Capitalism hits the fan

[Denny Crane!]

http://fora.tv/2010/03/03/Richard_Wo...m_Hits_the_Fan

This discusses our current crisis and its historical context.

It covers why regulation won't work

Why the wealth gap increases and how it helped cause the crisis

How business and the government isn't working and isn't helping us

Why Britain is screwed.



It really opened my eyes to a new perspective of how the current system is broken and why we really aren't getting out of this without more change than a further cycle into debt, and even more toxic kind. Massive national debt.

I know it is a long video but its awesome.

[Platon]

Hey Denny, maybe we can turn you into a Marxist after all
I posted this a year ago.. and Yes it's awesome!

[Denny Crane!]

Hey Denny, maybe we can turn you into a Marxist after all
I posted this a year ago.. and Yes it's awesome!

AH well I'd probably draw different conclusions about how to fix the problem I'm afraid but I respect people who spot the problems and the symptoms and are looking for equity.

[B5C]

Know what is ironic. I am watching "Capitalism: A Love Story" right now.

Ever since Reagan developed his pro-capitalism plan. Productivity did went up but wages stayed the same. CEOs got richer, public debt when higher, and bankruptcies rised.

[Soviet]

Know what is ironic. I am watching "Capitalism: A Love Story" right now.

That's not ironic.

[Thorn777]

^Plus he put Ayn Rand's protege Greenspan on the map. Sortof libertarian thinking at the FED. What a success...

[Enemy of the State]

Central banks... low interest rates... fiat currency... libertarian.

I think my head just exploded.

[Thorn777]

Central banks... low interest rates... fiat currency... libertarian.

I think my head just exploded.

Indeed....thats exactly whats wrong with it.

[Enemy of the State]

Indeed....thats exactly whats wrong with it.

What exactly do you think libertarians believe in, economics wise?

[Thorn777]

What exactly do you think libertarians believe in, economics wise?

Lots of things, but thats besides the point. He was a stern believer in objectivism, wrote parts in Ayn Rand's books, was part of her inner circle and later they got married.

The man had to swear on the constitution of the US and couldn't just go on a libertarian killing-spree, but whatever possible he did, like indeed deregulating and turning the blind eye on worrisome developments which proved to be catastrophic later, and all supported while in office by his believe in the market looking after itself.

Thats so dangerous: a libertarian at heart central-banking.

Its enough to make your head explode indeed. Thank you Reagan...

[removeduser_4536284751384]

Not a pretty sight.

How long do you think it will take to reduce the UK's (and other's) government debt to "acceptable" levels? (i.e. debt low compared to GDP and/or foreign currency and gold reserves)

[Denny Crane!]

So if someone was a libertarian and then completely disregards all their principles and goes against the aforementioned philosophy it makes the aforementioned philosophy suspect.

Great arguments Thorn, just quality.

In the same way that every MP who was Labour ever turned to Conservative completely invalidates the former ideals forever. Your logic is impeccable, why didn't I see it before!

[Thorn777]

So if someone was a libertarian and then completely disregards all their principles and goes against the aforementioned philosophy it makes the aforementioned philosophy suspect.

Great arguments Thorn, just quality.

In the same way that every MP who was Labour ever turned to Conservative completely invalidates the former ideals forever. Your logic is impeccable, why didn't I see it before!

He didn't completely disregard his convictions as a Fed, like the believe in the infinite market self-cleaning mechanisms, even when there are clear signs it takes a gun to its head. And he believed in much more, he just couldn't convert his ideas legally, or didn't even have the authority in the first place(was a social-Darwinist as well). He always was a libertarian at heart and In the end-effect his libertarian convictions greatly influenced certain important policy's and certain crisis-decisions that proved to be a failure on his part, while of course the very position as a central-banker and certain other policy's where completely going against many libertarian principles, but thats nothing new - the idea that people compromise their ideals to actually influence things in the real world(power corrupts). In this very contradiction at such an important position lies the danger...

And sure these ideas where also shared among his ultra-conservative benefactors like Reagan. Call it "libertarian-leaning" if you will, but my argument always was "a sortof libertarian at the Feds being dangerous and utterly contradictionary".

No idea whats so hard to understand about that.

[Denny Crane!]

He didn't completely disregard his convictions as a Fed, like the believe in the infinite market self-cleaning mechanisms, even when there are clear signs it takes a gun to its head. And he believed in much more, he just couldn't convert his ideas legally, or didn't even have the authority in the first place(was a social-Darwinist as well). He always was a libertarian at heart and In the end-effect his libertarian convictions greatly influenced certain important policy's and certain crisis-decisions that proved to be a failure on his part, while of course the very position as a central-banker and certain other policy's where completely going against many libertarian principles, but thats nothing new - the idea that people compromise their ideals to actually influence things in the real world(power corrupts). In this very contradiction at such an important position lies the danger...

And sure these ideas where also shared among his ultra-conservative benefactors like Reagan. Call it "libertarian-leaning" if you will, but my argument always was "a sortof libertarian at the Feds being dangerous and utterly contradictionary".

No idea whats so hard to understand about that.

What is hard to believe and understand is that you think if a man sticks a twig in his pocket it makes him a tree and it is ridiculous.



Ron Paul is half minarchist half libertarian, listen to the man attacking the Fed and Greenspan. That is semi libertarian Greenspan was not. One person quotes if Greenspan is a libertarian then Bush was a man of peace.

Some errors die hard. In today’s CNN Money, an interview with economist David Rosenberg featured this distortion:

The crisis came about because of excessive leverage, a misunderstanding of credit quality as linked to securitized products, and a general lack of appreciation for risk. Thanks to years of deregulation, the government created a wild west and never established a strong sheriff. The head of the Fed was a libertarian who believed that all economic problems would always be solved in the private sector and that the private sector would always adequately price risk. The degree of supervision never matched the extent of the regulation.

A few observations:
Ron Paul, who is undeniably America’s (if not the world’s) most famous libertarian at the moment, has always opposed Greenspanism as a central threat to both liberty and economic prosperity. If both Paul and Greenspan are libertarians, then the word has no meaning.

Rosenberg blames the crash on a “lack of appreciation for risk” and “excessive leverage.” Like all establishment economists, Rosenberg never bothers to ask why these two phenomena occurred. Could it have possibly been due to the Fed’s repeated forcing down of interest rates that in turn led to mal-investment based on the wrong conclusion that savings and investment were plentiful? The common answer is just that it was greed, and for some magical reason, greed was worse all of a sudden in the middle of the last decade. Animal spirits will surely be blamed since animal spirits are the great deus ex machina of bad economics.

Rosenberg also states that Greenspan believed that “the private sector would always adequately price risk.” Where was this fabled private sector? If by “private” he means the sector in which the government and its Fed set the interest rate, the money supply, reserve rates and lending standards, then the word “private” has no meaning either.

Update: Mr. Engelhardt raises a good point in the comments below. Rosenberg does seem to make a very weak attempt at providing a “why,” although Rosenberg’s explanation has almost nothing to do with his stated problems. He blames lack of regulation, yet, why should lack of regulation cause a private company to take on excessive leverage or to misunderstand credit quality or risk? The two aren’t connected logically without invoking animal spirits since in an unregulated free economy, private owners are very much preoccupied with minimizing risk. No one cared about risk because of the Fed’s policies and because everyone knew that the feds would bail out the GSEs. So sure, lack of regulation was a problem, but it was the governments and quasi-government agencies that needed to be reined in, not the “private” organizations.

[Enemy of the State]

any political position that advocates a radical redistribution of power [either "total or merely substantial"] from the coercive state to voluntary associations of free individuals

Great definition, I have to remember that.

[Thorn777]

You don't want to get it do you? You extremists and your purity issues when something isn't to your liking. Fact: Greenspan had personal libertarian convictions, was even married to Ayn Rand and wrote in her books, Fact is: he transfered some of his convictions at his position at the Fed's. Deal with it or not.

I never claimed he was a "pure" libertarian, I said his personal convictions coupled with his position at the Fed's is oh soo contradictionary and proved to be catastrophic.

This dumb argument is enough already. If you don't want to get there is a real world of positions of power that influences the economic world and that this needs compromises out there, then don't.

And yes a former Labour MP switching to the Tories, might just be called a left-leaning conservative after that depending on his/her views, just like you have libertarian-leaning or "sortof libertarians".

Don't act pathetic and butthurt with your purity lectures of what a "real" libertarian is supposed to be like while just not responding to the real-world arguments made. Its so freakin creepy...

[Denny Crane!]

You don't want to get it do you? You extremists and your purity issues when something isn't to your liking. Fact: Greenspan had personal libertarian convictions, was even married to Ayn Rand and wrote in her books, Fact is: he transfered some of his convictions at his position at the Fed's. Deal with it or not.

I never claimed he was a "pure" libertarian, I said his personal convictions coupled with his position at the Fed's is oh soo contradictionary and proved to be catastrophic.

This dumb argument is enough already. If you don't want to get there is a real world of positions of power and compromises out there, then don't.

And yes a former Labour MP switching to the Tories, might just be called a left-leaning conservative after that depending on his/her views, just like you have libertarian-leaning or "sortof libertarians".

Don't act pathetic and butthurt...

It is not being pathetic and butthurt it is not abusing language which I know people who are into politics love to do and you really don't seem to enjoy defending and indefensible position which is why you are getting so aggressive.

It isn't even purist it is merely adequately identifying peoples positions and there is a big difference between playing silly buggers with the private market and having unrealistic optimistic positions on the finance markets and the principled positions that are definitively associated with political positions.

As much as Nazis were ''social democrats'' in politics people label themselves according to what they think people want to hear.

[chilon]

Do the Von Mises posters agree with this definition of libertarian:

"A libertarian wants the smallest, least intrusive government consistent with maximum freedom for each individual to follow his own values as long as he doesn't interfere with others pursuing their freedom"

or would you prefer a different definition?

One of you linked to the Austrian school. So are advocates of the Chicago school not libertarians? The implication seems to be that some here associate the term "libertarian" solely with the Austrian school, which is not the only school of neo-classical econ.

[Snoopy]

Do the Von Mises posters agree with this definition of libertarian:

"A libertarian wants the smallest, least intrusive government consistent with maximum freedom for each individual to follow his own values as long as he doesn't interfere with others pursuing their freedom"

or would you prefer a different definition?

One of you linked to the Austrian school. So are advocates of the Chicago school not libertarians? The implication seems to be that some here associate the term "libertarian" solely with the Austrian school, which is not the only school of neo-classical econ.

That pretty much covers it, yeah.

2. Its amusing to me how people criticize a fiat monetary system but have absolutely no viable alternatives at this point. Do you honestly believe a viable alternative exists? Do you know what switching back to a commodity base for the world wide money supply would do at this point?

Free banking. A gold standard would be acceptable otherwise.

Chicagoists can be Libertarian too, but doesn't have to be. However, an Austrian basically has to be a Libertarian (or classical liberal) without contradicting himself. Furthermore, a Chicago schooler can't be an Austro-Libertarian, an advocate of the Night Watchman state, or an Anarcho-Capitalist.

Except Greenspan clearly wasn't a Libertarian, or he wouldn't have been manipulating interest rates with the Federal Reserve.

[Denny Crane!]

Roderick T Long defined it as the following

any political position that advocates a radical redistribution of power [either "total or merely substantial"] from the coercive state to voluntary associations of free individuals

Which to me seems a lot more specific than your rather more vague definition. To me the idea is not specific to capitalism as most people assume, which is why you have libertarian socialists. One thing I can be sure of is that a man working within and enhancing the power of a coercive, manipulative organisation like the FED should and must find his claims to be libertarian suspect. The one libertarian politician I'm aware of spent his years campaigning against that very organisation.

A belief in a free market or private business solutions is not synonymous with libertarianism.