It's not a matter how smart you are anymore. :nope:

It's how smart you are a Stealing now. :yep: :down:

Hello sky:D

You probably won't be surprised to learn that I see something totally different here.

It seems apparent to me that the cause is not deregulation but rather, excessive regulation. You may or may not remember some of my rants prior to and during the bailout debacle, where I basically said that this sort of thing was bound to happen. The first crisis wasn't brought about due to lack of government intervention, but because of it.

The problem comes when the government removes incentive by lessening the penalties for failure. You are correct in saying that an unregulated market is governed by selfishness. Indeed, a great many things are. So why would it surprise anyone when selfish individuals take the opportunity to profit and then let the state cover their failures with everyone else's money?

The beauty of a truly free market (which admittedly, must have limited, but strong, anti-fraud and anti-theft regulation) is that these people can't pawn off their failures. They get stuck with them unless they can sell them to someone else. If a business disappoints customers, it loses customers and it goes out of business. . Of course, in America's heavily-regulated economy, that doesn't always apply. Just look at General Motors or American Airlines. Both cost the taxpayers billions that they otherwise wouldn't have because the Feds stepped in to help them out with our money.

The key to the market is incentive (selfishness, if you prefer). The freedom to fail or prosper is the incentive. Remove or hinder either, and the market becomes ineffecient. It doesn't cycle the way it should. You wouldn't interfere with an ecosystem and expect it to function normally would you? The market is no different. It has good times and bad times, but it always grows.

Finally, remember that this country has not had a truly free-market economy that was largely independent of government since the second founding of the federally-sponsored central bank, which immediately set about mucking up the money supply and interfering with prices.

I know that you are aware of the dangers of plutocracy, so I'm confused as to how you could ever speak about deregulation as if it were a bad thing (except from an environmental perspective, of course, which is another discussion.) I mean, that would be combining the fiat powers of state over policy and money with extremely wealthy businessmen. How could it be any more plutocratic?

What system, exactly, would you like to see? A link is ok if you have typed it out before:up:

Dang, JM, you done it again!:rock:

Thats pretty much it in a nutshell.

The fact the regulations are lax enough to allow loans to people who can't afford them is the real cause of the problem. Untill this is delt with, the situation will not improve.

The fact that subprime loans make up such a large part of the loan market is a massive cause for concern. Here in Australia, Sub prime loans barely make up 0.1% of the overall loan market. This has ment bank and non bank lenders have had less loans failing than elsewhere (it has increased in the last couple of years, but 95% of loan still are going OK)

You don't have to stiffle the market, just make sure the market act with better control so things don't get as bad as they have. Sometimes letting a few of these companies fall will help remind others that if they play with fire, they too can crash and burn.

The incentive of failure is the only regulation that needs to be enacted, and the market has that already except where the state mucks it up. If they didn't have the reassurance that the Fed will bail out bad loans or purchase them (in some circumstances), there would be a lot less reason to accept subprime lenders. And yes, some people would still take on that high-risk venture, and eventually be rewarded with bankruptcy.

As far as loans to people who can't afford them goes, that would be an extraordinarily difficult to construct, and ultimately ineffective piece of legislation. For one thing, loans, by their very definition, go to people who can't afford the principle right now (Sorry, it's fun to be a smartass sometimes:D )
In addition, there are a lot of low-income families and individuals who need loans. Blanket legeislation about loan eligibility would hurt them a lot. What if a young person needs a loan for a car so they can go to work? A bank could look at that person, their credit history and any factors that may warrant explanation, and talk with them face to face to determine eligibility. A law can't do that.

Another important factor is the Federal Reserve's tampering with interest rates. Gnerally speaking, at least from the Austrian and Chicagoan schools of economics' points of view, when interest rates rise, the economy slows down before recovering and pushing ahead to the next bull market. Since the Fed sets interest rates under the guise of controlling inflation or spurring economic growth, they tamper with this cycle. When it is set too low, it encourages lending and therefore expansion of the money supply, often outpacing the value of alll national commerce and resulting in inflation. (Different economists prefer different methods for measuring this, GDP and GNP being two of the most popular. Others prefer time-based economic growth indexes and the like)

Of course, the Fed can't keep rates low forever, and the more they artificially inflate the economy, the farther down it has to go to before it settles into its' natural cycle. If the Fed continues lowering rates beyond this point, runaway inflation results from borrowers scrambling to accquire loans to pay off creditors, a natural consequence of trying to cram too much commerce into a national pool of resources that can only support so much at one time. (Their ventures fail because of increasing prices of goods, labor, too much competition, lack of demand, etc.) This period usually precedes an economic crash or severe recession as the means of capital generation equalize with the money supply.

Also, let's not forget Federal legislation to encourage subprime lending like the CRA and Fair Lending. Estimates typically put as much as 40% or as little as 20% of bad loans into this category. Certainly not the majority of them, but a significant chunk nonetheless.

So basically, there is a lot of regulation going on that is not helpful at all, and not a lot of interest in restoring the powerful self-regulatory forces of the market.

Finally, there's the all-important consideration that we know what happens when the government gets its' hands in things. I suspect that finding an American who believes that their government is efficient and effective would be something of a rarity. As such, why on earth would you ever let them have any kind of direct role in the management of something so central to the economy as lending? Unless, of course, you want an inefficient and ineffective economy.
It might also be worth noting the correaltion between the nations listed highest one the index of economic freedom and the nations with the highest PPP (Purchasing Power per Capita) GDP per capita, and average annual income. (Norway being one notable exception, and remmber that we are talking about economic freedom, not necessarily the left or right wing affiliation of the government. Believe it or not, welfare states can coexsist with economic freedom, to a degree. Of course, they never do as well as lassiez-faire states, but that's another matter)

On the bright side of things, the inevitable onslaught of banking regulations, controls, and economy-punishing legislation that is sure to assail us before long will be of great benefit to business lawyers, God bless their dear souls, and that's something we can all be happy about:down:

The argument "but the US doesn't have a really free market" sounds like the old "but the USSR didn't really have communism" argument to me
:rotfl:
Apart from parts of "new" europe and the UK, the US has the least regulated economy on the globe.
Aside of course from Somalia...

I think the US has regulations because at a certain level, a society needs them.
Totally free capitalism might work in Hayek's (or was it Friedman) famous Island, or in the society the founding fathers of the US lived in.
A bit like anarchism, which works just fine in a siberian village.

US intel: US set to lose dominant position within the next 20 years
 

summary:
http://www.guardian.co.uk/world/2008...ligence-agency

original document:
http://image.guardian.co.uk/sys-file...2025_FINAL.pdf

Double trouble for America, since demograpohs show that around 2040 white Americans will no longer form the majority of the american population, since more and more non-white immigration into the US takes place. As the Southern Poverty Law Centre in Alabama and the Center for the Study of Hate & Extremism at California State University, San Bernardino, show in their releases, publications and interviews with their leading heads, the (often seen before in history) counter-reaction of growing racism, and ideologies basing on Nazism, KKK-propagated supremacy of white race and growing racist hositlity against president elect Obama, already have switched into higher gear in reaction to the election result, with some Nazi groups ironically applauding Obama, for he will make things so bad for white man that the white population will see its mistake sooner or later and then strike back at non-whites even stronger, these sickos say.

Dominance fading, unilateralism passé, a black man president in the White house, whites loosing numeric dominance in US society, economy fumbling, finance model failing, skyrocketing debts and a de facto state-bankruptcy, making the nation depending on the good will of the rest of the globe paying for it's bills - white America is heading right into a massive identity crisis. After the Reagan years and Bush's new world order and the neocons' project for an American century, this is going to be a rude wakeup-call to harsh reality that has little in mind with this self-glorification.

And the longer America keeps on denying this trend, the stronger the rest of the world will be affected for the worse from this stubborn patient fighting against accepting unwelcomed realities and the simple fact that it's excessive way of life is suffering from threatening health problems. that's why the world should use sticks and carrots to make america to learn faster and adapt to reality instead of trying to make the world adapting to america. We cannot afford to always wait until the mess has been done, and then repairing the damage behind. Prevention is easier, and cheaper.

However, reading some comments here convinces me that we need more of what has brought us right into the current credit crisis. :88) Let's repeat the old mistakes again, comrades, but this time with greater élan and determination! We can reach the 100 trillion debt mark for sure, yes we can! :up:

An autobahn without traffic rules and speed limits and everybody racing at will with 220 km/h is a safe autobahn. :know:
Free ride for free citizens! :up: Be patriotic - drive fast!

Skybird never quits slamming my country with lies and propaganda does he?

This comes from the NIC, which is the coordinating body of the CIA and the other US intelligence services.
This is not a leftist whacko theory but the official analysis of the leaders of the US intelligence communtiy.
Don't shoot the messenger
;)

On the other hand, Europe won't be in too great a shape either.
They predict India and China, possibly Russia (if they can fix everything that needs fixing) as equal players, with Iran, Turkey and others as new regional powers.

Very cute, sky:rotfl:

I can only assume that you're talking to me, since everyone here either agrees with you to some extent or with me to some extent.

Still, I have a lot of respect for your perspectives, no matter how much they may vary from mine, since you're obviously an intelligent person. So, how's about a little more detailed summary of how you could expect anything other than minimally-regulated capitalism to work, and maybe a few less poor analogies?:D
Surely, you must realize that if I make the argument that we're doing the same thing we've been doing for years and it has led to our current (and many previous) crises, you would have to somehow assert that my conclusion is wrong and maybe provide some rational explanation.

If you're busy or tired right now, I can wait. One can always learn the most from a perspective that they are unfamiliar with, so it's worth it.

True, there can never be a generally desireable system of pure capitalism, and a system of pure communism simply cannot exsist, so the resemblance is there, I suppose. I imagine that both are like a system of forums where people have to actually read the entire post before they argue with it;

or a system in which people post things that aren't contradictory;
I misspoke myself there, perhaps too focussed on dramatic effect.

According to whom? I can easily produce a large list of sources contradicting this claim, but here is one of my favorites
http://www.heritage.org/research/fea...dex/topten.cfm

Bear in mind that the lower the number in the government size index, the more government there is. The number actually refers to freedom from government as a percentage.

In short, though, you are correct that capitalism cannot be totally free. It must have regulations to prevent fraud, theft, and exploitation, to some degree. However, these regulations should be as unobtrusive as possible, since they tend to hinder honest business more than they damage dishonest dealings.

One thing that I have come to expect from economic left-wingers over the years is a complete disregard for any kind of empirical evidence, so I doubt that the world's growing assortment of failing mixed economies, or the stark contrast of China's "Special Economic Zones" with the rest of the nation, or even the alarming correalations between the stregth of the U.S. economy/dollar value within the past few decades with an increase in socialistic policies, would dissuade them from believing that someone out there has the knowledge to understand the completely unfathomable nature of economics and can make some sort of policy to govern it efficiently and effectively.

Rarely in history are there such stark contrasts as those which economics can show us. Centralization inevitably always fails. Freedom (to a certain point, of course) inevitably generates prosperity.


While some brilliant mind may exsist who can effectively control any centralization of economy, I have yet to see them, so I ask those who would disagree; "What preferable system do you have?" "How would you control an economy more effectively than it can control itself with the minimal regulations of the nature I presented above?"
The rest of us eagerly await your response, becuase all the other people who claimed to have such solutions haven't done such a great job.

P.S. I have to apologize for getting so worked up over such issues. IMO, a healthy economy is vital to a healthy nation. Quite simply, I am not willing to trust the economic welfare of the country to an person or person(s) other than the producers and consumers. The alternative has historically been shown to fail, quite catastrophically on a number of occassions. Nonetheless, I'm the first to admit that I don't know everything (understatement of the century), so I would jump at the chance to hear an economic policy that I couldn't easily circumvent for my own gain.

Feel free to be harshly critical in your responses, it doesn't bother me a bit.:D

The important question is however, will the NIC's assessment and future predictions prove accurate in the next +20 years? Hell if I know. :-?

America's strength comes from it's ability to constantly change and grow. The demographic breakdown is irellevant. It's the quality of our people that matters, not the dominant color.

In the recent presidential election, just under 70 percent of the voters were white. We elected an African American president to serve in the White House, a building that was built by slaves a little more than a hundred years ago.

America offers more freedom and opportunity than any other country in the world, and it will continue to do so. Maybe that's why some other countries are so jealous of it.

The people of my country have yet to elect a Dictator, something that can't be said of some European Countries represented here.

It's also worth noting that because you have to be a natural born citizen of the United States in order to become President, there's no chance of an Austrian born painter attempting world dominace from our shores.

No offense intended to you AntEater but:

a. Skybird searches the web for negative articles about my country and has been doing so since I started reading this board half a decade ago. I trust him about as far as i can throw a tiger tank.

b. This is not the NIC article. It is the Guardians interpretation of the NIC article. Even his "original document" link doesn't come from the source but rather the Guardian.

c. It is merely an estimate of what might happen almost twenty years into the future. I leave it to you to calculate how accurate such projections tend to be.