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Old 03-09-2009, 02:54 PM   #21
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It's just a theory. It can be proven wrong. Many continue to attempt to disprove it. Would you like to take a swing at the pinata?
Not me. Much too lazy... hoping you had done the testing.
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Old 03-09-2009, 03:19 PM   #22
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Not me. Much too lazy... hoping you had done the testing.
I have only experienced the capitalism system first hand, but have heard less than positive reviews of other economic systems. From the survivors of those systems, anyway. I guess the dead ones don't speak much. Maybe those that really like other economic systems and the conditions they bring about stick with them and don't try to escape. If I was a head honcho in the politburo I might prefer a non-capitalist system, for example. But from a Rawlsian-original position viewpoint, I like capitalism, having been well acquainted with it's pluses and minuses.
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Old 03-09-2009, 09:11 PM   #23
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Capitalism is the only system that I know of where a coercive govt structure is not really needed. In such a system people trade objects or services to mutual benefit. If people feel a trade is fair... then they do so... if not... then not. Govt coersion is not required. The only pupose of govt in such a system is to prevent dis-honest dealings, and to prevent physical force aquiring things from other people.
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Old 03-21-2009, 02:10 PM   #24
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And where is the evidence to support that theory?




If you're looking for a system that maximizes per-capita GDP (a.k.a. standard of living) than we haven't yet found a better system than free market capitalism.

Anecdotally you can also look to the differences in living standards between Russia & the US circa 1980, East & West Germany, North & South Korea, Hong Kong and main land China . . .

Are there any examples were the reverse is true?
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Old 03-22-2009, 09:12 PM   #25
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If you're looking for a system that maximizes per-capita GDP (a.k.a. standard of living) than we haven't yet found a better system than free market capitalism.

Anecdotally you can also look to the differences in living standards between Russia & the US circa 1980, East & West Germany, North & South Korea, Hong Kong and main land China
Good work. I concede your point.
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Old 03-22-2009, 09:52 PM   #26
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Capitalism is the only system that I know of where a coercive govt structure is not really needed. In such a system people trade objects or services to mutual benefit. If people feel a trade is fair... then they do so... if not... then not. Govt coersion is not required. The only pupose of govt in such a system is to prevent dis-honest dealings, and to prevent physical force aquiring things from other people.
Look, our system is one where you can open up a small shop and ply your trade or sell your good, pay a piece to the gov for their services and keep the rest. For the most part, your customers are happy and you are happy. This is a good thing, you can express your art/cooking/selling/craft and get pleasure from it and make a living.

The trouble comes when you grow very large, and thus in quest to grow larger you are in a position to do wide spread damage, as well as good. This is the example of the megabanks and financial houses. They become essential, just like a small grocery is essential to feed the locals, these institutions become essential on a macro level.

So, this is what is happening now, good intentions when out of kilt. Thus, government in an objective way is essential to oversee the system, make sure no monkey wrenches are thrown into it, and sort of nudge it back on track when things start to go out of balance.

Look if when poor underwriting of mortgages started to be in vogue, had there been a mortgage underwriting watchdog put in a few regulations as far as guidelines go, then we would not be in the mess we are in now. Even if the derivatives were written on the packaged goods, the underlying product would have been sound enough to mitigate a disaster.

It was poor underwriting that was the root cause of this calamity.

jug
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Old 04-11-2009, 08:30 AM   #27
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Not to dredge this up again but... Here is an interesting Op-Ed piece:

A Different Sort of Red America

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Perhaps the most telling line in the Oxford English Dictionary’s definition of “socialism” is this one: “The range of application of the term is broad.” That’s something to bear in mind as we consider a much-discussed poll, released by Rasmussen on Thursday, that found that “Only 53% of American adults believe capitalism is better than socialism.”
Also is interesting from the Rasmussen report:

Quote:
Investors by a 5-to-1 margin choose capitalism. As for those who do not invest, 40% say capitalism is better while 25% prefer socialism.
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Old 04-11-2009, 10:17 PM   #28
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Not to dredge this up again but... Here is an interesting Op-Ed piece:

A Different Sort of Red America



Also is interesting from the Rasmussen report:


Not too surprised here. It all really depends on whether you choose to think for yourself, or allow others to think for you. For many, they believe the govt to be smarter than them, and take care of them. If you believe in the govt more than you believe in yourself, then you are much more likely to believe what you are told, without really thinking it through. If the govt starts saying that socialism is good, then they start believing it too. These are people that generally do not question their govt. And in some cases are even dependant on it.

Most of my friends tend to want to think for themselves. So even if you called "socialism" something else, say "co-operationism" and then explained to them, what that was all about, they would probably still disagree with it. Why, because in thinking for themselves they think about the pros and cons of the ideas, and pretty much dismiss whatever fancy "label" someone might want to call it.

This is a game that has been played for a long time in govt's and media outlets across the world. That is why terrorists have become "freedom fighters" and criminals become "dis-enfranchised youths". For some.... just changing the label on something can change it from bad to good, even though in reality it changed nothing at all.
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Old 04-11-2009, 10:23 PM   #29
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Look, our system is one where you can open up a small shop and ply your trade or sell your good, pay a piece to the gov for their services and keep the rest. For the most part, your customers are happy and you are happy. This is a good thing, you can express your art/cooking/selling/craft and get pleasure from it and make a living.

The trouble comes when you grow very large, and thus in quest to grow larger you are in a position to do wide spread damage, as well as good. This is the example of the megabanks and financial houses. They become essential, just like a small grocery is essential to feed the locals, these institutions become essential on a macro level.

So, this is what is happening now, good intentions when out of kilt. Thus, government in an objective way is essential to oversee the system, make sure no monkey wrenches are thrown into it, and sort of nudge it back on track when things start to go out of balance.

Look if when poor underwriting of mortgages started to be in vogue, had there been a mortgage underwriting watchdog put in a few regulations as far as guidelines go, then we would not be in the mess we are in now. Even if the derivatives were written on the packaged goods, the underlying product would have been sound enough to mitigate a disaster.

It was poor underwriting that was the root cause of this calamity.

jug
Yours is an interesting point. One maybe I had not considered. So is what you are saying that if the govt did not allow any one company to become too large, then it would be easier for the free market to run as it was intended? Instead of 4 or five very large large oil companies, maybe dozens of smaller ones, so if some were to fail they cannot impact so many people.

Maybe a govt law that a company can employ no more than X number of people or have a profit of more than Y per year?
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Old 04-11-2009, 11:05 PM   #30
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Yours is an interesting point. One maybe I had not considered. So is what you are saying that if the govt did not allow any one company to become too large, then it would be easier for the free market to run as it was intended? Instead of 4 or five very large large oil companies, maybe dozens of smaller ones, so if some were to fail they cannot impact so many people.

Maybe a govt law that a company can employ no more than X number of people or have a profit of more than Y per year?
And this differs from Socialism how? (Not the Soviet kind but the kind in my previous post.)
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Old 04-12-2009, 08:21 AM   #31
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Yours is an interesting point. One maybe I had not considered. So is what you are saying that if the govt did not allow any one company to become too large, then it would be easier for the free market to run as it was intended? Instead of 4 or five very large large oil companies, maybe dozens of smaller ones, so if some were to fail they cannot impact so many people.

Maybe a govt law that a company can employ no more than X number of people or have a profit of more than Y per year?
Not really. Gov't has no business controlling how big someone grows. If a toy manufacturer grows huge, it is probably of no concern to our way of life. However, if something grows very large, such as a power company, with the political pull that comes with largeness, via payoffs, contribs, etc, then we may have a problem.

Wall street combined is a very powerful force, has the ability to buy government. It can do good, it can screw things up. Depends on the who, what, where, how and why factors.

Wall street also plays with other peoples money, so in the most recent scenario, they sort of rolled the dice. Good example is AIG's financial services division which is essentially a wall street product, backed by other people's money, assets of AIG.

The purpose of these firms is to makes mucho bucks for the boys (big shareholders and upper management (parasitic types))

The problem is just not one firm, it's a system of firms, banks, investment banks (wall street) with access to mortgage products from which is derived financial products. All backed by the US treasury as we see now. They essentially put out "ads", "We buy any mortgage, just sign 'em up, dead or alive, and well pay out 102% of what you layed out" No worry about underwriting here, they pack em up, they stamp a AAA rating on XXX crap, with the blessing of S and P, and away they go. Government is paid off, regulators weakened, the boys are free to do what they want.

Sounds like something out of a mob story to me.

This is not capitalism, this is a "racket" when you finally analyze who is in charge, who profits, and who is connected to whom. A good federal prosecutor could probably build a RICO case against several thousand people here, but who would support it, would a good portion of the congress be charged? See the point!

The fact that they are not repealing Gramm Leach Bliley shows they are setting up to do this again. Wall street looks at banks and insurers the way a wolf looks at lamb chops. Why don't people see this, this is not capitalism, this is socialism for the guys on top.

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Old 04-12-2009, 09:34 AM   #32
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Once a "racket" is established, by way of controlling a certain industry or trade, whereas the racket impedes the free exchange of ideas and goods, and essentially controls the flow of profit stearing capital in predestined directions, all hell breaks loose and the free market system begins to break down forcing government to step in with a heavy hand, for political reasons.

Capitlism/free trade is based on a balance of supply and demand. Sometimes a gentle nudge is needed from a referee to keep things working in good order. If everyone played fair, not much regulation would be needed, but greed steps in and we essentially get social darwanism, where the biggest thug on the block rules ensuing in power struggles.

The whole idea is to keep balance. Countries that essentially switched from too much to less government control and visa versa are essentially evening out an imbalance. Cuba embracing Castro is going in one direction, the collapse of the Soviet Union is going in another, simply trying to fix imbalance.

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Old 04-12-2009, 11:40 AM   #33
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Once a "racket" is established, by way of controlling a certain industry or trade, whereas the racket impedes the free exchange of ideas and goods, and essentially controls the flow of profit stearing capital in predestined directions, all hell breaks loose and the free market system begins to break down forcing government to step in with a heavy hand, for political reasons.

I must admit.... you are really confusing me. In one sentance you say you do not want the govt to stop companies from becomming "too large", but in the next you claim the govt should step in to "fix the imbalance". And if the answer is some form of "well it depends" then I would claim to be against govt rulings that are completely arbitrary, and can change from day to day.
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Old 04-12-2009, 11:51 AM   #34
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Capitlism/free trade is based on a balance of supply and demand. Sometimes a gentle nudge is needed from a referee to keep things working in good order. If everyone played fair, not much regulation would be needed, but greed steps in and we essentially get social darwanism, where the biggest thug on the block rules ensuing in power struggles.

I would also disagree with that premise. So greed creates "social darwinism" which is bad. Is that not what capitalism means? So how would we as a society combat this? Impose laws so that no company becomes too "successful"? Make laws that determine which companies are allowed to bid on certain jobs so that other lesser performing ones can "have their chance"? What is not "playing fair"? When a company makes more profit than their competitor, is that unfair? To my way of thinking in business as long as no one was "forced" into making a purchase at a particular price, then I think it was completely "fair".

Why do you assume that the largest company is somehow unworthy of their position in that market, and that they must have done something "bad' to get there? Maybe they have the best product... one that more people wanted to buy than anyone elses.
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Old 04-12-2009, 12:00 PM   #35
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Capitalism like football needs to be refereed closely. Although my mind goes back and forth on instant replay and challenges.

One more thing - never let teenagers hide Easter Eggs for the younger kids.

After a 'while' the missing ones will show up - if the weather is warm - but you won't want them anymore.

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Old 04-12-2009, 01:28 PM   #36
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I would also disagree with that premise. So greed creates "social darwinism" which is bad. Is that not what capitalism means? So how would we as a society combat this? Impose laws so that no company becomes too "successful"? Make laws that determine which companies are allowed to bid on certain jobs so that other lesser performing ones can "have their chance"? What is not "playing fair"? When a company makes more profit than their competitor, is that unfair? To my way of thinking in business as long as no one was "forced" into making a purchase at a particular price, then I think it was completely "fair".

Why do you assume that the largest company is somehow unworthy of their position in that market, and that they must have done something "bad' to get there? Maybe they have the best product... one that more people wanted to buy than anyone elses.
Not sure attempting to regulate large, successful, profitable, fair, capitalism vs socialism or the like would do much. Many things had to fall into place to let this mess take place but isn't the root cause of the current problems massive over-leveraging, leading to a bubble and the inevitable resulting collapse? Could this have gotten this bad if we'd simply stuck with the mortgage qualifications & full doc of 25 years ago all along? Individuals and lenders got way overleveraged and Wall Street packaged those mistakes compounding the original sin about 30:1.
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Old 04-12-2009, 07:54 PM   #37
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Not sure attempting to regulate large, successful, profitable, fair, capitalism vs socialism or the like would do much. Many things had to fall into place to let this mess take place but isn't the root cause of the current problems massive over-leveraging, leading to a bubble and the inevitable resulting collapse? Could this have gotten this bad if we'd simply stuck with the mortgage qualifications & full doc of 25 years ago all along? Individuals and lenders got way overleveraged and Wall Street packaged those mistakes compounding the original sin about 30:1.
Well said Midpack.... But let us not forget that the govt had their hands into this one long before the meltdown started. Had the govt not backed anything, then the banks would not have done as risky things as they did. You better believe that a bailout of one form or another made it's way into their risk culculations. It pleases me to see that several banks now are attempting to give the bailout money back to the fed. Aparently the control that the govt gets as part of that deal is not acceptable. I can understand that point.

I was in my bank just a few weeks ago. And my banker asked me what could they do for me to invest more money with them. I told them to give me a non-FDIC insured bank account, but to offset my added risk, give me 5% interest on it. His mouth just sort of hung open for a few. But this is how the free market is supposed to function. More risk = more potential reward. And if that bank goes under... I should have no recourse whatsoever. I am an adult.... there is no net to catch me should I fall... and I am very aware of that fact.....
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Old 04-13-2009, 08:19 AM   #38
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Well said Midpack.... But let us not forget that the govt had their hands into this one long before the meltdown started.
Believe me I don't, in fact I'd say the govt started the ball rolling with CRA. It was a very well-intended when introduced during the Carter years but it was largely a paper tiger. Liberals today like to exonerate CRA by pointing to the Carter years. Subsequent admins Bush Sr, Clinton (especially) and then Bush Jr gave it the teeth needed to essentially force banks and other lendors to relax standards/documentation and make loans that never would have qualified by any reasonable measure. Congress had lots of warning signs with Fannie & Freddie along the way that they repeatedly chose to ignore as well. It was well-intended initially and I am not saying CRA was the sole cause, but I'm not sure this all could have happened without the role of CRA.

Community Reinvestment Act - Wikipedia, the free encyclopedia

Again, the debate about companies being too large seems beside the point WRT this meltdown to me.
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Old 04-13-2009, 11:37 AM   #39
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Believe me I don't, in fact I'd say the govt started the ball rolling with CRA. It was a very well-intended when introduced during the Carter years but it was largely a paper tiger. Liberals today like to exonerate CRA by pointing to the Carter years. Subsequent admins Bush Sr, Clinton (especially) and then Bush Jr gave it the teeth needed to essentially force banks and other lendors to relax standards/documentation and make loans that never would have qualified by any reasonable measure. Congress had lots of warning signs with Fannie & Freddie along the way that they repeatedly chose to ignore as well. It was well-intended initially and I am not saying CRA was the sole cause, but I'm not sure this all could have happened without the role of CRA.

Community Reinvestment Act - Wikipedia, the free encyclopedia

Again, the debate about companies being too large seems beside the point WRT this meltdown to me.
I agree..... it is like most programs that the govt starts to "help" people. In one way or another the act of them "helping" winds up unbalancing the free market forces. When the govt offers a "stick or carrot" to do things their way, it often has unintended consequences.
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Old 04-16-2009, 11:12 AM   #40
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So what I'm reading is that the government relaxed the regulations, the lenders took advantage because they saw huge (immediate) dollar signs, and now we're in this mess. Thus, we need more regulation.

I'm glad we finally agree.

Reading the wikipedia page on the CRA, it seems that there's very little to no evidence that the CRA caused the subprime mess. A bunch of op-eds in the Journal don't count as "evidence."

If only people would think for themselves, as armor99 wrote.
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