Capitalism: It was fun while it lasted... (in Off-topic)

Heck, we aren't even "quasi-socialist" anymore. We went for the whole shmeer, and now were full-blown, honest-to-goodness, socialists! You might even say that we now are "quasi-communists".
Forget being a entrepreneur, I'll just get a nice, safe, well paying government job.
Why work, even? I can just get paid for doing nothing. In fact, this is the only country in the world where you get paid for NOT having a job!
Novus Ordo Seclorum, indeed.
(Forgive the cynicalness of my post, I'm just rather mad.)

man, i am glad i am not canadian! ; )

parents who give their toddlers whatever they want (ice cream for supper, play in the road, etc) don't deserve to be parents. governments are the same.

when i can't vote libertarian, i'll vote anarchist.

England has it too...

While I wouldn't go quite so far as the original post, I too am displeased with the current state of affairs.

"In fact, this is the only country in the world where you get paid for NOT having a job!"

Don't be silly!

I'm getting the equivalent of USD$300 per fortnight for looking for work from the Australian government!
Of course, I can't find work because the market is dead... Wheeeeee!

Much of the western world will pay you when you're not working.

And as for the world moving towards 'socialism'; that's rubbish, it's moving towards 'poor'. There's a difference.

And how did we get poor? Capitalists playing fast and loose with our finances. Lets not forget that.

Well, I'm not especially knowledgeable about welfare in other countries, but I'm pretty sure that in most other countries, with the exception of Sweden, of course, not having a job is a job.

"And as for the world moving towards 'socialism'; that's rubbish".
I was sort of talking about the USA, JW. And yes, we are practically socialist. Government run economy, government run transportation, government run education, almost-government run health care... sounds pretty socialist to me...

> And how did we get poor? Capitalists playing fast and loose with our finances. Lets not forget that.

Well, to counter one oversimplification with another,

capitalists playing fast and loose with THEIR money is their job. WE got poor when our government (many of whom are ex wall street types and have lots of friends there) decided to bail them out with OUR money.

with out the bail out banks fall. When banks fall you can't even get to your money.
Employers can't get to their money because their bank accounts are frozen, and you don't get paid.
You don't get paid, you can't buy anything and the economy goes down the drain...

Well, I suppose then we'll have government run banks...

We're all capitalists. Everyone who plays this game. Well everyone who plays it well.
Capitalism is investing capital into something that produces more capital. Use the least amount to produce the most amount possible. That's efficiency.
Carnage blender is investing experience into skills that produces a fighting machine capable of pulling in even more experience by having an advantage over those who have a higher score. How do you do that? You invest in skills that produce the greatest overall return in exp through battles. Your characters are like businesses, i.e. farms. I'm sure if anyone here set their mind to a real business they would be incredibly good at it.
Except instead of worrying about the damage ratio of my magic missile I would have to learn something like accounting.

> with out the bail out banks fall.

yes. letting losers fail is part of capitalism too.

> When banks fall you can't even get to your money.

no. the FDIC is still there. the world wouldn't end.

monday morning quarterbacking is an easy thing to do! without a crystal ball it is all just speculation though. here is a pretty good little article that talks about why a bailout may be smaller if done now rather than waiting longer to act:

http://247wallst.com/2008/02/22/the-biggest-bai/

Or we could just, ye'know, not bail them out...

And yeah, Wolfmother, I'm pretty sure that if anyone on CB thought as much about business as they thought about CB, we'd all be billionaires... ;)

To make another analogy.
Suppose there were an experience tax. For every amount of experience you get 10% of it was deducted by Carnage Blender Admin. An the more experience you made the higher your tax. Then Carnage Blender decides to give all this accumulated experience to low ranked players. After all everyone deserves experience right? It's not fair that some are wealthier than others in experience. Redistribution of experience would cause those that worked hard to create and stick with a winning strategy to pay for those with a losing strategy, and what will happen with the experience the low ranks accumulate this way? They likely waste it, 'cause they didn't earn it. It was given to them.
Socialism. A scary thought in Carnage Blender.

/me breathes a sigh of relief looking at the healthy Canadian banking system which is so 'burdened' by regulation....

Just be glad you aren't in Canada Marl, our socialism way out socializes yours!

*sigh* Man, I am so sick of hearing whiney conservatives rant about socialism.

1. We never had a 100% pure capitalist economic structure. We had a mixed economy that leaned toward capitalism, most often heavily so, but with elements of socialism thrown in for balance. And we were better for it.

2. 100% pure unrestrained capitalism isn't any better than pure socialism. People need to have the economic freedom to try new things, take risks, develop new products, etc, but we also need safeguards to ensure that the middle and under classes are not trampled the the mighty economic weight of the upper class. Allowing all the nations wealth to rise to the top and widening the rich/poor divide does not, contrary to conservative dogma, do anything for the middle class.

3. CB is not real life. Here on CB, I'm a hard line capitalist. But not on planet Earth. It's just a game, and if someone ends up poor, it has no bearing on one's ability to live. I can't take a Blacksword of Nan Elmoth and evicerate everyone I meet on the street today, and I wouldn't want to apply a game's economic principles to the US economy either.

Social Democracy... say it with me now... Social Democracy.

That being said I do think Marl has a point.
Although I believe we are a totalitarian nightmare, I don't think we've jumped off the socialist bridge just yet. The current collusion between government and business is more akin to fascism than communism.

The "greatness" of our economy (the only part of the nation that matters) requires we prop up the corporate entities that fuel the economic engine. The populace has once again been convinced that fear of what might happen is more than enough to calm the terror of what IS happening. First our civil freedoms, then the financial ones. The power hungry and the money hungry hand in arthritic hand leading us all towards decimation.

We have based the last 50 years of economic growth on consumer spending increasing exponentially. We've poisoned ourselves with
trinkets and sugar. Crippled from excess, we now face the possibility of it all going away. Death is assured for our way of life. This scares the crap out of us, and if the Feds want to tell us they'll save us from that fate, we'll listen even up to the moment our hydrogenated heart stops beating.

Socialism, communism, capitalism... all of these ideals fail to deal with the anarchists in power. The people in control recognize no law, and never will.

Jon, "oversimplification"? Oh yes. Deliberately.

Meanwhile, if we are talking about socialism in the US, don't forget the first moves in that direction came from Bush. His final legacy to the States.

While I don't like Bush-bashing, I will agree with JW here. Bush grabbed far more power than should be allotted to a President, and did use it to further his economic policies.

We never should have gone off the gold standard.

"no. the FDIC is still there. the world wouldn't end."


Federal banks can't guarantee every single penny out there.
When Ice Save fell, Iceland bank, the federal government in the Netherlands only guaranteed up to ﾀ100,000.

No, bail outs are good in the long run.

The FDIC can only guarantee 1.22 cents on the dollar, the rest the Fed has to print.

The FDIC insures up to $250,000, but anyway the bank bailout makes sense. Loans are essential to the economy. How are you going to be an entrepreneur without capital?

The big three car bailout, I can't see justified from any stand point. Not to mention are the idiocy about congress caring about corporate jets.

As for the massive spending it should increase GDP, but hopefully it's spent on at least moderately useful measures & fair wages.

The opening post is quite overblown though..

I see a lot of votes in the car bailout.

"The big three car bailout, I can't see justified from any stand point."

You don't live in Michigan, do you?

"Forget being a entrepreneur, I'll just get a nice, safe, well paying government job."

Have you tried getting a government job? It's not easy

"Why work, even? I can just get paid for doing nothing. In fact, this is the only country in the world where you get paid for NOT having a job!"

In the Us Employers pay unemployment insurance as part of the post depression social welfare projects. Nearly every western country has an unemployment compensation system of some sort.

"I was sort of talking about the USA, JW. And yes, we are practically socialist. Government run economy, government run transportation, government run education, almost-government run health care... sounds pretty socialist to me..."

The government doesn't run the economy if they did you think there would be a massive recession? mm doubtful. The fed can attempt to speed up or slow down the economy through interest rate hike which the banks use as a standard for lending practices but there is very rarely intervention.
Public education is a necessity for the modern world previous to public education an overwhelming majority of the country was illiterate. The country as a whole profits by better paying jobs and more tax revenue.
As for government run healthcare... Medicare and small state programs only offer health insurance, not healthcare. There are almost NO government run medical facilities in the US open to the public. Most of the free clinics are run by non profits and funded by grants and donations. You must be a teenager and never had to pay 30% of your paycheck to get health insurance that only covers half the costs.

Seriously man did you get your information off of a teenie bopper blog? Because you have no idea what you are talking about at all

As I posted before, it's now a job not to have a job. I also said we almost had government run health care.

Part of what makes America great is the freedom to fail and succeed. And as far as being poor, America is one of the few countries where people who are considered poor are overweight.

"As I posted before, it's now a job not to have a job. "

And as I posted it's not. Unemployment compensation is 40% of your average income over 2 years and does run out quickly. It's not a job it's something to keep you from starving when the savings run out.

"I also said we almost had government run health care."

No. No we didn't. All of the plans coming up for for government insurance none would have changed the healthcare system at all. Therefore we would still have an incredibly overpriced healthcare system completely tilted towards the health care industry making money hand over foot while people die waiting to be seen by a doctor.

As usual, Flatcap is the voice of reason.

"The big three car bailout, I can't see justified from any stand point."

You don't live in Michigan, do you?

No, I don't; so why should it be the responsibility of the rest of the country to employ Michigan to lose money by making uncompetetive cars?

Part of what makes America great is the freedom to fail and succeed. And as far as being poor, America is one of the few countries where people who are considered poor are overweight.

Exactly, the freedom to fail is necessary because it indirectly allows people be more inventive and take more risks. Many of which end successfully, and help advance this country.

What we are experiencing is a sudden and drastic halt to consumer spending as a result of wages, savings, and investments evaporating virtually overnight.

I would like to see a big car maker go away, and all the jobs that go with it go away, but not for the same reason Cube and the others have said, but because I'm a bit selfish, and I like having social services. I think by letting an entire city 'fail' we would be providing ample evidence of why we have and need government in the first place.

By letting an entire city in our country fail, we will get to see first hand what happens when people get pushed to the limits and what is the end result. Then we get to see how heart-wrenchingly bad it becomes, and essentially have a good data point on charts to point at to say, "This, right here, is why we have government, and why 'the market' should not be expected to provide us with everything."

You truly are an idealist Fex... such a data point would be as easy to spin this time as it has been in all the other times it has happened.

"No, I don't; so why should it be the responsibility of the rest of the country to employ Michigan to lose money by making uncompetitive cars?"

Do you have any idea how many people the auto companies employ? How many other businesses? The auto companies fail, and the employees get laid off. Other companies that relied on the auto companies shut their doors. Their employees lose their jobs. Businesses THEY employ lose work, get rid of workers, and so on. It's a domino effect. They were discussing this today on WRIF. Some guy who works for a cleaning/maintenance company lost his job. His company shut down because their biggest client shut down, because the auto companies terminated that company's contract. That's three "generations" of trickle-down job loss, all because the business at the top was failing.

On the matter of the competitiveness of the cars coming out of those companies, well, I can't argue with you there.

"Exactly, the freedom to fail is necessary because it indirectly allows people be more inventive and take more risks. Many of which end successfully, and help advance this country."

I agree with what you literally wrote here. But freedom to fail doesn't translate to a responsibility to lose your job, your income, your home, and your ability to provide for yourself when someone else fails. It's the people who didn't fail, but who got hit hard by those that did who need this bailout now.

"I think by letting an entire city 'fail' we would be providing ample evidence of why we have and need government in the first place."

Then volunteer your city to take that fall, not mine. Detroit has suffered enough.

i personaly don't agree with a bail out for the car companies, maybe a 0% or real low interest government loan to get them back rolling again, but hey its not my fault they keep making huge gas guzzling monsters that don't sell and then cry they're going under afterwards. businesses have darwinism applied to them just like anything else does, either adapt and survive or go extinct.

"businesses have darwinism applied to them just like anything else does, either adapt and survive or go extinct."

would this apply to countries as well? bailout = adaptation?

I'd like to point out that Toyota recently had a loss-quarter (year?) as well. So it isn't just Big America. Granted, I have thought SUVs and such were retarded since...1999? But my voice rarely counts for much. The Big Three were able to SELL these large-margin vehicles. I know several people, people with sense, who just "had to have one". They needed it to haul -- heck, I don't know. I doubt they really knew either. But the market decided all that. A capitalist market.

Now, is a bail-out the right way out? Lord Bob has good points about geography. St. Louis is not in Michigan. But it has HUGE car plants. Head out west on I-44 and you'll see the huge vents and stacks of industrialism in a big Chrysler concern. It hurts when those people lose jobs. St. Louis is extremely blue-collar.

Verifex, you want better social services... Here's a scenario: One way to really get a "social service" pushed would be to raise gas taxes. Yes, I said raise them. Impel people to take public transport through taxation. Mass transit is a social service, isn't it? Some cities do it privately, some do it publicly, but it's social. It's for the people.

Would you be for a large Federal tax increase on gas? I am. And I drive a silly 20 MPG turbo-charged Subaru. If gas were $5/gallon, I would MAKE a walk/bus/train/bus/walk route accomplish what I needed to get to work. And that's in STL, where public transport is marginal at best. THAT'S policy. That's making something happen.

What are your thoughts?

One more comment on gas: I hear a lot of folks rail against a bail out of any kind in our current economic situation.

And yet, I can't recall hearing one negative word after Katrina hit and the gov't thought about releasing (or did?) petroleum from the National Reserve to ease prices.

A bail-out is a bail-out, folks. If you don't like this one, I'm curious as to why I didn't hear anyone complaining when the government was working to lessen near-term gas prices back in 2005?

And yes, I'll accept it now if you say you were against the post-Katrina gas bail-out. I'm not on a witch hunt or anything. I just can't recall anyone I spoke to or anyone in the media really railing against a raid on Federal petroleum reserves to "bail out" people's gas tanks. But now it's easy to find a critic. Go figure.

I think I agree with Cube.

I drove a Ford Taurus a couple of times, and it was horrible. My old Honda Civic, after it started falling apart, was better than that car. Now, the Taurus in question wasn't a new one, and I'm sure it didn't come out of the factory with all those problems, but then again, the Civic was 6 years older and had 100k more miles on it. I would say "uncompetitive" is quite a fitting term. And when businesses are uncompetitive, in the natural order of things, they should fail. It's natural selection.

Now, that sentiment is entirely different than saying "everyone who works for this or that car company doesn't deserve to have a job," and I completely understand how a proposal to let them fail sits well with neither those employees nor their close friends and family members.

I don't really have a solution or an argument, but I don't believe it is right nor does it make sense that the government would support an industry that would otherwise die out because it produces an inferior product. If Domino's pizza were in trouble and the City Council in my hometown decided to bail them out, I would hold the same view, because there are other pizza alternatives that have proven themselves to be successful businesses with a more desirable product. Despite my compassion for the people who are losing jobs left and right, I don't think moving money around without a rational economic reason (i.e. supply and demand) to do so is not helpful in any way to the economy.

As for whether or not we have a government-run economy or not, refer to "gold standard." A dollar used to be worth 1/35th of an ounce of gold, or, said differently, an ounce of gold was worth $35. But then, under President Nixon, we changed the whole system. Now, a dollar is worth about 1/995 of the price of an ounce of gold, but that's gone up and down from 988 dollars an ounce to 1005 dollars an ounce just in the last 24 hours. A dollar is no longer worth a set amount of anything tangible -- it is simply worth whatever the government says it's worth. Money is power, and one dollar is a very, very small fraction of that power. Our GDP for 2008 was in the $14 trillion range, so I guess one dollar can be said to equal 1/14,000,000,000,000 of our government's influence in a global economy. Obviously, this is variable. Unfortunately, as we have become a nation of largely service industry jobs rather than industrial, our GDP figures are somewhat ethereal -- we haven't made things worth about $14 trillion, we've simply provided that much in services.

The point is, if people (and corporations and governments) stop paying for services as much because the global economy's whackin' out, we don't have that much to go on. Producers of food will always be needed, and producers of necessary, widely-used goods will also. Producers of efficiency and accessibility are much less essential to the basic function of an economy, and can only really be taken advantage of in times of plenty by entities that will make gain from the streamlining of their operations.

I guess I kinda went off a little tangent there, maybe. Anyway, the government issues money, prints money, and tells you how much there is and how much it's worth. Without the government's credibility there to back it up, you could have every dollar bill in existence and not be able to redeem it for anything. Money doesn't really exist, except in the mind. It's credit.

I'm reminded of a scene from a movie I've seen a lot of times. In Dumb and Dumber, there's a point where they finally encounter the bad guy, and he opens the briefcase that's supposed to contain $1,000,000, and instead sees a bunch of I O Us. He says "What is this? Where's all the money?" and Lloyd responds "That's as good as money, sir -- those are I O Us." In Lloyd's mind, there may as well still be 10,000 hundred-dollar bills in the briefcase, even though he now has a Lamborghini and has gone skiing in the Rockies, stayed in a 5-star hotel for a week (giving generous tips to every staffperson he sees), has gotten spa treatments, a professional haircut, an extravagant custom tuxedo for both himself and Harry, and countless other expenditures. All that money was out there, in the pockets of hotel employees and car manufacturers and beauticians and tailors, buying their lunches and paying their bills and moving right along in and out of the economy. A million extra dollars moving around -- but remember, there's also still "as good as" a million dollars in the briefcase, isn't there? Where did the second million come from?

That's essentially what money has become, and we've let our system become too dependent on credit (again). And all the cash you have is just a sheet of paper from the government with a number written on it saying "I O U (x amount)."

So let's hope our government maintains its power and credibility on the international stage, eh?

Totally Kyle -- quick question:

What makes you think money has EVER been worth other than "what people think it's worth?"

The gold standard was abandoned for myriad reasons. Money/wealth has always been only an idea. Just like gold. If you have 14 tons of gold, but I don't need any gold, can you guess how much that gold is worth?

Yep. $0.00 per ounce. There goes your economy.

If you want to talk about an imbalanced commodity, what about diamonds? Should we use that as a standard, even though diamonds are plentiful? The only reason they are expensive is because of false supply-control and silly demand. I think we might need to step back and really talk about what "wealth" is, no?

I was typing that last one for so long that I missed like three replies.

Lord Bob: You're right. The cleaning service guy lost his job because he no longer had a necessary service to provide. It's not his fault, and I do feel sorry for him... but it's the only thing that makes sense, isn't it? If his clients shut down, is the city government supposed to pay him to mop the trees at the park or something so that he can keep his job? As for the company that shut down that cause his company to shut down... apparently their service was no longer required by anyone with enough capital to make it worth their while, so it also makes sense that they shut down. I would rather it didn't work that way, if we could find a way for it to work differently while avoiding paying people to do things that don't accomplish anything or help anybody, simply because it once was a good field to go into.

I've never been to Detroit, but it sounds to me like somebody's got all their eggs in one basket (the auto industry), which is unwise and unsafe in general, and in a business sense it's one of the first things to avoid. There's nothing we can do about it at this point, but in hindsight, it looks to me like the business plan that built Detroit was bound to have this happen to it eventually.

Now, let's explore some hypotheticals about what sort of fallout there would be if we allowed these businesses to declare bankruptcy, restructure, and either come back as successful companies or disappear. Please, someone else start.

hehe... it's marlFOX news ^_^

I think Andrew Wilkow put it best:
"Gold and silver is money, everything else is credit."

Nice Hatch. ;)

Sut, of course you are right. The international gold standard, however, enabled global trade to function with a base standard for what stuff is worth, rather than it being worth whatever our government's credibility divided by whatever number they want to say there are or should be or can be in existence. If I can buy gold with dollars, and then I can sell them for, say, Euros, I have a safety net in case the United States' government does something stupid and all of Europe stops accepting dollars for Euros when you go over there.

Other than the gold standard or some similar benchmark, I don't think I have much of a reasonable proposition to the problem of currency having nothing more than perceived value. I feel that abandoning currency altogether would be a rather large step, and probably one in the wrong direction, though in ways it would make much more sense if I had tomatoes and you had barley and we made an exchange because each of those have intrinsic value to them.

Look it is like this bush drained the economy with a pointless war now it is time to pay back the people with our childrens mony /me scatches head...... who knows what to do if you claim to run for congress!

Blaming it all on Bush, I see...

Sometimes I wish I knew stuff about things.

TK, it was all commoditized... Already. Who had the most gold? What if an HUGE amount of gold were found? All currency suddenly is worthless? I don't think it is a coincidence that the gold standard was abandoned as fossil fuels became the new "economy".

You are asking for more "honesty" in wealth, at least from what you have posted, and I agree with that and respect it. Abandoning the gold standard is what gave that honesty. No propping up on a shiny mineral that can be manipulated. Yes, there is "safety" in gems and precious metals -- that's old-school thought that leads to people hiding in caves and putting bank notes under pillows. Is that a thriving economy? I don't think so. That's reactionary.

I own nothing of real wealth, in the conventional sense. And I am not a muscular man, able to, say, break more logs or mine more coal than the next. In other words, my "gold standard" is worth zero. But I have a great mind. Introverted, so I can't use the mind easily for entrepreneurial endeavors. Drat.

So, what should I do in a full-on, gold-standard, laissez-faire economy? Mental capital would be worth nothing in such a scheme, unless I sold myself into indentured mental servitude.

No. I have money because I am worth something. I have wealth, potential and otherwise. And gold has not one thing to do with it.

and far as "Why work, even? I can just get paid for doing nothing.", you have no idea how right you are. By my job, there is a group of three "homeless" panhandlers... Only, it's rare to see them on weekends, or after 8pm or so... During weekdays, they typically split up, and two of them take opposite sides of a busy intersection while one of them rolls up and down the publix shopping plaza in the wheelchair that he doesn't need... Turns out, they make about $100-150 /day... *EACH*... That's actually a bit over twice what i make by actually *working* the same amount of hours they spend out there...

On the bright side, we live in a country/society where hard work and dedication can possibly get you somewhere...

Unfortunately, we live in a country/society where lying, cheating, and taking advantage of the few decent people who have yet to realize/believe this next line is true can, and most often will, get you further =/

Hatch, are you talking about your 'homeless' guys? Or are you talking about presidents and prime ministers? Or advertising execs?

"And I am not a muscular man, able to, say, break more logs or mine more coal than the next."


i'll help with the log-breaking... I'm huge and carry an ax just about anywhere i go (though i have cut down on this alot due to working at Quiznos... Everyone there already knows I'm nuts... Not sure what they'd do if i showed up with my hatchet clip...) ^_^ Far as mining goes you're on your own as I no longer own a pickaxe (Didn't bother bringing it with me last time i moved)...

Well i have to say australia is in a much better state with its banks and such i reckon we have one of the top 5 banking systems in the world :)

Just a slight bit of info i believe they were looking into switching the base standard of currency from gold to some other mineral due to its rarity anyone know what it is?

I've been wondering for a long while now how long a world economy based on debt would last and it looks like where finally seeing the result.

Just a quick question isn't the american government buying debt off banks and in return recieving shares (control) of those banks making the system somewhat more government controlled?

Bailouts will not work they are short term and provide no long term solutions. They are unsustainable. They are creating more debt and will generate inflation as the us government prints more and more money.

This is something that needs to happen Companies that are weak need to chnage and evolve or leave to die out. In australia companies are folding and heck i may even lose my job but it needs to happen over here companies are suring up finances paying off there debt give it another year or two and nearly all surviving auctralian companies wil have actual money and not debt backing them up and our industries will be stronger for it and they will grow and rebuild and re-employ people.

it was semi-OT response to an OT rant... I only say semi-OT, because strictly out of context, it had a point. I tend to avoid discussing politics (except in the event that something is just way offbase and untrue) due to the fact that there is no right and wrong... It's just an onslaught of conflicting viewpoints, almost all of which can be proven to be the "right" way or "best" way or even "the way that will destroy our nation/society/world" using factual and true evidence to support their claims.

Basically, you will only ever manage to change the mind of the ignorant, all else is just either argumentative or self-serving assurances.

Immortal, bail-outs and long-term solutions have never been inextricably linked. No one (at least not here) ever said they were.

Bail-outs are for short term stability, while long-term policy is put in place. Whether or not that is happening is an entirely different question.

But to say, "Bail outs are bad because they forego long-term solutions" is, I think, a false dichotomy. One does not, should not necessarily, have anything to do with the other. They are separate problems with separate solutions.

Johnnywas: Much of the western world will pay you when you're not working.

-Yes, the major differences being policies toward length and amount of payments and whether or not the worker was fired for cause rather than simply laid off.

And as for the world moving towards 'socialism'; that's rubbish, it's moving towards 'poor'. There's a difference.

-The United States is most certainly moving towards a more socialized economic system, considering the government has been moving to take stakes in the banking system and certainly has plans to do so for the health care system and automotive industry. Besides, socialism inhibits personal achievement and the creation of wealth while creating programs and classes dedicated to draining the efforts and profits of others. So, "socialism" and "poor" go hand in hand.

And how did we get poor? Capitalists playing fast and loose with our finances. Lets not forget that.

-If this is the fault of the cowboy capitalists, how are a large portion of European banks more heavily leveraged than their counterparts in the United States?

Lord Bob: The big three car bailout, I can't see justified from any stand point."

You don't live in Michigan, do you?

-If residents of Michigan want to save jobs, perhaps they can figure out how companies in other states can make cars at a profit, and work to emulate the conditions that allow for businesses to excel.

First of all, understanding what socialism is--the concept, original theory and economic structure, would be the first step to actually knowing what you're talking about when you say "Damn, America is ruined I better move to Canada, the world sucks!" Second of all, the horrible things many of you have been brainwashed into thinking about communism and socialism are wrong. The Soviet Union was not a communist nation. They were a totalitarian society based off Marxist ideals and ruined by Lenin's inability to complete a governing structure. In fact, most of the 'communist' states today are no more than totalitarian regimes. For example North Korea. If you want to get mad at something, at least know what you are getting mad at.

Third of all, get the Cold War cobwebs out of your brains! The actual ideals of socialism are not terrible atrocities of thought. When these ideals are merged with capitalism, a country can find a nice balanced economy that can be regulated by the government (whether you like it or not they are the best means of regulation in today's global markets), causing there to be much less economic upheaval, recessionary gaps and finally much less public chaos.

(PS -RECESSIONARY- should be added to the dictionary)

[quote]Yes, I said raise them. Impel people to take public transport through taxation.[/quote]

Doesn't work.

People don't use Public Transport, becuase it's just not as efficient as your own transport.

We have ludicrous Petrol prices due to taxation, Toll Booths that were installed years ago just to pay the cost for the bridge that remain to this day (having paid the cost many times over already) and a 'congestion' charge.

People pay. Becuase the Public Transport system just isn't good enough, and actually couldn't cope with increased use. And you can bet the money raised through the taxation isn't used to make the transport system better either...

People pay, things stay as they are, and folk just grumble about it.

I blame people that were loaning and loaning and loaning and banks that just give out loans to people who really can't afford those loans.

And of course buying everything on credit. Not saving one single penny, spending cash like there is no tomorrow.

No I blame the credit crisis on irresponsible loaners in the US!

Scy, can you give me some examples of a succesful blend of capitalism and socialism?

(Nice to see you back, btw.)

You get paid for not working in Australia, that is all, Marl.

GL, are you comparing mass transit usage in the UK to that in the US? I find it hard to believe the US uses it as much as European countries. Heck, in a lot of US cities there are barely buses, simply because there is zero demand for it (i.e. it couldn't make money).

I think if the gas price were increased, that would change over time. I can't be certain that is the case, but I know in large cities where owning a car costs a lot (whether it be because of insurance, parking, or gas), people sell their cars. When I worked in Chicago, folks living there would say things like, "So I sold my car and moved here..." pretty regularly. Chicago has a great train system, both for getting out to the suburbs and getting around town. I believe parking costs, registration fees, and insurance are the driving factors there, but it is the same concept. Costs is cost.

Hm, might not even matter -- need to read more and find more links, but this is one source that says mass transit isn't any better anyway in terms of efficiency, and a lot of the points seem sensible:

Link

Need to go dig up some more info!

I don't know if I'd be as generous as to call those arguments 'reasonable'.

The whole diesel is more efficient but *gasp* it pollutes seems to indicate that gasoline does not (and the environmental damage certainly does not favour gasoline to that extent).

And the argument that buses actually encourage more driving by freeing up road space is basically trumped up nonsense. This akin to a study on death penalty vs murder rates basing it's conclusions on robbery statistics...

Whether or not public transit is that beneficial I do not know. I used to live on a road in Toronto that had 450 buses/day pass along it (it was in an overlap between two transit systems) and they were more often full than not. Personally I do not keep a car at the moment because of the public transportation system here in Victoria. However, this is as result of cost analysis not socialist or environmental ideals.

I thinks I may have wondered off topic.... apologies

"If residents of Michigan want to save jobs, perhaps they can figure out how companies in other states can make cars at a profit, and work to emulate the conditions that allow for businesses to excel."

You do realize that the residents of Michigan don't own the auto industry, right? We just rely on them for, well, pretty much everything around here. I'm not sure how you just expect us to vote them into making better business decisions.

There haven't been any, which makes the fact that a blend of them may work out to be the most workable economic system that the world has seen yet. Essentially socialism was created to be a step towards a Utopian society. Capitalism is the most (unfortunately) workable economic system that is currently in place, other than a barter system (impossible to ever implement globally unless Armageddon :) ). And a blend of socialist aspects with capitalism could lead to a stable macro-economy for the United States at least for now, assuming we all dont die in the next 10 years.

To all of you people who claim that the few should not carry the many, economically, I say that throughout American history people have made sacrifices for the greater good. If you cannot see between the 2nd and third HD big screen TVs, and look at the state of the people, the economy, then there are much bigger problems in America than the state of the economy.

(Dunno if im back for the long haul...just logged in and found a interesting thread)

Sute, that's the point. ;)

We've got a wide and varied system of public transport. Overground and Underground trains, Busses and specific Night Busses, Minibusses, a 'light Railway' and other's I'm sure I've forgotten. I think the odd Tram.

An infrastructure larger and better than most.

But people still hang on to thier trusty car.

Even with vastly inflated Taxation, additional tolls and charges and a green push to ditch your cars for bicycles.

We just grumble and continue to drive.

Increasing taxation on gas or imposing additional charges won't encourage more folk to ditch thier cars.

You'd have to heavily invest in much more public transport facilities than you currently have to encourage people to make the change. Squeezing the purse strings won't work.

River Boats down the Thames.

I knew there was another one I missed. ;)

The 3 main reasons that the US is in a financial downturn/recession/crisis are:

1. Government regulation of the lending industry and forcing banks and lending institutions to loan to people that should never have qualified for the loans.
2. The banks not standing their ground and saying "hell no" when the government started poking their nose in their private industry.
3. The consumers who knowingly applied for and accepted loans that they knew were beyond their ability to pay.

As a result of these main factors, home prices skyrocketed throughout the US, loans/credit became non-regulated via the Government regulation, and the bubble created due to this inflation is now bursting.

Because of this bursting, consumers are hoarding/saving their money because their confidence is low, and companies are tightening their belts by cutting expenses and even workforce resources due to a pullback in their revenues.

The bank bail-out was somewhat necessary due to the regulation enforced in the lending industry to compensate for lost revenues in defaulted loans, but it should have been highly scrutinized in regard to payments to the banking executives for pensions, golden parachutes and incentives.

After the mismanaged way in which the bank bail-out was implemented, why would we think the government has any more ability to do a better job in other areas of the economy?

Failing companies where there was no government regulation that caused the financial duress should NOT be helped. Yes, it is a hard stance, but the reality is, if you never have consequences for poor decisions, then poor decisions will create no learning.

The auto industry in America has been doing the same thing since its inception and isn't the definition of insanity doing the same thing and expecting a different result?

The government giving them money to continue to do the same thing is perpetuating insanity.

Relic, with all due respect, go take a basic economics course with particular emphasis on macro economics. To decrease government spending if the form of a bailout now would be more or less economic suicide for the country. Furthermore the global market is not your mother letting you burn your hand on a hot pot so that you learn not to do it again. If something is not given to the auto-industry then there is a possibility of the US's economy collapsing totally. Not only has the auto industry been a integral part of the Us economy since 1920, but right now if they go down (and it looks like they will) the economic crisis could escalate to a stock market crash and viva-Great Depression. Yes, the auto industry has not made the best choices after 1973, so obviously they cannot be trusted to continue without government interference. They made the same mistake twice, so now maybe we should not wait until a third time when there is more at stake.

Sutekh: I brought up the gold standard to point out that we no longer have money with a value tied to anything, and only credit with value tied to anything or nothing or belief or promises. Credit can be created at will by financial institutions through loans -- you have a million dollars to pour into circulation, but they still have that money, too, because they have an I O U with your name on it. That money exists twice, temporarily, until the discrepancy is reconciled. Or, at least, it's on the books as being in two places.

Say I owe $200,000 on my mortgage, and I make in income $50,000 per year. Because the bank credited me $200,000 that I do not possess, and I spent it on something, someone else received money that I didn't really have, which I borrowed from a source that only can really back up 10% of it. That's 4 years of gross income that I haven't made -- I haven't produced any of it, yet -- that is out there as a representation of nothing other than the belief that I will produce enough over the years to be able to pay back the loan.
Now, let's say this $200,000 dollars that represents 0 units of work accomplished circulates for a while in the economy, and $40,000 ends up in another bank's reserves. This bank can now used that $40,000 to issue $400,000 in new loans -- before I've even paid my mortgage balance down to $160,000, if they want. So now there are loans being issued with money that wouldn't even be available to back up the loans if that money hadn't been loaned into the economy in the first place.

Now, people are having trouble paying back their loans, and all of a sudden, the banks start sucking up money in order to return to the point of origin -- the point where the total amount of money = the total amount of work done by the workforce. And then $4 trillion dollars we though existed suddenly don't, because it turns out that we got a little overconfident about the future and skipped the part where you actually earn before you spend and produce before you consume. And now, there's a liquidity crisis, because things aren't moving as they were, because they way they were moving was artificially inflated by speculation about the productiveness of the American workforce. There's not as much money to go around, now, because it turns out there wasn't really that much money to begin with, but we moved it around so much that it looked like there was. That is why money needs to be tied to something. It can't just appear and disappear in this crazy process. That sends the economy into shock.

Relic: You're right; those are some influential causative factors. However, I think it is a little imprudent to say or imply that those are the only three or the main three or the core three reasons behind the whole issue. There were many factors involved. But yes, the general effect of all the issues was to create a bubble that would eventually burst because of other issues, not least of which is the fact that bubbles always burst.

another key factor:

http://abcnews.go.com/Business/wireStory?id=6095195

TK, I don't need a lesson in real estate or in general lending. And in a strange way, you're making a simplification that makes things more complicated...

All a mortgage is is a long term, low interest loan. Loans are easy to understand. Time, and money. In fact, a mortgage shows the best reason why money doesn't need a "standard" behind it. If you HAD the money, you wouldn't need the loan, would you? If you had the gold, or whatever other standard, loans wouldn't exist. A mortgage can be acquired on basically nothing but potential.

So what is the point of having a standard?

What DOES make real estate tough is ignorance and stupidity. Since college, I was told "buy a house". I rented for 7 years after college, taking crap the whole time. I then proceeded to get married and buy a house and promptly lost 4,000 dollars to a sewer issue I couldn't have possibly known about unless we had spent thousands of dollars on various non-standard inspections. That house took a loss (I moved to St. Louis). So much for the magic of home ownership.

Various retarded parties, however, don't understand real estate. They start feeling entitled to an ever-rising return while getting to forego rent for equity. It's not a slam dunk. And if people knew that, going in, trickle it up, if you will, that would have helped the crisis. That's a lot to ask from the uneducated masses when banks are shoving NINA (No Income, No Asset) loans, though. Why not grab the piece of the pie?

But I digress -- let's get back to the standard thing... How does a standard help with lending? Educate me.

Sut: I would totally get on board with mass transit (pun intended) if it would lead to improved services. For instance: I used to work in a very populace area nearby, that it was very easily accessible via bus. I took the bus every day, and it only took about 10-20 min each way.

Now though, I would have to spend close to 1.5 hours on the bus in order to go work, or I can spend about 10-15 min each way. Driving my crappy little car saves me lots of time, and while I hate spending money on gas, my time is more expensive then the current going rate of gas.

"while I hate spending money on gas"

bart says buy petrol then :P

"If you HAD the money, you wouldn't need the loan, would you? If you had the gold, or whatever other standard, loans wouldn't exist. A mortgage can be acquired on basically nothing but potential."

And that's very dangerous. I'm not against loans existing, I'm simply against the rampant, unchecked creation of "money" through them. I bought my friend some KFC the other day and he intends to pay me back, but in that case, the money I loaned him was money I had on hand. I didn't go up to the cashier, hand him 70 cents from my pocket, and $6.30 out of midair to pay for it.

I can see the advantages of banks being able to give out loans while only actually having 10% of the loaned amount on hand to back it up, but it is also much more risky -- you're leveraging a lot of money you don't have against some estimation of an individual's potential.

I'm sorry I put so much stuff you already know in these replies. I'm not trying to be patronizing; I'm just trying to organize my thoughts on paper as I work my way towards a point. Though I suppose that helps to make it more accessible to others.

Basically, this is my point: if there is a standard, only as much as that amount can ever be generated. Sure, you pointed out why gold is a bad one: because we haven't mined it all, so some random country could just come up with a huge deposit and become disproportionately powerful vis-a-vis their production. But if we can find something to use as a standard, it will help stabilize the economy.

Of course, first, it will cause a period of deflation as all the credit already out there gets reconciled with the amount of money there really is. But deflation will happen during the course of this crisis anyway, because institutions across the board are trying to lessen the amount of debt they have, thereby lessening the amount of credit floating around out there. So, at that point, we have two options: setting a standard, or letting our economy grow out of proportion and bubble up due to excessive credit lending to the point that it crashes once again. Yes, a standard would slow our economic growth, but it seems that we've caused our economy to outgrow itself twice already since 1900. And that's no good for anybody, except the people who made big money after 1960 and are now dead so they don't have to deal with their retirement accounts and saving all falling to pieces.

"But if we can find something to use as a standard, it will help stabilize the economy."

Gold-pressed Latinum? ;)

TK, you are reducing all of economics to a substance. You appear to understand the ethereal nature of wealth, then want a standard, a physical one, to back it.

That doesn't make sense. If you didn't think your KFC friend had the funds, don't loan to him. It is EXACTLY that simple. No gold standard required. Don't make bad loans. That has nothing to do with what the nation backs its wealth upon.

I guess I'll have to back up a lot here... What does a standard, of any kind, have to do with the loan industry?

Assets and goods are very tangible. Currency is meant to represent the value of tangible things, services rendered, and general work output. Where is the disconnect that makes money not have to be backed up with something real?

The difference with the KFC example is that I had 7 dollars on hand when I loaned them to my friend, whereas a bank wouldn't have to.

If I wanted to invest $400,000 in a business my friend is starting, I would have to have that much money. A bank, though, could invest $400,000 while only having $40,000 in their vaults to back it up. If my friend's business fails, I'll be out $400,000, but the bank would be out $400,000 and have $360,000 it needs to make up in assets in order to balance out the influx of cash it put into the economy. My investment would count as a loss for me, but I wouldn't owe anything on top of it. Of course rule number one is "Don't make bad loans," but assuming we make a mistake in estimating which will be good loans (and, statistically, anyone who gives loans out as their main source of income is bound to), the real difference lies it what the fallout is.

The bank hasn't produced anything or rendered any services to justify that it can give out 1000% of its on-hand assets in loans. This extra money it creates has nothing backing its value except that people can't really distinguish it in any way from real money, so it is treated as such. And when people treat it as such, some of it gets deposited into banks, where it is used to back up 10% of whatever loans are made there. When this happens, while one bank can only loan out 1000% of its assets, a potentially infinite amount of dollars can be generated because of the instantly-compounded 900% interest on any money a bank uses to loan.

And it's a good thing that so much money is thrust into the economy by this process, because the interest that needs to be paid on these loans would be almost impossible to repay without so much money floating around in circulation that was generated by other loans. The system is self-perpetuating, but also can't be maintained if there is a hiccup in the cycle of self-perpetuation. And there will always be potential for a hiccup, which means potential for a temporary downturn, which will be less temporary and much harsher the longer it has been since the last downturn of this kind.

Money is meant to move around. It's a placeholder for value. When more work is done, it doesn't generate more money, it just moves it around. So making a leveraged loan is temporarily creating money to replace money that already exists but is expected to change hands some time in the future. Paying off a loan is effectively destroying money earned to make up for the money created upon the issuing of the loan. So there are small-scale inflationary and deflationary actions taking place all the time. Except that, in order for the system to function properly, there has to be a net increase over time of the total amount of money available -- a much larger increase than the increase in the amount of goods produced year-to-year. That doesn't make sense.

The loaning industry as it currently functions increases the amount of money present in the economic system that has no reason to be there other than the fact that it didn't exist when someone needed it. It increases the amount of money that doesn't represent anything tangible. If money is tied to something tangible, this cannot happen by definition. That's how it ties together.

Shifting gears to address the government bailout a little bit, what is going on there is kinda like what you mentioned about "What happens if some country finds a bunch more gold?" Money is meant to hold its value and to remain relatively stable in its availability. It's meant to move due to economic forces -- the same way gold was meant to move when it was still used as money and everybody was way into mercantilism. All of a sudden, though, all this money is brought into certain industries through non-economic means. The government gave them money; they didn't purchase any of their products or services. This is akin to Zimbabwe finding a huge deposit of precious metals while everyone else's stores of gold remain constant. And, because Zimbabwe is how it is with money, it will briefly spend its newfound wealth on all sorts of things, the rest of the world will absorb the new supply of metals into the international trade balance sheet, and Zimbabwe will be broke again.

You guys should either become lawyers or politicians as you can all justify any side with relative efficiency.

Good Work Guys and Gals.

my turn

ok not to be weird but is it insane to not care?
i mean nothing down here is really slowing down at all, sure some ppl like myself have fallen on hard times but, there is always something around the corner.

nayab just like you stated your opinion everyone is allowed theirs

Nayab never said anyone was not allowed to state their opinion.

i agree nayab, these threads are always worth the time to read.