The government or rather the public has its own holdings which can be utilized to set a standard of service and care for which corporations can compete within. It's the difference between playing football in space and playing it on a marked field.
    The primary issue with using public assets in the private sector to try and maintain healthy competition involves the same problems as the lending scenario I spoke of above.

    Also, the post office is probably the worst example you could use here, and that's why I ignored it. The post office is a classic example of an antiquated business model and product propped up by government habit. As the postmaster general mentioned in his press conference following the suspension of Saturday delivery, "if the Post Office had anywhere near the volume of mail we had thirty years ago, our financial dilemma would not exist...... In an age when people can bank online for free, I mean, you can't beat free." The Post Office offers products; many of which are now conducted online, as he said, and the rest of which are offered more reliably and frequently in the private sector. When you order something online, do you send it via UPS or FedEx, or USPS? If you're anything like me and just about everyone I've talked to personally, you avoid USPS at nearly every opportunity. Granted, when the nation was starting out - 250 years ago - we didn't have the infrastructure to facilitate private communication, and the Post Office was an invaluable resource. Now, the private sector does a much better job at meeting those needs, and the Post Office is a money pit. GOP-enforced pension requirements don't help the situation, but that doesn't change the fact that the USPS is antique.
    I'm not entirely sure I follow this tangent.
    I was throwing out general scenarios trying to find out exactly what you mean by "planned economy." As I said, mixed markets, planned economies, pluralism, what have you, exist in every modern economy. The degrees of variation are a matter of perpetual debate and adjustment.
    Gross oversimplification.
    How so?
    I'm really not sure what you're getting at here. Any number of reasons not to mention the simple fact that the chicken farmer has limited profits to contribute to the government. No chicken farmer will ever make enough money to dominate the government. However you're correct some companies do. The pharmaceuticals and the oil industries both regularly do. Still who has imposed regulation on both? Oh yes, the democrats. Frankly a healthy relationship engenders far more benefits than a short term parasitism. On the other hand, who also forces open competition and imposes lobbying limits? Also the democrats. Jee.
    Obviously the chicken farmer was a random example, and your partisan politics don't help things. The pharmaceutical and insurance industries, for example, practically wrote the ACA. The largest industries play both sides of the table in every election. Who do you think receives all the proposed "green tech" money? Mom and pop start-ups? Your precious democrats simply prioritize different moneyed interests, not fewer ones.
    No more tax cuts for the rich, a progressive sliding tax rate, welfare in a variety of ways, a higher maximum marginal tax rate. More tax breaks for the poor and middle class.
    ...Aaand an exemption from any actual effect this rhetoric may take for those who play ball. That's what I mean by "the way business is done."
    Of course the $550,000,000,000 of defense cuts going into effect over the next decade is just foreplay, after that we're giving them back all of the money and then some!
    Source? Given that the military budget, excluding the Foreign Contingency Fund, fluctuates between 500-600 billion per year, $550 billion in cuts would basically eliminate the budget. What you're talking about is the savings from the withdrawal from Afghanistan and Iraq, which has its own budget; though I will mention its hilarious to hear about all these "10-year plans" from Congress when the national debt will exceed GDP by 2016. Currently, plans from both parties cut military spending in the short term while spreading the customary increase over future years. The "half trillion" in cuts you mention is taking place regardless of party due to the scheduled withdrawal from Iraq and Afghanistan. That's what the Foreign Contingency Fund is. The base budget would continue to increase like it always does.
    I would never suggest eliminating our military. Do I see it needing cuts? Yes.
    Of course; huge cuts. But those kinds of necessary cuts mean decreasing our military presence in the world. This apparently is impossible under your conditions since......
    Which I support.
    .....all that costs an ever-greater amount of money.
    Not sure what you mean.
    I mean, for example, assisting the British in deposing Mosaddegh in the interests of BP and installing a brutal dictator that directly led to the rise of nuke-waving Islamofascists thirty years later - to name one classic example. Or take a look at Latin American history for some more examples of the glories of American interventionalism.
    The democrats spend slightly less than the republicans do.
    Mother Jones isn't exactly a source worth mentioning. Here's what the CBO said:
    Spoiler Alert, click show to read: 
    In its analysis of the President’s proposals excluding any macroeconomic effects, which was issued on March 16, CBO concluded that the federal budget deficit would equal $1.3 trillion (or 8.1 percent of gross domestic product, GDP) in fiscal year 2012 and would decline to about $1.0 trillion (or 6.1 percent of GDP) in 2013. The deficit would decline further relative to GDP in subsequent years, reaching 2.5 percent by 2017, but then increase again, reaching 3.0 percent of GDP in 2022.

    The projected deficits under the President’s proposals would exceed those in CBO’s baseline—a benchmark showing the outcome if current laws generally remained unchanged—by 0.5 percent of GDP ($82 billion) in 2012, by 2.2 percent of GDP ($365 billion) in 2013, and by between 1.4 percent and 1.9 percent of GDP in each year from 2014 through 2022. In all, between 2013 and 2022, deficits would total $6.4 trillion (or 3.2 percent of total GDP projected for that period), $3.5 trillion more than the cumulative deficit in CBO’s baseline.

    Thus, the Dems want to cut spending in the short term and continue the onward and upward trend of debt in the long term, just like the GOP.
    The difference is they spend it on those who need it. The republicans spend it on white corporate high wage earners.
    Ah that wonderful political fairy tale of the needy downtrodden struggling against the "evil white corporations." If you fail to see that your precious Democrats belong to the same interests and share the same donors every election cycle as the GOP, I don't think I can say anything that might temper your rhetoric here.
    ----

    After a few go-rounds here, I think you've confirmed my suspicions that your positions more closely fit the realm of social democracy, not socialism. If you want to call your ideas "socialism," that's fine, but then realize that this skews your ideas about capitalism. As I've said, we're all capitalists. The nature of the pluralist system we currently live in therefore shifts the debate to the degrees to which socialistic ideas should regulate and tax our capitalism. As I said early on, that is a perpetual debate that the "experts" are still bickering about, so I don't really want to jump in. You say more, I say less, and ultimately there is no "magic formula" that will prove either of us right or wrong. The only complicity either of us would have in this process is at the ballot box, and as I've said, even that seems to have less and less relevance as time goes on. As for those "running the show," I just hope they have some idea of what the hell they're doing, and that it doesn't involve a future equivalent of 1984. In other words, I hope to god I won't be sitting in a gutter or a People's Worker Battalion someday saying, "I told you so."
    Last edited by Lord Thesaurian; February 10, 2013 at 08:20 PM.
    Of these facts there cannot be any shadow of doubt: for instance, that civil society was renovated in every part by Christian institutions; that in the strength of that renewal the human race was lifted up to better things-nay, that it was brought back from death to life, and to so excellent a life that nothing more perfect had been known before, or will come to be known in the ages that have yet to be. - Pope Leo XIII

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    Default Re: CHALLENGE THREAD -- Issue a challenge here

    You can probably save your self a lot of time reading this if you just understand you've got to stop strawmanning my arguments stop making baseless statements and arbitrary rejections of concepts and begin arguing about the degree of mixed-market versus market or this debate is utterly pointless. I have dropped the terminology of socialism versus capitalism in my last post and as such most of this post of yours is entirely offtopic and irrelevant.

    Quote Originally Posted by Legio_Italica View Post
    Right, this is what I was saying. No one serious about economics is arguing for pure capitalism, nor for pure socialism. The "mix" is the foundation of what has become an increasingly homogeneous modern political and economic system loosely defined as "pluralism." All "civilized" governments have pretty much agreed that the market mechanism is a good concept and should be maintained, if only because we're all trading with each other on....the global markets. At the national level, the eternal debate is centered not on socialism vs capitalism, but rather, how much socialism we ought to tax our capitalism with to satisfy social and economic concerns. The argument of "how much" to plan and how much to leave to the Market is an eternal debate, one I do not wish to engage in; certainly not here or now. That is why I did not think that debate on the issue was possible, and regret that this has become one.
    You say this and go on to argue the very same thing.

    Quote Originally Posted by Legio_Italica View Post
    The advocates of pure capitalism were swept from the limelight in the wake of the global Great Depression. While millions around the world began to eye socialism and communism as the "solution," men like Keynes came forward with ideas to "fix" capitalism and make it last indefinitely. Now, liberals like myself may be forever wary of any economic planning or wealth redistribution, but that doesn't mean I'm demanding anarcho-capitalism. My most basic concerns have to do with market and regulatory transparency, because in my opinion, state capitalism, the end result of these "mixed" economies, facilitates massive corruption amidst the union of public and private money and interest.
    Right and this is your opinion an entirely unfounded opinion. You're taking the mere present of possibility and applying it infinitely to the extreme. This is entirely irrational and is not a tenable position to take unless we ignore the entire body of evidence and take this argument into the realm of the purely philosophical. This is not the purely philosophical however. You've still missed uncomfortable points and your responses are rehashing the same capitalism vs socialism shtick I had just hoped to clairfy with my utilization of the term mixed market so we could clarify what policies we agreed with or disagreed with and why. Instead this debate is about you tearing apart every economic system you can in order to perpetuate your entirely unfounded claims that modern economic theory is entirely misinformed and unethical. The entire time you seem to forget that if your way was mandated the penalty upon the society which depends on said economy is incalculable. But no, it doesn't matter to you. Your argument sounds like Hoover.

    Quote Originally Posted by Legio_Italica View Post
    These variables you mention are important ones, to be sure. However, I will always be skeptical of those who claim there is a "plan" that mathematically takes all variables into account and "solves" them.
    You can be skeptical all you wish but that does not validate your rejection of data and theory. The data and the theory exist because it is literally the best we have, your proposal to reject it forgets that without it we are set back massively. Something you don't seem to account for in the least. You're using entirely unfounded idealism to view this problem. For example, I can be skeptical that the laws of science do not perfectly describe the universe, however it would be utterly ignorant of me to dismiss or disregard them because while not perfect they are accurate within a limit to truth. This is the same of economic theory, at least that supported by data and empirical observation anyways.

    Quote Originally Posted by Legio_Italica View Post
    The problem with "planned" economies is that there is no sure-fire way to "plan" human choice.
    This is under the assumption that humans make individualized choices. They do not. In fact science defies this and says most people act the same in most instances with a few exceptions. The exceptions can then be accounted for further allowing the accuracy of the theory to tighten up further. You're view of the economy is hopelessly tied to the microscopic economic events which upon the macroscopic scale do occur in patterns. Yes things can upset the balance. However we did not reject clocks three hundred years ago because after a year they could be a week off or more. We continued to wind them up and re-calibrate them to the accurate position. Without the ability to measure that time scale even inaccurately we could never hope to do so accurately. Your rejection of the theory is fundamentally wrong. There's room to argue the degree, there's no room to debate the concept out of existence however.

    Quote Originally Posted by Legio_Italica View Post
    Therefore, the most "stable" models of planned economy involve the removal of human choice from as many factors as possible, facilitating if not guaranteeing what liberals like me like to call "tyranny."
    This is purely conspiracist rhetoric.

    Quote Originally Posted by Legio_Italica View Post
    The kind of "socialist mixed" economy you are talking about would essentially ask how much capitalist fuel one would need to power a socialist machine, or, in reference to the current state of affairs in the world, how much socialism our capitalism can withstand.
    I'm not entirely sure why you're going on and on about socialism and capitalism when the debate should have already moved past these terms. You're beating a dead horse with meaningless terminology we've already agreed held no meaning. While you say that the capitalist engine powers the socialist machine I can just as easily claim a socialist engine powers the capitalist machine. The fact of the matter is you cannot state that we're purely capitalist and thus any attempt to derive which one is more valid, socialism or capitalism is entirely impossible to do. You've ceased to speak in the world of reality and instead are contemplating illusions.

    Quote Originally Posted by Legio_Italica View Post
    If the means of production is privately owned, meaning any industry or sector not directly administered by the government, then the public sector does not produce capital; rather, it controls it and taxes it to varying degrees. In a case of pluralist coexistence between the public and private, if capital exists to be traded and created by new market activity, then the model is inherently capitalist, regardless of whether the CEO is a proprietor or government employee.
    And this paragraph is entirely moot. I can reverse the words socialist and capitalist in this paragraph and it makes equal amounts of sense. You're talking in circles or saying a lot without saying anything at all. This is utterly meaningless rhetoric.

    Quote Originally Posted by Legio_Italica View Post
    In a world where pluralism has blurred the lines between classical conceptions of socialism and capitalism, neither truly exist in the original sense. Unless one advocates the abolition of capital, he/she is a capitalist to some degree.
    Ugh. Another pointless paragraph. Unless you advocate abolition of the public/state you are socialist to some degree.

    Quote Originally Posted by Legio_Italica View Post
    No modern economic system demands the abolition of capital, only its manipulation, redistribution, and control to varying degrees. Therefore, socialism does not really exist, only different kinds of capitalism as the defining word of the utilization of capital as a means of production.
    No modern economic system demands the abolition of the public or state only it's manipulation redistribution and control to varying degrees. Therefore capitalism does not really exist, only different kinds of socialism, as the defining word of the utilization of the public as a means of production.

    As you can see I can easily say the same thing with different words and it still means the same thing, nothing. The debate has moved on past this.

    Quote Originally Posted by Legio_Italica View Post
    The world's largest commercial interests are an immensely powerful governing body. The bourgeois will never surrender their capital to a central authority, therefore the existence of a foundationally socialist system is impossible. Any existence of independent capital and the trade thereof is capitalist by definition. The private accumulation of capital does not define capitalism, nor does public interference in the degree to which an individual may accumulate capital define socialism.
    It does. But again we're not using these terms remember? The reason for that was I was unwilling to accept your definition of socialism and you were unwilling to accept my definition of capitalism. Which in reference to our debate which is policy not definition is entirely arbitrary.

    Quote Originally Posted by Legio_Italica View Post
    The dialectic relationship with which individuals act and react to each other does not indicate the existence of some a priori "hand" or "class." This really gets into pure philosophy more than economics. Unless the human mind is merely a subsidiary to some higher abstraction, then the Individual is naturally sovereign, meaning an independent variable. These independent variables become dependent on one another by reaction to each other, and in my opinion, it is to the study and acknowledgement of trends within these reactions that the study of economics is best suited; rather than the attempt to control or prevent said reactions.
    So by your logic, a security camera is best used as a device we watch helplessly as robbers steal from us rather than a device to alert the policy in case something does occur and to provide evidence when something goes wrong? That is utterly silly. The ability of the device to describe these variables is the very reason that it's use is necessitated.

    Quote Originally Posted by Legio_Italica View Post
    Right. That's not socialism, that's a kind(s) of capitalism.
    Dude. I don't understand why you're going on and on about this definition thing. I've painted exactly what I'm talking about yet rather than turn your attention to the debate you're trying to finish off a strawman. Why?

    Quote Originally Posted by Legio_Italica View Post
    As any Federal Reserve Board member will tell you, however, the prediction and manipulation of supply and demand is an extremely difficult and hazardous process.
    Which I agree with.

    Quote Originally Posted by Legio_Italica View Post
    Not only do I consider such manipulation unethical
    Why? To return to my security camera metaphor it is unethical for the monitoring body not to attempt to do something when the camera allows them to see a crime they otherwise wouldn't be able to. You're attempt to foist the unethical position upon these manipulations is entirely unfounded and rather fallacious.

    Quote Originally Posted by Legio_Italica View Post
    but more importantly, destructive and untenable; if only because the inevitable margins of error in these manipulations is composed of waste and scarcity.
    Which skips over the fact that the margin of errors inherent with these methods are still better than the margin of error inherent in market self regulation. If you're aruging on the side of margin of error you're holding the wrong position my friend.

    Quote Originally Posted by Legio_Italica View Post
    The system is especially volatile by the necessity of perpetual debt and interest accumulation. As Keynes said, the perceived problem of "classical" capitalism is the accumulation of capital. Therefore, the modern model, utilizing monetarist policies, demands that every individual spend as much capital as possible and borrow continuously on the value of existing capital in the hope that the economic growth and real wages achieved by this mechanism will match or outpace the growth of debt.
    I don't think I can even call this a gross oversimplification, you're clearly talking about something else entirely. Or you're really stretching a tiny principle to become totipotent relative to the concept. The monetarist policy is indeed a band-aid that accrues debt, but you've yet to show that is a bad thing. In fact it's rather easy to imagine situations where it clearly isn't a bad thing. In fact if you paid attention to economic theory you'd have a very good idea of when it isn't or is a bad idea. Within a certain margin of error of course, but that margin of error is still better than the ignorance of policy all together. It's like you're arguing that you're afraid that not only will the policy be inaccurate to within a margin of error but that it will also do exactly the opposite of intended. It's like prosposing that H2+O2 -> Black hole that swallows up earth so let's use chemical theory to observe chemistry but not ever hope to manipulate it.

    The crux of the argument here is that economic theory shows us that monetarist policies are dangerous and hazardous and can lead to some pretty undesirable effects. Most governments have misused them at one point or another in their history. However monetarist policies have also been used by most governments almost continuously throughout their proposals. The difference isn't between governments rejecting or accepting them but in the theory that supports their use. For a long time the theory that supported it however was based off of negating humans entirely or in negating money entirely science has only recently been used to evaluate economics and when applied it has had success across the board.

    Quote Originally Posted by Legio_Italica View Post
    Said debt is then converted to quasi-capital by fractional reserve banking inherent to monetarist policies, which compounds the process. I call the glaring drawbacks to this system inherent flaws. You seem to think them simple miscalculations that can be solved with more of the same policies.
    Define more of the same policies. I quite clearly said that montarist policies alones are ineffective. I understand there's a margin of error, what I don't think you understand is the degree to which that margin is.

    Quote Originally Posted by Legio_Italica View Post
    Right, and that's why a function of government is to maintain choices, not simply force the "evil corporations" to improve their behavior. Transparency is key, not planned outcomes. If the largest corporations in the carrot industry have somehow come to a cartel agreement to produce more carrots at lower cost by growing low-quality carrots that harm people's health, the role of the government is to break the cartel, not simply force it to provide better carrots. This seems another primary difference between us.
    This is not a fundamental difference between us because I would agree with it at least partially. What this has to do with everything else you've said I'm not sure because it's not directly tied to any of it. I would state that forcing the cartels to provide better carrots however is fundamental to getting the ball rolling, if they're already providing rotten carrots simply breaking them up is not enough. Whats to stop them from simply competing at quality of rotten carrots, the ability to sell rotten carrots should not even be on the table.

    Quote Originally Posted by Legio_Italica View Post
    Hence my point. When the government enacts duplicitous and opaque regulatory legislation, those who have the resources to gain a regulatory edge over their competitors will do so. This is a problem, for the reasons you mention. This is a political problem, not "evil capitalism."
    Which is still skipping over the fact it can be curbed with social policy and regulation. If the government does not set the standard for example then corporations are free to set the 'level' playing field at $100 a bottle of water and compete at that level. Yes competition will occur but someone still needs to set the bar. Adding players to the game without deciding on what the rules are is rather silly, who knows which game they'll end up playing.

    Quote Originally Posted by Legio_Italica View Post
    Exactly. Take Walmart, for example. Supposedly, they're the bane of humanity. I love Walmart. Ever been there when you're hungry or played Walmart tag? Its ing awesome My point is, if Walmart were so terrible, then enough people would stop shopping there, and Walmart's wallet would start to hurt; the company would do anything necessary to maintain profits.
    This is a horribly flawed ideology and has been proven wrong for more than a century but since it seems it's such a hard lesson to learn allow me to explain it to you. Who do you suppose the consumers will shop at instead? Which stores do you suppose offer something similar to walmart? Target? Fred Meyers? Stores which utilize the same practices walmart does? Admittedly they don't use unions but then again walmart is pennies cheaper and far more widespread. Now this also requires the practices of walmart to be common knowledge and requires a consumer to have a fair business education to even begin to understand before they can finally disagree. Do people like this exist that disagree? Yes. Does the general population listen to them? Sometimes.

    Now walmart is the largest company (sometimes it's exxon they're about the same) in the world with annual profits of 310 or so billion a year. Who do you suppose can compete with them? Now if they decide to do something unethical which gives them an even larger competitive edge how are they to be stopped? They can't be. I would suggest you look into some of the unethical practices walmart uses before you declare you love them. Do I blame the poor or middle class for shopping there? No, I can see why money to the common man is more important than making a stand which is meaningless without 300 million more just like you. Now walmart's unethical practices does often get it pushed out of communities who are better off for it but that usually requires the government.

    Quote Originally Posted by Legio_Italica View Post
    As it is, the parking lot of my local Walmart is full 24/7. Apparently people don't hate it as much as they say they do.
    I don't think you realize just how markets work. The demographics targeted by walmart are not the demographics concerned with ethics, the problem is that hurts us all. You who values competition, who will compete with walmart? Please explain that to me because the concept of it is rather funny to me.

    Quote Originally Posted by Legio_Italica View Post
    So why should the government "punish" Walmart based on your subjective conceptions of social justice? If "there's not enough people who care to do anything about it," then apparently there's not a big enough problem.
    It's hilarious that scientific economic theory has boiled down to my subjective opinion. I don't believe we're even in the same debate anymore.

    Quote Originally Posted by Legio_Italica View Post
    Any demand-side issues Walmart has would be legal, like, say, strong-arming competition with physical intimidation, tax evasion, lying to stock holders of government regulators, etc. Otherwise, hiring people at minimum wage and importing toys from China does not seem sufficient to warrant your "demand side solutions."
    Clearly you're not familiar with what a demand side solution is. Walmart can never 'use' a demand side solution, the concept of a supplier by definition taking advantage of a solution designed to create demand is hilarious. Now they can aritifically alter their supplies which can extermalize their cost to society. That would be called corruption and is exactly what you're describing. Not a 'demand' side solution.



    http://en.wikipedia.org/wiki/Unemplo...side_solutions

    Both demand side and supply side solutions theoretically can reduce corruption because corruption is the result of an economic bottleneck. When to use demand or when to use supply is predicated on economic theory. When things go wrong monetarist policy can be used like a bandage this is essentially economics 101 in a nutshell. I'm not really sure what tangent you're on but let's get this back on track.

    Quote Originally Posted by Legio_Italica View Post
    I haven't the necessary information to decide whether central banking itself is an inherently bad idea. There is certainly evidence to suggest that having some kind of central monetary guidelines is beneficial. However, controlling entire economies by manipulating interest rates is almost universally destructive, if only because, as I elaborated above, it is impossible to consider every possible variable, let alone control it via a single "valve."
    Your argument is nonwithstanding to the simple fact that we don't know everything but this does not itself predicate inaction. Your logic is the logic of a pracrastinator not of economist. Because you cannot understand it and fear no one else does you want us to all hide under our desks? That simply does not make sense. Manipulating interest rates is not universally destructive. I'm not even sure where you have come up with such nonsense but it is purely nonsense.

    Quote Originally Posted by Legio_Italica View Post
    Moreover, when the unfailing priority of "monetarist policy" for the last century has been to maintain the interest and position of those with the most capital at all costs, and often to the detriment of everyone else, it doesn't seem too conspiratorial to say there is a systemic problem.
    I do not see this statement as true and can find no evidence of it either.

    Quote Originally Posted by Legio_Italica View Post
    Nor do I remember what your examples were, unfortunately.
    There were examples from the japanese economy, the english economy our own economy and several more. Search successful quantitative easing in google. You'll be flabbergasted at how hallow your theory is.

    Quote Originally Posted by Legio_Italica View Post
    The basic nature of fiat currency is tied to monetarism and fractional reserve banking. In a fiat economy, the sum of a nation's total assets and potential value is expressed in units of currency, which have value based on the value of other currencies.In this way, everything considered to be of any possible value in a country is considered capital to be borrowed against, and in turn, the borrowed amount is then considered to be more capital to be borrowed against, and so on and so on.
    Not true, even theoretically the maximum allowance of this is to theoretically have twice as much capital in the system further it does not legitimately make twice as much capital but allows capital to flow as though there was twice as much in play. This is a crucial distinction. It's similar to our own body and the gating mechanisms for our blood. We do not have enough blood to run our bodily processes simultaneously but by diverting flows an inferior quantity of blood acts as though we had three times as much constantly flowing. You seem to understand this and there's really no practical way for it to come bite us in the ass if we don't get greedy. The issue comes about when people cease spending this capital there's a variety of ways this flow can be choked off and that's where demand side solutions come into play.

    Quote Originally Posted by Legio_Italica View Post
    Supposedly, the central bank is charged with ensuring this process does not continue ad infinitum through reserve requirements and control of interest rates. For the last century, we've watched the Federal Reserve exhaust more and more of its bag of tricks, until recently, when the Fed squeezed interest rates and reserve requirements to zero and began the forced conversion of private assets to liquid capital, basically announcing that the ad infinitum of fractional reserve banking, debt, and interest accumulation would continue unrestricted "until we start seeing positive results." If you don't see the horrific implications of the very system that would permit such madness, then I guess we have very little to discuss.
    You're right, I do not see the horrific implications. I can see the issues that could arise. Further federal reserve limits are not zero they're about 10 percent for most institutions which is fairly regular world around. Smaller institutions have a zero percent but smaller institutions are also not having the issues the larger banks are.

    Quote Originally Posted by Legio_Italica View Post
    Nobody's talking in terms of extremes, so there is no "opposite." If you're going to install a bank with supreme power over the economy, then only a fool would make this power arbitrary, as in the case of the Federal Reserve. Oversight is key. The justification behind allowing the Fed its secretive and closed-door status is of course the idea of an apolitical, independent regulatory institution; but this is of course nonsense, as Fed Chairman Arthur Burns admitted. Allowing more federal oversight into the Fed would undoubtedly fix transparency issues, but then open the possibility of manipulating the entire US economy for political purposes. There is no easy solution, but the problems are undeniably systemic.
    This conspiracy nonsense is just conspiracy nonsense. The federal bank is not out to get us or out to steal money from the little guy. The federal reserve bank has several mandates which it must work towards, profit is not one of them, maintaining employment is. The reason? Becausing focusing on profit has proven before to be folly for the reserve bank. There is oversight for the federal reserve banking system via congress and the board of governors. Not to mention they must defend their actions. I do not think the federal reserve system is as easy to corrupt as you claim it is. Your fears are unwarranted and you've yet to provide any reason to respect them. Not sure what the nixon administration policy has to do with what we're talking about.

    Quote Originally Posted by Legio_Italica View Post
    Power corrupts.
    I call bull. Power does not corrupt it's people who corrupt and corruption only occurs when we create a system which incentivises it.

    Quote Originally Posted by Legio_Italica View Post
    That's why a republican system of checks and balances is key.
    Which is what we have.

    Quote Originally Posted by Legio_Italica View Post
    The economic and political centralization of the United States has perfectly illustrated the dangers of the concentration of unchecked power. The more one plans an economy, the the greater the incidence of human error, incompetence, and corruption of the planners rippling across the social, economic, and political spectra.
    This is an unfounded statement.

    Quote Originally Posted by Legio_Italica View Post
    When human beings control the system of intrinsic economic value upon which a society functions as opposed to an objective commodity value, the inevitable result is corruption, error, and incompetence that ricochets across said society.
    I find it funny to think of an idea of an objective commodity value. The reason objective commodity values were dropped as a standard of economy is that there's no such thing. Gold has the value humanity says it does. The same thing applies to currency. It's not an arbitrary value but it certainly is subjective.

    Quote Originally Posted by Legio_Italica View Post
    If I have the power to dictate the value of the dollar and the total number of dollars, my personal biases, desires, and prejudices, along with those of the parties I interact with, will inevitably influence policy.
    But no one can arbitrarily dictate this, even the federal government if it were to unbalance things as far as it could could only do so much to influence the economy. You're issue is in seeing these manipulations as real manipulations, as they would be on a microeconomic scale. On the macroeconomic scale monetarist policies (when applied appropriately) lead to positive effects. This has been demonstrated throughout history and it is again something you willfully avoid.

    Quote Originally Posted by Legio_Italica View Post
    Not only that, but my reasoning behind said policy will inevitably fail on some level due to the sheer magnitude of the number of variables involved. Capital, like any commodity, can function as a resource. When human beings control the composition, amount, and value of capital, waste and scarcity will inevitably result to some degree.
    You really have spent this entire post saying the same thing with more words than you could have ever possibly needed. You have yet to demonstrate ANY of it is actually true.

    Quote Originally Posted by Legio_Italica View Post
    Now, you might say we can control capital to net benefit in spite of this, and maybe you're right.
    Amazing, this is exactly what I was saying.

    Quote Originally Posted by Legio_Italica View Post
    However, that doesn't make me any less skeptical of the idea, especially since the latter ultimately relies on the moral character, intellect, and the assumed herculean management skills of a few powerful men.
    You're massively oversimplifying what it actually relies upon. It certainly sounds foolish to say that I'm not going to trust my calculations of landing on the moon to a few men in lab coats from the early 1920's if you dismiss the amount of intellectual development that went into the theory of gravitation and kinetics. You can certainly do the same thing with economics but it's again rather foolish to do. You seem to keep forgetting that we have these theories of economics for a reason, because they reduce our incidence of error and narrow our margin of error. We understand there is a margin of error with these theories because they do not describe reality perfectly. However science does not need reality to be described perfectly. We cannot pinpoint where an electron is but this doesn't stop us from describing the wave function of possibilities. Similarly we cannot tell you the perfect way to run the economy but we can tell you this this and this have this this and this effects. If you understood the economic policies and theories that went into the decision making process what the federal reserve is doing seems conservative not liberal. Mostly because while we do know these things should work we're leery of relying upon them so largely.

    Further you seem to think that the federal reserve's goal is to reduce the reserve limits to 0, inter trading fees to 0 and wants to spend as much money as it can for nothing. This has absolutely nothing to do with the reality of what is happening and is a rather ignorant view of all things economics. Your argument is substanceless because you don't understand economics but are afraid of big government. You're couching this fear in economics for whatever reason and I'm calling bull on it.

    Quote Originally Posted by Legio_Italica View Post
    Of course. My point was that a large social safety net does not indicate a socialist economy.
    Which is exactly opposite of my claim that a capitalist market does not indicate a capitalist economy. Again a moot point because we're using mixed market ideologies both of us. The argument is about how much to plan the economy not whether or not regulations or a social safety net should exist I had assumed.

    Quote Originally Posted by Legio_Italica View Post
    Part of my point that the foundations of Keynesian economic theory have never fallen from favor or practice since their first applications in the wake of the Great Depression.
    You cannot take a function of the theory out of context of the theory and evaluate it. You're again making no sense attacking a theory which is no longer utilized in it's purity but rather has become something else entirely. You're like a man calling dolphins fishes ignorant of the fact that we've realized they're mammals. You can continue to attack an outdated outmodded and replaced theory but it's utterly pointless. I've stated exactly what economic policy I'm speaking of and you've yet to deal with it directly. Why? Because you can't deal with it because you're argument is substance-less.

    Quote Originally Posted by Legio_Italica View Post
    Perhaps, but then this would indicate two sides of the same coin. If you consider bailouts and rescue packages supply side solutions, then I don't really recall a time when these were not on the front page of the monetarist and Keynesian playbook. In other words, I don't recall when or if, after about 1920, market manipulations in the forms of both supply and demand manipulation were ever not utilized.
    Bailout and rescue packages are not supply side solutions. They are demand-side solutions. They can be transformed in supply side solutions as many tarp programs were ceased upon by corporate leaders to benefit the supply rather than the demand. However the bailouts post bush era had tigher oversight and the QE utilized has much less issue with corporate corruption messing it up.

    As far as your conception of demand side and supply side solutions go of course there's never been a time that we haven't used them. These are the name of tools not the name of the procedures which call for their utilization which is derived by economic theory. I'm not arguing to discard tools, you are. I'm arguing to utilize the economic theory which derives how to utilize them from empirical results. I've already described this theory to you in multiple forms and I'm at a loss of why you're unable to understand it yet. I feel like I'm not arguing with you I'm still trying to get you to pay attention to me as you destroy your latest strawman. Please focus on the debate at hand. It's clear that your understanding of economics comes from at best secondary and tierary sources. I would highly recommend you abandon the interpretations of interpretations you've read in poor articles and even more irrelevant books and find primary sources to base your ideology off of.

    Quote Originally Posted by Legio_Italica View Post
    Again, the accumulation of capital is not a necessary feature of capitalism, so to blame capitalism for stark income inequality is, frankly, a childish way of looking at things, especially when the particular function of monetarist policies for their entire modern existence has expressly facilitated this "pyramid" condition.
    Your statement of monetarist policy is false. Monetarist policies have almost universally been used for the opposite. Are we even on the same planet here? Accumulation of capital is a simple issue of a capitalism and it is driven by greed. Greed is one thing that is dealt with very well in game theory. Simply put do not trust the rich to ever put themselves in a situation where they're not rich and instead use the government to pull the wealth from them. This is well established and I'm not sure what you're arguing about considering you seem to be contradicting your own ideas. Regardless of whether accumulation of wealth is a necessary feature of capitalism it's a common symptom that must be defended against for capitalism to succeed which does compromise capitalism's purist principles. Which is again why we were supposed to cease with this terminology bull and concentrate on mixed market versus market and the policies therein. You've managed to do nothing but attack a strawman.

    Quote Originally Posted by Legio_Italica View Post
    My point was that central banking has released the governments of the world from the constraints of tax revenue and accountability to the taxpayers.
    This is not true.

    Quote Originally Posted by Legio_Italica View Post
    A central bank gives the host government access to potentially unlimited sums of money
    Also not true in a practical sense. If you want to destroy your economy sure. If you believe that is the federal reserve's goal then they could've accomplished this much more easily. You don't even have a proper understanding of the policies to see that they're holding a rather conservative stance on this and for that reason we can't begin to have a rational debate on the subject because it's a subject you clearly don't understand.

    Quote Originally Posted by Legio_Italica View Post
    the cost of which is arbitrarily passed to the citizenry via inflation.


    So wait, there is a cost to it? Then they can't do it infinitely. 90% of what you just said is invalid thank you to this little statement.

    Quote Originally Posted by Legio_Italica View Post
    I certainly do not support this idea; I was merely pointing out that modern governments will and have chosen this method of fiscal function over such "outdated" means as taxation. Therefore, modern taxation, under present conditions, functions primarily as a social and political tool and little else.


    I was sure it couldn't get anymore wrong but jesus taxes are only a social and political tool? What? I mean sure you could ultimately claim that the economy is just a social and political tool but I'm assuming you mean taxes are arbitrary. If that's what you're claiming then you're very wrong and taxes are a very important part of making this whole bag of tricks functional.

    Quote Originally Posted by Legio_Italica View Post
    Notice that the discussion of tax policy in the US, for example, has little or no impact on government fiscal policy. Instead, taxes are almost always discussed from their only relevant aspect; the social.
    This is because social directly applies to fiscal. This is demand side solutions and if you'd understand the terminology you could identify what's happening and why. Furthermore I don't see anyone not talking about the fiscal policy implications. Bush era tax benefits for the rich cost us a huge amount of money. Closing that gap was a good policy. Closing tax loopholes in corporate taxation has also generated a rather large fiscal boost for the democratic party. I don't think we're even on the same page anymore.

    Quote Originally Posted by Legio_Italica View Post
    Politicians always talk of "tax cuts for the middle class" and, lately, "fair share taxes" on the wealthy. Rarely is it ever discussed that virtually any tax increase or decrease will have a nominal effect on the massive spending and debt obligations the country currently has and will always have.
    This is simply statements of fantasy. I can't describe it any other way, fiscal policy is rather always discussed in relation to taxes. The issue is it becomes a social battle because the layman doesn't understand fiscal policy. It makes neither fiscal nor social sense to give tax cuts to the rich. Further you're discounting the demand side boost observed when cutting taxes for the poor and middle class.

    Quote Originally Posted by Legio_Italica View Post
    You assume two things:

    1. It is possible to successfully plan an economy; or at least aspects of it.
    Yes. This has been part of economic theory for over a century.

    Quote Originally Posted by Legio_Italica View Post
    That may be true on a limited scale, but as I've said, the greater the role of planning has in a market, the greater incidence of the errors of a few negatively impacting the outcomes of many.
    You're stating nothing but meaningless statement. Of course the policies can be utilized correctly that's not the issue. The issue is when to utilize them. This is a side of the debate you have not touched at all in your overdefining of capitalism beyond the scope of it's own ideology, and beyond your attempt to tear down all economic theory in favor of your purist market driven economy which I cannot even get a real definition for because of your own contradictory statements and flip flopping on policies which you think are unrelated but are rather very much related. You say one thing and you press for a policy which does the opposite and is known to do the opposite. You press for market driven economy which we know is a poor theory to describe how the economy works and has a much higher margin of error than anything I've supposed. You either understand little about economics and are trusting entirely in poor secondary resources to do your learning for you or possess a huge mountain of data that no one else in the world does.

    Quote Originally Posted by Legio_Italica View Post
    2. An "economy" is a finite and tangible mechanism that should be utilized to that great and ancient abstraction, "the public good."
    I'm not even sure this has any meaning to it. Of course the economy is used for the public good, that is what the economy exists for in the first place.

    Quote Originally Posted by Legio_Italica View Post
    Firstly, an economy exists in any interactive human community.
    Because humans socially interact, amazing.

    Quote Originally Posted by Legio_Italica View Post
    Trade and the desire for personal economic success, be it profit or mere comfort, will exist, legally or otherwise.
    So? Have I argued against any of this? No. How many strawmen can you pull out for one debate?

    Quote Originally Posted by Legio_Italica View Post
    Therefore, an economy is not a condition that a public creates, but rather, an environment in which a public interacts.
    This is non-sequitur and not to mention meaningless. The economy is created via social interaction between people and attempting to subjectively assign a value to those social interactions. The economy is non existent without the public which create it. You cannot have an economy with one person. What implications that statement has for your argument I can only guess at but it should be pointed out how utterly meaningless it is and thus every argument predicated on it as well.

    Quote Originally Posted by Legio_Italica View Post
    Persuading the people in this environment to abide by some manner of economic action and/or forbearance is the basic function of any central regulatory entity. Hence, a belief that the economy ought to function for some arbitrary "public" goal influences how people interact in an economy and therefore the inputs and outputs associated with it; not the existence of the economy itself. You cannot "command" nature, only manipulate it.


    I can't even begin to guess at what this means but it seems to me that you're saying that some arbitrary public goal influences the economy. All I can respond to that with is duh? You're aware I'm not talking of getting rid of the economy in the least right? *sigh*

    Quote Originally Posted by Legio_Italica View Post
    Close. The Fed instituted a policy of low interest rates and easy lending (I talked about the Fed funds rate and the mechanisms associated with it in some earlier post, I believe).
    This is exactly what I was responding to, You should keep track of what my quotes are responding to, it might help the clarity of our debate immensely because I'm rather bored of saying the same thing a hundred times because you don't seem to understand that response A was responding to point A and thus must be delt with before you can re-assert point A.

    Quote Originally Posted by Legio_Italica View Post
    This is what I mean by "cheap money." The easy credit created the illusion of prosperity; the "false boom" I talked about. This had little to do with federal regulatory policy and everything to do with the Fed's manipulation of money and interest rates.
    Yes the fed instituted this policy in the 1930's and then, they changed the interest rates and easy lending back to their standards far too early and everything dried up. I'm not sure what point you're making but there doesn't seem to be one.

    Quote Originally Posted by Legio_Italica View Post
    When excessive debt and inflation resulted, investors grew panicky by the late 20s. The Fed responded by raising interest rates and tightening credit, but this only exacerbated the wholesale flight from the markets that, by then, was taking place.
    The response by the fed had nothing to do with excessive debt or inflation, the response had to do with policy driven politically which stopped the federal reserve's actions. Whether this was the result of the members of the federal reserve and their political ideology or due to oversight by political ideology I don't really know or care about. Your first statements were that the fed upped the interest rate and reserve requirement arbitrarily to 'shut down' the economy. This clearly wasn't the case. I'm not sure what you're attempting to morph this point into now.

    Quote Originally Posted by Legio_Italica View Post
    Either this lends credit to a conspiracy, or to my assertion of the unsustainable dangers associated with allowing a few human beings to control an entire economy.
    Or a poor economic theory driven by 1930's understanding of teh world? I mean one major thing they didn't have that we have, computers? How many years would it have taken to crunch the numbers to understand what they were doing at a level of what do today? Thousands if not millions by hand. If your argument is that monetarist policy failed us in the great depression, I'd point out that monetarist policy resulted in the massive boom to american economy practically from FDR on. The roadblock to these booms was hit in the 1970's when infrastructure and supply were highly lacking for the given demand.

    Quote Originally Posted by Legio_Italica View Post
    You mean more artificial demand.
    Social programs create real demand not artificial demand. Monetarist manipulations create artificial demand/supply. Please try and understand the economic policy you're arguing against because it's very hard to argue from a position in a formal debate and watch you attack strawmen with nothing to do with the topic at hand.

    Quote Originally Posted by Legio_Italica View Post
    Simply opening the public treasury to give people more capital to spend would have compounded the situation by the very nature of the flaws themselves. Again, the social safety net is an artificial construct. It does not create value or wealth; it redistributes it. The discussion of how much wealth to redistribute and to whom to prevent the idle accumulation of capital is ongoing.
    This is false and it is your issue with understanding demand-side solutions. If you're going to assert that demand side solutions have no bearing on the economy you're not only wrong but you're on an entirely different planet. I'm not sure what you're talking about opening the public treasury to give more people to spend, that's not what happened and is entirely irrelevant. You're using provocative language and talking in circles which is to say you're saying nothing to make a point.

    Quote Originally Posted by Legio_Italica View Post
    The essential problem, as I said, was artificially cheap credit due to the Fed's arbitrary policy of low interest rates. The Fed, having no risk of liability or loss, does a notoriously poor job of analyzing risk. The basic function of charging interest on money is a desire for profit to compensate the lender for the risk undertaken in parting with his money.
    Not only is the fed not bad at assessing risk this is exactly how the mechanism works. The federal government takes upon itself the risk associated with the investments because the impact of the risk is a function of the assets which is to say, averaging out the risk across society eliminates the impact of the risk on individuals. This in turn drives up demand massively. The issue is that the federal government must balance it's acceptance of risk with the inflation of the economy. The government would need to spend a whole hell of a lot more money for that to become an issue. Again they're being very conservative. Again you don't understand that because you don't understand the economic theory. Again your disapproval of the economic theory is baseless. And again the economic theory is better than your alternative of no economic theory.

    Quote Originally Posted by Legio_Italica View Post
    When there is no risk of loss on the part of the lender, he no longer has a way to gauge the cost/benefit in determining an effective interest rate.
    Not the case. There is risk of loss, the government for all intents and purposes assumes that risk and the loss which is averaged out across the economy. It's similar to a community building a bridge across a valley because to allow people to fall into the casm costs society and the economy more than not doing so. This is cost-benefit analysis that you seem willfully blind to because you refuse to accept the benefit.

    Quote Originally Posted by Legio_Italica View Post
    Now, he must operate based upon assumptions of what the borrower will do with the money. This is, obviously, a much more ambiguous system and therefore hopelessly prone to error.
    The assumptions of what they're going to do with the money is averaged out with an understood margin of error. You make it sound like we're shooting blind. Shooting with an inaccuracy of a couple of inches to the bullseye is different than blindfolding yourself and shooting. This is not about ambiguity but the opposite, how much can ambiguity be removed via application of the data. This is economic theory. Again you'll have to stop beating your strawman to deal with that.

    Quote Originally Posted by Legio_Italica View Post
    By lending without risk of loss, the lender is now assuming the borrower will invest this capital to the mutual benefit of "everyone."
    Wrong. The is no need to invest the capital to the benefit of everyone. What creating more capital does is create more opportunity for investment. The net effect of this is to the benefit of everyone. People can really invest in anything they want, so long as they continue to invest.

    Quote Originally Posted by Legio_Italica View Post
    As we've seen time and time again, the banks and institutions who've received money from the Fed commonly use them to secure for the borrower a more stable position that will facilitate the accumulation of capital in the future, creating a situation exactly opposite of what the Fed had claimed to desire.
    I do see what you're talking about here but if I'm understanding it I must suggest that this is not a bad thing. I'm not sure what you think the federal government desires. Creating more capital of course creates a more stable position for the borrower. Which facilitates investment. Which is exactly the mechanism we're utilizing.

    Quote Originally Posted by Legio_Italica View Post
    You say this is an unfortunate accident; I say it is the express purpose of the system itself. Either way, the situation is increasingly untenable.
    Wait wait wait, what do I say is an unfortunate accident? I said it was an accident that the fed raised the reserve requirements and interest rates to the detriment of the economy in the 1930's. I'm not sure what you're claiming I've said.

    Quote Originally Posted by Legio_Italica View Post
    An easy solution to a problem that has no easy solution. More oversight has political implications, as I discussed above.


    If I'm understanding it right, you would tear apart government and allow the market to exist unencumbered by it. Not only is this irresponsible but it's an unreasonable position to hold. Yes saying more oversight isn't a easy thing to understand but oversight is a demand-side solution. Which again is what I'm arguing for and again something you seem to have difficulties understanding.

    Quote Originally Posted by Legio_Italica View Post
    It has little to do with the Fed Funds Rate and everything to do with the role of the Fed and central banking itself. The express goal of the Fed was economic moderation; to scientifically control markets to linearize the "boom bust" cycles of the 19th century. The result has been the exact opposite.
    No it hasn't.

    Quote Originally Posted by Legio_Italica View Post
    More frantic boom bust cycles enabled by huge amounts of debt and "capital," courtesy of fractional reserve banking, all with equal if not increased frequency. Hence, either the Fed has failed utterly, or succeeded in placing the checkbook of an entire nation at the disposal of an elite few.
    This is entirely misinformation.

    Quote Originally Posted by Legio_Italica View Post
    Notice you keep using the word "market," acknowledging the market exists on a fundamental level, be it mixed or whatever, acknowledging that what I said about the Market is inherently true.
    This is not the case because I deny your definition of market. I've utilized the termiology of market, mixed market and planned for this reason. If you cannot cease this pedantic attempt to win this debate in a realm purely devoted to semantics, supposition and fallacy I must say I'm rather disappointed in you. You have not yet touched a single point I've made.

    Quote Originally Posted by Legio_Italica View Post
    The relevance is that we're both talking variations on the same theme of capitalism, but you want to call your version socialism. It has been my endeavor to point out that it is all capitalism.
    And I can just as easily point out that it is all socialism. You will not win that semantic struggle and I gave up attempting to win against you. I don't care about the semantic struggle and it's utterly moot in regards to our debate because neither of us agree with either the ideology of socialism or capitalism purely. Which negates your usage of the term as the 'correct' usage just as it does my own.

    Quote Originally Posted by Legio_Italica View Post
    I'm not sure what you're talking about. I realize outsourcing is different from immigrant labor. I spoke of them respectively and in a past tense. Anyway, obviously the "exploitation" of immigrant labor is a problem that would need to be dealt with in any discussion of immigration reform. Claiming the issue is systemic, however, is quite a stretch, and an unfounded one. I am personal friends and coworkers with many immigrants, as my father owns a construction company. Oftentimes, these "immigrants" are paid very good wages, and the ablest among them are appointed foremen who make upwards of $1200 in a typical week (keep in mind this is in an area with a median household income of 25-30k per year). My father often jokes that "I wish I knew where all this 'cheap immigrant labor' is, 'cause I'd certainly like to buy some." Again, it has to do with human capital. The supply and ability of labor is matched with the demand for it; short of political considerations. The immigrants in my community are among the hardest working and most economically active members, and, in my case, they are well-paid for their abilities; especially the "illegal" ones, who escape taxation by claiming numerous dependents and exemptions under a false identity.
    You mean the illegal ones who escape taxation because the government doesn't know about them? I don't think you quite understand what an illegal immigrant is. I would love to see your father pay illegal immigrants like that and not be shut down. Obviously you have no idea about labor law nor how suspicious it would be to pay immigrants like that. The government isn't stupid and it's not about to allow that type of tax revenue go.

    My only statement is that immigrant labor does not improve the situation of the immigrants until they're naturalized or at least legal workers in which case they're no longer considered immigrant labor but domestic labor. I further stated that outsourcing into third world countries such as what walmart does will not improve the situations within those third world countries because walmart is a coporation of such that it is able to move into the country with nearly zero overhead (which is what would build said country) and the gains it makes are kept by the company not paid into said society. Outsourcing to india or canada or germany are good examples of outsourcing because said outsourcing contributes domestically to society. Outsourcing to the third is almost exclusively parasitic. If you want to debate that ask south america how society improved while they were under the thumb of the american government and forced to allow companies to contribute all of their resources towards the betterment of the US.

    Quote Originally Posted by Legio_Italica View Post
    This represents a few fundamentally flawed ideas about how the global economy works. More basically put, the Third World has a tremendous supply of labor, but relatively few markets.
    Supply of labor requires a demand side solution to take advantage of. Really I shouldn't have to explain that to you. You're the one who doesn't seem to understand economics.

    Quote Originally Posted by Legio_Italica View Post
    The developed world utilizes the labor, providing a market, providing wages to the laborers and tax revenue and exports to the local governments.
    The developed world utilizes the labor, providing a market, and providing wages to the laborers, the laborers then contribute their money to their society resulting in inflation of prices. When after ten years the government realizes they're receiving no benefit from said company's presence and tries to change the terms of the contract the corporation threatens to leave upsetting the economy further, simply does leave to another country, or calls in the US government to protect it's interests.

    This is willfully ignorant of the fact that most corporations seek to recover their losses to wage within the country itself. For example a company may offer to create a public works water pump that they get to profit from which in turn not only takes the modest contribution to society they've given the country but even more wealth than the country started off with. Frankly it sounds like you only have a theoretical understanding of outsourcing and have no knowledge of what it really looks like or what really occurs with it.

    Quote Originally Posted by Legio_Italica View Post
    The trade of capital for goods in this scenario is what helps the host region to develop. The linked book does a much better and more detailed job of explaining exactly how this works. Any real-world problems with the application of this model represent independent problems not associated with the practice itself; a practice that has provided huge net benefits historically, despite "fair trade" propaganda.
    I'm not sure which book you're speaking of. Whether the problems are owned by the existence of the practice or not they come about and are properly accounted for in my economic theory. Though they seem ignored as not important in your own. Why might this be? Because you have no grasp of how the economy works in practical terms. Which is surprising because at least naked economics should give you a fairly good understanding of what I'm talking about.

    Quote Originally Posted by Legio_Italica View Post
    So wait, you claim the social safety net is an engine of wealth creation, but somehow, actual trade of value for value is artificial?
    I'm not sure that you understanding how quoting works, you see this has nothing to do with my statement:

    Agreed. However again this is only serving to artificially increase demand by lowering costs of supply. It certainly benefits those countries with skilled labor who can work cheaper etc than we do. The problem is that it definitely harms us.
    I stated nothing about any social safety nets nor what the hell else you're claiming I've said. Stop creating strawmen. I've only said it about a dozen times so far but perhaps at least one will get through.

    Quote Originally Posted by Legio_Italica View Post
    If I understand you correctly, you have it backwards. When a demand exists, it will utilize any supply where the latter exists.
    Yes. This is not against anything I said. Reading comprehension is lacking severely.

    Quote Originally Posted by Legio_Italica View Post
    When faced with foreign labor competition, domestic labor has a few choices; one, work for less, two, improve the quality of work, or three, institute protectionist policies. The latter has historically rippled across markets with a net negative effect, for the classic reason that, if you raise your prices, so will everyone else, to the detriment of the consumer.
    So you reject the protectionist policies offhandedly with no basis. You make a vague statement that history supports your claim. It quite clearly does not. But I guess we're just going to make baseless statements and arguments predicated on them and move on.

    Quote Originally Posted by Legio_Italica View Post
    Of course, the Nordic model has found how to turn this to benefit, which is one reason it greatly interests me.
    I've only been explaining the economic policies therewithin for three posts now, maybe the fourth one you'll drop the strawman and argue against the policy I'm speaking of.

    Quote Originally Posted by Legio_Italica View Post
    In any case, the "problem" of cheap labor is not an artificial one, nor are there linear solutions for domestic labor. When the man down the road is selling more human capital for less money, you had better figure out a way to either compete, or turn the situation to your advantage by making yourself of use to said man through trade - or would you have a global authority restrict India's access to the market?
    Outsourcing to india a first world country is not a bad practice. Again you're constructing strawman and now you're willfully dismissing thing's I've already said and asserting that I've said the opposite. This isn't a debate.

    Quote Originally Posted by Legio_Italica View Post
    It seems your alternative would be to place "trust" in the objectivity and fortitude of a central regulatory authority to manage outcomes.
    Yes although I know you're also adding other definitions to this so we'll deal with this separately.

    Quote Originally Posted by Legio_Italica View Post
    I fail to see how this is preferable, let alone successful.
    Then you either don't assess cost to society as a legitimate cost or you dismiss all economic theory.

    Quote Originally Posted by Legio_Italica View Post
    Also, it appears you claim these same actions which make a corporation "evil" are not evil, though an inherently "pragmatic" tendency. I too would say there are few or no inherently "evil" corporations, but rather, some who take advantage of political imperfections; however, this is a political problem, as I said. Managing outcomes will not repair the systemic issues that produced the negative outcomes in the first place.
    Tell me what is the difference between managing outcomes and managing the system? You've latched upon this distinction for no apparent reason because it's a distinction that is so varied as to be arbitrary. Most policies which can manage the outcomes also impact the system that gives rise to the policy. If there's a leak in a pipe closing the leak will decrease the pressure of the water attempting to push through said leak to the same pressure along the pipe. You'll have to be more specific about what you mean by managing outcomes, do you mean we should do away with tariffs and etc? Trade protectionism? That's ridiculous.

    Quote Originally Posted by Legio_Italica View Post
    The primary issue with using public assets in the private sector to try and maintain healthy competition involves the same problems as the lending scenario I spoke of above.
    Lending scenario? You mean the off the wall scenario you paint which sounds like conspiracist nonsense? Oh, I'm sorry I don't entertain that as valid due to it's extremist nature. You will never truly understand these concepts as long as you can't moderate your opinions and base them on tangible supported ideas. Your creating an economic theory that is nothing more than a philosophy devoid of data and empiricism entirely. You again are failing to deal with the fact the government can and does compete with the market well.

    Quote Originally Posted by Legio_Italica View Post
    Also, the post office is probably the worst example you could use here, and that's why I ignored it. The post office is a classic example of an antiquated business model and product propped up by government habit.


    And why is the post office a bad example?

    It introduced standards of care to the process of delivering goods, and a base price to do so. The post office was never touted as a business that could succeed in a corporate capacity. That was never the point. The point was to create a bar of expectations. Without the post office companies like UPS would have no issue with double or trippling or quadrupling their prices. Fed ex, DHL would follow suit because now they can put the level playing field at the maximal level where cost is feasible. This means that a huge amount of money ends up sunk in simply paying for deliveries which in turn is a cost past onto society. If it's not reinvested into society. What do you imagine the prices for delivering goods would be without the post office? If you honestly believe they'd be anywhere near what they are today you're kidding yourself.

    The post office lost 16 billion last year. UPS made 54 billion last year. Do the math. If UPS were able to charge double (which is fairly reasonable to assume) what do you believe the cost to society would be?

    Quote Originally Posted by Legio_Italica View Post
    As the postmaster general mentioned in his press conference following the suspension of Saturday delivery, "if the Post Office had anywhere near the volume of mail we had thirty years ago, our financial dilemma would not exist...... In an age when people can bank online for free, I mean, you can't beat free."
    Irrelevant to the point I was making.

    Quote Originally Posted by Legio_Italica View Post
    The Post Office offers products; many of which are now conducted online, as he said, and the rest of which are offered more reliably and frequently in the private sector. When you order something online, do you send it via UPS or FedEx, or USPS? If you're anything like me and just about everyone I've talked to personally, you avoid USPS at nearly every opportunity.
    This is silly the standard is simply which ever is cheapest. The cheapest can vary between any of those three at times. For example fairly recently since the post office recently offered standardized weight requirements and only cares about volume of goods USPS has been cheaper than UPS. This has forced UPS to lower it's prices, UPS btw is a company doing very well all things considered. Their small hit to profits was a tiny fraction of what they could've 'survived'. This is what the post office accomplishes. Delivering packages is an over a 100 billion dollar business. Paying 16 billion to prevent that from being a 200 billion dollar business is something I'm more than willing to do. This is why your economic theory falls flat, you forget that spending money in one way can prevent a much larger cost in another. This is the driving force of modern economic theory and it is the primary reason the nordic system works.

    Quote Originally Posted by Legio_Italica View Post
    Granted, when the nation was starting out - 250 years ago - we didn't have the infrastructure to facilitate private communication, and the Post Office was an invaluable resource. Now, the private sector does a much better job at meeting those needs, and the Post Office is a money pit. GOP-enforced pension requirements don't help the situation, but that doesn't change the fact that the USPS is antique.
    Look at the benefits the UPS offers compared to the post office. Without the post office to set the standard UPS probably wouldn't offer any of it, it certainly wouldn't need to. Unfortunately working at UPS you're paid quite a bit less and receive quite a bit fewer benefits but it would be entirely acceptable for UPS to pay their workers minimum wage with no benefits. The benefits that UPS pays for generate a demand side pull that is greater than the costs of implementation.

    Quote Originally Posted by Legio_Italica View Post
    I was throwing out general scenarios trying to find out exactly what you mean by "planned economy." As I said, mixed markets, planned economies, pluralism, what have you, exist in every modern economy. The degrees of variation are a matter of perpetual debate and adjustment.
    Thank you, now 90% of your previous post should've been erased.

    Quote Originally Posted by Legio_Italica View Post
    How so?
    Because we've already established we're not talking of purist capitalism or socialism thus your statement is that capitalism with some socialistic tendancies (both of which are being left undefined even though that should be where this debate is taking place) has produced the most winners with both socialism purely and capitalism purely failing rather spectacularly.

    Quote Originally Posted by Legio_Italica View Post
    Obviously the chicken farmer was a random example, and your partisan politics don't help things.


    Because you made the baseless statement that both parties were doing the same thing. I specified that they were not which is true.

    Quote Originally Posted by Legio_Italica View Post
    The pharmaceutical and insurance industries, for example, practically wrote the ACA.
    That's funny looking at the authors who did it the top five contributors (as far as lobbyists) are all pretty much the same. Comcast giving a large amount, news corp giving a large amount, dish and other media outlets. These tend to be the big guys as far as the dems are concerned. I'd need to see some evidence that this is the case because those fighting the bill are in fact being funded by insurance and pharmaceutical companies. I take it this is more hearsay and baseless.

    Go to www.opensecrets.org to trace the funding of any candidate in US politics.

    Quote Originally Posted by Legio_Italica View Post
    The largest industries play both sides of the table in every election. Who do you think receives all the proposed "green tech" money? Mom and pop start-ups? Your precious democrats simply prioritize different moneyed interests, not fewer ones.
    Different money interests = the needy. I didn't say fewer ones, if anything they prioritize more than the GOP does. I'd really like to hear who you think got the green start up money. Here's a list:

    https://lpo.energy.gov/?page_id=45

    Quote Originally Posted by Legio_Italica View Post
    ...Aaand an exemption from any actual effect this rhetoric may take for those who play ball. That's what I mean by "the way business is done."
    Indeed? Such as who? Baseless statements are baseless.

    Quote Originally Posted by Legio_Italica View Post
    Source? Given that the military budget, excluding the Foreign Contingency Fund, fluctuates between 500-600 billion per year, $550 billion in cuts would basically eliminate the budget.
    Reading comprehension again for the fail.

    http://www.whitehouse.gov/fact-sheet...merican-people

    Notice the statement over the next decade.

    Good game by the way, accuse me of not having a source while not sourcing or basing any of your claims. You'll find that every claim I make has a source and a primary one at that.

    Quote Originally Posted by Legio_Italica View Post
    What you're talking about is the savings from the withdrawal from Afghanistan and Iraq, which has its own budget; though I will mention its hilarious to hear about all these "10-year plans" from Congress when the national debt will exceed GDP by 2016.
    This is before macroeconomic effects or policy is taken into account. This chart is totaling only the costs associated with programs. None of the legislation involved with paying for said programs. I can't find any redeeming reasons you'd utilize this website when the charts can be altered to say literally anything you want them to.

    Quote Originally Posted by Legio_Italica View Post
    Currently, plans from both parties cut military spending in the short term while spreading the customary increase over future years. The "half trillion" in cuts you mention is taking place regardless of party due to the scheduled withdrawal from Iraq and Afghanistan. That's what the Foreign Contingency Fund is. The base budget would continue to increase like it always does.
    You said spending on the military. The spending on the military is decreasing. Let's just go directly to what the administration is saying:

    http://money.cnn.com/2012/10/23/news...icy/index.html

    The Budget Control Act is the primary act concerned with saving money. The savings are in addition to those from the afghanistan/iraq war. It does constitute a cut by the technical definition. You're correct both parties voted for it (although there was a lot of resistance from the GOP) the gop merely said it was going to fight it and didn't. The GOP is great at saying one thing and doing another I suppose. Regardless I wouldn't credit their party platform for it when they said they wouldn't and did anyways.

    Quote Originally Posted by Legio_Italica View Post
    Of course; huge cuts. But those kinds of necessary cuts mean decreasing our military presence in the world. This apparently is impossible under your conditions since......
    .....all that costs an ever-greater amount of money.
    Another strawman *sigh*. I didn't say what type of cuts would be necessary. Decreasing our military presence in the world is a good thing, eliminating it is stupid. Tell me when you're ready to stop introducing strawmen and fallacies.

    Quote Originally Posted by Legio_Italica View Post
    I mean, for example, assisting the British in deposing Mosaddegh in the interests of BP and installing a brutal dictator that directly led to the rise of nuke-waving Islamofascists thirty years later - to name one classic example. Or take a look at Latin American history for some more examples of the glories of American interventionalism.
    Or to prevent chinese aggressions in nearby territorial waters, or to help maintain global peace and order, to protect humanitarian rights and to prevent imperialistic aggressions. Is there anything opinion-wise about you that isn't one extreme or another? You're aware of a middle ground right? I really hope you are. Although not one of these arguments has applied it.

    Quote Originally Posted by Legio_Italica View Post
    Mother Jones isn't exactly a source worth mentioning. Here's what the CBO said
    Haha, what's wrong you don't like the secondary sources?

    Spoiler Alert, click show to read: 
    In its analysis of the President’s proposals excluding any macroeconomic effects, which was issued on March 16, CBO concluded that the federal budget deficit would equal $1.3 trillion (or 8.1 percent of gross domestic product, GDP) in fiscal year 2012 and would decline to about $1.0 trillion (or 6.1 percent of GDP) in 2013. The deficit would decline further relative to GDP in subsequent years, reaching 2.5 percent by 2017, but then increase again, reaching 3.0 percent of GDP in 2022.

    The projected deficits under the President’s proposals would exceed those in CBO’s baseline—a benchmark showing the outcome if current laws generally remained unchanged—by 0.5 percent of GDP ($82 billion) in 2012, by 2.2 percent of GDP ($365 billion) in 2013, and by between 1.4 percent and 1.9 percent of GDP in each year from 2014 through 2022. In all, between 2013 and 2022, deficits would total $6.4 trillion (or 3.2 percent of total GDP projected for that period), $3.5 trillion more than the cumulative deficit in CBO’s baseline.


    Correct. This is discounting all macroeconomic effects and change in law. Which you don't believe in so I suppose for you this is your basis. Now if I'm understanding you right, what we need to do is cut 1-2% of our spending over the next decade. Which is exactly the proposals being worked over. If you finished reading the budget proposal the true results of the policy changes are likely to be a very slight increase in the deficit over 10 years (assuming very small macroeconomic effects, i.e. very conservative) or a decrease in the deficit over 10 years given a liberal estimate. The distribution there is somewhere between an increase of .6% and -2.0% to the deficit which is to say, if the wave form of what is likely to happen shows us that the most likely case is that the deficit is reduced, with a small probability to massively reduce it or to slightly increase it. Or that's to say, the democratic administration took a huge loss to GDP and increase to the deficit that we would've had and made it into something which is very likely to be positive for us all.

    Great source btw.

    Quote Originally Posted by Legio_Italica View Post
    Thus, the Dems want to cut spending in the short term and continue the onward and upward trend of debt in the long term, just like the GOP.
    This is a gross oversimplification, neither administration is likely to be able to reduce the debt much in the long term. The fact that the democratic proposals can do up to 2.0% is very impressive economically speaking. Considering the republican platform's proposals are so different on which policies they would implement I highly doubt the GOP's proposals would accomplish anything good or even better than this. Alas we'd need the CBO to do another report with the GOP's platform modeled. They might have such and I would honestly be curious about such a thing.

    Quote Originally Posted by Legio_Italica View Post
    Ah that wonderful political fairy tale of the needy downtrodden struggling against the "evil white corporations." If you fail to see that your precious Democrats belong to the same interests and share the same donors every election cycle as the GOP, I don't think I can say anything that might temper your rhetoric here.
    No you cannot change my views on the two parties short of showing me a CBO report which validates that the GOP platform would produce anything close to the gains with the dem's policy, that's beyond the scope of this debate mostly. I'm very well established with who has said what and who is funded by who, so your vague allusions to corruption within the democratic party are rather pointless. I'm aware that neither party is perfect, i just consider the GOP to have fallen much farther from the standard than the dems have.

    Quote Originally Posted by Legio_Italica View Post
    After a few go-rounds here, I think you've confirmed my suspicions that your positions more closely fit the realm of social democracy, not socialism. If you want to call your ideas "socialism," that's fine, but then realize that this skews your ideas about capitalism.
    I've already stated that we shouldn't be using these terms. I'm not sure how to missed that.

    Quote Originally Posted by Legio_Italica View Post
    As I've said, we're all capitalists. The nature of the pluralist system we currently live in therefore shifts the debate to the degrees to which socialistic ideas should regulate and tax our capitalism. As I said early on, that is a perpetual debate that the "experts" are still bickering about, so I don't really want to jump in.
    Then this debate was entirely pointless, why did you attempt it?

    Quote Originally Posted by Legio_Italica View Post
    You say more, I say less, and ultimately there is no "magic formula" that will prove either of us right or wrong.
    Yes it would require you to go through individual policies which I'm more than willing to do and trace their effects, you don't believe any information of value can be had in this approach however and fundamentally are illsuited to an economics debate.

    Quote Originally Posted by Legio_Italica View Post
    The only complicity either of us would have in this process is at the ballot box, and as I've said, even that seems to have less and less relevance as time goes on. As for those "running the show," I just hope they have some idea of what the hell they're doing, and that it doesn't involve a future equivalent of 1984. In other words, I hope to god I won't be sitting in a gutter or a People's Worker Battalion someday saying, "I told you so."
    Alas, this debate seems to have run it's course. You're unwilling to argue the actual substance of the debate and have maintained a large distance from it focusing on semantic distinctions which neither of us are truly purist on and thus neither of us have the ability to say we're definitively 'correct' objectively with. Thus the definitions are utterly pointless but this seems to be the only debate you're actually interested in. In which case you should forfeit the debate as unwilling to continue it further.
    Last edited by Elfdude; February 12, 2013 at 06:06 PM.

  10. #10

    Default Re: CHALLENGE THREAD -- Issue a challenge here

    Quote Originally Posted by elfdude View Post
    You can probably save your self a lot of time reading this if you just understand you've got to stop strawmanning my arguments stop making baseless statements and arbitrary rejections of concepts and begin arguing about the degree of mixed-market versus market or this debate is utterly pointless. I have dropped the terminology of socialism versus capitalism in my last post and as such most of this post of yours is entirely offtopic and irrelevant.
    It appears my attempts to branch into various tangents in an effort to find common ground has backfired horribly. Let me restate: This "debate" we seem to have stumbled into is supposed to revolve around the general degrees to which a market ought to be controlled, and by inference, in what ways. I have more or less laid out my personal prejudices, biases, and reservations going in to it in an effort to discern exactly what your starting position is, that I might take up the defensive on the start. Since apparently this isn't to your liking and you dismiss most of my assertions as conspiratorial and redundant (and indeed, some of them are), I will attempt to form a cohesive position and begin an actual debate. The thing is, this is all quite easy for you, as you already apparently have a real-world model, the "Nordic Model," that you can point to as ideal. I must speak in terms of hopelessly abstract policy trend ideas. Yours is convenient, also, because the model is an unprecedentedly successful one. My reservations on this idea center on the precaution that the "Nordic model" seems exactly that, a Nordic one. I have doubts that its pillars could be universally applicable anywhere in the world, and would point to a couple basic "impressions" I have about the system that seem to be echoed in journalistic academia:

    http://www.economist.com/news/specia...d-secret-their
    From the article:
    Yet it is hard to see the Nordic model of government spreading quickly, mainly because the Nordic talent for government is sui generis. Nordic government arose from a combination of difficult geography and benign history. All the Nordic countries have small populations, which means that members of the ruling elites have to get on with each other. Their monarchs lived in relatively modest places and their barons had to strike bargains with independent-minded peasants and seafarers.
    So, yes, the Nordic model seems to work wonderfully. They have an efficient, virtually corruption-free government, and a strong private sector. As things stand, I don't see this as some kind of "breakthrough" in the "economic theory" you speak of, rather, a wonderful example of what can be achieved when a human society actually functions the way economists and political philosophers would want; almost no corruption, few systemic social problems/issues with minorities, and a social safety net and economic agenda that is actually mostly run by scientists and not politicians. The "Nords," with their social unity and technocratic set-up, have found what works for them. Great. Would the same system work just about anywhere else? I wonder, but I think not. You certainly haven't brought much to support the applications of
    The nordic system again utilizes the system of economy I'm describing to you.
    So far, you've mentioned
    To which my response is....And? These are foundations of the current world economy, not unique theories that could be called some kind of "idea."

    Your Nordic article, from what I've read so far, seems to concur with my impression of it; ie a fairly liberal private sector that has financed their comparatively large social safety net, and a small, ethnically and culturally unified population that has facilitated uncommonly high degrees of socially symbiotic and coordinated economic behaviors. Again, this unprecedented level of cultural homogeneity, referenced on page 39 of the report, is given primary responsibility for the extremely convenient set of precedents that has made the Nordic system so successful. In fact, the report mentions in that same section that serious problems are evolving due to a systemic inability to effectively assimilate immigrants thus far. This is why it cannot be taken as a universal model, only an example from which we can take limited lessons that are not necessarily ideologically unique to the model itself; ex. widening the tax pool and lowering taxes.

    Spoiler Alert, click show to read: 
    The claim that the Nordics are complying with and exploiting
    market forces rather than suppressing them is supported by the
    data reported in figure 2.1
    , which shows the OECD’s index of the
    strictness of employment protection legislation (EPL, vertical axis)
    and its index of the strictness of product market regulation
    Source: OECD Economic Surveys: Italy-OECD (2007).

    While broadly based, the indices reported in figure 2.1 arguably do not suffice to characterize the attitude of member states
    to the market mechanism. However, there is a wealth of other
    information pointing in the same direction. The Nordic countries
    rank very high in terms of the index for “Ease of Doing Business”
    (EDB) produced by the World Bank Group. Denmark, Sweden
    and Finland are all among the top 6 performers in the “Global
    Competitiveness Index”
    published by the World Economic Forum.
    The Nordic countries have a good track record with regard to
    transposition of and compliance with Community legislation for
    the internal market. In the area of banking, Denmark and Finland
    nowadays have low regulatory barriers to competition and all the
    Nordic countries have relatively light rules for prudential supervision (de Serres et al. (2006)). Turning to a wider perspective, there
    is an extensive “economic freedom index” compiled by the Fraser
    Institute, and a globalization index developed by a Swiss institute
    (the “Konjunkturforschungsstelle” in Zurich). Both of these indices
    give high ranks to the Nordic countries, and the ranking between
    groups of countries is roughly the same as in figure 2.1. According
    to Bergh (2006), the Nordic countries have in the past decades
    improved their ranking significantly according to both indices. It
    is also interesting to note that Denmark, Sweden and Finland are
    among the six top nations in the world (with Singapore, Hong
    Kong and Norway) in the subindex of the EDB measuring external
    openness, that is, the “trading across borders”.

    To repeat, the argument of this section is the following: in
    the 1980s and 1990s the Nordic countries accepted openness to
    financial capital and factor movements as an extension of their
    long-standing commitment to free trade in the new circumstances
    created by the IT revolution and globalization. After the process
    had started, the arguments for further liberalization turned out
    to be strong and self-reinforcing. The perception of the Nordic
    countries as being heavily regulated has no obvious justification,
    certainly not if the EU15 is used as the reference.
    In fact, the Nordics appear to be among the frontrunners in
    liberalization
    . This has facilitated a successful transformation of
    their economies in favour of knowledge-intensive activities, and
    the Nordic countries have thereby been successful in adapting
    to the on-going changes in the global allocation of labour. The
    process, which has been remarkably swift notably in Finland, has
    been supported by the existence of high-quality education for large
    shares of young age cohorts and government support for research
    and innovation.


    ....Which is exactly a part of the center of what could become my argument: the importance of human capital in an economy. Its not so much about the depth of economic regulation that makes a difference in the end, but rather, what an economy offers to the markets in terms of the skills and assets its labor force has, in the context of labor as a commodity. On a general point, The Nordics have apparently achieved what ideologues in the US never will. Yes, they may have high unionization rates and large social safety nets, but they don't let that get in the way of the nuts and bolts of doing business. As I have stressed at a couple points in the previous posts, the optimal goal ought to be to react, comply, and exploit the natural behaviors of the Market mechanism rather than to try and control it. That was what I meant when I spoke of "economy" as a state of nature, not a public institution. The abstract of my position could be stated thusly:

    Without any real knowledge of the latest developments in economic theory, it seems the Market has been accepted as the most efficient economic engine yet available to human civilization. Since most relevant figures in economic academia have agreed that capitalism and the capitalist means of production should remain at the foundation of the world economy, the trick then lies in how much to regulate capitalism and in what ways. This is much easier said than done, of course. The foundations of my "economic model" would be difficult to define other than in the hopelessly broad ways which I've already begun to mention it, and even harder to apply in the place I'm most familiar with, the US, because the social issues currently at play would be equally problematic.

    Bottom line as far as a bare minimum to start with; you seem to want me to attack the Nordic model. Why should I? I agree with virtually all its foundational premises, I just don't think them universally applicable if one expects a similar degree of success; again because of the uniqueness of Nordic geopolitics and social composition. You want to, say, raise taxes? Fine. In the US, everyone's going to need to pay more taxes, the government is going to need to slash spending in every major sector (Medicare, Social Security, military), and the military is going to need to take a vastly smaller role on the world stage (for example, closing Cold War bases in Western Europe is a good start). Also, any entitlements the US does keep and/or add need to be reevaluated on an actual cost-benefit level instead of ideology. Is healthcare expensive. Obviously. Would national healthcare save both the public and private sectors money in the long run? Maybe. In conjunction with raising taxes and the tremendous size of the US economy, I don't see why a public health system directly administered by a federal agency is entirely out of the question, provided it is run competently. I would vastly prefer it to simply guaranteeing the insurance monopolies 320 million customers who are backed by federal funds.

    This gets into the issue of corruption. The larger the public sector, the more imperative it is to maintain efficiency and a corruption-free environment. The US entitlement system doesn't exactly have a good track record in that regard, and I don't trust it going forward. The system is going to need massive overhauls before we even begin to talk about fantasies of public healthcare.

    As far as the private sector regulation, the higher tax rates would necessitate the deregulation of many of America's strongest economic assets like energy, technology, and (to a much lesser extent these days) industry. Because I am typically an advocate of regulatory uniformity on principle, I'm wary of this aspect and would hope a careful approach would avoid conflict of interests and a net loss by one industry or another.

    With regard to EPA regulations, I would limit the agency's scope of authority to the protection of freshwater sources. I would close the Energy Dept, HUD, and possibly, the Dept of Education, excepting the latter if it can be shown definitively that federal education standards are having any positive effect relative to turning executive education authority over to the states.

    So, in general, my "system" means playing to America's strengths geographically and economically, "trust busting" where conflicts of interest exist (ex. separating commercial and investment banking), and "fixing" education to improve human capital in the US, "investing" in energy by, for example, opening federal lands of exploration and exploitation (hopefully this "investment" can be facilitated through technocratically sound policy rather than the further public subsidies and the like). Realistically analyze the costs-benefits of collective risk sharing like public healthcare, and broadening the tax base to minimize or hopefully eliminate the necessity of genuinely higher taxes across the board. Take a second look at the revenue lost to certain tax credits (Earned Income Tax Credit, Child Tax Credit....are credits like these really all that beneficial economically? Maybe, but if not, eliminate them). Tightening border security with a militarily enforced perimeter, financed and manned by the closing of bases mentioned earlier, to stem the billions in illegal drug traffic. This also means cost-benefit analysis of how much drug legalization, and of which drugs, in determining how much can be saved by reducing drug crime and illegal traffic to cut back on enforcement............

    ......etc etc all those rosy, generic, uncontestable ideas that would fit nicely in any campaign speech. So what do we have here....."collective risk sharing," higher taxes, huge military and entitlement cuts, "technocracy"...... will any of this every happen in the US? Hell no.

    I guess it comes to this: before all this hullabaloo started, remember, we were feeling out whether or not a debate was even possible. Based on my understanding of socialism meant that when you said "socialism," that implied a desire for fundamental economic change at a systemic level. So my inial queries revolved around the basic question of "Why do we need drastic change? The current world economic system works fine." Given that we're merely conflicted over minor particulars, I don't see much to argue about. You say the Nordic system is "ideal?" Well, perhaps my shotgun approach to this has robbed you of a chance to synthesize a position, but, I haven't seen you discuss economic issues unique to the Nordic system at all, much less how and if you think they can be applied elsewhere like the US. Who knows, I just might agree with you. The initial signals I was getting still prompt me to take fundamental issue with what seems a cornerstone of your premise, and correct me if I'm misreading yet again. You seem to think that an economy exists as a public institution to be controlled by "science" for the "public good." I again take issue with that, pointing to the very system you champion. A Market mechanism economy has basic traits that must be reacted to as a force of "nature," not controlled. Moreover, Economics is a social science. The specifics of its theories are not a natural science, because the study of human behavior is not a natural science. We may observe trends and human civilization, but these are ever-changing, and constants take centuries to state definitively. Hence, I'm not sure what you mean by "planning an economy with economic theory," as though the latter contains any level of certainty or uniformity beyond the acceptance of capitalism itself as a foundation.
    You can be skeptical all you wish but that does not validate your rejection of data and theory. The data and the theory exist because it is literally the best we have, your proposal to reject it forgets that without it we are set back massively. Something you don't seem to account for in the least. You're using entirely unfounded idealism to view this problem. For example, I can be skeptical that the laws of science do not perfectly describe the universe, however it would be utterly ignorant of me to dismiss or disregard them because while not perfect they are accurate within a limit to truth. This is the same of economic theory, at least that supported by data and empirical observation anyways.
    What is all this data and theory that is so obvious and universal, exactly? Again, I'm really sorry if I missed your links, but I reposted all of them I could find above, and they provided only the most general and universal of positions.
    This is under the assumption that humans make individualized choices. They do not. In fact science defies this and says most people act the same in most instances with a few exceptions. The exceptions can then be accounted for further allowing the accuracy of the theory to tighten up further. You're view of the economy is hopelessly tied to the microscopic economic events which upon the macroscopic scale do occur in patterns. Yes things can upset the balance. However we did not reject clocks three hundred years ago because after a year they could be a week off or more. We continued to wind them up and re-calibrate them to the accurate position. Without the ability to measure that time scale even inaccurately we could never hope to do so accurately. Your rejection of the theory is fundamentally wrong. There's room to argue the degree, there's no room to debate the concept out of existence however.
    What is "the" theory I'm rejecting. Am I rejecting any possibility of successful monetarist policies, as evidenced by the repeated tendency of our own example, the Fed, to fail in its efforts to control economic downturn, and succeed primarily in the perpetuation of the current, increasingly top-heavy systems after every successive cycle:

    http://articles.baltimoresun.com/201...ce-corporation
    So by your logic, a security camera is best used as a device we watch helplessly as robbers steal from us rather than a device to alert the policy in case something does occur and to provide evidence when something goes wrong? That is utterly silly. The ability of the device to describe these variables is the very reason that it's use is necessitated.
    Not sure what you're getting at here, but I was referring to a basic approach to economics, not regulatory philosophy. Ironically, my words here echo those the Nordic article, ie the goal of economic study and policy ought to react to Market mechanism factors, not try to change the nature in which the mechanism naturally functions.
    Why? To return to my security camera metaphor it is unethical for the monitoring body not to attempt to do something when the camera allows them to see a crime they otherwise wouldn't be able to. You're attempt to foist the unethical position upon these manipulations is entirely unfounded and rather fallacious.
    Any act of force is unethical, no? The pragmatism of governance necessitates otherwise. And, the particular manipulations the Fed is in charge of would be akin to accepting the directives of a private security company after being told that your house is being broken into too often and you need to accept certain lifestyle changes to avoid that trend in the future. So you take their advice and follow through. Funny thing is, your house continues to be broken into just as often, and now, the thieves are taking more and more stuff. The security firm reimburses you for your losses, but you can't help but notice that the notes they reimburse you with are becoming less and less valuable, and it is becoming more and more difficult for you to replace your stolen belongings as a result. Moreover, you can't help but notice that after every break in, the security firm's investors buy up more and more houses and bring them under the same "security system."
    You call this conspiracy, so I guess we can drop it since the nuances of central banking are not inherently tied to market regulation.
    Which skips over the fact that the margin of errors inherent with these methods are still better than the margin of error inherent in market self regulation. If you're aruging on the side of margin of error you're holding the wrong position my friend.
    What? Who's talking about "market self-regulation?" Just because I don't want the money in my pocket and the economy I live and work in controlled by a private mega-bank whose sole beneficiary seems to be the Money Power doesn't mean I suddenly want to dissolve the federal government. Maybe the Fed is necessary. Isn't there some way we can structure the banking and capital system on something other than infinite debt and inflation, upon which we occasionally move the goalposts by raising real wages as inflation works its way through the system?
    It's like prosposing that H2+O2 -> Black hole that swallows up earth so let's use chemical theory to observe chemistry but not ever hope to manipulate it.
    No, its more like, "Hey, lets be a little more specific about what we should try to manipulate and what we can leave alone, instead of trying to centralize the entire system on a single formula." But, hell, I'm just an unpaid intern. Maybe the czars of the State Science Institute have a method to the madness. Judging by the explosions and acidic gases billowing out of the room, I'd say they ed up somewhere, but again, I'm no expert.
    The crux of the argument here is that economic theory shows us that monetarist policies are dangerous and hazardous and can lead to some pretty undesirable effects. Most governments have misused them at one point or another in their history. However monetarist policies have also been used by most governments almost continuously throughout their proposals. The difference isn't between governments rejecting or accepting them but in the theory that supports their use. For a long time the theory that supported it however was based off of negating humans entirely or in negating money entirely science has only recently been used to evaluate economics and when applied it has had success across the board.
    You seem to think there is some theory or some science that will greatly improve the social science of economics. Yes, reams and reams of data synthesized into a nice curve with derivatives might tell us alot of useful things if we have our data and parameters right. Does that mean we have the math necessary to control the Market mechanism? I would say hell no, especially not by these central formula concepts, where we have the classic "Maestro" attitude of, "Well boys, if we raise the interest rate .00002%, we could save the car industry. If we raise it .000021%, we risk crashing the economy. So lets hope .000001% margin of error is enough." Don't you realize the power the Fed has, and how even the smallest adjustments to something basic can have profound effects on the economy? Doesn't that seem just a little too centralized to you? It is possible to have banking regulation without central banks, you know.
    Define more of the same policies. I quite clearly said that montarist policies alones are ineffective. I understand there's a margin of error, what I don't think you understand is the degree to which that margin is.
    When I criticize the systemic pitfalls of monetarist policy, you seem to counter that the only problem is that the policies weren't thorough enough, or that the math was somehow wrong. My question is why the hell we are relying on a handful of math formulas to make or break the economy.
    This is not a fundamental difference between us because I would agree with it at least partially. What this has to do with everything else you've said I'm not sure because it's not directly tied to any of it. I would state that forcing the cartels to provide better carrots however is fundamental to getting the ball rolling, if they're already providing rotten carrots simply breaking them up is not enough. Whats to stop them from simply competing at quality of rotten carrots, the ability to sell rotten carrots should not even be on the table.
    Mandating minimum carrot quality is fine. In the example scenario, that piece of legislation should come after the one that breaks up the carrot cartels and breaks up the territorial market barriers they set up for themselves. Priorities is the main difference, I'd say
    Which is still skipping over the fact it can be curbed with social policy and regulation. If the government does not set the standard for example then corporations are free to set the 'level' playing field at $100 a bottle of water and compete at that level. Yes competition will occur but someone still needs to set the bar. Adding players to the game without deciding on what the rules are is rather silly, who knows which game they'll end up playing.
    Who ever said anything about social policy and regulation being out of the question? If a conflict of interest exists, "regulate" it away. Break the monopolies, set quality standards, blah blah blah. If you want to get into the realm of profit caps, price fixes and quotas, however, not only is that Orwellian, but at least borderline counter-productive as the band aids are probably piling up without reference to the source of the wound.
    This is a horribly flawed ideology and has been proven wrong for more than a century but since it seems it's such a hard lesson to learn allow me to explain it to you. Who do you suppose the consumers will shop at instead? Which stores do you suppose offer something similar to walmart? Target? Fred Meyers? Stores which utilize the same practices walmart does? Admittedly they don't use unions but then again walmart is pennies cheaper and far more widespread. Now this also requires the practices of walmart to be common knowledge and requires a consumer to have a fair business education to even begin to understand before they can finally disagree. Do people like this exist that disagree? Yes. Does the general population listen to them? Sometimes.
    Again, this gets into political and social issues. Take the Nordic model for example. In the article, freedom of information acts are mentioned as essential to consumer education. Do you want the government to include some kind of warning label on its packages? Again, the advantage of the Nordic model in this context is that the small and socially homogeneous population actually gives a and utilizes the information provided to them. For 's sake, we passed the Patriot Act on ourselves. Do you really think the American public gives a damn where their toys come from? You say no. I agree. So what should the government do? Protect the citizenry from themselves? It's not like the any product information about Walmart isn't readily available. Is Walmart breaking the law? How would you have the government intervene in these perceived business ethics violations?[/quote]
    I don't think you realize just how markets work. The demographics targeted by walmart are not the demographics concerned with ethics, the problem is that hurts us all. You who values competition, who will compete with walmart? Please explain that to me because the concept of it is rather funny to me.
    How exactly is Walmart "hurting us all?" Is there some manner of market stagnation and inefficiency just waiting for new and innovative companies to fill the void? If so, point it out, and I'll be glad to give my interpretation of how the government could fix that problem. Otherwise, it seems like you just don't like Walmart.
    Clearly you're not familiar with what a demand side solution is. Walmart can never 'use' a demand side solution, the concept of a supplier by definition taking advantage of a solution designed to create demand is hilarious. Now they can aritifically alter their supplies which can extermalize their cost to society. That would be called corruption and is exactly what you're describing. Not a 'demand' side solution.
    I never said Walmart could "use" demand side solutions (not sure where you got that). I said that it seems to me the only current justification the government has for taking punitive action against Walmart is if the latter is breaking the law. If all you mean by "demand-side solutions" is strengthening the social safety net, I have absolutely no idea why you continue to reference such an externality in such a wide range of contexts. Simply redistributing Walmart's wealth doesn't have much to do with their ethical situation.
    Your argument is nonwithstanding to the simple fact that we don't know everything but this does not itself predicate inaction. Your logic is the logic of a pracrastinator not of economist. Because you cannot understand it and fear no one else does you want us to all hide under our desks? That simply does not make sense. Manipulating interest rates is not universally destructive. I'm not even sure where you have come up with such nonsense but it is purely nonsense.
    This has nothing to do with "procrastination" or "rejecting science." Modern economic theory has yet to produce magic formulas that solve all the world's problems. As I've said, the "science" of modern economics primarily revolves around developing formulas to explain and observe trends we see in the world today, and how we might better conform to Market and social factors to adapt to these phenomena. You act as if economics developed mathematical theorems decades ago to "solve" systemic problems, and are simply being ignored. That may be true in extreme political situations, but given that these guys have all been monumentally influential in helping modern systems to observe and understand trends therein, I'd say the point is, as you say, "moot." Economics can tell us alot about the systems in which we live. That doesn't mean there is some kind of uniform code just waiting to be implemented. Economics, again, is a social science. Most of the people on that list dedicated their careers to politics and/or social justice. Their job is to interpret, not create.
    I do not see this statement as true and can find no evidence of it either.
    TARP is a great example of how the system works. I believe I linked earlier.
    There were examples from the japanese economy, the english economy our own economy and several more. Search successful quantitative easing in google. You'll be flabbergasted at how hallow your theory is. Not true, even theoretically the maximum allowance of this is to theoretically have twice as much capital in the system further it does not legitimately make twice as much capital but allows capital to flow as though there was twice as much in play. This is a crucial distinction. It's similar to our own body and the gating mechanisms for our blood. We do not have enough blood to run our bodily processes simultaneously but by diverting flows an inferior quantity of blood acts as though we had three times as much constantly flowing. You seem to understand this and there's really no practical way for it to come bite us in the ass if we don't get greedy. The issue comes about when people cease spending this capital there's a variety of ways this flow can be choked off and that's where demand side solutions come into play.
    http://www.frbsf.org/publications/ec...el2006-28.html

    Article on the Japanese QE. While the real effects are still unknown, the massive inflation of liquid capital definitely propped up weaker sectors artificially, which is exactly what I was talking about. QE is just another band-aid that grants longevity to systemic problems in an effort to postpone the negative effects, as do bailouts, financial rescue programs, and the like. Moreover, the problem of inflationary effects in the long term are unknowable and possibly even more harmful.

    http://www.telegraph.co.uk/finance/b...st-resort.html

    The fact is that QE is simply the deliberate act of "creating liquid capital." Central banks no longer need to print money, they simply declare their reserves to be of a desired size; ex. the central bank, formerly having 700 billion in reserves, will now declare it has 1 trillion or 2 trillion or whatever, and is ready to purchase assets. So the central bank begins buying up private banking assets with this newly created money under the assumption that banks won't like having all this cash sitting around and will then move to lend it out cheaply to balance their accounts. This also assumes more people will borrow money just because the interest rate is cheaper. The data on this latest experiment by the Fed, indeed a measure of "last resort," is forthcoming, but it hasn't worked so far, which is why Bernanke announced the plan for Unlimited QE.

    http://www.federalreserve.gov/moneta...reservereq.htm

    Here is the current reserve requirements. The 10% requirement on transactions over 80 million is basically meaningless at that level, since large banks who make those kinds of large transactions will always have enough outstanding assets to use as reserves. "Reserves" used to be the amount of gold or commodity a bank had in the safe, hence the system was always based partially on real value. This was a "receipt" money system. Under the fiat system, a Fed reserve requirement of 10% just means that 10% of a new loan value must be backed by an equal value of "assets," meaning existing loans. So, if I have $100 in existing loans, that now becomes a reserve that will allow me to create $900 in new loans; that $900 literally existing only as an arbitrary inflation of the value of the original $100. Even the original $100 is only backed by the same system. So, the system works great as long as the interest rates keep rolling in and people don't pay their debts (this would cancel a reserve, because the "asset" of the loan would be paid off and thus cease to exist). Ideally, no one will ever pay their debts, and just keep paying interest forever. That way, the system would sustain infinite debt and inflation. When people don't borrow money, the game of musical chairs gets tricky. That's why the Fed has begun pouring money into the jukebox trying to keep the music playing and convince people to keep borrowing. This is basic fractional reserve banking, and I don't think you ought to be treating very risky and unproven techniques like QE as some kind of "no brainer." It is a part of a system of infinite debt and inflation, and the response to any problems in the system, as the Fed has demonstrated, is to try and force the creation of more debt and inflation. Where will it end? One can only force so much leverage before the crowbar snaps.

    Anyway, QE is not inherently fundamental to "mixed market" economics. Perhaps we can drop it and leave you to your bizarre faith. As far as demand side solutions you keep bringing up, I don't see how redistributing wealth is going to convince people to borrow money. If anything, the more money I have, the less incentive I will have to borrow. Perhaps I misunderstand you?
    Not sure what the nixon administration policy has to do with what we're talking about.
    Just an example of the "impartial" Fed abusing its power. Burns admitted in the linked book that he slashed interest and reserve rates in the early 70s to create a false boom, rejuvenate the sluggish economy, and greatly aid Nixon's reelection chances. Not only was this action corrupt, but was in many ways responsible for the economic downturn of the Carter years. Yet another example of how even the power of a single economic planner can have disastrous results.
    I call bull. Power does not corrupt it's people who corrupt and corruption only occurs when we create a system which incentivises it.
    I think you can agree that the greater power a person has, the greater responsibility and strength of character that person must have to wield said power ethically. Apparently, you would place faith in the ethics of a few individuals, "experts," to indirectly or directly control vital levers within the economy.
    Which is what we have.
    Given the increasing plutocracy, Executive Branch power, and Caesarian populism of American if not all of modern politics, I think even you would agree that our "checks and balances" have been seriously eroded. I would begin by repealing the 17th amendment and returning Senate elections to the State legislatures, for example.
    This is an unfounded statement.
    Really? You don't think the fact that a simple arbitrary change of interest rates by a Board of seven people can make or break the entire economy is evidence of a dangerous level of economic centralization?
    I find it funny to think of an idea of an objective commodity value. The reason objective commodity values were dropped as a standard of economy is that there's no such thing. Gold has the value humanity says it does. The same thing applies to currency. It's not an arbitrary value but it certainly is subjective.
    Obviously. Who do you think determines value. Supply and demand is what the Market is all about. "objective" value means a value that is determined by a market consensus, and gold has held its value better than any other commodity in history. I'm not demanding a return to the gold standard. Obviously the world economy has moved far beyond such constraints. I'm simply saying that the Fed shouldn't have the power to simply create money by "editing" its balance sheets with no oversight whatsoever. Again, however, more oversight means more political interaction between the Bank and its regulators. That's why I said there is really no easy solution to this mess.
    But no one can arbitrarily dictate this, even the federal government if it were to unbalance things as far as it could could only do so much to influence the economy. You're issue is in seeing these manipulations as real manipulations, as they would be on a microeconomic scale. On the macroeconomic scale monetarist policies (when applied appropriately) lead to positive effects. This has been demonstrated throughout history and it is again something you willfully avoid.
    Which part of "history" has demonstrated such positive results? As I said, the game of musical chairs known as fractional reserve banking usually works out pretty well if the system is well regulated. Sure, there's the false boom followed by the recession every four or five years, but generally, as long as people keep borrowing, and new loans continue to flow, everything generally works out. I would argue that the system itself is unsustainable, and we will see if I am right if this latest QE trick works out. If not, there's always the option of reforming the entire currency. The largest capital holders will be taken care of as always, and the rest of us will take the shaft. Should be fine.
    Further you seem to think that the federal reserve's goal is to reduce the reserve limits to 0, inter trading fees to 0 and wants to spend as much money as it can for nothing. This has absolutely nothing to do with the reality of what is happening and is a rather ignorant view of all things economics. Your argument is substanceless because you don't understand economics but are afraid of big government. You're couching this fear in economics for whatever reason and I'm calling bull on it.
    No. Originally I said that the entire structure of the world economy is inherently capitalist and I didn't really believe you were a socialist. This was in response to your original prompt that you would argue the socialist perspective. Given that you've basically demonstrated that you are a capitalist (which basically means a mainstream view of economics given the lengthy descriptions I've given), we've now stumbled into this quasi-debate about degrees of Market planning that I said at the outset I'd rather not have. Now that we're here, you've yet to go into detail about any of the applications or ideas of your ideal "Nordic model," aside from concepts that exist to some degree in any existing modern economy. Again, perhaps this is my fault for lingering over definitions...... As for your bizarrely staunch support of QE, a policy that opened to international criticism and mixed reactions in the business world even before Bernanke announced the unlimited plan, I will never understand why you continue to mock my primarily standard criticisms of the practice as "conspiratorial" when said practice is fairly new and decidedly unproven. Moreover, QE is a tangent to the issue at hand, and certainly not related to your "ideal model" and "demand side solutions" you keep talking about. Again, if I'm the one pressing this tangent issue, I apologize, however, I honestly have yet to see a summary of details on your support for the Nordic model, or your proposed use and context of the "demand-side solutions" you keep talking about.
    Bailout and rescue packages are not supply side solutions. They are demand-side solutions. They can be transformed in supply side solutions as many tarp programs were ceased upon by corporate leaders to benefit the supply rather than the demand. However the bailouts post bush era had tigher oversight and the QE utilized has much less issue with corporate corruption messing it up.
    All the more reason why I can't see what you're getting at with this "if we would just use more demand-side solutions, everything would be cool" rhetoric. Social safety nets, financial rescues, bailouts, monetarist policies.... all these have been in place and used frequently for the last 80 years in the US alone. Not sure why you are stressing demand-side solutions when they're pretty common.
    This is not true.
    Where does the government go for money? Tax payers? Foreign governments? As a baseline, yeah, sure. How does the government continue to finance huge deficits and massive spending programs for decades with no intention of slowing or reversing the trend? The Fed steps in and buys treasury bonds. What if the government wants more money? The Fed buys more treasury bonds. What would the government do without the Fed? Go bankrupt in about half a second, that's what. Apparently this isn't true, and the government has not run at a deficit for most of the last century, nor has it been able to accrue trillions in debt.
    Also not true in a practical sense. If you want to destroy your economy sure. If you believe that is the federal reserve's goal then they could've accomplished this much more easily. You don't even have a proper understanding of the policies to see that they're holding a rather conservative stance on this and for that reason we can't begin to have a rational debate on the subject because it's a subject you clearly don't understand.
    It has nothing to do with the Fed's "goal." Congress could technically borrow as much as it wanted from the Fed because the Fed could technically purchase as many treasury bonds as necessary. Obviously, the rest of the world would get a little too antsy and begin shedding US investments at some point, but you get the picture. The US government never had near the borrowing privileges that it would once the Fed came along, because it could only turn to private or international bond sales/loans. The Fed is a bond purchaser with potentially unlimited money. Just because "the probably would never do that (create money/liquid capital indefinitely)" doesn't mean its impossible, certainly in the midst of QE.
    So wait, there is a cost to it? Then they can't do it infinitely. 90% of what you just said is invalid thank you to this little statement.
    Only 90%? Gee thanks. Actually, the US dollar is the current world currency and the largest reserve currency in the word. That is why stunts like QE don't actually directly inflate the dollars in our pockets. The US economy is so massive that the Fed can play with a cool trillion dollars of newly created money without causing hyperinflation, and also because QE is a conversion of assets, not actually printing money. If the Fed simply flooded trillions into the markets, all hell would break loose. QE means banks have a load of liquid capital that now must find a borrower. Over time, of course, the effects of QE, bailouts, debt, etc add up. The reason these effects are not devastatingly harmful is because they are spread over a long period of time. $1 in 1913 is worth $23.10 today, but the markets had 100 years to adjust along the way. It will be interesting to see what happens now as the Fed's $40 billion a month in cash infusions tests the strength of the system.
    I was sure it couldn't get anymore wrong but jesus taxes are only a social and political tool? What? I mean sure you could ultimately claim that the economy is just a social and political tool but I'm assuming you mean taxes are arbitrary. If that's what you're claiming then you're very wrong and taxes are a very important part of making this whole bag of tricks functional.
    What? So now I'm saying taxes are irrelevant? Obviously, taxes are vital to the baseline fiscal functions. They just have extremely diminished fiscal importance relative to the central bank. Think about it. If forced to choose between getting rid of taxes for 2 years or getting rid of the Fed's ability to lend Congress money for two years, which do you think would be the logical option. Obviously, a two year tax moratorium means the government has to borrow more money from the Fed. A two year shut down of the Fed's treasury bond program means the government goes bankrupt overnight.
    Furthermore I don't see anyone not talking about the fiscal policy implications. Bush era tax benefits for the rich cost us a huge amount of money. Closing that gap was a good policy.
    I agree to some extent, but does that "huge amount of money" include the economic impact?
    Closing tax loopholes in corporate taxation has also generated a rather large fiscal boost for the democratic party. I don't think we're even on the same page anymore.
    Closing tax loopholes was on my "agenda" at the top. Not sure where this came from
    You're stating nothing but meaningless statement. Of course the policies can be utilized correctly that's not the issue. The issue is when to utilize them. This is a side of the debate you have not touched at all in your overdefining of capitalism beyond the scope of it's own ideology, and beyond your attempt to tear down all economic theory in favor of your purist market driven economy which I cannot even get a real definition for because of your own contradictory statements and flip flopping on policies which you think are unrelated but are rather very much related. You say one thing and you press for a policy which does the opposite and is known to do the opposite. You press for market driven economy which we know is a poor theory to describe how the economy works and has a much higher margin of error than anything I've supposed. You either understand little about economics and are trusting entirely in poor secondary resources to do your learning for you or possess a huge mountain of data that no one else in the world does.
    If capitalism is an "ideology," then it is the foundational ideology of the world economy as I've said. Just because you want to limit the definition of capitalism to some kind of 19th century classicist robber baron novelty doesn't mean its true, nor does it mean I'm "overdefining" anything. For the 87th, time, nobody's demanding some kind of laissez-faire Market. The Market is going to exist indefinitely as a condition within the existence of human civilization. The proceeding response then, is to learn how to engineer policies and structures that avoid the drawbacks ("demand-side solutions", regulations, etc) and play to the strengths of the Market mechanism. Hell, your own Nordic article said as much. I'm not proposing "radical" ideas or throwing out "centuries of economic wisdom." If anything, I'm saying that the current system, at its core, is fine, and am asking you what you would change about it as a "socialist." Now, I might piss and moan about central banking and debt and whatnot, but that's all part of the superstructure. My criticism of it, as such, revolves around the worries of how much the externalities of current monetarist policy will cost the means of production relative to the supposed benefits. In other words, where is the exit strategy? Currently, there isn't one. I have a problem with that.
    I'm not even sure this has any meaning to it. Of course the economy is used for the public good, that is what the economy exists for in the first place.
    You say that, then go on to call my description self-evident (which it is). The economy exists as a consequence of human interaction (to which your response was "duh" and "strawman," even after you just said the opposite above). It is not an imposed system orchestrated out of some general will for public betterment. The economy simply exists. It does not exist as a result of "the public welfare." See above for the rest.
    Yes the fed instituted this policy in the 1930's and then, they changed the interest rates and easy lending back to their standards far too early and everything dried up. I'm not sure what point you're making but there doesn't seem to be one.
    My point is that the Fed greatly exacerbated the problems that caused the Great Depression, if not caused the depth and length of the latter altogether. Bernanke admitted this, as I linked earlier. Your response seems to be "yeah, so? We have computers now." In essence, I'm talking to a brick wall.
    Social programs create real demand not artificial demand. Monetarist manipulations create artificial demand/supply. Please try and understand the economic policy you're arguing against because it's very hard to argue from a position in a formal debate and watch you attack strawmen with nothing to do with the topic at hand.
    Under normal circumstances, where the social safety net is financed by actual wealth redistributed from the affluent, then yes, you could consider such a "demand-side solution" sustainable, supposing the amount of wealth habitually redistributed remains constant at a minimum, and the person receiving the wealth spends it without fail. I suppose your example would be the government taking $100 from a rich man who would have stashed it and giving it to a poor man to spend? I would agree that this can create sustainable demand under the conditions outlined previously. However, this is far from the case in the US at present. As things stand, the government has already spent the $100 dollars on tanks and missiles, so now the wealth being "redistributed" is mostly just borrowed money. While this may create demand the positive effect is cancelled by the public debt incurred and the fact that capital accumulation has not been affected at all. This is what I mean when I say, "the social safety net does not create real demand," because at present, the social safety net is functioning almost exactly the same as a bailout, to the tune of hundreds of billions per year. This is made even worse by the fact that contributions do not, will not, and have not met obligations for many years.
    This is false and it is your issue with understanding demand-side solutions. If you're going to assert that demand side solutions have no bearing on the economy you're not only wrong but you're on an entirely different planet. I'm not sure what you're talking about opening the public treasury to give more people to spend, that's not what happened and is entirely irrelevant. You're using provocative language and talking in circles which is to say you're saying nothing to make a point.
    No. You said that social programs would have "increased demand." I said this had nothing to do with the problem. Demand was fine. It was the Roaring Twenties for god's sake. A high load of private debt, coupled with a flight from the stock market, meant capital began to dry up. The situation was akin to a person making payments on debt with a credit card, and then having his or her credit frozen. The social safety net had little to do with it. A "demand side solution" would have been something similar to what the government and the Fed did in 2008 with regard to market toxicity; that is, purchase the toxic assets and basically give people their money back to prevent a chain rout from the market. As I said, the opposite took place. That doesn't mean I suddenly support bailouts and such as standard policy. It was just a clear and universally regarded example of your precious Fed doing the opposite of what it was chartered for and making a bad situation worse.
    And again the economic theory is better than your alternative of no economic theory. This is economic theory
    Ah yes. By criticizing a system of endless debt and inflation, I must be demanding anarchy. It never ceases to amaze me that you treat such experimental and controversial mechanisms as bailouts and QE as some kind of ancient economic law akin to supply and demand.
    Not the case. There is risk of loss, the government for all intents and purposes assumes that risk and the loss which is averaged out across the economy. It's similar to a community building a bridge across a valley because to allow people to fall into the casm costs society and the economy more than not doing so. This is cost-benefit analysis that you seem willfully blind to because you refuse to accept the benefit.
    What happens when the Fed loses an investment by default? Does its assets contract? No. As I said, the amounts on its balance sheet are arbitrary. If the Fed lost $700 billion dollars it would just make $700 billion more dollars. This isn't to say that the effects on the economy of such an event wouldn't be catastrophic, but it certainly wouldn't harm the Fed or its ability to lend. That's what I mean by "no risk of loss." When a private lender loses money, he then has less to lend in the aftermath. The Fed simply "adjusts."
    Wrong. The is no need to invest the capital to the benefit of everyone. What creating more capital does is create more opportunity for investment. The net effect of this is to the benefit of everyone. People can really invest in anything they want, so long as they continue to invest.
    Exactly. What if investment fails to drum up? Well, the Fed's response has been to just pump more money into the system until things somehow manage to improve. Not very scientific for a champion of economic "science."
    I do see what you're talking about here but if I'm understanding it I must suggest that this is not a bad thing. I'm not sure what you think the federal government desires. Creating more capital of course creates a more stable position for the borrower. Which facilitates investment. Which is exactly the mechanism we're utilizing.
    It doesn't always achieve investment activity. If it did, we wouldn't be under unlimited QE.
    My only statement is that immigrant labor does not improve the situation of the immigrants until they're naturalized or at least legal workers in which case they're no longer considered immigrant labor but domestic labor.
    If immigrants were unable to improve their lives, they wouldn't be coming in by the millions, earning wages, and buying stuff; risking their lives and life savings just for a chance to make it over the border.
    I further stated that outsourcing into third world countries such as what walmart does will not improve the situations within those third world countries because walmart is a coporation of such that it is able to move into the country with nearly zero overhead (which is what would build said country) and the gains it makes are kept by the company not paid into said society. Outsourcing to india or canada or germany are good examples of outsourcing because said outsourcing contributes domestically to society. Outsourcing to the third is almost exclusively parasitic. If you want to debate that ask south america how society improved while they were under the thumb of the american government and forced to allow companies to contribute all of their resources towards the betterment of the US.
    You assume Third World governments cannot tax Walmart and/or treat locally produced materials as domestic and not simply the sole property of Walmart. Moreover, if the local population did not have some advantage in real wages to work for Walmart in "sweat shops," they wouldn't work there. Any cancellation of real wages or failure of local development is, again, a political problem. Moreover, this system has provided a huge net benefit over the modern track record, as the book I linked when first discussing it outlines. Here.
    Supply of labor requires a demand side solution to take advantage of. Really I shouldn't have to explain that to you. You're the one who doesn't seem to understand economics.
    What? I said the Third World provides labor and the First World provides a market. Are you saying the local workers somehow can't gain from this without a social safety net to redistribute their own wealth? That makes no sense.
    The developed world utilizes the labor, providing a market, and providing wages to the laborers, the laborers then contribute their money to their society resulting in inflation of prices. When after ten years the government realizes they're receiving no benefit from said company's presence and tries to change the terms of the contract the corporation threatens to leave upsetting the economy further, simply does leave to another country, or calls in the US government to protect it's interests.
    Again, political problem, and definitely not the norm.
    So you reject the protectionist policies offhandedly with no basis. You make a vague statement that history supports your claim. It quite clearly does not. But I guess we're just going to make baseless statements and arguments predicated on them and move on.
    Sigh....no. Protectionism involves a trade off, and permanent protectionism often creates permanent problems. Why do you think "free trade" is pretty much the foundation of international economic relations. Protectionism may exist in certain sectors as a government policy. Example: The US car industry enjoyed tariffs in the 70s and 80s to avoid being crushed by Japan. Hence, we all gave up access to cheaper, longer lasting, and more efficient vehicles to prop up our own car industry; hence the trade off. Eventually, the US industry became competitive, and tariffs were reduced or eliminated.[/quote]
    Then you either don't assess cost to society as a legitimate cost or you dismiss all economic theory.
    Anti-current Fed policies=anti-"science." Good luck with that.
    Tell me what is the difference between managing outcomes and managing the system? You've latched upon this distinction for no apparent reason because it's a distinction that is so varied as to be arbitrary. Most policies which can manage the outcomes also impact the system that gives rise to the policy. If there's a leak in a pipe closing the leak will decrease the pressure of the water attempting to push through said leak to the same pressure along the pipe. You'll have to be more specific about what you mean by managing outcomes, do you mean we should do away with tariffs and etc? Trade protectionism? That's ridiculous.
    Ive given quite a few examples. Managing policy means creating policies and a government framework to facilitate successful economic practice. Managing outcomes means covering up bad outcomes with band aids instead of addressing problems with the system.
    It introduced standards of care to the process of delivering goods, and a base price to do so. The post office was never touted as a business that could succeed in a corporate capacity. That was never the point. The point was to create a bar of expectations. Without the post office companies like UPS would have no issue with double or trippling or quadrupling their prices. Fed ex, DHL would follow suit because now they can put the level playing field at the maximal level where cost is feasible. This means that a huge amount of money ends up sunk in simply paying for deliveries which in turn is a cost past onto society. If it's not reinvested into society. What do you imagine the prices for delivering goods would be without the post office? If you honestly believe they'd be anywhere near what they are today you're kidding yourself.
    The post office lost 16 billion last year. UPS made 54 billion last year. Do the math. If UPS were able to charge double (which is fairly reasonable to assume) what do you believe the cost to society would be?
    So the government has to create public companies to perform horribly and lose money again and again all so the evil private companies won't overcharge people. Seriously?? How about, if UPS and Fed Ex form some kind of monopoly, the government breaks them up or forces them to compete without blowing billions on the post office pony express? Hows that for "demand side solutions?"
    This is the driving force of modern economic theory and it is the primary reason the nordic system works.
    I'm beginning to wonder if you know anything specific about your prized model, much less what makes it tick. You should have said you wanted a debate on the Nordic System about 10 posts ago and I wouldn't have bothered to reply.
    Because you made the baseless statement that both parties were doing the same thing. I specified that they were not which is true.
    I didn't say they were "doing the same thing." I said they belong to the same interests:

    Spoiler Alert, click show to read: 

    Romney 2012:

    Goldman Sachs $1,033,204
    Bank of America $1,009,402
    Morgan Stanley $911,055
    JPMorgan Chase & Co $833,096
    Wells Fargo $674,076
    Credit Suisse Group $640,620
    Deloitte LLP $609,124
    Kirkland & Ellis $518,041
    Citigroup Inc $510,199
    PricewaterhouseCoopers $459,400
    UBS AG $448,540
    Barclays $446,000
    Ernst & Young $390,492
    HIG Capital $382,904
    Blackstone Group $366,525
    General Electric $332,875
    EMC Corp $320,679
    Bain Capital $285,970
    Elliott Management $281,675
    Rothman Institute $259,500


    Obama 2008:
    University of California $1,648,685
    Goldman Sachs $1,013,091
    Harvard University $878,164
    Microsoft Corp $852,167
    Google Inc $814,540
    JPMorgan Chase & Co $808,799
    Citigroup Inc $736,771
    Time Warner $624,618
    Sidley Austin LLP $600,298
    Stanford University $595,716
    National Amusements Inc $563,798
    WilmerHale LLP $550,668
    Columbia University $547,852
    Skadden, Arps et al $543,539
    UBS AG $532,674
    IBM Corp $532,372
    General Electric $529,855
    US Government $513,308
    Morgan Stanley $512,232
    Latham & Watkins $503,295

    www.opensecrets.org

    You think those donors want anything different from Romney than they did from Obama? They're huge corporations and financial institutions. They vote status quo, and they vote for winners; usually to both sides in different amounts to hedge their bets. Neither parties are going to do anything drastic because neither are all that different at the end of the day.
    That's funny looking at the authors who did it the top five contributors (as far as lobbyists) are all pretty much the same. Comcast giving a large amount, news corp giving a large amount, dish and other media outlets. These tend to be the big guys as far as the dems are concerned. I'd need to see some evidence that this is the case because those fighting the bill are in fact being funded by insurance and pharmaceutical companies. I take it this is more hearsay and baseless.
    Please. This isn't the first time insurance companies and pharmaceuticals have dictated healthcare legislation. Moreover, the insurance industry stands to gain 320 million government-backed customers from Obamacare. Obviously they were ready to write their own ticket.


    Different money interests = the needy. I didn't say fewer ones, if anything they prioritize more than the GOP does
    ...The "needy"....... Yeah, and Goldman Sachs, JP Morgan, Citibank, and Pfizer are all guys I met around a burning trash barrel.
    I'd really like to hear who you think got the green start up money. Here's a list:
    Well aside from bankrupt shenanigans like these:
    Spoiler Alert, click show to read: 
    “Abound Solar (Loveland, Colorado), manufacturer of thin film photovoltaic modules.
    Beacon Power (Tyngsborough, Massachusetts), designed and developed advanced products and services to support stable, reliable and efficient electricity grid operation.
    Ener1 (Indianapolis, Indiana), built compact lithium-ion-powered battery solutions for hybrid and electric cars.
    Energy Conversion Devices (Rochester Hills, Michigan/Auburn Hills, Michigan), manufacturer of flexible thin film photovoltaic (PV) technology and a producer of batteries and other renewable energy-related products.
    Evergreen Solar, Inc. (Marlborough, Massachusetts), manufactured and installed solar panels.
    Mountain Plaza, Inc. (Dandridge, Tennessee), designed and implemented “truck-stop electrification” technology.
    Olsen’s Crop Service and Olsens Mills Acquisition Co. (Berlin, Wisconsin), a private company producing ethanol.
    Range Fuels (Soperton, Georgia), tried to develop a technology that converted biomass into ethanol without the use of enzymes.
    Raser Technologies (Provo, Utah), geothermal power plants and technology licensing.
    Solyndra (Fremont, California), manufacturer of cylindrical panels of thin-film solar cells.
    Spectrawatt (Hopewell, New York), solar cell manufacturer.
    Thompson River Power LLC (Wayzata, Minnesota), designed and developed advanced products and services to support stable, reliable and efficient electricity grid operation.”

    .....Not to mention Solyndra which proved to be a campaign kickback, the NYT reports that "90%" of green subsidies went to large companies like GE Goldman Sachs, Morgan Stanley, or their subsidiaries. Moreover:

    "The government support — which includes loan guarantees, cash grants and contracts that require electric customers to pay higher rates — largely eliminated the risk to the private investors and almost guaranteed them large profits for years to come."
    So, these programs are government-guaranteed, meaning there's no risk of loss for investors, creating an entire false industry built on false investor confidence.
    Good game by the way, accuse me of not having a source while not sourcing or basing any of your claims. You'll find that every claim I make has a source and a primary one at that.
    So the White House is a primary source on how awesome its policies are? Go figure. If you would read my sources you wouldn't need to throw tantrums about tangent conversations. Again:

    http://articles.latimes.com/2012/jan...-cuts-20120127
    http://www.usgovernmentspending.com/..._chart_30.html

    The defense budget is not being cut; and certainly not in the long term. As I said, the Foreign contingency fund is being cut drastically due to the withdrawal from Iraq and Afghanistan. That is not some kind of Democrat fiscal heroics. The actual Defense budget will continue to receive its customary increases.
    This is before macroeconomic effects or policy is taken into account. This chart is totaling only the costs associated with programs. None of the legislation involved with paying for said programs. I can't find any redeeming reasons you'd utilize this website when the charts can be altered to say literally anything you want them to.
    So your response is basically, "spending is not going up because said spending is going to fund items the White House hopes will turn a net benefit by economic improvement." Please.....
    You said spending on the military. The spending on the military is decreasing. Let's just go directly to what the administration is saying:
    I don't give a what Obama says. Obama also said he'd cut the deficit in half by the end of his first term:
    http://money.cnn.com/2009/02/23/news...mmit/index.htm

    I gave you three sources. You can't simply dismiss government spending as "investment" as if your future hopes are a given. Both parties will continue to increase spending, debt, and deficits. Instead of trying to fight to obvious, you should just be more honest about what you basically said. "Yeah, but the Democrats are going to spend it 'better'."
    Or to prevent chinese aggressions in nearby territorial waters, or to help maintain global peace and order, to protect humanitarian rights and to prevent imperialistic aggressions. Is there anything opinion-wise about you that isn't one extreme or another? You're aware of a middle ground right? I really hope you are. Although not one of these arguments has applied it.
    Yeah. Making the world "safe for democracy" since 1898. USA! USA! USA!
    No you cannot change my views on the two parties short of showing me a CBO report which validates that the GOP platform would produce anything close to the gains with the dem's policy, that's beyond the scope of this debate mostly. I'm very well established with who has said what and who is funded by who, so your vague allusions to corruption within the democratic party are rather pointless. I'm aware that neither party is perfect, i just consider the GOP to have fallen much farther from the standard than the dems have.
    So now the CBO is in the pocket of the GOP?
    --------

    I apologize for shotgunning things to begin with, but you were very unclear about what you wanted this debate to be about. Based on the subjects you keep referencing, you should have asked for a debate on the Nordic system to begin with. I have no qualms with the Nordic System and wish them the best of luck for having discovered a program that plays wonderfully to the strengths of the region. As far as your idea that an economy is some kind of public projection to be commanded rather than a state of nature to be understood, I don't know how we can continue a discussion in light of such a fundamental difference. As far as "demand side solutions," my point continues to be that the things you are talking about are utilized all the time. Simply saying that you want to see more of them isn't exactly a conversation starter; especially when your original idea was "socialism v capitalism."
    Last edited by Lord Thesaurian; February 13, 2013 at 05:28 PM.
    Of these facts there cannot be any shadow of doubt: for instance, that civil society was renovated in every part by Christian institutions; that in the strength of that renewal the human race was lifted up to better things-nay, that it was brought back from death to life, and to so excellent a life that nothing more perfect had been known before, or will come to be known in the ages that have yet to be. - Pope Leo XIII

  11. #11
    Elfdude's Avatar Tribunus
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    Default Re: Capitalism vs. Socialism: Which is the better economy? [elfdude vs. Legio Italica]

    Quote Originally Posted by Legio_Italica View Post
    It appears my attempts to branch into various tangents in an effort to find common ground has backfired horribly.
    The largest issue we had in the debate was sticking to the same definitions you were using previously. This in turn impacted every point you made and had the effect of dismissing a vast majority of your argument as irrelevant. Seeing as the reponse still is suffering from horrible reading comprehension for every point you make I'll do three things:

    1. Explain the fallacies involved
    2. Explain the statement I was making
    3. Provide a source supporting the statement I'm making

    You do not seem to understand what a primary source is, a primary source is the source which produces the data itself to be analyzed. Posting any article in the terms of this debate is rather pointlessly trivial because you need to be able to interpret the data yourself, the major reason for this should be apparent in our debate, economics is very easy to say anything you want about really without saying anything at all. The points many of your links made are points which have counter points which you've ignored. I'm not going to turn this debate into a point counter point war with us searching for other's arguments and not understanding the basis to those arguments. Which is to say, if you want to use LA times, find the data LA times is using and post that a long with your interpretation of that data.

    Quote Originally Posted by Legio_Italica View Post
    Let me restate: This "debate" we seem to have stumbled into is supposed to revolve around the general degrees to which a market ought to be controlled, and by inference, in what ways.
    Agreed.

    Quote Originally Posted by Legio_Italica View Post
    I have more or less laid out my personal prejudices, biases, and reservations going in to it in an effort to discern exactly what your starting position is, that I might take up the defensive on the start.
    This is silly, your argument should stand upon positive reasons of its own, validating your position by attacking my own accomplishes nothing and is a fallacy. If this was your intention then of course I wasn't about to do that because again the arguments we make need to stand upon their own.

    Quote Originally Posted by Legio_Italica View Post
    Since apparently this isn't to your liking and you dismiss most of my assertions as conspiratorial and redundant (and indeed, some of them are), I will attempt to form a cohesive position and begin an actual debate.
    Don't get me wrong, whether your opinions are outlandish or not I don't care so long as they have basis. If you tell me that the japanese were ready to surrender before the a-bomb and you show me evidence of their attempts to do so then your opinion while conspiracist is also rational.

    Quote Originally Posted by Legio_Italica View Post
    The thing is, this is all quite easy for you, as you already apparently have a real-world model, the "Nordic Model," that you can point to as ideal. I must speak in terms of hopelessly abstract policy trend ideas. Yours is convenient, also, because the model is an unprecedentedly successful one.
    This indeed is a major issue, I have formalized business and economics education which makes navigating philosophies far easier and constructing them easier as well. This is a major reason why your suppositions are more or less worthless in regards to the argument. I don't really care that you disagree with monetarist policies I want to know which ones and why. To say you disagree with them entirely is to intellectually retreat from this debate and prevent it from happening. This is what the majority of my last few posts have been about.

    Quote Originally Posted by Legio_Italica View Post
    My reservations on this idea center on the precaution that the "Nordic model" seems exactly that, a Nordic one. I have doubts that its pillars could be universally applicable anywhere in the world, and would point to a couple basic "impressions" I have about the system that seem to be echoed in journalistic academia
    Journalistic Academia is an oxy-moron. Journalists are secondary resources and should be avoided whenever possible.

    Quote Originally Posted by Legio_Italica View Post
    I really hate the economist, wall street journal and a lot of the other sources you seem to prefer using. These groups sell agendas not analysis and listening to them is a rather poor idea. If they provide direct facts I don't mind so much but when they attempt to interpret those facts is where I draw the line and must assert they are not experts but merely journalists working for a magazine that would not be caught dead doing a piece that emphasizes the social side of things. They're pushing deliberately for the idea that the economy is number one and even are pushing the idea that we can have the nordic system without the nordic benefits socially which is utterly stupid not to mention defies the data in several respects.

    http://www.sciencedirect.com/science...05750X98001569
    http://wbro.oxfordjournals.org/content/15/2/225.short

    The fact of the matter is public welfare is so closely tied to economic welfare that the two cannot and should not be separated and considered independently. This is a major flaw I feel in everything that you consider economically. Fact of the matter is you can't have a first world country without first world policy, however you can definitely still have a first world country without a first world economy. Which is to say, our economic side of things is the largest bar none in the world. There isn't a country on the same playing field as us when it comes to income. So then you must wonder why we can't afford all of these social policies when countries which make far less than we do can.

    Thus it's not acceptable to me to compromise in the arena of social policy, we have the best economy in the world, we should live like it. Now the theory that our social policies cause these economic bubbles is utterly unfounded because economic bubbles happen regardless of the social policy. Certainly some of them can accelerate the process, if banks are already giving too many risky loans, making it easier to get loans isn't a great idea. This is an example of a poor policy. The concept of concentrating more capital into the lower rungs of society however is proven to be a good one.

    What is the difference here then? The difference is that by making the loan mechanism you're not protecting people's rights to being treated fairly, or equally, you're not helping them to legitimately own anything, you're making it easier for them to owe someone. Scientifically it would be foolish to expect that sort of policy to help anyone other than the banks.

    Now how did the banks get away with it for so long? Banks aren't stupid. The bubble was known about almost since day one. The combination of GOP policy and clintons policy simply reduced far too many regulations and opened up a channel of corruptions. The ability to make bad investments and have the government pay for them. This primarily was the cause of the 2008 bubble. Risky capital was used in investments purposely designed to fail.

    Now who do we blame here? We can blame the corporation but we must remember that at the end of the day so long as the corporation's books are green it couldn't care less about it's own behavior. Most people don't even understand what hedge funds are or what the derivatives market does or how it comes into play. Congress certainly tried to blame the corporations. Congressional hearings resulted in the finding that yes the banks were fully aware of what they were doing.

    Why didn't it get noticed earlier? This is purely due to transparency, corruption and a lack of accountability. The market mechanisms used were technically legal, although the spirit of the law was certainly never designed to infinitely reimburse banks for their bad bets because this pathway exists and nothing really existed to stop it it was used. The long term result of this was that the banks were not making risky loans, they were making guarenteed loans backed by the government which also means that the capital created for the 'needy' was hijacked and simply worked to disenfranchise them more.

    What do you suppose the nordic system would've done to deal with this? Heavy taxing of the rich and tax breaks for the poor makes far more sense than the government trying to create an all inclusive loan policy that both allows more loans and incurs less risk. There's a variety of other ways to do it too. Increase minimum wage. Increased social benefits (maternity/paternity leave, sick leave, daycare, insurance, etc).

    Essentially the government could've really done just about anything so long as the net effect was creating more wealth in the most needy areas of society. What I find the most intriguing of the nordic system was the concept that the richest of rich cannot get richer without elevating the most needy of the society.In the US when the rich stop getting richer it's not uncommon for them to disenfranchise society to continue that growth. Which is to say, you have two options, increase economic inequality or to increase it. The nordic system is a system that doesn't fight itself. The rich aren't fighting the poor and the poor aren't fighting the rich. The government's job is to ensure that every member of the poorest sector have the opportunity to become rich themselves and to ensure that they're not left at a disadvantage that is systemic.

    Quote Originally Posted by Legio_Italica View Post
    So, yes, the Nordic model seems to work wonderfully. They have an efficient, virtually corruption-free government, and a strong private sector. As things stand, I don't see this as some kind of "breakthrough" in the "economic theory" you speak of, rather, a wonderful example of what can be achieved when a human society actually functions the way economists and political philosophers would want; almost no corruption, few systemic social problems/issues with minorities, and a social safety net and economic agenda that is actually mostly run by scientists and not politicians.
    I think the analysis from the economist is throwing off your opinion here. Corruption will always exist if there's a place for it. The fact it does not exist is the result of the fact that being corrupt in the nordic system generates very little in the way of gain. They've closed those loopholes so to speak or created proper pathways that are more beneficial anyways.

    Quote Originally Posted by Legio_Italica View Post
    The "Nords," with their social unity and technocratic set-up, have found what works for them. Great. Would the same system work just about anywhere else? I wonder, but I think not.
    I'll agree that transforming a country into the nordic system would be difficult, just changing the laws that drastically would be difficult. I have little doubt however that doing so would result in a similar result.

    Quote Originally Posted by Legio_Italica View Post
    You certainly haven't brought much to support the applications of So far, you've mentioned To which my response is....And? These are foundations of the current world economy, not unique theories that could be called some kind of "idea."[in reference to the economic theories]
    You're correct, they're foundations of current world economy. They drive policy and that's their central reason for being present in this debate. This debate is about policy. It's only appropriate to look at the reason why policy is what it is. You cannot fix a system by tearing the system down and apart, you must work within the bounds of that system. A mammal is probably never going to evolve a set of lungs like a birds, it would be an evolutionary dead end to attempt to. Can America truly evolve into the nordic system? Of course not. Can the nordic system be used to generate a best fit using what we currently have? Very much so.

    Your statement of 'And...?' is completely off base. This is the central and most important part of our debate. To dismiss them as irrelevant is to dismiss the debate. Now you've made several statements (even in your responses) which defy the expectations and principles in those theories. Theories which I seriously doubt you've yet to really understand or even attempt to given your responses.

    Quote Originally Posted by Legio_Italica View Post
    Your Nordic article, from what I've read so far, seems to concur with my impression of it; ie a fairly liberal private sector that has financed their comparatively large social safety net, and a small, ethnically and culturally unified population that has facilitated uncommonly high degrees of socially symbiotic and coordinated economic behaviors.
    Ethnic and cultural unification has little to do with the success of their policy. Don't get me wrong without such a united core they would've had difficulties setting up the laws but the laws are set up now and aren't really suffering from increased diversity within the population. They are egalitarian societies at their basis which means regardless of cultural heritage you're likely to be treated the same. This is actually mandated in their planning of economics. There is some issues with the nordic system and islamic communities but this has no evidence of being systemic but rather due to the population itself. Unrest is being caused because the assimilation of islamic culture is difficult. Your attempting to draw the implication that if our country was homogeneous it would be easier to manage. The Nordic system assumes equality as the standard, not the equality of outcomes but the equality of opportunity. Which admittedly does require some attention to the outcomes as well. So yes, having a homogenous society makes it easier to get things done. That doesn't mean that the right thing will get done however. In this case I strongly assert that the right thing has more to do with the egalitarian principles and the role of government in preserving those.

    Quote Originally Posted by Legio_Italica View Post
    Again, this unprecedented level of cultural homogeneity, referenced on page 39 of the report, is given primary responsibility for the extremely convenient set of precedents that has made the Nordic system so successful. In fact, the report mentions in that same section that serious problems are evolving due to a systemic inability to effectively assimilate immigrants thus far. This is why it cannot be taken as a universal model, only an example from which we can take limited lessons that are not necessarily ideologically unique to the model itself; ex. widening the tax pool and lowering taxes.
    There's many lessons we can learn from the Nordic model. I'm glad you agree. I agree with most of this. While there are difficulties in integrating immigrants the difficulties lay mostly with the population and some's desire to change the law to protect the native nordic cultures. This isn't a problem for the economics however because as of yet the countries have not elected to curb their standards of egalitarianism trusting in the power of opportunity to assimilate the people. I'm quite interested to see how they manage to resolve this issue but starting out on a right foot is almost certain to make it far easier. In the US's case we had to undo centuries long bigotry and etc to elevate the bottom rungs of minorities to parity with the general population, in the nordic country immigrants are immediately benefitting from being equal citizens, the population's issue is that they're not really acting like nordic citizens.

    Quote Originally Posted by Legio_Italica View Post
    Spoiler Alert, click show to read: 
    The claim that the Nordics are complying with and exploiting
    market forces rather than suppressing them is supported by the
    data reported in figure 2.1
    , which shows the OECD’s index of the
    strictness of employment protection legislation (EPL, vertical axis)
    and its index of the strictness of product market regulation
    Source: OECD Economic Surveys: Italy-OECD (2007).
    Spoiler Alert, click show to read: 


    I would never suggest suppressing the economy.

    Quote Originally Posted by Legio_Italica View Post
    While broadly based, the indices reported in figure 2.1 arguably do not suffice to characterize the attitude of member states
    to the market mechanism. However, there is a wealth of other
    information pointing in the same direction. The Nordic countries
    rank very high in terms of the index for “Ease of Doing Business”
    (EDB) produced by the World Bank Group. Denmark, Sweden
    and Finland are all among the top 6 performers in the “Global
    Competitiveness Index”
    published by the World Economic Forum.
    The Nordic countries have a good track record with regard to
    transposition of and compliance with Community legislation for
    the internal market. In the area of banking, Denmark and Finland
    nowadays have low regulatory barriers to competition and all the
    Nordic countries have relatively light rules for prudential supervision (de Serres et al. (2006)). Turning to a wider perspective, there
    is an extensive “economic freedom index” compiled by the Fraser
    Institute, and a globalization index developed by a Swiss institute
    (the “Konjunkturforschungsstelle” in Zurich). Both of these indices
    give high ranks to the Nordic countries, and the ranking between
    groups of countries is roughly the same as in figure 2.1. According
    to Bergh (2006), the Nordic countries have in the past decades
    improved their ranking significantly according to both indices. It
    is also interesting to note that Denmark, Sweden and Finland are
    among the six top nations in the world (with Singapore, Hong
    Kong and Norway) in the subindex of the EDB measuring external
    openness, that is, the “trading across borders”.

    To repeat, the argument of this section is the following: in
    the 1980s and 1990s the Nordic countries accepted openness to
    financial capital and factor movements as an extension of their
    long-standing commitment to free trade in the new circumstances
    created by the IT revolution and globalization. After the process
    had started, the arguments for further liberalization turned out
    to be strong and self-reinforcing. The perception of the Nordic
    countries as being heavily regulated has no obvious justification,
    certainly not if the EU15 is used as the reference.
    In fact, the Nordics appear to be among the frontrunners in
    liberalization
    . This has facilitated a successful transformation of
    their economies in favour of knowledge-intensive activities, and
    the Nordic countries have thereby been successful in adapting
    to the on-going changes in the global allocation of labour. The
    process, which has been remarkably swift notably in Finland, has
    been supported by the existence of high-quality education for large
    shares of young age cohorts and government support for research
    and innovation.
    I agree with all of this. The nordic system is a much easier to navigate business system without all of these jagged laws poking in and out of the market creating their own push and pulls which severely distorts the market. That is not to say that when a company takes advantage of the consumer the norse don't stop it however. They offer very tight consumer protections within their country and set very clear standards for business practices. The economy is there to support the social prosperity of the country. Many of the possibly corrupt avenues of business are not at all utilized because the system is also set up to make those options less profitable. This is combined with a highly active population with a lot of trust. Our society is a very apathetic population with very little trust. However that's likely the result of the laws we currently have in place.

    There's also something that the norse don't have any difficulties with, holding companies accountable. Current US law protects corporations from most real punishment. For example it's not uncommon in the US to penalize companies for illegal dumping at a smaller rate than the costs for doing it ethically. This incentivizes the poor behavior of illegal dumping and truly (unfortunately) just about every US company has been fined for it. The common conception in the US is that this is the cost of doing business. The Nordic system would never allow such a thing to occur. Further incentives for companies to avoid externalizing their costs to the detriment of society also exist which are working wonderfully.

    Don't get me wrong, complexity does not equal a better economic model.

    Quote Originally Posted by Legio_Italica View Post
    ....Which is exactly a part of the center of what could become my argument: the importance of human capital in an economy. Its not so much about the depth of economic regulation that makes a difference in the end, but rather, what an economy offers to the markets in terms of the skills and assets its labor force has, in the context of labor as a commodity. On a general point, The Nordics have apparently achieved what ideologues in the US never will. Yes, they may have high unionization rates and large social safety nets, but they don't let that get in the way of the nuts and bolts of doing business.
    They do let it get in the way of doing business. This is their primary methods of actually getting in the way. The fact of the matter is this system is one sided in the US of recent. There is no real way to get in a company's way without pulling society apart on accident which hurts everyone (of course the companies can do this on their own). We have a vast network of laws which are supposed to cause regulation and oversight and their real effect is to confuse the entire system of oversight so much that there really is none.

    Quote Originally Posted by Legio_Italica View Post
    As I have stressed at a couple points in the previous posts, the optimal goal ought to be to react, comply, and exploit the natural behaviors of the Market mechanism rather than to try and control it. That was what I meant when I spoke of "economy" as a state of nature, not a public institution.
    This isn't quite accurate, the Nordic system isn't to control the economy directly but rather to place a huge amount of oversight and accountability over the market. If the Market acts in a way they don't like they bring the hammer down very hard, (much harder than can be said of the US law system). Your meaning of economy being a state of nature not a public institution is still unclear because the sentence simply doesn't make any practical or legitimate sense. The economy is not a state of nature. The economy is a public institution. Your statement is nonsense and connecting it to what you said before only obscures what you might mean with your 'clairification'. As such I would drop this meaningless statement.

    Quote Originally Posted by Legio_Italica View Post
    Without any real knowledge of the latest developments in economic theory, it seems the Market has been accepted as the most efficient economic engine yet available to human civilization.
    This is another meaningless statement. The market is synonymous to the economy. There is no such thing as an economy without a market. The 'desires' of the market are a product of the system in which it exists and have nothing to do with the market itself. This is my difficulty in debating with you. You don't really say much I can disagree with, you don't really say anything at all. But you utilize a lot of these things to construct meanings which I entirely disagree with. It's like we're looking at the same coin and you call it dull while I call it shiny.

    Quote Originally Posted by Legio_Italica View Post
    Since most relevant figures in economic academia have agreed that capitalism and the capitalist means of production should remain at the foundation of the world economy, the trick then lies in how much to regulate capitalism and in what ways.
    We're dropping this terminology remember? I agree with your meaning here and that this is the central issue of our debate. You should understand that in framing the debate this way you and I are on the same side. This is not the point of contention and you really should stick to the point of contention.

    Quote Originally Posted by Legio_Italica View Post
    This is much easier said than done, of course. The foundations of my "economic model" would be difficult to define other than in the hopelessly broad ways which I've already begun to mention it, and even harder to apply in the place I'm most familiar with, the US, because the social issues currently at play would be equally problematic.
    Then would it be safe to say that you don't actually understand the economics at all? In which case I must wonder why you feel you're even valid in your attempt to discuss the virtue of X Y or Z policy especially as it ties to economics. I would never say X policy is a bad policy because it conflicts with my general view of the world. I would ask why is X policy a good policy, why is X policy a bad policy. A great example is our QE debate, you dismissed it entirely without seeming to go through this process. A good debate would include the process of deciding whether or not this policy was good so that it can be followed by your debater (me). However you're not doing this and don't ever seem to really do it. You make statements which are loosely supported by various articles of interpretation. Articles on a subject which you yourself don't understand and thus cannot attest to the quality of credibility therein.

    Quote Originally Posted by Legio_Italica View Post
    Bottom line as far as a bare minimum to start with; you seem to want me to attack the Nordic model. Why should I?
    I don't wish for you to attack the Nordic model. However you must admit that the Nordic model pushes holes in what you've already stated in this debate are important economically. In coming to understand the nordic model you've realized that the social implications of policy have an economic effect as well and should understand that the two are invariably related and dependent upon one another. You do agree with this do you not? Another way to put it is that the social programs you consider a drain on the economy are not necessarily so, in fact it would be easy to argue in many cases they boost it. Do you disagree with this? If you do then the debate is still impossible to be had.

    Quote Originally Posted by Legio_Italica View Post
    I agree with virtually all its foundational premises, I just don't think them universally applicable if one expects a similar degree of success; again because of the uniqueness of Nordic geopolitics and social composition.
    This is not an acceptable line of reasoning. You think that the nordic system is impossible without the composition of society resembling the norse? That's rather silly and requires one to dismiss the effects and influences of the policy. Now you might say, I think it's got a lot to due with that and a little to do with policy but to make such a statement you would need to find a homogenous society like the norse. Can we do so? Of course we can.

    Let's see, North Korea is one of the most homogenous societies in the world. Obviously homogenuity alone has nothing to do with economy. What about the other ones? Let's just look at the top ten. I'll highlight red countries which are homogenous but overall poor economically and visa versa with green,

    North Korea - racially homogeneous; small Chinese community, a few ethnic Japanese
    South Korea - homogeneous (except for about 20,000 Chinese)
    Japan - Japanese 99%; Korean, Chinese, Brazillian, Filipino, other 1% (2004)

    Lesotho - Sotho 99.7%, Europeans, Asians, and other 0.3%
    Bangladesh - Bengali 98%, tribal groups, non-Bengali Muslims (1998)
    Egypt - Egyptian 98%, Berber, Nubian, Bedouin, and Beja 1%, Greek, Armenian, other European (primarily Italian and French) 1%
    Jordan - Arab 98%, Circassian 1%, Armenian 1%
    Armenia - Armenian 97.9%, Russian 0.5%, Kurds 1.3%, other 0.3%

    Poland - Polish 96.7%, German 0.4%, Belorussian 0.1% Ukrainian 0.1%, other 2.7%
    Lebanon - Arab 95%, Armenian 4%, other 1%


    Beautiful. This should demonstrate rather definitively to you in a very visual manner that the Nordic system's superiority may have been facilitated by a more unified populace but it's benefits are not the result of homogenous population but rather the policies that population came to. Case in point Japan, Poland and South Korea are all doing ok but none are doing as well as the Nordic countries. Surely by your logic they would all be great candidates to benefit directly from the Nordic system?

    Of course they probably would be great candidates, but to claim that the policy itself from the nordic system isn't something we can recreate here or etc seems rather silly. Considering in norway the population has about 85% norse (far from homogenous) and in the US we have a population that's 75% white and 12% american-black which makes up about 87% of the population which very homogenous concerns in society and culture. I don't really see this logic as withstanding. Furthermore, while I don't think a direct rendition is possible simply because we're starting at a different point many best fit approaches can be implemented.

    Quote Originally Posted by Legio_Italica View Post
    You want to, say, raise taxes? Fine. In the US, everyone's going to need to pay more taxes, the government is going to need to slash spending in every major sector (Medicare, Social Security, military), and the military is going to need to take a vastly smaller role on the world stage (for example, closing Cold War bases in Western Europe is a good start).
    Wait wait wait. What does this all have to do with raising taxes? Now if we raise taxes on the top payers by 1-2% we're talking between 200-300 billion over ten years in tax revenues. Our top marginal tax rate is 33%. If our top marginal tax rate was 40% we'd be looking at somewhere between 1-1.5 trillion in revenues. This is only talking about increasing taxes on the top which includes the top 10% of society. Now keep in mind their effective tax rate is actually about 20.7% after deductions credits etc. We could very easily maintain the status quo without much change at all in society. I highly doubt 10% more burden on the top earners is going to cause any real economic woes. As a top earner myself I would be more than happy to contribute more of my income (and considering I pay an effective tax rate of about 9% on a seven figure salary, I could easily do so and still not pay as much proprotionally as a large amount of those making less than I do).

    The myth that the rich are the primary producers and thus taxing them kills the economy is just a myth. Perpetuated by the rich. Doing so does the opposite and pretty much always has within reason. I would personally push for a redistribution program that attempts to maintain a 10 to 1 income inequality, in that the top earners earned upwards of ten times the poverty level. There's no reasons for the 49 to 1 income gap that is present today.

    http://www.cbpp.org/cms/index.cfm?fa=view&id=3629

    Quote Originally Posted by Legio_Italica View Post
    Also, any entitlements the US does keep and/or add need to be reevaluated on an actual cost-benefit level instead of ideology.
    Since you use entitlements to describe any social program you disagree with this is a very vague statement. I would agree some entitlements could be removed.

    Quote Originally Posted by Legio_Italica View Post
    Is healthcare expensive. Obviously. Would national healthcare save both the public and private sectors money in the long run? Maybe.
    Most definitely. I would point out two great study countries on this: China and India.

    http://www.sciencedirect.com/science...47272797000571
    http://ideas.repec.org/b/oxp/obooks/9780198295280.html

    Specifically the massive trigger in development took place not because of a high population of able workers, but rather because the governments began to invest in social programs which in turn elevated society far faster than any other manipulation of policy could have. The reason for this? The huge disparity between the bottom and top. To put it another way, spending your time elevating society with a huge income gap is rather pointless because the lowest rungs will pull down the highest leading to a more and more distorted pyramid rather than a normal distribution. Spending the same amount of time when society poverty is so high to redistribute this has much larger effects on growth then simply giving the same amount of money to a corporation would. This effect is lost as the society becomes more and more equal.

    Quote Originally Posted by Legio_Italica View Post
    In conjunction with raising taxes and the tremendous size of the US economy, I don't see why a public health system directly administered by a federal agency is entirely out of the question, provided it is run competently.
    I agree and that would be preferable to the ACA but alas even the inferior ACA will still have the same effect as wealth redistribution (because essentially that's what it is) which will benefit our horrible unequal economy massively.

    Quote Originally Posted by Legio_Italica View Post
    I would vastly prefer it to simply guaranteeing the insurance monopolies 320 million customers who are backed by federal funds.
    This is a gross oversimplification of the ACA and truly insurance companies stand to loose a lot from the ACA despite what you've said. The bet would be very good for the insurance companies if those uninsured were primarily young healthy adults. Unfortunately this isn't the case necessarily with a huge amount of elderly and preconditioned individuals who must be insured and cannot be denied. These individuals increase the risk for insurance companies. Which is to say insurance companies are losing out a bit on this. Pfizer however is benefiting thanks to it preventing negotiation into selling it's brand named medicines as generics. Personally I'm not too concerned about the modest kick back Pfizer will see as the administration has done other things to upset this balance, most recently resulting in many big pharma companies losing out to investments into biotech and major losses to big pharma in the arena of patents.

    AIG for example is one of the insurance companies fighting the healthcare act because they will lose on it. The whole point of insurance is a large body of healthy individuals averaging out the risk of a small body of unhealthy individuals. However, if the effect of the healthcare act is to dramatically increase the health overall of the country, both the healthcare and insurance companies will indeed benefit. Then again I'm not so concerned of the idea that a company benefits when society itself does.

    Quote Originally Posted by Legio_Italica View Post
    This gets into the issue of corruption. The larger the public sector, the more imperative it is to maintain efficiency and a corruption-free environment. The US entitlement system doesn't exactly have a good track record in that regard, and I don't trust it going forward. The system is going to need massive overhauls before we even begin to talk about fantasies of public healthcare.
    This is one perception I don't really understand. When you say the US entitlement system I'm assuming you're talking of the social programs already in place. Such that the widely spread myth that welfare is taken advantage of. In fact almost all US entitlement programs (that I would consider such) have a far lower abuse rate than the Nordic system does. For example the nordic system on any given day 3% of the workers are out sick (although this allows the nordic system to over employ which helps them too) or the fact that 9% live of of entitlements from the government such as pensions etc. This cost is really minor and it something that is used to distract from the real debate.

    Quote Originally Posted by Legio_Italica View Post
    As far as the private sector regulation, the higher tax rates would necessitate the deregulation of many of America's strongest economic assets like energy, technology, and (to a much lesser extent these days) industry. Because I am typically an advocate of regulatory uniformity on principle, I'm wary of this aspect and would hope a careful approach would avoid conflict of interests and a net loss by one industry or another.
    Our corporate taxes are amongst the highest in the world. They should be reduced if anything. The largest issue with taxations in the corporate realm is loopholes which the Obama administration has closed hundreds of. Many of the small name bills recently have been more than entirely payed for in this fashion. The last I heard the administration wanted to reduce taxes to 28% from 35% simply by closing tax loopholes. Although the GOP's response to this has been odd (from initially dismissing it to embracing it to prevent the tax cuts for the rich from going under).

    Quote Originally Posted by Legio_Italica View Post
    With regard to EPA regulations, I would limit the agency's scope of authority to the protection of freshwater sources. I would close the Energy Dept, HUD, and possibly, the Dept of Education, excepting the latter if it can be shown definitively that federal education standards are having any positive effect relative to turning executive education authority over to the states.
    I'm not sure why you would change any of this. Can you elaborate? Frankly the Dept of Education should be invested with more power, the number of organizations it is powerless to stop is rather irritating. Voucher schools are legal but that doesn't stop most of the government funds being spent on them from going to unaccredited and unacceptable institutions, hell the number of late night unaccredited colleges you see on tv that can't be shut down either because of the DOE's hands being tied is ridiculous. Corporate profiteering on federal education subsidies is a major issue.

    Quote Originally Posted by Legio_Italica View Post
    So, in general, my "system" means playing to America's strengths geographically and economically, "trust busting" where conflicts of interest exist (ex. separating commercial and investment banking), and "fixing" education to improve human capital in the US, "investing" in energy by, for example, opening federal lands of exploration and exploitation (hopefully this "investment" can be facilitated through technocratically sound policy rather than the further public subsidies and the like).
    I can agree with all of this. I do of course think they should need to be more careful exploiting resources in a wildlife preserve or etc but to close off development entirely is probably a bad idea. I don't agree with closing the US bases around the world. I do agree with however eliminating a large amount of the private contractors used by the US as well as regulations forcing more reasonable pricing. The MI complex has a stranglehold on US subsidies and with no real competition happening between companies the government is massively overpaying for many items of equipment. For example, my brother is a mechanic for the army. He broke a high temperature screw within a complicated assembly for a tank which cost roughly $40,000 alone. Calculating the base cost in production the screw should be maybe $1,000, assuming the company wanted the technology to pay for itself and provide reasonable profits after completion of the contract.

    Instead corporations regularly bid for more and more and more from the government often needing a fraction of it to develop or build the tools they're contracted for. This creates a false perception amongst policy makers that the industry needs more money than it does which in turn allows them to drive up costs further. We're spending roughly $100,000 per service man right now. Not only could we outfit our soldiers better if we gave that money directly to them competition could again begin to drive innovation. Some of the best innovation I've seen for the military has been from free crowd-sourced projects which the government none the less scrapped probably due to corruption.

    Quote Originally Posted by Legio_Italica View Post
    Realistically analyze the costs-benefits of collective risk sharing like public healthcare, and broadening the tax base to minimize or hopefully eliminate the necessity of genuinely higher taxes across the board.
    What do you mean by broadening the tax base. There's not exactly more people to tax. If we nationalized immigrants we would have a broader base but that doesn't really help anything except prevent the immigrants from working the low paying jobs or to do so illegally defeating the benefit anyways.

    Quote Originally Posted by Legio_Italica View Post
    Take a second look at the revenue lost to certain tax credits (Earned Income Tax Credit, Child Tax Credit....are credits like these really all that beneficial economically? Maybe, but if not, eliminate them).
    While I have to agree with you entirely on the tax credits I don't think I agree with you on which ones you chose. Those are examples of good tax credits. The examples of bad tax credits are the types that for example I take advantage of to drive my effective tax rate down to 10% or lower. Essentially there's a huge amount of tax credits which only benefit those with assets and money in the first place. I can't guess at why they exist except in the name of misinformed capitalist theory (give more money to the rich!) or due to pork and corruption in their formation. Closing these loopholes alone could generate up to 20% more tax income from the top 400 people in the country and up to 15% more from the top 10%. I don't see the need to restrict really any programs designed to help the poor or middle class.

    Quote Originally Posted by Legio_Italica View Post
    Tightening border security with a militarily enforced perimeter, financed and manned by the closing of bases mentioned earlier, to stem the billions in illegal drug traffic. This also means cost-benefit analysis of how much drug legalization, and of which drugs, in determining how much can be saved by reducing drug crime and illegal traffic to cut back on enforcement
    Actually it makes massively more sense to legalize all of the drugs and use a small fraction of the money saved for rehabilitation. I would highly agree with that. As far as monitoring the border is concerned I'm not convinced this will result in anything good for the economy, while it would certainly prevent new illegal immigrants and emigrants and reduce corruption simply ending the war on drugs should go a long way to stopping the destructive stuff entirely. Farmers would struggle even more if immigrant labor was removed. Perhaps a better system would be to restrict the borders in the name of crime while forcing grocery stores to provide reasonable compensation to farmers. Currently the profit margins on farm stuffs etc is obscene (nearly 100%) and even a couple of percent more to the farmers would double or triple their earnings.

    Quote Originally Posted by Legio_Italica View Post
    ......etc etc all those rosy, generic, uncontestable ideas that would fit nicely in any campaign speech. So what do we have here....."collective risk sharing," higher taxes, huge military and entitlement cuts, "technocracy"...... will any of this every happen in the US? Hell no.
    Why? Furthermore why not do your best to encourage it? I mean, if we've established this is the right process to take then the issue is in convincing others to do so, not in arguing with each other.

    Quote Originally Posted by Legio_Italica View Post
    I guess it comes to this: before all this hullabaloo started, remember, we were feeling out whether or not a debate was even possible. Based on my understanding of socialism meant that when you said "socialism," that implied a desire for fundamental economic change at a systemic level. So my inial queries revolved around the basic question of "Why do we need drastic change? The current world economic system works fine."
    My initial responses were much the same, so when I heard you say capitalism that implied a desire from fundamental economic change and deregulation at a systemic level, so my initial queries revolved around the basic question of why do we need drastic change? Current theory works fine and can help us even figure out how to improve what already exists.

    Quote Originally Posted by Legio_Italica View Post
    Given that we're merely conflicted over minor particulars, I don't see much to argue about. You say the Nordic system is "ideal?" Well, perhaps my shotgun approach to this has robbed you of a chance to synthesize a position, but, I haven't seen you discuss economic issues unique to the Nordic system at all, much less how and if you think they can be applied elsewhere like the US. Who knows, I just might agree with you.
    Quite possibly. When this economic debate started the desire was to debate the specifics of social tennets, or rather the idea that social policy in turn leads to economic gains. In this the nordic system was a point of reference. This debate was never designed to be about the nordic system but rather whether the benefits apparent in the nordic system can be applied elsewhere. You've vaguely stated a no to that and have provided some vague inspecific reasoning on it which I can't really tell if I agree with or not. While I know I do not agree with the idea that the ideals can't be applied elsewhere or can't work elsewhere in some fashion I don't know where the dis-junction in reasoning occurs.

    Quote Originally Posted by Legio_Italica View Post
    The initial signals I was getting still prompt me to take fundamental issue with what seems a cornerstone of your premise, and correct me if I'm misreading yet again. You seem to think that an economy exists as a public institution to be controlled by "science" for the "public good."
    I think the economy exists as a public institution. I don't think it's purpose is to be controlled for the public good. The purpose of an economy like the purpose of life is up for debate and really I couldn't care less about it. My point was that looking at the two principles as a dichotomy, the economy or the social policies is fallacious and borderline idiotic.

    Quote Originally Posted by Legio_Italica View Post
    I again take issue with that, pointing to the very system you champion. A Market mechanism economy has basic traits that must be reacted to as a force of "nature," not controlled.
    Your issue again is in black and white interpretation. Calling a market mechanism a force of nature is entirely wrong because it is not nature. It does not happen at random, and it does not defy prediction, it does not persist without the society to create it. A market will always exist just as a sense of morality will always exist so long as society exists. i'm not entirely sure what you're getting at with the idea of the market as a force of nature as it doesn't seem to be reliant for any of the ideas you've stated so far nor does it seem to have anything to do with anything I've said.

    Quote Originally Posted by Legio_Italica View Post
    Moreover, Economics is a social science. The specifics of its theories are not a natural science, because the study of human behavior is not a natural science.
    The distinction between natural and social, hard science and soft science is a delineation only used by those outside of the paradigm of science. They are improper terms used to create distinctions within science that science itself does not recognize.

    Quote Originally Posted by Legio_Italica View Post
    We may observe trends and human civilization, but these are ever-changing, and constants take centuries to state definitively.
    A wave form does not require accuracy or certainty. A wave form description is essentially telling you where something isn't or what is impossible to occur and working from there. If the possibility to not occur how you expect it it 1-2% that's like saying that 98% of the possibilities other than predicted are not possible. With more similar situations creating a gradient with the most distinct ones from most likely to least likely. Through this we can create 'educated guesses' about what will happen if we do X Y Z. In common terms these are practical certainties. All we need to create a wave form is some understanding of statistics, and a series of data and we can create a wave form for literally anything from moral ideas, to social prescriptions to etc. The more data we have the more exact our conclusions can be. For example statistically one paper would not be enough to severely effect the theory of gravity. Because the pile of data leading to our wave form description of gravity (which is inaccurate dozens of zeroes out) it would take hundreds if not thousands of papers all saying roughly the same thing about gravity for us to seriously doubt our wave-form and get rid of gravity all together as a concept.

    We can apply these same principles to the economy and this is what the best economic systems have focused upon. If random number theory ever becomes perfected our abilities to describe wave forms will become so accurate that we can even tell if something is correlated or unrelated for reals or if it's simply an artifact of the data. We can do that now of course but only with the addition of more data. If we do perfect such a thing we will be able to predct the outcome of just about anything with the only limit being the universal indeterminance which may or may not exist.

    Quote Originally Posted by Legio_Italica View Post
    Hence, I'm not sure what you mean by "planning an economy with economic theory," as though the latter contains any level of certainty or uniformity beyond the acceptance of capitalism itself as a foundation.


    No. The of level of certainty is far far higher in excess of the credit you give it. You seem to target these principles as having half of a chance of making things better and half a chance of making things worse at your most liberal. These policies are not irrational and unrelated to the problems at hand, they're directed and predicated upon theory and data which itself is built off of knowledge which is true or certain to within a given degree.

    For example the CBO (which I never said anything about being tied to teh GOP, I'm not sure where you got that from) predicts the effects of Obama's policies on the deficit by 2020 to be a decrease of up to 2.0 or an increase of about half a percent overall. The actual result will be within the bounds of this limit usually following a normal distribution in which the central position or mean, median and mode of outcomes is about .75% decrease to the overall deficit by 2020+/- 1.25%.

    This is the range of inaccuracy of their calculations. Now if they had very little data a small change in the data could massively change their conclusions. However their data has both accuracy and depth enough to form rather accurate conclusions. If the true result falls outside of this distribution then there's a major issue in the reporting of the data.

    Quote Originally Posted by Legio_Italica View Post
    What is all this data and theory that is so obvious and universal, exactly? Again, I'm really sorry if I missed your links, but I reposted all of them I could find above, and they provided only the most general and universal of positions.
    The wikipedia links are aggregates of first tier resources. Your best bet when using wikipedia is to utilize the resources in the citations page. The links provided were only provided to give you an overview of what I was talking about. Unfortunately you ignored them and pressed your own concepts of what I was talking about. Which by the way you're still doing with your description of natural force of the economy and your extremist conception of what I mean by planning. To really go into the quality of the data you simply need to go through the citations listed on the wiki pages. If you had a specific issue I could post a specific resource. However when it comes to dismissing generalists you make, posting a general list of my principles is more than appropriate. You should've taken them at face value, instead the debate became something which again had and has no relevance.

    Quote Originally Posted by Legio_Italica View Post
    What is "the" theory I'm rejecting. Am I rejecting any possibility of successful monetarist policies, as evidenced by the repeated tendency of our own example, the Fed, to fail in its efforts to control economic downturn, and succeed primarily in the perpetuation of the current, increasingly top-heavy systems after every successive cycle
    Well you phrased it as a question, and judging by your responses and the large caveat the answer is yes. You are dismissing monetarist policy which is again perpetuated by scientific knowhow. You cannot reject these types of policies offhandedly and further your debate (if you do) is massively contradictory because monetarist policies include a whole host of policies you do agree with. This is what I mean when your debate is nonsensical. Taking the stance of either agreeing with monetarist policy exclusively or not is silly because montarist policies make up such a wide range of possible outcomes. Yes there are outdated monetarist policies, referencing them does not benefit your debate at all however because you're merely showing that some policies have failed. Who cares, I'm not attempting to defend outdated monetarist policies that have been proven wrong.

    Quote Originally Posted by Legio_Italica View Post
    I don't disagree with breaking the banks up. Furthermore I do not agree that the monetarist policy which created that symptom is all bad. Dealing with these problems is something you must do anytime you utilize monetarist solutions to keep an economy stable. That's very different to rejecting their use entirely. It's intellectually untenable to argue that:"All monetarist policies are bad and should never be used." All monetarist manipulations create symptoms but often those symptoms are easier to deal with than they were otherwise. Creating a system where the biggest banks don't fail, end up getting bigger isn't a problem at all if you don't have an issue with splitting them up again. In fact that's a problem that is much easier to deal with than trillions of in assets and capital suddenly being taken off the table. Remember these banks have trillions in holdings. The loss from them collapsing would've been several trillions of burden on society. Now that we understand how risk sharing works, and your only clear alternative is to reject tarp entirely can anyone honestly with a shred of intellectual honesty say we would be better off without TARP? I would say no. At best it would've changed the problem into a different type of issue, one that I doubt we could have so easily managed.

    Quote Originally Posted by Legio_Italica View Post
    Not sure what you're getting at here, but I was referring to a basic approach to economics, not regulatory philosophy. Ironically, my words here echo those the Nordic article, ie the goal of economic study and policy ought to react to Market mechanism factors, not try to change the nature in which the mechanism naturally functions.
    To claim the mechanism naturally functions at all is rather silly. There is no economy without society. The fluctuations within an economy are directly due to those within society. The Nordic system recognizes this explicitly.

    Quote Originally Posted by Legio_Italica View Post
    Any act of force is unethical, no? The pragmatism of governance necessitates otherwise.
    No, this is a rather puerile viewpoint to hold with regards to ethics. There a positive freedoms and negative freedoms. Your positive freedom to have cigarettes for example should be weighed against the negative freedom of me living without them. The positive freedom of a company to dump toxic compounds should be weighed against the negative freedom of society to live without exposure to said compounds. Thus the role of government is to navigate these borders and take upon itself the responsibility as a neutral third party of enacting, enforcing or incentivizing them. Thus governance is ultimately about force and enforcement in some regard. The advantage of having government do it instead of people is obvious and instead of businesses should be obvious as well.

    Quote Originally Posted by Legio_Italica View Post
    And, the particular manipulations the Fed is in charge of would be akin to accepting the directives of a private security company after being told that your house is being broken into too often and you need to accept certain lifestyle changes to avoid that trend in the future. So you take their advice and follow through. Funny thing is, your house continues to be broken into just as often, and now, the thieves are taking more and more stuff. The security firm reimburses you for your losses, but you can't help but notice that the notes they reimburse you with are becoming less and less valuable, and it is becoming more and more difficult for you to replace your stolen belongings as a result. Moreover, you can't help but notice that after every break in, the security firm's investors buy up more and more houses and bring them under the same "security system."
    Irrelevant conspiracist nonsense.

    Quote Originally Posted by Legio_Italica View Post
    You call this conspiracy, so I guess we can drop it since the nuances of central banking are not inherently tied to market regulation.
    Yes they are. The only way for you to drop this point is to concede it isn't the case or to provide evidence of this conspiracy in line with the tone you've conveyed. That tone is one of criminality or of conspiracy between the federal government and the markets it's manipulations affect. You're right in some sense that the government's interests are the same as the corporate interests. If the economy is good and stable and growing everyone benefits, but I don't think you're correct that the government's interest is corrupt as to stand with the company against society itself. Such a claim is ridiculous. Discussing the actual affects of government manipulations including their costs and benefits would be much more appropriate. At least then we could say X is a bad policy or Y is a good policy because of A B C. For example what you said about tarp is very easy to deal with economically.

    Quote Originally Posted by Legio_Italica View Post
    What? Who's talking about "market self-regulation?" Just because I don't want the money in my pocket and the economy I live and work in controlled by a private mega-bank whose sole beneficiary seems to be the Money Power doesn't mean I suddenly want to dissolve the federal government.
    Interesting, so your provocative language and word choice has nothing to do with how intently you believe this? That's something that isn't apparent through your overly dramatic language.

    Quote Originally Posted by Legio_Italica View Post
    Maybe the Fed is necessary. Isn't there some way we can structure the banking and capital system on something other than infinite debt and inflation, upon which we occasionally move the goalposts by raising real wages as inflation works its way through the system?
    But banking and capital is not structure upon infinite debt and inflation. The idea of infinite debt itself is another conspiracy propaganda term with no real meaning. Of course there's a limit to inflation and debt. Denying that there is doesn't do anything except make your statements even less sensible and understandable.

    Quote Originally Posted by Legio_Italica View Post
    No, its more like, "Hey, lets be a little more specific about what we should try to manipulate and what we can leave alone, instead of trying to centralize the entire system on a single formula." But, hell, I'm just an unpaid intern. Maybe the czars of the State Science Institute have a method to the madness. Judging by the explosions and acidic gases billowing out of the room, I'd say they ed up somewhere, but again, I'm no expert.
    I see, it would've saved everyone a lot of time and effort if you were to have said you didn't know what wrong with the federal reserve but that you 'feel' that is the issue. Understanding why you feel this way is quite important to the terms of the debate and should have some basis in reality. If it does then it can be discussed, if it's based on meaningless supposition and generalisms then you need to increase your standard for intellectual honesty.

    Quote Originally Posted by Legio_Italica View Post
    You seem to think there is some theory or some science that will greatly improve the social science of economics. Yes, reams and reams of data synthesized into a nice curve with derivatives might tell us alot of useful things if we have our data and parameters right. Does that mean we have the math necessary to control the Market mechanism? I would say hell no, especially not by these central formula concepts, where we have the classic "Maestro" attitude of, "Well boys, if we raise the interest rate .00002%, we could save the car industry. If we raise it .000021%, we risk crashing the economy. So lets hope .000001% margin of error is enough."
    This is the first realistic description of what an economist policy does despite your rejection of it. Now notable the real margins of error are about 1-2% not .0000001% or w/e. This is why these manipulations are suited to particularly large macroeconomic events because until things start impacting the economy at a large enough size we cannot sort the math out. There's no way for us to see a factor or an effect that is much smaller than our margin of error because it can be buried in that error. This is a given however and is simply the limits of knowledge. We don't stop using newton's theories of gravity until college because 1-2% error doesn't make that much of a difference.

    Quote Originally Posted by Legio_Italica View Post
    Don't you realize the power the Fed has, and how even the smallest adjustments to something basic can have profound effects on the economy?
    Of course I realize that? Do you not realize that appealing to fear, appealing to power and ignorance all are fallacious and can be dismissed from any debate offhandedly? Your argument would be better off subjecting each of the fed reserve member's to a personality test and telling me that they're all psychopaths. At least then you'd have some basis to what you're saying. Instead you're focusing on a few instances of failures to the exclusion of the vast majority of successes which include just about every moment of every day the economy isn't failing. Hell I doubt our economy wouldn't collapse if the federal reserves manipulations ceased for one year and we were already at a stable position much less a decade.

    Quote Originally Posted by Legio_Italica View Post
    Doesn't that seem just a little too centralized to you? It is possible to have banking regulation without central banks, you know.
    Too centralized relative to what? Without a qualifier there this is another ambiguous statement which is utterly meaningless. I do not see the federal reserve as a force for bad. I do not see it as perfect by any stretch of the imagination but I do not see removing it as even on the table for debate. If you want to have a proper debate debate what limitations you might impose, come up with realistic terminology for your thoughts and ideas. I can both correct which ones I do not agree with and which ones I do. Having a debate with no federal reserve pure stop is pointlessly trivial and it's not something I or really any person who knows anything about the economy will agree with doing. Which is to say I can dismiss most of your arguments (if I wanted to) based on the tone of extremism. I don't believe you're legitimately an extremist I believe you're simply painting yourself into that position while simultaneously holding a different one. Hence why I bother continuing this debate at all.

    Quote Originally Posted by Legio_Italica View Post
    When I criticize the systemic pitfalls of monetarist policy, you seem to counter that the only problem is that the policies weren't thorough enough, or that the math was somehow wrong. My question is why the hell we are relying on a handful of math formulas to make or break the economy.
    Attacking math is a fallacy. You cut off your own head if you demean the systems of logic and rationality and make this debate legitimately unable to be had. You can attack the accuracy of the math but again your extremist positioning is demeaning your credibility massively. You've criticized monetarist policy in general. When you've been specifics your interpretation of it has been jaded, extremist and unwarranted. I've yet to see a reasoned approach to the conclusion of rejecting monetarist policy and rightfully one probably can't be made because no matter who you are some monetarist policies are indeed the right way to go. If instead you focused on specifics the debate could continue. However you seem perfectly satisfied with maintaining this level of debate between the differences of socialism versus capitalism. A distinction I abandoned several posts ago and redefined several times since with zero recognition from you.

    Quote Originally Posted by Legio_Italica View Post
    Mandating minimum carrot quality is fine. In the example scenario, that piece of legislation should come after the one that breaks up the carrot cartels and breaks up the territorial market barriers they set up for themselves. Priorities is the main difference, I'd say
    This again defies your extremist positioning. Mandating a quality of carrot is mandating what the market produces. This is direct planning of outcomes something you only paragraphs before seemed entirely unable to be negotiated with about. So you do support defining outcomes to a certain extent. This is a reasonable position to hold, the position of not is not a reasonable position to hold.

    Quote Originally Posted by Legio_Italica View Post
    Who ever said anything about social policy and regulation being out of the question? If a conflict of interest exists, "regulate" it away. Break the monopolies, set quality standards, blah blah blah. If you want to get into the realm of profit caps, price fixes and quotas, however, not only is that Orwellian, but at least borderline counter-productive as the band aids are probably piling up without reference to the source of the wound.
    The question must arise of how one might actually set profit caps price fixes and etc. For example mandating that an organization has X% profits will cause one of two things, purchasing of il-liquid assets or investment. What happens when either of these occurs? Improvement to society. Companies can invest into other companies helping them to grow, or companies can invest in their own infrastructure helping stabilize. This also creates the incentive to invest into the local community because if you can't keep the profits either way you might as well spend it on something that vaguely benefits you. I'm not sure what you mean by price fixing and quotas but I entertain the idea that either one could probably be done in a beneficial way. Now on the other-hand cutting a company's profits in other ways could indeed result in stagnation of the company, but that's the razor edge we need to be able to walk confidently. The only thing which gives us that confidence is science.

    Quote Originally Posted by Legio_Italica View Post
    Again, this gets into political and social issues. Take the Nordic model for example. In the article, freedom of information acts are mentioned as essential to consumer education. Do you want the government to include some kind of warning label on its packages? Again, the advantage of the Nordic model in this context is that the small and socially homogeneous population actually gives a and utilizes the information provided to them. For 's sake, we passed the Patriot Act on ourselves. Do you really think the American public gives a damn where their toys come from? You say no. I agree. So what should the government do? Protect the citizenry from themselves? It's not like the any product information about Walmart isn't readily available. Is Walmart breaking the law? How would you have the government intervene in these perceived business ethics violations?
    Well a large part of the lack of apathy is the trust in the government. Unfortunately with the repeal of the fairness doctrine by the GOP, Nixon and others our faith in our government is at a all time low, a huge amount of it was done specifically by corporate interests to essentially declaw regulators and the public. The best way to improve this would be to restore faith in the government. The only way the government can do this is to legitimately benefit the society that is under it and to make a big deal about it. Previously media sources could be trusted for more or less unbiased news but without the fairness doctrine we're back to yellow journalism where just about any news outlet will say anything it wants to without fear of having to provide the opposite side of the story. This is a large reason why I reject more or less all news for anything worthy of controversy.

    Quote Originally Posted by Legio_Italica View Post
    How exactly is Walmart "hurting us all?" Is there some manner of market stagnation and inefficiency just waiting for new and innovative companies to fill the void? If so, point it out, and I'll be glad to give my interpretation of how the government could fix that problem. Otherwise, it seems like you just don't like Walmart.
    Walmart hurts society by being one of the number one companies guilty of a practice called externalization. The practice came into it's own in the 1980's with Raegan in which companies argued that their costs of operation prevented them from competing (essentially, why ever be ethical because all ethics does is increase your costs) this lead to a huge amount of government subsidies designed to alleviate the cost of operation in companies.

    Essentially speaking it lead to a systemic issue with companies receiving subsidies and funds directly from the government as well as a slippery slope to bad behavior amongst companies. If the cost of doing business is too much for companies to handle then the cost for behaving is seen as an extra on top of that. This reversal is happening slowly to be pre-reagan era conception of a company needing to pay attention to it's stakeholders not just it's share holder (which includes everyone affected by their actions).

    http://www.goodjobsfirst.org/corpora...taxpayer-costs

    Note the above site is an aggregator of tier one resources not a source in of itself!

    There's a lot of things, just look at the total number of fines walmart pays a year to get a sense of it's business model. One would not be inaccurate to say walmart wouldn't exist if not for its criminal activities. By criminal I mean illegal. Walmart is the victim of over 5,000 lawsuits each year regarding it's employment practices alone. It faces millions upon millions of dollars of fine each year. For example they faced millions in fines due to bribery of mexican officials. Or the simple fact that walmart's tactics with wages has lead to a dramatic rise of welfare reliance in the lower classes.

    Quote Originally Posted by Legio_Italica View Post
    I never said Walmart could "use" demand side solutions (not sure where you got that). I said that it seems to me the only current justification the government has for taking punitive action against Walmart is if the latter is breaking the law. If all you mean by "demand-side solutions" is strengthening the social safety net, I have absolutely no idea why you continue to reference such an externality in such a wide range of contexts. Simply redistributing Walmart's wealth doesn't have much to do with their ethical situation.
    What I said was in reference to this:

    Quote Originally Posted by Legio_Italica
    Any demand-side issues Walmart has would be legal, like, say, strong-arming competition with physical intimidation, tax evasion, lying to stock holders of government regulators, etc. Otherwise, hiring people at minimum wage and importing toys from China does not seem sufficient to warrant your "demand side solutions."
    In understanding what you meant was that the government didn't have cause to use demand side solutions upon walmart as in punitive actions then I must say you've completely misunderstood what demand-side solutions are hence my confusion to what you had just said. Although I suppose a law system which takes punitive action on corporations is essentially a demand-side solution in ofitself.

    Actually the government takes a ton of actions on Walmart. But unfortunately walmart is a person that neither dies, nor ages and is composed of the abilities of over a million. This means that though fines can be excessively prohibitive for any small business or single person, for the corporation they are extremely manageable. This is what I mean about incentivization of corruption. In many cases because of it's size it is actually cheaper for walmart to blatantly violate the law. Punitive damages have their limits and even at the maximum rates which would stop most walmart actually benefits massively. So yeah, I would say the government is taking punitive damage but the system under which it is constructed has favored corporations legally since the idea's first creation (kind of the point of a corporation, liability) and in walmart's case even more so. Corporations in the nordic system do not benefit from this advantage. Walmart's tactics with unions alone would be enough to encourage action.

    On the opposite hand exxon while not godly by any stretch of the imagination gets by with one or less safety violations a year. They're roughly the same size. So how can one act so many hundreds of times better? Exxon has a union. What makes sense from an accounting's perspective still has to be agreed with by the union. A union is a demand side solution.

    Quote Originally Posted by Legio_Italica View Post
    This has nothing to do with "procrastination" or "rejecting science." Modern economic theory has yet to produce magic formulas that solve all the world's problems. As I've said, the "science" of modern economics primarily revolves around developing formulas to explain and observe trends we see in the world today, and how we might better conform to Market and social factors to adapt to these phenomena. You act as if economics developed mathematical theorems decades ago to "solve" systemic problems, and are simply being ignored.
    I do not but feel you grossly underestimate their accuracy as the same as any other idea or opinion.

    Quote Originally Posted by Legio_Italica View Post
    This has nothing to do with "procrastination" or "rejecting science." Modern economic That may be true in extreme political situations, but given that these guys have all been monumentally influential in helping modern systems to observe and understand trends therein, I'd say the point is, as you say, "moot." Economics can tell us alot about the systems in which we live. That doesn't mean there is some kind of uniform code just waiting to be implemented. Economics, again, is a social science. Most of the people on that list dedicated their careers to politics and/or social justice. Their job is to interpret, not create.
    You dismiss it far too much.

    Quote Originally Posted by Legio_Italica View Post
    TARP is a great example of how the system works. I believe I linked earlier.


    I know what tarp is and I do not agree with you that it had the undesired outcome. The cost of smaller banks going out of business is simply the cost of keeping the larger ones in business. I do agree the banks should now be split but as long as we're willing to do that no harm no foul. You seem to make the conclusion that because there's fewer banks with more market share that tarp has failed? That's not even the purpose of tarp in the first place. I'm sorry but I can't understand why you feel this is important or a point at all.

    Quote Originally Posted by Legio_Italica View Post
    http://www.frbsf.org/publications/ec...el2006-28.html

    Article on the Japanese QE. While the real effects are still unknown, the massive inflation of liquid capital definitely propped up weaker sectors artificially, which is exactly what I was talking about. QE is just another band-aid that grants longevity to systemic problems in an effort to postpone the negative effects, as do bailouts, financial rescue programs, and the like. Moreover, the problem of inflationary effects in the long term are unknowable and possibly even more harmful.
    This was the article I actually linked you in our discussion of QE initially IIRC btw. I know it quite well. Further I think it's key to point out that QE's goal was a success with the margins of that versus the target not sure but still an overall success. Further the inflation was minor. I can see inflation being a serious issue if ignored, I just see no reason for you to assume it will be ignored. We have to pay that cost at some point, QE allows us to pay it when it's better for us to do so. It was known that this was likely to be the result before hand, their stated goal and outcome match beautifully if not yet enough is known to be precise. So yes, this is an example of successful QE. Thank you for providing it.

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    Default Re: Capitalism vs. Socialism: Which is the better economy? [elfdude vs. Legio Italica]

    Quote Originally Posted by Legio_Italica View Post
    I have no idea why you insist in these secondary articles. I don't agree with their assessment when it comes to analysis. It has worked in this economy and I think that much is quite abundantly clear. At least as far as it's intentions were concerned. Furthermore it should be pointed out this analysis is from 2009.

    Quote Originally Posted by Legio_Italica View Post
    The fact is that QE is simply the deliberate act of "creating liquid capital." Central banks no longer need to print money, they simply declare their reserves to be of a desired size; ex. the central bank, formerly having 700 billion in reserves, will now declare it has 1 trillion or 2 trillion or whatever, and is ready to purchase assets. So the central bank begins buying up private banking assets with this newly created money under the assumption that banks won't like having all this cash sitting around and will then move to lend it out cheaply to balance their accounts. This also assumes more people will borrow money just because the interest rate is cheaper. The data on this latest experiment by the Fed, indeed a measure of "last resort," is forthcoming, but it hasn't worked so far, which is why Bernanke announced the plan for Unlimited QE.
    It actually has worked and they've seen growth in response to QE1 and QE2 hence the reason QE3 which has shown growth so far as well. I don't agree with your assessment.

    Quote Originally Posted by Legio_Italica View Post
    Here is the current reserve requirements. The 10% requirement on transactions over 80 million is basically meaningless at that level, since large banks who make those kinds of large transactions will always have enough outstanding assets to use as reserves.[/quote]

    Which means the banks will also essentially always have money on hand to prevent the negative effects of reserve requirements from resulting in no real money and all theoretical money. So long as enough money is present to satisfy that reserve requirement I do not see anything negative occuring because of a low interest rate, in fact it simply creates more money. It is a long term danger but reserve requirements and interest rates usually increase when they can to tighten up in times of good and loosen up in times of bad. I used this website to make the statements I did.

    Quote Originally Posted by Legio_Italica View Post
    "Reserves" used to be the amount of gold or commodity a bank had in the safe, hence the system was always based partially on real value. This was a "receipt" money system. Under the fiat system, a Fed reserve requirement of 10% just means that 10% of a new loan value must be backed by an equal value of "assets," meaning existing loans. So, if I have $100 in existing loans, that now becomes a reserve that will allow me to create $900 in new loans; that $900 literally existing only as an arbitrary inflation of the value of the original $100.
    This does not go on forever. The effect of this with fiat currency is at maximum a theoretical doubling of the value of capital by creating more flow of capital within the system. This increased flow of capital benefits many things, it's risky however if the banks do not have the money to physically back up what they have a sudden withdrawal could be disastrous. I made the analogy to you earlier of our body and the blood flow.

    Quote Originally Posted by Legio_Italica View Post
    Even the original $100 is only backed by the same system. So, the system works great as long as the interest rates keep rolling in and people don't pay their debts (this would cancel a reserve, because the "asset" of the loan would be paid off and thus cease to exist). Ideally, no one will ever pay their debts, and just keep paying interest forever. That way, the system would sustain infinite debt and inflation. When people don't borrow money, the game of musical chairs gets tricky. That's why the Fed has begun pouring money into the jukebox trying to keep the music playing and convince people to keep borrowing.
    This is vaguely accurate but the provocative language you're using turns it into conspiracist nonsense. The maximum this practice can inflate our economy even theroetically is twice capital. All this practice means is that when you put your money in the bank, the bank can use it to purchase private securities and attempt to increase this money by utilizing it's value to create more value, i.e. investing in the growth of the economy (at least that's what they're supposed to do, the recent hedge fund fiasco involved making purposely poor bets). They cannot infinitely create money with this process and I haven't the slightest clue where you got that from.

    Quote Originally Posted by Legio_Italica View Post
    This is basic fractional reserve banking, and I don't think you ought to be treating very risky and unproven techniques like QE as some kind of "no brainer." It is a part of a system of infinite debt and inflation, and the response to any problems in the system, as the Fed has demonstrated, is to try and force the creation of more debt and inflation. Where will it end? One can only force so much leverage before the crowbar snaps.


    Your conspiracist tone in describing something that is not a terrible thing at all completely negates your sensibility. If you meant to say QE could easily be overused, sure I'd agree with you. If you'd say QE is bad no, you're wrong and your own sources have shown you that. If you say fractional reserve banking is creating infinite debt you're also wrong. There is no infinite debt creation that cost is assessed somehow or somewhere. These policies only change where or when, not how.

    Quote Originally Posted by Legio_Italica View Post
    Anyway, QE is not inherently fundamental to "mixed market" economics. Perhaps we can drop it and leave you to your bizarre faith. As far as demand side solutions you keep bringing up, I don't see how redistributing wealth is going to convince people to borrow money. If anything, the more money I have, the less incentive I will have to borrow. Perhaps I misunderstand you?
    Borrowing money is not necessarily a great policy and it's simply a monetarist manipulation. While I know and understand it you seem to think this is equivalent to creating infinite wealth. Frankly the concept to me is as hilariously mis-representative as the concept of perpetual motion. Wealth redistribution is a demand-side solution which impacts real wealth creation.

    Quote Originally Posted by Legio_Italica View Post
    Just an example of the "impartial" Fed abusing its power. Burns admitted in the linked book that he slashed interest and reserve rates in the early 70s to create a false boom, rejuvenate the sluggish economy, and greatly aid Nixon's reelection chances. Not only was this action corrupt, but was in many ways responsible for the economic downturn of the Carter years. Yet another example of how even the power of a single economic planner can have disastrous results.
    I know it can be used to do this. The same principle can be used corruptly and can be used appropriately. Congratulations you found waldo, or corruption in this case. This is no way says that the system is inherently evil and this distinction will forever torment you I suppose. When something is inherently bad, we should never use it. When something can be bad or good, there's certain times we use it. This is central to everything from life to economics to science and everything in between. I'm having such difficulties understanding how you take a concept and immediately turn it into some black or white effigy of corruption and plutocracy.

    Quote Originally Posted by Legio_Italica View Post
    I think you can agree that the greater power a person has, the greater responsibility and strength of character that person must have to wield said power ethically. Apparently, you would place faith in the ethics of a few individuals, "experts," to indirectly or directly control vital levers within the economy.
    I do not see the link between greater responsibility and strength of character. Yes it would be desirable if everyone did have greater ethical capacity there but they don't and there's no reason to trust that they do. This is not the same as saying however that they're invariably corrupted and thus should be eliminated all together. Neither that nor does the mere possibility of this in practice necessitate the end of said practice. Understanding that X Y and Z is evil does not mean the alphabet is evil. This is the fatal flaw of your entire argument.

    Quote Originally Posted by Legio_Italica View Post
    Given the increasing plutocracy, Executive Branch power, and Caesarian populism of American if not all of modern politics, I think even you would agree that our "checks and balances" have been seriously eroded. I would begin by repealing the 17th amendment and returning Senate elections to the State legislatures, for example.
    I think you target the wrong culprit in your vendetta. It is one of degree not creed. Targeting centralization is just as naive as targeting socialism or capitalism or homosexuality or blacks or or or or. The issue is not solved by doing this and I don't agree that senate elections at the state level would be good. I do think however reestablishment of the fairness doctrine should be mandated.

    Quote Originally Posted by Legio_Italica View Post
    Really? You don't think the fact that a simple arbitrary change of interest rates by a Board of seven people can make or break the entire economy is evidence of a dangerous level of economic centralization?
    No also I don't agree with the idea that you've properly accounted for the accountability to congress, the board of governors, the judicial branch etc etc.

    Quote Originally Posted by Legio_Italica View Post
    Obviously. Who do you think determines value. Supply and demand is what the Market is all about. "objective" value means a value that is determined by a market consensus, and gold has held its value better than any other commodity in history. I'm not demanding a return to the gold standard. Obviously the world economy has moved far beyond such constraints. I'm simply saying that the Fed shouldn't have the power to simply create money by "editing" its balance sheets with no oversight whatsoever. Again, however, more oversight means more political interaction between the Bank and its regulators. That's why I said there is really no easy solution to this mess.
    Again this is not the power the fed has. The oversight beyond just the governmental structures which you ignore is the very economy itself. The fed's manipulations cannot exceed the norm. They do not create a new level of existence for teh economy, they can only skew it in certain ways. There is no possible way to create infinite value without the conspiracy of every person on earth. Which is utterly impossible for a variety of reasons. Do they have power to alter the value and create some liquid capital? Yes. They can alter things in the degree of 5-10% I would say rather liberally. Is this infinite? No. Does it necessitate immediate rejection as 'bad'? No. Your argument is borderline paranoid and predicated on variations that are all just to the right of truth.

    Quote Originally Posted by Legio_Italica View Post
    Which part of "history" has demonstrated such positive results? As I said, the game of musical chairs known as fractional reserve banking usually works out pretty well if the system is well regulated. Sure, there's the false boom followed by the recession every four or five years, but generally, as long as people keep borrowing, and new loans continue to flow, everything generally works out. I would argue that the system itself is unsustainable, and we will see if I am right if this latest QE trick works out. If not, there's always the option of reforming the entire currency. The largest capital holders will be taken care of as always, and the rest of us will take the shaft. Should be fine.
    The funny thing is if it were to happen I agree with you that it would look like that, if things went to , but I don't agree that is what is happening and I'm starting to realize how important this faulty concept of infinite wealth creation (as if there's such a thing) is to your worldview. I don't really know what to say about it as I've never heard the idea spelled out thoroughly like that.

    Quote Originally Posted by Legio_Italica View Post
    No. Originally I said that the entire structure of the world economy is inherently capitalist and I didn't really believe you were a socialist. This was in response to your original prompt that you would argue the socialist perspective. Given that you've basically demonstrated that you are a capitalist (which basically means a mainstream view of economics given the lengthy descriptions I've given), we've now stumbled into this quasi-debate about degrees of Market planning that I said at the outset I'd rather not have. Now that we're here, you've yet to go into detail about any of the applications or ideas of your ideal "Nordic model," aside from concepts that exist to some degree in any existing modern economy. Again, perhaps this is my fault for lingering over definitions...... As for your bizarrely staunch support of QE, a policy that opened to international criticism and mixed reactions in the business world even before Bernanke announced the unlimited plan, I will never understand why you continue to mock my primarily standard criticisms of the practice as "conspiratorial" when said practice is fairly new and decidedly unproven. Moreover, QE is a tangent to the issue at hand, and certainly not related to your "ideal model" and "demand side solutions" you keep talking about. Again, if I'm the one pressing this tangent issue, I apologize, however, I honestly have yet to see a summary of details on your support for the Nordic model, or your proposed use and context of the "demand-side solutions" you keep talking about.
    My economic model combines monetarist, demand-side and supply side solutions, I've already said as much. I'm not sure what your obsession with black or white is and if you weren't interested in having a debate you've done a marvelous job of not indicating that. I simply dismiss or ignore things I'm not going to debate. If you give me a line of reasoning I can refute sure, but you haven't. You make this vague association then jump to the immediate conclusion that everything's a lie and the man's out to get you.

    Quote Originally Posted by Legio_Italica View Post
    All the more reason why I can't see what you're getting at with this "if we would just use more demand-side solutions, everything would be cool" rhetoric. Social safety nets, financial rescues, bailouts, monetarist policies.... all these have been in place and used frequently for the last 80 years in the US alone. Not sure why you are stressing demand-side solutions when they're pretty common.


    Congratulations you can now successfully identify what a demand-side solution is. Now to understand why I suggest implementing them and why I think their implementation is a good thing.

    Quote Originally Posted by Legio_Italica View Post
    Where does the government go for money? Tax payers? Foreign governments? As a baseline, yeah, sure. How does the government continue to finance huge deficits and massive spending programs for decades with no intention of slowing or reversing the trend? The Fed steps in and buys treasury bonds. What if the government wants more money? The Fed buys more treasury bonds. What would the government do without the Fed? Go bankrupt in about half a second, that's what. Apparently this isn't true, and the government has not run at a deficit for most of the last century, nor has it been able to accrue trillions in debt.
    I did not say that the government has not run at a deficit. You stretch words to mean more than they do and to make implications which do not follow. This isn't a line of reasoning it's like arguing with a mad man. What the hell are you on about now? Yes the government runs at a deficit, yes we've accrued debt, no the debt is not a good thing. What is your point? I can't understand how you've even got this notion in your head that I disagree with it nor can I understand why you don't connect your extremeist rhetoric with the misunderstanding of your words. I don't know why when you say that:

    Quote Originally Posted by Legio_Italica View Post
    My point was that central banking has released the governments of the world from the constraints of tax revenue and accountability to the taxpayers.
    And I say it isn't true you jump to:

    Where does the government go for money? Tax payers? Foreign governments? As a baseline, yeah, sure. How does the government continue to finance huge deficits and massive spending programs for decades with no intention of slowing or reversing the trend? wtf where does this come from? The Fed steps in and buys treasury bonds. What if the government wants more money? The Fed buys more treasury bonds. So? What would the government do without the Fed? Go bankrupt in about half a second, that's what. Apparently this isn't true, and the government has not run at a deficit for most of the last century, nor has it been able to accrue trillions in debt. again wtf?

    In fact the only part that makes sense is the first part. The rest is you talking to yourself and arguing yourself into the idea that I don't know the government is in debt. The hilarity of your responses is jaw dropping and I don't think you intend them to be so.

    Quote Originally Posted by Legio_Italica View Post
    It has nothing to do with the Fed's "goal." Congress could technically borrow as much as it wanted from the Fed because the Fed could technically purchase as many treasury bonds as necessary. Obviously, the rest of the world would get a little too antsy and begin shedding US investments at some point, but you get the picture. The US government never had near the borrowing privileges that it would once the Fed came along, because it could only turn to private or international bond sales/loans. The Fed is a bond purchaser with potentially unlimited money. Just because "the probably would never do that (create money/liquid capital indefinitely)" doesn't mean its impossible, certainly in the midst of QE.


    I don't understand why you don't see this as a conspiracy. You start off rational enough and spiral into paranoia about half way through. You mention in the first part even why the fed cannot do this. Practical limitations come into play even in the most liberal interpretations and frankly by liberal interpretations the fed is being conservative so I see these statements as pointless hypotheticals and fear mongering.

    Quote Originally Posted by Legio_Italica View Post
    Only 90%? Gee thanks. Actually, the US dollar is the current world currency and the largest reserve currency in the word. That is why stunts like QE don't actually directly inflate the dollars in our pockets. The US economy is so massive that the Fed can play with a cool trillion dollars of newly created money without causing hyperinflation, and also because QE is a conversion of assets, not actually printing money. If the Fed simply flooded trillions into the markets, all hell would break loose. QE means banks have a load of liquid capital that now must find a borrower. Over time, of course, the effects of QE, bailouts, debt, etc add up. The reason these effects are not devastatingly harmful is because they are spread over a long period of time. $1 in 1913 is worth $23.10 today, but the markets had 100 years to adjust along the way. It will be interesting to see what happens now as the Fed's $40 billion a month in cash infusions tests the strength of the system.
    40 billion is a drop in the bucket. You see a bunch of economists with an eye dropper sitting over a bucket full of economy and fear that they're going to disturb the delicate balance. It's simply not a rational tone to take. You've exaggerated the small into something larger and larger and larger. Your own CBO report showed your own philosophies to be wrong unless you reject the CBO's predictions on the economic forcast with regard to policy shifts but not in regards to assessing costs without policy impact. A large portion of this paragraph makes perfect sense and then you take a sudden left turn into crazy town. I do not trust business insider's analysis. They are a secondary resource not a primary one. I can understand the facts of what they said and they do not add up to their conclusion on fact alone.

    Quote Originally Posted by Legio_Italica View Post
    What? So now I'm saying taxes are irrelevant? Obviously, taxes are vital to the baseline fiscal functions. They just have extremely diminished fiscal importance relative to the central bank. Think about it. If forced to choose between getting rid of taxes for 2 years or getting rid of the Fed's ability to lend Congress money for two years, which do you think would be the logical option. Obviously, a two year tax moratorium means the government has to borrow more money from the Fed. A two year shut down of the Fed's treasury bond program means the government goes bankrupt overnight.
    Neither would be possible. The cost of forgoing taxes in one year would more than burry the fed's contributions to debt and double our current national debt. So no, I don't think it's that significant. To put this in perspective, if the government was a middle class citizen they would be in debt less than an average mortgage or maybe 30-$40,000. Roughly equal to their yearly income. This is definitely a bad idea and should be fixed but it's not worth for example forgoing paying for the electric or water or food or clothing or gas or etc. If push comes to serve increasing this debt by .5% over ten years is certainly the wrong way to go, but it's far from world shattering and considering small shifts in policy could reduce it by up to 2% in that same amount of time there's no reason to do a revolutionary shift in your lifestyle. Just like finding an extra 4,000 more a year is easy finding an extra 10% in cash flow is easy. The government could fix the debt entirely in 10 years by increasing the effective tax rate on the top by 10%. This isn't cruel, that's practical.

    Quote Originally Posted by Legio_Italica View Post
    I agree to some extent, but does that "huge amount of money" include the economic impact?
    Economic impact of what? Of the tax cuts for the rich? Likely not a god damn thing. Tax cuts for the wealthy have proven in thousands of cases across the world to do nothing except increase income inequality. Tax cuts for the poor and the middle class on the other hand result in massive upsurges of demand.

    Quote Originally Posted by Legio_Italica View Post
    Closing tax loopholes was on my "agenda" at the top. Not sure where this came from
    Is it not obvious when you read your own quoted response? *sigh* You stated taxes weren't significant, I stated they were and cited reasons as to why. It doesn't really seem that difficult to understand.

    Quote Originally Posted by Legio_Italica View Post
    If capitalism is an "ideology," then it is the foundational ideology of the world economy as I've said. Just because you want to limit the definition of capitalism to some kind of 19th century classicist robber baron novelty doesn't mean its true, nor does it mean I'm "overdefining" anything.
    Your contention of this subject is POINTLESSLY TRIVIAL AND OF NO MERIT. My point was that your definition of capitalism is not the one I use. You have not demonstrated a reason why I should consider your definition the 'official' definition. Therefore my definition is preserved and has nothing to do with this robber baron effigy called a strawman fallacy you've hypothesized in it's wake. I couldn't care less what you call capitalism. Because when you say that capitalism is the central market ideology I know your definitions are such as to mean the same when I say that social public wellness is teh central ideal to the economy. This is how meaningless your attempts at any further elaboration of this subject have been and how utterly tiresome they have grown. Drop the pointlessly trivial stabs at semantics. I don't care no one does and they of are no importance at all to the debate of what we actually mean. Now I have contentions with your specifics. Your gernalisms hold generally true, that is not my issue and has not been from the outset. Your overextreme exaggeration of concepts, your jumps in logic from rational to paranoid and back, your inability to trace what you've said and why I'm responding to it has served to do nothing but preponder this debate endless back and forth. I've stated I didn't care, yet you respond to my statements of not caring with more assertions of the various things I don't care or disagree with.

    The finality of it is that I do not agree with your conception of capitalism and define that conception as holding with my own conception of socialism which by your conception defines pretty much every rational position. That is the scope of my debate and why my paradigm is unaffected by your statement of contrary. I really cannot think of a simpler way to get this across except simply to say that I dropped the contention of attempting to convince you of my definition because I realized you do not agree with it. Furthermore neither of us are using an official definition of either concept. You can argue that you do in ways, but resembling something in ways is not resembling something entirely which is what the requirement would be for your definition to trump my own. Hence the proposal of using a neutral term which meant exactly what I was saying anyways and exactly what you were saying anyways was proposed. The so-called mix-market but even this became a pointlessly trivial point of contention with you to the point of utter frustration because apparently the 'market' of mixed market demonstrates that it is really just capitalism (it does not in the least) and you were right in defining that all along. Which I must respond to you at nearly the point of screaming that I don't care and I never have and stop talking about it because each time I attempt to alleviate myself of the debate while recognizing the point made and explaining why it's irrelevant you make it again twice as long and said in as many different ways as you can STILL ENTIRELY IRRELEVANT to the concepts attempting to break their way through.

    Quote Originally Posted by Legio_Italica View Post
    For the 87th, time, nobody's demanding some kind of laissez-faire Market.
    For the 88th when you say capitalism that is what it means to me and is far closer in my estimation to the technical definition of what capitalism is. To me your statements of CAPITALIST ENGINE or force of nature are pointless trivial attempts to get me to concede to your hopelessly arbitrary definition for no apparent reason. If I say YES I AM A CAPITALIST all that means to you is I agree with your position which is something I DO NOT DO. But you can't understand the difference of a degree, the contention in the specifics and return over and over and over and over to this pointless trite topic of who is capitalist and who is not. If you think I am a capitalist then say so and move on, I don't care it's of absolutely no bearing because even if you want to call me a capitalist I do not agree with YOUR type of capitalism which arbitrarily decides centralism is evil and rejects monetarist policies and then only paragraphs later admits to the very mechanisms responsible for making them work or limiting them from taking over the known world. I don't know why this circle of reasoning is so important to you. It has nothing to do with anything. Stick to the definition of mixed market because the TECHNICAL definition of mixed market is what I'm talking about and what you're also talking about. The differences in what those conceptions in now being obvious rather than stained with arbitrary messages of capitalism or socialism. What you call the engine I call the chassis, and what I call the chassis you call the engine. I don't care about this. What I care about is why you think the car will go faster or slower with or without X Y or Z. The below responses are each irrelevant and strawmen. I don't even have the patience to trace the origins of the responses to show you how off base your response is and where your jumps in logic occur.

    Quote Originally Posted by Legio_Italica View Post
    The Market is going to exist indefinitely as a condition within the existence of human civilization. The proceeding response then, is to learn how to engineer policies and structures that avoid the drawbacks ("demand-side solutions", regulations, etc) and play to the strengths of the Market mechanism. Hell, your own Nordic article said as much. I'm not proposing "radical" ideas or throwing out "centuries of economic wisdom." If anything, I'm saying that the current system, at its core, is fine, and am asking you what you would change about it as a "socialist." Now, I might piss and moan about central banking and debt and whatnot, but that's all part of the superstructure. My criticism of it, as such, revolves around the worries of how much the externalities of current monetarist policy will cost the means of production relative to the supposed benefits. In other words, where is the exit strategy? Currently, there isn't one. I have a problem with that.
    There is an exit strategy, I've talked about this multiple times and I can't figure out another way to say it. Stop perpetuating half truths and say what you mean, you mean you know there is an exit strategy you're just paranoid and don't trust it as being sufficient. I agree with alot of this, stop trying to spin it as though I don't. The points made in the my quoted paragraph have zero to do with ANY of your response. You misidentify the market mechanism as the most important factor of the nordic system. I couldn't give you better blinders. I've mentioned what I think as a socialist and you still are having so much trouble understanding that that I've had to change my definition to mixed market simply to prevent you from hijacking the concept and you still don't understand. I'm at a loss here and am terribly disappointed.

    Quote Originally Posted by Legio_Italica View Post
    You say that, then go on to call my description self-evident (which it is). The economy exists as a consequence of human interaction (to which your response was "duh" and "strawman," even after you just said the opposite above).
    This isn't even an accurate recreation of events. I said it was a strawman to continue to frame the debate as you are and were. It still is. Do you not understand what a strawman is? A strawman is when you make a claim that may or may not be similar to something I would say and then defeat that claim. This is exactly by definition what you are doing. I have not stated your definition was every self evident. That is explicitly absent from ALL of my posts. What I did say is that you've made statements of the obvious and used them to jump into NON SEQUITUR arguments which mean you jumped in logic from one thing to another, or to put it another way talking to a mad man. This is what I mean about strawmanning arguments. In fact 90% of this debate has been your strawman versus me trying to tell you, no that's a strawman and has nothing to do with what I'm saying, here is what I'm saying. Then you quote the post, you remove the descriptions of what I'm saying and quote the area where I say you're making irrelevant claims about definitional alignments which again have nothing to do with anything,

    Let's look at your next strawman:

    Quote Originally Posted by Legio_Italica View Post
    It is not an imposed system orchestrated out of some general will for public betterment. The economy simply exists. It does not exist as a result of "the public welfare." See above for the rest.
    Funny I don't remember saying the economy was an imposed system orchestrated out of some general will for public betterment.

    What I did say was: the economy was the result of human interaction. I stated the purpose of this interaction was maintenance of that society in which it takes place.

    Please stop strawmanning my arguments to say things which I did not say. It's utterly pointless. It's quite infuriating to me on one hand but on the other hand it's quite entertaining to see how long you can continue down this tangent if you keep jumping into fallacies. This debate has become less about economics and more about debate etiquette, how to respond, reading comprehension and overuse of fallacies to the point of being unable to understand explicit messages.

    Quote Originally Posted by Legio_Italica View Post
    My point is that the Fed greatly exacerbated the problems that caused the Great Depression, if not caused the depth and length of the latter altogether. Bernanke admitted this, as I linked earlier. Your response seems to be "yeah, so? We have computers now." In essence, I'm talking to a brick wall.
    My response very clearly was not that. This is both a strawman and gross oversimplification. Two more fallacies. I said the Fed did not exacerbate the problems caused by the great depression. If anything their actions still minimized the fallout. The difference was dropping someone on the climbing wall from ten feet not 100. I'm not sure how Bernake can admit to the fed exacerbating problems of the great depression, the only reference Bernake makes is that this won't be like the great depression in which the fed shut off the funds to early. Which I agree with. How you stretch this to mean whatever twisted meaning it has taken I don't know, I blame fallacies.

    Quote Originally Posted by Legio_Italica View Post
    Under normal circumstances, where the social safety net is financed by actual wealth redistributed from the affluent, then yes, you could consider such a "demand-side solution" sustainable, supposing the amount of wealth habitually redistributed remains constant at a minimum, and the person receiving the wealth spends it without fail.
    Why do you make all of these excessive caveats which are not at all necessary to the function of the system you're describing. This is EXACTLY a strawman. Demand side solutions are demand side solutions. It is the nature of what they are designed to do that defines them. Even a bad demand side solution is a demand side solution. A demand side solution is not a panacea for an economy and I've never suggested it was. You again fail to describe my argument and instead rely upon a strawman which is inaccurate in more ways than I can go into. The above paragraphs describe nicely EVERY exacting detail of the policies that should be discussed. Instead you make these fallacious accusations about the nature of my argument.

    Quote Originally Posted by Legio_Italica View Post
    I suppose your example would be the government taking $100 from a rich man who would have stashed it and giving it to a poor man to spend? I would agree that this can create sustainable demand under the conditions outlined previously. However, this is far from the case in the US at present. As things stand, the government has already spent the $100 dollars on tanks and missiles, so now the wealth being "redistributed" is mostly just borrowed money.
    Which you consider infinite, and in considering that infinite (which somehow you know is also not infinite) your entire description of the world transforms into the mad ramblings of a crazy hobo.

    Quote Originally Posted by Legio_Italica View Post
    While this may create demand the positive effect is cancelled by the public debt incurred and the fact that capital accumulation has not been affected at all.
    To properly describe using your own example. Mr money bags has 1,000,000. He has not spent his money but instead gleefully accumulates more and more of it. In the economy every other person has 1$ and there's a million people. Thus the economy is highly simplified with a million people and two million dollars. Mr rich has now taken the effective capital of that economy and reduced it by 1/2. This is because he has reduced the capital that can be invested back into the economy which defines the economy itself.

    When the super rich make thousands of times more than your average civilian there is a massive reduction in the capital acting in the economy. This is one of the reasons closing the economic gap is important. The Rich simply put cannot generate the demand that the multitudes can. This is because the rich have little they need and no luxury in the world will be enough to make them 'not rich' in most cases.

    I cannot generate the demand of a family of four. But I can definitely make more than four families. This is where your understanding of supply and demand leads to. In understanding that demand and supply are products of the social atmosphere in which they arise. Alter the social atmosphere, alter the economics. Hence a change in hands of capital generates demand which sustains growth.

    Now a montarist policy is a policy which creates the illusion of more capital. One can do this with fractional reserve banking which banks are allowed to spend the money deposited into them. Which they do and can spend no more than. Nothing accrues infinite wealth and to suggest anything does in the economy is a horrible misunderstanding in some fashion of economics and current policy in general.

    Quote Originally Posted by Legio_Italica View Post
    This is what I mean when I say, "the social safety net does not create real demand," because at present, the social safety net is functioning almost exactly the same as a bailout, to the tune of hundreds of billions per year. This is made even worse by the fact that contributions do not, will not, and have not met obligations for many years.


    A bailout is a demand side solution, social safety nets are demand side solution. Is it surprising to you that they function the same? You believe that their only function is to increase debt? That is willfully ignorant of what they do. They increase demand which sustains supply which creates growth. Amazing how that all fits together when you look at every piece of the pie rather than one jaded slice of it.

    Quote Originally Posted by Legio_Italica View Post
    No. You said that social programs would have "increased demand." I said this had nothing to do with the problem. Demand was fine. It was the Roaring Twenties for god's sake. A high load of private debt, coupled with a flight from the stock market, meant capital began to dry up. The situation was akin to a person making payments on debt with a credit card, and then having his or her credit frozen. The social safety net had little to do with it. A "demand side solution" would have been something similar to what the government and the Fed did in 2008 with regard to market toxicity; that is, purchase the toxic assets and basically give people their money back to prevent a chain rout from the market. As I said, the opposite took place. That doesn't mean I suddenly support bailouts and such as standard policy. It was just a clear and universally regarded example of your precious Fed doing the opposite of what it was chartered for and making a bad situation worse.
    Your example is entirely moot and I'll try to go slow. The FED did not do the opposite of what it was chartered for. This should be clear, at best the fed made a mistake in anticipating WHEN to adjust inflation back up. Yes that was a mistake. What does this have to do with the great depression and demand side solutions I haven't the faintest idea. Bailouts are demand side solutions which come from congress not the FED. The fed can only institute monetarist manipulations which can increase or decrease the flow of capital but not actually effect the amount of capital. A demand side solution is typically of no relation to the fed's own activities although the FED may recommend as with tarp that the government allow them to institute demand side procedures. I haven't the slightest idea how the fed making a mistake on interest rates HAS ANYTHING TO DO WITH DEMAND SIDE SOLUTIONS or has any impact on the truth that implementing demand side solutions to a greater extent in the great depression would've offset or potentially even prevented it.

    That's what the federal government attempted to do with interest manipulation alone in the roaring twenties they simply stopped way too soon. The game of redescribe what I just said in a slightly different way is tiresome. The roaring twenties was a time of extremely high supply sustained by an artifically created demand. I've said this already. If instead money was diverted into the demand side of things capital would've flown again as this is the effect of a demand side solution. A supply side solution increases the ability to concentrate capital. Reducing the taxes on the rich is an example of a supply side solution. In the twenties if we imagine the sliders the sliders were placing supply at the far end with the politicalization of laissez faire economics. Which by their very nature would be described as a supply-side heavy economics policy to the point of excluding demand side solution. Monetarism is another shebang all together which is about manipulating the money that exists rather than creating it or etc.

    Quote Originally Posted by Legio_Italica View Post
    Ah yes. By criticizing a system of endless debt and inflation, I must be demanding anarchy. It never ceases to amaze me that you treat such experimental and controversial mechanisms as bailouts and QE as some kind of ancient economic law akin to supply and demand.
    That's exactly what they are. QE is pretty untested but it is not untested. It if based on rather accurate theory which has proven (EVEN IN THE LINK YOU INCLUDED) to be successful. Bailouts have traditionally always been considered a demand-side solution because they're designed to protect the public. This whole infinite money thing is a dumb concept and of no relation to reality.

    Quote Originally Posted by Legio_Italica View Post
    What happens when the Fed loses an investment by default? Does its assets contract? No. As I said, the amounts on its balance sheet are arbitrary. If the Fed lost $700 billion dollars it would just make $700 billion more dollars. This isn't to say that the effects on the economy of such an event wouldn't be catastrophic, but it certainly wouldn't harm the Fed or its ability to lend. That's what I mean by "no risk of loss." When a private lender loses money, he then has less to lend in the aftermath. The Fed simply "adjusts."
    This is stupid. You're simply redefining the terms. So because the federal reserves losses are matched against the value of the country as a whole you believe it doesn't have any risk? What the hell are you talking about. Why would you describe it that way? It's utterly nonsensical. The federal reserve is simply put matching the losses incurred by it against the country as a whole. This is WHAT IT IS DESIGNED TO DO and EXACLTY WHY IT CAN BE A GOOD THING. But as you've been repeating many times the sword cuts both ways. If misused the fed can generate all sorts of negative effects. This is the risk the fed takes. It is not a risk taken lightly and it's a risk the FED MUST DEFEND IN OVERSIGHT. Thus all of your hypothetical nonsense is just nonsense or slight exaggerations of the truth.

    Quote Originally Posted by Legio_Italica View Post
    Exactly. What if investment fails to drum up? Well, the Fed's response has been to just pump more money into the system until things somehow manage to improve. Not very scientific for a champion of economic "science."
    Ugh no you just don't seem to understand how this works. Since you seem to be mixing as many investment concepts as possible into one glorious superconcept I'll split this concept for you. The investing that the fed does with QE is not investing to see a return, what it is doing is liberating money from bad investments to be reused. It's essentially taking the hit of the bad investment against the worth of the country in order to reduce the impact of the loss on any specific subset which in turn could have major fallout if a major pillar collapses. This type of investment does not need to return on investment, the investment is already paid with the loss matched against the country. Any gain is a gain globally. Because the economy is in general improving over the long term this is a good bet to take. I've explained this before.

    The other type of investment is investment by banks of your money into different types of securities and etc up to their fractional reserve limit. This has the practical limitation of the amount of money the bank holds in its accounts. This money in turn can be invested, and from this investment the bank pulls it's profits and the interest rate you get back as a 'thank you for letting us use your money' fee. This investment creates more capital flow up the theoretical limit of twice as much capital 'acting' in your economy.

    The next type of investment is investment into bonds of the government. Buying these bonds decreases inflation and offering more increases inflation. If the government were to for example offer bonds and depress the currency by 1% the cost to purchase the bonds back would be exactly equal in magnitude to the gain gotten by the extra currency if it occurs instantly. If not the extra capital can have a time to turn an investment meaning that there are gains left even after the bonds are purchase again. This is because prices are sticky but inflation is instant.

    All of these practices must be utiltized in a healthy function economy and I see no reason to arbitrarily dismiss any of them.

    Quote Originally Posted by Legio_Italica View Post
    It doesn't always achieve investment activity. If it did, we wouldn't be under unlimited QE.
    It did achieve investment. The spin by the right wing is that it didn't achieve enough, this is silly. It did achieve it and QE 1 and 2 were trial runs of the concept to prove it's ideas were valid. They showed that they were and the government was more willing to allow the fed to do so on a longer term basis. However even theoretically unless re-approved this ends at the end of 2013.

    Quote Originally Posted by Legio_Italica View Post
    If immigrants were unable to improve their lives, they wouldn't be coming in by the millions, earning wages, and buying stuff; risking their lives and life savings just for a chance to make it over the border.
    What? How do you turn a plain statement into such a different one? This is strawmaning. I said that immigrant labor does not improve the lives of immigrants, naturalization or legally working here in the US does. As illegals their lives suck, they only have the opportunity to become Americans or at least their children do which is their common reason for coming here. Most do not ever improve their own lives, most do not learn english. Most do not get an education. It's unfortunate but that's the truth. They come here because conditions in mexico are miserable and most often it has to do with a family here or one over there.

    Quote Originally Posted by Legio_Italica View Post
    You assume Third World governments cannot tax Walmart and/or treat locally produced materials as domestic and not simply the sole property of Walmart. Moreover, if the local population did not have some advantage in real wages to work for Walmart in "sweat shops," they wouldn't work there. Any cancellation of real wages or failure of local development is, again, a political problem. Moreover, this system has provided a huge net benefit over the modern track record, as the book I linked when first discussing it outlines. Here.
    I didn't say the population didn't have an advantage to real wages. A local population does, a country does not. The local population see their prices inflate as the further distant population dillutes their gains. These gains are often met with restrictive taxes and etc on said population overall. Your claims about walmart are rather unfounded. I'm not sure which passage of that book validates your meaning but I'd also caution you to remember a book is a secondary resource. Understanding what they base their analysis off of is more important than their analysis and if they ignore the truths about walmart's business practices I'm sure they could definitely come to those conclusions. Because there's several scientific studies (I linked a few) that show just the opposite and a grossly negative effect.

    Quote Originally Posted by Legio_Italica View Post
    What? I said the Third World provides labor and the First World provides a market. Are you saying the local workers somehow can't gain from this without a social safety net to redistribute their own wealth? That makes no sense.
    No I'm saying that the third world does not benefit from this because they cannot benefit from the supply they are generating. They are losing their ability to grow their own country and contributing it to the low cost goods in the first world. When a country like india or china or germany outsources they benefit from the relation with teh company much in the same way as the first world does. I've yet to see any evidence of any first world outsourcing to the third world which has resulted in 'good'.

    http://link.springer.com/article/10....614797?LI=true

    Yes outsourcing decreases transaction costs and production costs. The cost of supply is not the only important thing. How do you think the economics involved are effected with high cost goods are produced in a low cost area? Now given that most outsourcing increases economic inequality in societies which in turn further depresses growth why would you assert sweat shops are a good thing?

    Quote Originally Posted by Legio_Italica View Post
    Sigh....no. Protectionism involves a trade off, and permanent protectionism often creates permanent problems. Why do you think "free trade" is pretty much the foundation of international economic relations. Protectionism may exist in certain sectors as a government policy. Example: The US car industry enjoyed tariffs in the 70s and 80s to avoid being crushed by Japan. Hence, we all gave up access to cheaper, longer lasting, and more efficient vehicles to prop up our own car industry; hence the trade off. Eventually, the US industry became competitive, and tariffs were reduced or eliminated.
    What the hell is permanent protectionism and why is it relevant to the debate? You stated that protectionism has historically ripped across economies upsetting them, this was in reference to the trade protectionism of the nordic system. In fact trade protectionism is a crucial feature of economics and there exists very little truly free trades except for items which are priced in similar circumstances. For example between us and canada or us and europe (sometimes not even then). This is a standard practice and of course it's a variable practice that varies according to the need of the tariff with higher exchange differentials resulting in larger tariffs.

    Quote Originally Posted by Legio_Italica View Post
    Anti-current Fed policies=anti-"science." Good luck with that.
    That's incredibly different from saying you fail to see how it is preferable or even successful to trust a central regulatory agency. Nice spin there but you've simply morphed your argument. Trace the quote history if you must.

    Quote Originally Posted by Legio_Italica View Post
    Ive given quite a few examples. Managing policy means creating policies and a government framework to facilitate successful economic practice. Managing outcomes means covering up bad outcomes with band aids instead of addressing problems with the system.
    That's a very interesting definition of the concepts and not at all what I would have meant with them. Managing outcomes to me would be literally managing outcomes, i.e. putting a minimum in regards to the quality of the carrot. Managing policy would be instituting laws which force corporations to behave within certain constraints, i.e. so long as you don't do this or this you're good. Whereas managing outcomes would mean forcing the corporations to produce a good of X conditions for Y reasons.

    I haven't been arguing for and band aid approaches exclusively and have been quite up front with their inability to fix the problems. They are a temp fix while real fixes can be put in place. They are a finger in a dike until a plug can be made. So either you strawmanned my argument to mean something it didn't (most likely) or you've given a different definition to the one you were using when describing what policies I supported.

    Quote Originally Posted by Legio_Italica View Post
    So the government has to create public companies to perform horribly and lose money again and again all so the evil private companies won't overcharge people. Seriously?? How about, if UPS and Fed Ex form some kind of monopoly, the government breaks them up or forces them to compete without blowing billions on the post office pony express? Hows that for "demand side solutions?
    This is quintessentially a strawman and isn't deserving of a response. Clearly not what I said.

    Quote Originally Posted by Legio_Italica View Post
    I'm beginning to wonder if you know anything specific about your prized model, much less what makes it tick. You should have said you wanted a debate on the Nordic System about 10 posts ago and I wouldn't have bothered to reply.
    You should've listened several posts ago. I've framed the debate every post I've made which you've ignored.

    Quote Originally Posted by Legio_Italica View Post
    I didn't say they were "doing the same thing." I said they belong to the same interests:

    Spoiler Alert, click show to read: 

    Romney 2012:

    Goldman Sachs $1,033,204
    Bank of America $1,009,402
    Morgan Stanley $911,055
    JPMorgan Chase & Co $833,096
    Wells Fargo $674,076
    Credit Suisse Group $640,620
    Deloitte LLP $609,124
    Kirkland & Ellis $518,041
    Citigroup Inc $510,199
    PricewaterhouseCoopers $459,400
    UBS AG $448,540
    Barclays $446,000
    Ernst & Young $390,492
    HIG Capital $382,904
    Blackstone Group $366,525
    General Electric $332,875
    EMC Corp $320,679
    Bain Capital $285,970
    Elliott Management $281,675
    Rothman Institute $259,500


    Obama 2008:
    University of California $1,648,685
    Goldman Sachs $1,013,091
    Harvard University $878,164
    Microsoft Corp $852,167
    Google Inc $814,540
    JPMorgan Chase & Co $808,799
    Citigroup Inc $736,771
    Time Warner $624,618
    Sidley Austin LLP $600,298
    Stanford University $595,716
    National Amusements Inc $563,798
    WilmerHale LLP $550,668
    Columbia University $547,852
    Skadden, Arps et al $543,539
    UBS AG $532,674
    IBM Corp $532,372
    General Electric $529,855
    US Government $513,308
    Morgan Stanley $512,232
    Latham & Watkins $503,295

    www.opensecrets.org

    You think those donors want anything different from Romney than they did from Obama? They're huge corporations and financial institutions. They vote status quo, and they vote for winners; usually to both sides in different amounts to hedge their bets. Neither parties are going to do anything drastic because neither are all that different at the end of the day.
    That's a hilarious conception there. I agree with you that the interests which are benefitted in both ways tells us how the two are similar. What I think is more telling is how they differ. I'm not sure how you could miss that but really that's the key difference. Yes you and a flower are both living organisms, what I need to know is what makes you, a human, different than a flower.

    Quote Originally Posted by Legio_Italica View Post
    Please. This isn't the first time insurance companies and pharmaceuticals have dictated healthcare legislation. Moreover, the insurance industry stands to gain 320 million government-backed customers from Obamacare. Obviously they were ready to write their own ticket.

    You use some pretty horrible sources there. I'm not sure if you understand the difference between pharma and insurance. Yes Pharma companies benefitted from the bill, they also lost many key patents. Your articles are meh, the government made a deal to get support.

    Quote Originally Posted by Legio_Italica View Post
    ...The "needy".......:: Yeah, and Goldman Sachs, JP Morgan, Citibank, and Pfizer are all guys I met around a burning trash barrel.
    This isn't what I meant and you know it. They would've gotten their check either way, what's important is the other checks going out to the other interests which DO differ. Pfizer suffered huge losses due to big pharma's hits politically with transparency issues and ethics concerns and several landmark losses with patent law.

    I do hope that our government would split up the banking groups there but I doubt they ever will.

    Quote Originally Posted by Legio_Italica View Post
    Well aside from bankrupt shenanigans like these:
    Spoiler Alert, click show to read: 
    “Abound Solar (Loveland, Colorado), manufacturer of thin film photovoltaic modules.
    Beacon Power (Tyngsborough, Massachusetts), designed and developed advanced products and services to support stable, reliable and efficient electricity grid operation.
    Ener1 (Indianapolis, Indiana), built compact lithium-ion-powered battery solutions for hybrid and electric cars.
    Energy Conversion Devices (Rochester Hills, Michigan/Auburn Hills, Michigan), manufacturer of flexible thin film photovoltaic (PV) technology and a producer of batteries and other renewable energy-related products.
    Evergreen Solar, Inc. (Marlborough, Massachusetts), manufactured and installed solar panels.
    Mountain Plaza, Inc. (Dandridge, Tennessee), designed and implemented “truck-stop electrification” technology.
    Olsen’s Crop Service and Olsens Mills Acquisition Co. (Berlin, Wisconsin), a private company producing ethanol.
    Range Fuels (Soperton, Georgia), tried to develop a technology that converted biomass into ethanol without the use of enzymes.
    Raser Technologies (Provo, Utah), geothermal power plants and technology licensing.
    Solyndra (Fremont, California), manufacturer of cylindrical panels of thin-film solar cells.
    Spectrawatt (Hopewell, New York), solar cell manufacturer.
    Thompson River Power LLC (Wayzata, Minnesota), designed and developed advanced products and services to support stable, reliable and efficient electricity grid operation.”
    You do know that the success rate for the green start up companies is massively higher than the success rate for any company in general right?

    Yes companies went bankrupt, this was expected. the Government anticipated a 1 in 5 success rate and last I checked only about two thirds have gone under (with many not going under so much as merging). The common success rate is somewhere between 1 in 10 or 1 in 20.

    Quote Originally Posted by Legio_Italica View Post
    .....Not to mention Solyndra which proved to be a campaign kickback, the NYT reports that "90%" of green subsidies went to large companies like GE Goldman Sachs, Morgan Stanley, or their subsidiaries. Moreover:
    "The government support — which includes loan guarantees, cash grants and contracts that require electric customers to pay higher rates — largely eliminated the risk to the private investors and almost guaranteed them large profits for years to come."
    So, these programs are government-guaranteed, meaning there's no risk of loss for investors, creating an entire false industry built on false investor confidence.
    Uhm. Solyndra campaign kickback? What? No? That's not true nor in your links? It went bankrupt? http://en.wikipedia.org/wiki/Solyndra

    I'm not sure why you would say that. 90% of green subsidies going to large companies isn't a big issue. It eliminated the overhead for these companies to generate a large amount of jobs very quickly. Many of the start ups failed but were expected to. The larger companies are the more stable bet and deserve larger amounts. For example money for GE to build a nuclear reactor is a good green subsidy. As far as no risk for investors, not having a risk doesn't mean the industry is false however I would say this quote that bankruptcy of solyndra and other high tech companies were:

    "stark reminders of the risks that go with disproportionate levels of leveraging and the reliance on unsustainable government subsidies and unreasonable fiscal incentives to 'stimulate' demand. In many ways, real estate and solar energy assets were de facto owned by 'unnatural owners' such as banks, and, when the banks collapsed, by Western governments unable or unwilling to provide fresh capital in a context of fiscal austerity and tighter credit limits."

    Which is a tough lesson of course but far from saying the green subsidies were a bad thing.

    Quote Originally Posted by Legio_Italica View Post
    So the White House is a primary source on how awesome its policies are? Go figure. If you would read my sources you wouldn't need to throw tantrums about tangent conversations. Again:

    http://articles.latimes.com/2012/jan...-cuts-20120127
    http://www.usgovernmentspending.com/..._chart_30.html

    The defense budget is not being cut; and certainly not in the long term. As I said, the Foreign contingency fund is being cut drastically due to the withdrawal from Iraq and Afghanistan. That is not some kind of Democrat fiscal heroics. The actual Defense budget will continue to receive its customary increases.
    I was referencing cuts outside of said reduction. A cut INCLUDES any increase of the budget that is not being planned. The budget over all was increased, this does not mean the programs individually were not cut. Many programs were cut which would total further spending increases to the budget. For example they cut the boeing laser program. This was a cut and the budget increase necessary to continue it was not included in the future budget. I'm tired of splitting hairs with you. Deny it as much as you want, physical programs were cut from the defense budget. Your secondary resources are pointless but even they don't support your conclusion in anything other than the surface passing:

    Quote Originally Posted by LAtimes
    The proposal meets both goals [defense cuts and budget increase] because spending on the wars in Afghanistan and Iraq is dropping sharply, allowing the base budget — the annual cost of paying troops and buying planes, ships and tanks — to increase modestly, even while complying with last year's bipartisan deal in Congress to reduce the deficit.
    There were cuts in last years bipartisan deal. Seems like you're wrong on this one.

    Quote Originally Posted by Legio_Italica View Post
    So your response is basically, "spending is not going up because said spending is going to fund items the White House hopes will turn a net benefit by economic improvement." Please.....


    That is not my response at all and another glorious strawman. You're really ending this in style. What I said IS THAT THE CONGRESSIONAL BUDGET OFFICE PREDICTS A DEFICIT DECREASE OF 2.0% IN THE VERY REPORT YOU LINKED. You quoted a portion of the report out of context which was including only the projected costs and no change from current projections. This projection is the CBO's baseline which predicts the next ten years of economic development if only inflation and other costs are considered while maintaining the policy as is. This serve as the measurement of different between one projection and another.

    The congressional budget office then includes a projection based on the same models of the economic development over the next ten years given the macroeconomic effects. These macroeconomic effects are not for certain by any stretch of the imagination however their vectors are known within a given range. Hence the Congression Budget Office's final conclusion in the very report you linked that the deficit over the next decade would decrease overall by 2% or possibly increase up to .5% under obama's policies. This is a margin of error in their prediction of 1.25%+- meaning the normal median is .75% decrease to the deficit.

    This is what happens when you don't read all of the reports link or the responses I make.

    Quote Originally Posted by Legio_Italica View Post
    I don't give a what Obama says. Obama also said he'd cut the deficit in half by the end of his first term:
    http://money.cnn.com/2009/02/23/news...mmit/index.htm

    I gave you three sources. You can't simply dismiss government spending as "investment" as if your future hopes are a given. Both parties will continue to increase spending, debt, and deficits. Instead of trying to fight to obvious, you should just be more honest about what you basically said. "Yeah, but the Democrats are going to spend it 'better'."
    This is a rather strange combination of responses, I assume you lost the paragraph you were responding to with your second one? I fail to see the relevance of the second paragraph to military spending cuts. Military spending cuts already took place. They were set into law in 2011. Sorry you missed that. Just because the defense budget is increasing doesn't mean cuts didn't take place.

    Quote Originally Posted by Legio_Italica View Post
    Yeah. Making the world "safe for democracy" since 1898. USA! USA! USA!
    It can't hurt.

    Quote Originally Posted by Legio_Italica View Post
    So now the CBO is in the pocket of the GOP?
    Wow. This is the most strawman of an argument so far in the debate. It is completely unrelated to what I said. I said if the Congressional Budget Office WERE to make a prediction showing the GOP's policies to be better than the policies projected with the current administration I might believe you. But I do not. The congressional budget office has only projected the policies for this administration and the projections they've made are contrary to your claims.

    Quote Originally Posted by Legio_Italica View Post
    I apologize for shotgunning things to begin with, but you were very unclear about what you wanted this debate to be about.
    This has nothing to do with my lack of clarity. At this point you couldn't have mistranslated many of my statements much worse. I haven't the slightest idea if you did so intentionally hoping it wouldn't seem off or if you did so accidentally but the thousands of tangents you've introduced into my position which do not exist (STRAWMEN) is ridiculous.

    Quote Originally Posted by Legio_Italica View Post
    Based on the subjects you keep referencing, you should have asked for a debate on the Nordic system to begin with. I have no qualms with the Nordic System and wish them the best of luck for having discovered a program that plays wonderfully to the strengths of the region.
    *sigh* I don't think you've come any closer to understanding any points i've made. Namely that this isn't what my intent was.

    Quote Originally Posted by Legio_Italica View Post
    As far as your idea that an economy is some kind of public projection to be commanded rather than a state of nature to be understood, I don't know how we can continue a discussion in light of such a fundamental difference.
    This is an utterly meaningless series of words you've put together here. Public projection to be commanded/ State of nature to be understood? I'll be sure to talk to my economics professors about the previously undiscovered state of nature called Economis Neccesitus that transcends the human interaction that gives rise to and lives off of it.

    Quote Originally Posted by Legio_Italica View Post
    As far as "demand side solutions," my point continues to be that the things you are talking about are utilized all the time. Simply saying that you want to see more of them isn't exactly a conversation starter; especially when your original idea was "socialism v capitalism."
    We've come full circle even in the very last sentence you still can't understand I neither agree with your definitions of capitalism vs socialism nor have done what you've accused me of. Alas I must assume you really have no interest in any debate, your goal was to win a point for capitalism and bloody socialism and realized almost immediately that your words were entirely misdirected. I'm not sure why you insist to the very last word of asserting that they were in fact directly correctly, but I must assume it's your final strawman as a parting gift.

    Alas I don't think there can be any debate between us, there is clearly something at issue with understanding each other (or rather you understanding me) and I'm at a loss of how to rectify this. I've provided metaphors, I've provided long exhaustive descriptions, I've stated step by step which policies in more specific terms I agree with and more. Your reply? "Well is it capitalism? I say it is!" and my response to that is simply "..."

  13. #13

    Default Re: Capitalism vs. Socialism: Which is the better economy? [elfdude vs. Legio Italica]

    Rather than wasting both our times combing through mountains of text in yet another futile quote war, I must confess that I have little to no idea what this debate is about. Given that my communication skills are apparently crap, I will cease trying to find out. This discussion, begun almost by accident, initially revolved around socialism v capitalism. Given that we do not agree on what these terms mean in essence, it is impossible to discuss them. Officially, the subject then moved on to degrees of Market regulation, basically resulting in the demonstration that you are basically content with the way the central economic foundations of the world function and see no problems beyond various policy ideas (probably the most unsocialistic position possible, just sayin). I agree with most of the economic and policy positions. I just can't seem to understand your philosophy that just because we "can" achieve these ideal situations and methods you mention mathematically on a piece of paper doesn't mean that we "can" in the social and political constraints of reality. A few general objections before I wash my hands of this disaster:

    Quote Originally Posted by elfdude
    This is not an acceptable line of reasoning. You think that the nordic system is impossible without the composition of society resembling the norse? That's rather silly and requires one to dismiss the effects and influences of the policy. Now you might say, I think it's got a lot to due with that and a little to do with policy but to make such a statement you would need to find a homogenous society like the norse. Can we do so? Of course we can.

    Let's see, North Korea is one of the most homogenous societies in the world. Obviously homogenuity alone has nothing to do with economy. What about the other ones? Let's just look at the top ten. I'll highlight red countries which are homogenous but overall poor economically and visa versa with green,

    North Korea - racially homogeneous; small Chinese community, a few ethnic Japanese
    South Korea - homogeneous (except for about 20,000 Chinese)
    Japan - Japanese 99%; Korean, Chinese, Brazillian, Filipino, other 1% (2004)
    Lesotho - Sotho 99.7%, Europeans, Asians, and other 0.3%
    Bangladesh - Bengali 98%, tribal groups, non-Bengali Muslims (1998)
    Egypt - Egyptian 98%, Berber, Nubian, Bedouin, and Beja 1%, Greek, Armenian, other European (primarily Italian and French) 1%
    Jordan - Arab 98%, Circassian 1%, Armenian 1%
    Armenia - Armenian 97.9%, Russian 0.5%, Kurds 1.3%, other 0.3%
    Poland - Polish 96.7%, German 0.4%, Belorussian 0.1% Ukrainian 0.1%, other 2.7%
    Lebanon - Arab 95%, Armenian 4%, other 1%


    Beautiful. This should demonstrate rather definitively to you in a very visual manner that the Nordic system's superiority may have been facilitated by a more unified populace but it's benefits are not the result of homogenous population but rather the policies that population came to. Case in point Japan, Poland and South Korea are all doing ok but none are doing as well as the Nordic countries. Surely by your logic they would all be great candidates to benefit directly from the Nordic system?

    Of course they probably would be great candidates, but to claim that the policy itself from the nordic system isn't something we can recreate here or etc seems rather silly. Considering in norway the population has about 85% norse (far from homogenous) and in the US we have a population that's 75% white and 12% american-black which makes up about 87% of the population which very homogenous concerns in society and culture. I don't really see this logic as withstanding. Furthermore, while I don't think a direct rendition is possible simply because we're starting at a different point many best fit approaches can be implemented.
    This is, well, a...."strawman." I did not say that the mere homogeneity of Nordic society would make any subsequent political and economic system functional; nor did I say it would be impossible to borrow individual policies or ideas from the Nordic model. I said that, because Nordic society is homogeneous, it has made development and implementation of policy much easier and uniform, as mentioned in the quote from the Nordic paper. If I have to develop a solution for X, Y, and Z, each of whom represent distinct groups within society and whose inherent characteristics are conducive to friction, my task will be much more difficult than if I just had to develop a system conducive to the needs of X. Under the XYZ scenario, I now have to institute checks and balances to try and facilitate ideal conditions for all three groups without allowing the conflicting interests of one group to grow too powerful and thus aggravate the interests of the others (this is essentially what the US Constitution did a wonderful job at). Hence, saying the Nordic system is ideal and should serve as a model for everybody else doesn't really pan out, if only because the Nordic system exists under much simpler and more benign preconditions than does just about any other major economy. Sure, there are lots of good ideas and strategies that another country might borrow from the Nordics, but even then this is not a simple, nor a definitive process.

    As far as your explaining homogeneity in terms of race, I'd say this is a very naive comparison to try and make. Just because the US is predominantly white does not mean that "white" segment will share even remotely the same worldview. Moreover, the concept of benign, mutual trust as a constant trend does not exist in the US; very different from Nordic society. We rebelled from Britain over taxes, then nearly rebelled against our own government over the same thing. After the "Miracle at Philadelphia," (the very name indicating what a miracle it was to forge a united republic from so many fiercely divided interests), we would still bicker and hiss at each other until it finally boiled over into a Civil War that cost over 600,000 military deaths alone. My point is that the US was born out of fierce individualism and mistrust of authority. Its in our culture. So far, this diversity has arguably been our greatest strength. However, this means that we cannot simply look to a unified and highly centralized system like the Nordic model for comprehensive answers.

    That's why my response to basic ideas about something as simple as collective risk sharing from a social standpoint being possible in the US was "Hell no." Right now, Congress can't even agree over budgets, much less comprehensive reform. Moreover, we haven't been led by a truly "good" and functional federal government since the days of Webster and Clay. Even after the huge strides Progressivism made in creating the true and universal sense of American nationalism, the government has still primarily relied upon propaganda and lies to facilitate public support for massive public endeavors; for everything from the Spanish-American War to the Great Society. Thus, the concepts of "good" government, general will, and public trust, essential to the great European social projects you support, are nearly alien to the US. I am an embodiment of this problem. I always fiercely mistrust the intentions if not the very actions of any authority. I see the federal government as a begrudging necessity rather than some engine for collective utopian crusades. I regard any action or development in federal policy or function with fierce skepticism and distrust if not disdain; even as I regard many federal functions as essential and ultimately of benefit; and as an authority that must be obeyed as per the Constitution.

    Take the most basic example I gave earlier, public health care. Even if all the necessary funds, infrastructure, and "good" government apparati were in place, a national consensus on the issue would be nearly impossible. Hence, the government would have to lie to us to promote the bill for any chance of success; just like the administration did for the ACA.... make up statistics about "millions of uninsured walking corpses," claim anyone opposed to the plan is trying to murder the elderly, poor and sick, etc. So even if after all this, if public healthcare passed and were implemented with 100% success, it would be one piece of the prized Nordic structure, with thousands more similar battles between here and there. If this "crusade" were pursued, the country would become even more embittered and divided along the way, and habitual necessities of civic maintenance would undoubtedly fall to the wayside. So again, is the Nordic model wonderful? Sure. Will anything even close ever happen here? No. To be honest, I don't think the "American system" is inherently doomed, I just don't think its headed on a desirable trajectory.
    ------

    Anyway, it seems our primary subtopic regarding the "degrees of Market regulation" revolves on the role of central banking; or at least, the Fed. I mentioned TARP as an example of how the Fed system either fails to promote long-term economic stability and "the public welfare," or, how it succeeds in concentrating economic and social resources at the apex of a pyramid. When you basically said
    I know what tarp is and I do not agree with you that it had the undesired outcome. The cost of smaller banks going out of business is simply the cost of keeping the larger ones in business. I do agree the banks should now be split but as long as we're willing to do that no harm no foul. You seem to make the conclusion that because there's fewer banks with more market share that tarp has failed? That's not even the purpose of tarp in the first place. I'm sorry but I can't understand why you feel this is important or a point at all.
    This made me realize that you were perfectly fine with smaller banks (and by extension, I would say smaller enterprises in general) being swept away every boom-bust cycle while the largest are strengthened. You seem to prefer this essential function of the Fed, and suggest that the government simply trim the weeds when the system gets too top-heavy. Given this fundamental difference between us, I do not think we can continue the discussion on the Fed and the nature in which government regulation ought to behave.

    Economically, I agree with 90% of what you're saying, while also pointing out that the same rhetorical percentage of your positions are already in place. Hence I don't really know what you're getting at, especially when virtually everything we've discussed so far has very little to do, directly, with the expressed subject of debate. Moreover, when my tone of inquiry into your central position comes off as conspiratorial and "strawmen," There is really no effective medium through which we can communicate regarding a topic that remains elusive, at least to me. Thus, I forfeit this seemingly non-existent debate on the grounds of disinterest in its continuation. I apologize for wasting your time.
    Last edited by Lord Thesaurian; February 15, 2013 at 01:26 PM.
    Of these facts there cannot be any shadow of doubt: for instance, that civil society was renovated in every part by Christian institutions; that in the strength of that renewal the human race was lifted up to better things-nay, that it was brought back from death to life, and to so excellent a life that nothing more perfect had been known before, or will come to be known in the ages that have yet to be. - Pope Leo XIII

  14. #14
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    Default Re: Capitalism vs. Socialism: Which is the better economy? [elfdude vs. Legio Italica]

    Quote Originally Posted by Legio_Italica View Post
    Rather than wasting both our times combing through mountains of text in yet another futile quote war, I must confess that I have little to no idea what this debate is about.
    I should note that you really should've done this sooner. If I had understood that your points were really unrelated to what I was getting at I would've dropped them but instead figured you would clarify, elaborate or otherwise.

    Quote Originally Posted by Legio_Italica View Post
    Given that my communication skills are apparently crap, I will cease trying to find out.
    The single largest problem is just trying to get us on the same playing field working from the same definitions. Even the most innocuous statements you made seemed to jump in logic from a statement of truth to a sudden exaggeration of what if it all goes wrong. Beyond that the few parts of the debate I enjoyed (arguing the federal reserve, centralization, healthcare, social policy) seemed to be ignored. Even if your final post this much seems to be the case. It's beyond frustrating to feel like you're chasing your tail and I hope you did not mistake my fury at our inability to get to a central understanding of communication as fury at you.

    I do think that you really would benefit from fleshing out your theories quite a bit more, your closing statements feature a return to many statements I had thought I had already dealt with as though this discussion never really took place (it's definitely not a debate) however I understand you were unwilling to argue them in the first place although I think pressing on that house of cards you call capitalism (regardless if I don't) will force you to evaluate more of these concepts at a deeper level. Your interpretation of reality can't just be good or bad because most things in reality can be used in either way, understanding why and when something is bad and why or when something is good is paramount to rational discourse on the subject and I don't think you have a good grasp of these specifics.

    Furthermore it's probably folly to rely so heavily upon media sources and secondary resources for your arguments. There's a news story perpetuating just about anything you might try and say and the reason for that is partially the internet where a lot of 'news' articles are really just blogs of different writers paid by XYZ organization and the fact that most of these people are paid to assert an agenda in their analysis not to make an analysis. One might attempt to identify which media sources are 'more' valid than others but I feel this is probably naive as even the news sources I almost explicitly agree with still make statements of obvious propaganda. The two news organizations I disagree with the least are the daily show and colbert report mostly because they only talk about the extreme examples that can be ridiculed.

    Quote Originally Posted by Legio_Italica View Post
    This discussion, begun almost by accident, initially revolved around socialism v capitalism. Given that we do not agree on what these terms mean in essence, it is impossible to discuss them. Officially, the subject then moved on to degrees of Market regulation, basically resulting in the demonstration that you are basically content with the way the central economic foundations of the world function and see no problems beyond various policy ideas (probably the most unsocialistic position possible, just sayin). I agree with most of the economic and policy positions. I just can't seem to understand your philosophy that just because we "can" achieve these ideal situations and methods you mention mathematically on a piece of paper doesn't mean that we "can" in the social and political constraints of reality.
    I don't feel this is a fair approximation of my thoughts either. I could pick out and change a lot of things about how our economy runs, and I see you trying to accomplish roughly the same thing with your selection. My fear is that you've mistargeted which policies are important and will create the effects you desire. Fact of the matter is dismantling the centralized federal reserve would make the costs associated with the healthcare, tarp and the military seem utterly trivial. It's essentially prohibitive to even try. On the other hand a tiny increase of taxes on the richest sectors and everything balances out nicely.

    Quote Originally Posted by Legio_Italica View Post
    This is, well, a...."strawman." I did not say that the mere homogeneity of Nordic society would make any subsequent political and economic system functional; nor did I say it would be impossible to borrow individual policies or ideas from the Nordic model.
    My mistake. I did not intend to strawman your argument.

    Quote Originally Posted by Legio_Italica View Post
    I said that, because Nordic society is homogeneous, it has made development and implementation of policy much easier and uniform, as mentioned in the quote from the Nordic paper.
    A quote I responded to directly, this theory is not withstanding to the information I presented to you. Which demonstrate clearly that trust in your government, independence, homogenuity are not the big players as far as factors affecting the norse economic system. Considering there's hundreds of corporations which cross back and forth between the nordic style countries it seems very likely that our economy and theirs can play the same type of ball.

    Quote Originally Posted by Legio_Italica View Post
    If I have to develop a solution for X, Y, and Z, each of whom represent distinct groups within society and whose inherent characteristics are conducive to friction, my task will be much more difficult than if I just had to develop a system conducive to the needs of X. Under the XYZ scenario, I now have to institute checks and balances to try and facilitate ideal conditions for all three groups without allowing the conflicting interests of one group to grow too powerful and thus aggravate the interests of the others (this is essentially what the US Constitution did a wonderful job at).
    I don't agree with this characterization, the policy should not be different based on ethnic or cultural concerns. Further you're using a faulty metaphor in that the degree of difference between the norse and the US when it comes to homogeneity is only a few percent away. If we consider only those who have been here for two generations as assimilated the same thing occurs, norway has roughly the same diversity we do. Their lack of apathy and trust in their government is MUCH MUCH more significantly different than the US. This could be a point of friction in trying to transpose the lessons.

    Quote Originally Posted by Legio_Italica View Post
    Hence, saying the Nordic system is ideal and should serve as a model for everybody else doesn't really pan out, if only because the Nordic system exists under much simpler and more benign preconditions than does just about any other major economy.Sure, there are lots of good ideas and strategies that another country might borrow from the Nordics, but even then this is not a simple, nor a definitive process.
    Your statement that the nordic model should not serve as a model for everyone else and this statement conflict. If this is the totality of your opinion then I agree with this.

    Quote Originally Posted by Legio_Italica View Post
    As far as your explaining homogeneity in terms of race, I'd say this is a very naive comparison to try and make. Just because the US is predominantly white does not mean that "white" segment will share even remotely the same worldview.
    I would be rather curious for you to find a better breakdown of homogenity that can be compared to the same stats from Norway which are only paying attention to ethnicity. The burden of proof is on you to validate this statement.

    Quote Originally Posted by Legio_Italica View Post
    Moreover, the concept of benign, mutual trust as a constant trend does not exist in the US; very different from Nordic society.
    Given.

    Quote Originally Posted by Legio_Italica View Post
    We rebelled from Britain over taxes, then nearly rebelled against our own government over the same thing.
    I'm not sure I follow what you mean by rebelled against our government on the same thing. What?

    Quote Originally Posted by Legio_Italica View Post
    After the "Miracle at Philadelphia," (the very name indicating what a miracle it was to forge a united republic from so many fiercely divided interests), we would still bicker and hiss at each other until it finally boiled over into a Civil War that cost over 600,000 military deaths alone. My point is that the US was born out of fierce individualism and mistrust of authority. Its in our culture. So far, this diversity has arguably been our greatest strength. However, this means that we cannot simply look to a unified and highly centralized system like the Nordic model for comprehensive answers.
    However I feel like your description here defies your earlier statement that we can. Likely this has to do with the inclusion of comprehensive which I'm betting you're attatching some sort of depth of meaning to which is ambiguous (lack of qualifiers) to anyone else. Of course the nordic system does not offer every answer. I didn't state it did and your point of contention doesn't seem to be a point of contention at all.

    Quote Originally Posted by Legio_Italica View Post
    That's why my response to basic ideas about something as simple as collective risk sharing from a social standpoint being possible in the US was "Hell no."
    This does not follow. Collective risk sharing is something every country already utilizes, the norse are simply more upfront about it. I'm not sure why you would say hell no to this, this doesn't seem to follow from your line of reasoning before.

    Quote Originally Posted by Legio_Italica View Post
    Right now, Congress can't even agree over budgets, much less comprehensive reform. Moreover, we haven't been led by a truly "good" and functional federal government since the days of Webster and Clay. Even after the huge strides Progressivism made in creating the true and universal sense of American nationalism, the government has still primarily relied upon propaganda and lies to facilitate public support for massive public endeavors; for everything from the Spanish-American War to the Great Society. Thus, the concepts of "good" government, general will, and public trust, essential to the great European social projects you support, are nearly alien to the US.
    I think you overestimate the inherent goodness of alternative governments in an attempt to draw distinction between the US and the nordic system. What purpose this distinction serves I'm not sure, perhaps to be contrary. If you were to exhaustively compare the societies between the US and the nordic system countries you'd find that our cultural habits, and inclinations are extremely similar. In fact our independence probably comes primarily from the slavic and germanic countries which utilize the nordic system. Fear of authority and the government has only become really popular in the last 20-30 years. Before that it was an undercurrent of conspiracist nonsense. I would target fear mongering by the republican party and media as the primary reason for this myself. So as you can see I consider the two countries much more similar than you do and for good reason, I do believe if we were to re-institute the fairness doctrine we'd see a massive upsurge in confidence by the public in what our government is doing and why not to mention a lot of very rational policies.

    Quote Originally Posted by Legio_Italica View Post
    I am an embodiment of this problem. I always fiercely mistrust the intentions if not the very actions of any authority. I see the federal government as a begrudging necessity rather than some engine for collective utopian crusades. I regard any action or development in federal policy or function with fierce skepticism and distrust if not disdain; even as I regard many federal functions as essential and ultimately of benefit; and as an authority that must be obeyed as per the Constitution.
    That makes sense in regards to our discussion and it means most of my difficulty in understanding you lays with the fact you make a contradictory unstable position as your 'center'.

    Quote Originally Posted by Legio_Italica View Post
    Take the most basic example I gave earlier, public health care. Even if all the necessary funds, infrastructure, and "good" government apparati were in place, a national consensus on the issue would be nearly impossible.
    On one hand the nordic system has a much more complicated atmosphere of public policy makers making it hard to assign them as 'liberal' or conservative in our terms, this also defies party unity meaning a lot of policy makers are evaluating the policies on their own rather than voting with their team. In the US I see the democratic party do this as well, the GOP almost always votes as a single unit. Thus to me the GOP is largely to blame for a majority of woes and the stalemate the government constantly finds itself in. The democrats are usually compromising with the GOP to the point of almost demeaning the very policies they propose. Healthcare is a good example of that.

    Quote Originally Posted by Legio_Italica View Post
    Anyway, it seems our primary subtopic regarding the "degrees of Market regulation" revolves on the role of central banking; or at least, the Fed. I mentioned TARP as an example of how the Fed system either fails to promote long-term economic stability and "the public welfare," or, how it succeeds in concentrating economic and social resources at the apex of a pyramid.
    I do not agree with your analysis that this is what is happening. Tarp has not failed to promote long term stability. It create stability in the economic atmosphere. Fewer small business banks is not destabilizing the economy nor is it evidence that the fed's desire is to create economic resources

    Quote Originally Posted by Legio_Italica View Post
    This made me realize that you were perfectly fine with smaller banks (and by extension, I would say smaller enterprises in general) being swept away every boom-bust cycle while the largest are strengthened. You seem to prefer this essential function of the Fed, and suggest that the government simply trim the weeds when the system gets too top-heavy.
    The difference is you feel the fed desires to create this situation. Every boom and bust cycle effects the small businesses (usually) more than the strongest. They fail anyways, and they can fail because as an economy society doesn't feel it. When a bank with 2.2 trillion dollars in holdings (US bank) fails what do you imagine happens? Pandemonium.

    Anyways I still see numerous points of contention I would argue with you but this debate should be considered finished for now at least. If you ever feel up to having a more specific policy by policy debate I'm sure we can reopen this or start a new one.

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