DreamTheaterForums.org Dream Theater Fan Site
General => Archive => Political and Religious => Topic started by: Chino on February 16, 2012, 08:41:42 AM
-
I'll post my thoughts in a bit, but I have to get to class in a minute, just thought I would get the ball rolling. In short, I think it was a good move, I'll elaborate later.
-
I think it was a good move, but it's easy to say that now that we see how successful it ended up being. It seemed like an unfortunate necessity at the time.
-
I think in the physical sense it was a good thing. That being the direct effect it had on the business and the industry. People got to keep working, cars kept getting built and so on. I think a negative however is that it sets a precedent of bad business practice being rewarded. This sense of, ok well if we fail the government will bail us out because our company is so large.
I don't know, I feel like GM just should have had better business practices and come up with better products and would have been in better shape. I don't think people should be rewarded for doing a bad job. That said, I don't necessarily want to see GM go away either...
I just hope that this bailout thing doesn't become a trend. Businesses need to know that they need to be great and stay on the cutting edge, or people won't buy into their product and they will go out of business. This hopefully would lead to the rise of a better company with a better product.
I guess that's how I feel about it.
-
I thought a government loan to get them through a controlled bankruptcy would have been a better solution. It seems like this was just to keep them afloat, without addressing some of the underlying problems within the industry.
-
As others have said, at the time it happened it was important to not have a complete industry and its supply chains collapse. Because once it collapses you can't just revive it, a company out of business is a company out of business.
I view it as risk investment, just like thousands of VC groups do. The government gambled right and got the money back with a bonus. It should only be a last-resort measure though, but I have no reason to believe this will change.
rumborak
-
But would they have gone out of business?
-
To my understanding it was assured they would without help, right?
EDIT: Yes, in 2009 the combination effect of low sales and inability to get loans (because banks were no longer giving loans to anybody) put GM close to liquidation. That I would call "going out of business"
rumborak
-
To use an analogy, to me this like an alcoholic who has an acute liver failure. You got two options, either say "You shouldn't have let it come to this" and let him die, or prop him up long enough so he can recover and have a second chance. Giving the importance of GM in terms of employment I think it was the right decision at the moment.
rumborak
-
To my understanding it was assured they would without help, right?
EDIT: Yes, in 2009 the combination effect of low sales and inability to get loans (because banks were no longer giving loans to anybody) put GM close to liquidation. That I would call "going out of business"
rumborak
I wasn't sure if it was bankruptcy or closure that they were fending off. Regardless, I supported giving them loans to keep them afloat. I just thought that bankruptcy precedings should have been part of the deal.
-
The government made money off it, didn't they? I mean, all in all I don't know how you can criticize them for making what amounted to a wise investment.
-
Hey, as long as it contributes to the Detroit renaissance and hopefully pursuit of cleaner cars...
-
The government made money off it, didn't they? I mean, all in all I don't know how you can criticize them for making what amounted to a wise investment.
Depending on which side your listening to, it either made money, or lost money, and I'm really not sure who to believe.
Honestly, the failure of those two companies probably would have made things a lot worse. Things would have reorganized themselves eventually, but it wasn't a good time to basically have our manufacturing industry crumble more than it already was. One thing that's sorta not relevant directly to this, but which seems to already be having an impact, is that Obama set national fuel efficiency standards. I think it's a fleet average of 56mpg, or somewhere around there. He also funded battery research and production. Those two things are probably going to really help the car industyr move forward.
Ideally, no, we wouldn't have bailed them out. But we weren't an in ideal situation, and we coulnd't treat it as such.
-
Absolutely now. It's especially horrid if it works to revive the business. What if the government had tried to preserve farming 200 years ago when urbanization began because of more advanced farming, just to save farming jobs. The government bailed it out to keep people from being laid off and for other protectionist reasons - but that prolongs progress.
-
In one.
This guy got it.
I would like to add that big companies (like, really big) that are dubbed 'too big to fail' should pay the Government insurance.
Ready, break.
-
I thought a government loan to get them through a controlled bankruptcy would have been a better solution. It seems like this was just to keep them afloat, without addressing some of the underlying problems within the industry.
:clap:
-
No. They're no more special than any other private company that succeeds or fails. They would be better off with a real chapter 11 where there would be an actual restructuring, and not screwing over the bond holders in favor or the parasitic UAW.
-
If I can take this thread *slightly* off-topic then, if not bailing out GM, how would you guys suggest bringing Detroit back on its feet economically? Because the truth of the matter is it's working; after all, that's the idea behind all those "Imported from Detroit" ads.
-
Cars don't have to be manufactured in Detroit. For a while it'll be tough there, but they'll find employment again - and the world will be better off because of a proper bankruptcy process. It paves the way for a more effective use of the assets of the companies that go under.
-
Find employment again from where, exactly? Detroit's been trying to find alternatives for the last twenty years, and has been on tough times for the last fifty; only in the time since the bailout are things finally picking up.
-
Who gives a fuck about Detroit? I'm more concerned about El Barto's house. I supported keeping the US auto industry from imploding, but Detroit can become the next Pripriat for all I care. In fact, I think I'd actually like that a great deal.
-
Who gives a fuck about Detroit? I'm more concerned about El Barto's house. I supported keeping the US auto industry from imploding, but Detroit can become the next Pripriat for all I care. In fact, I think I'd actually like that a great deal.
I live in Michigan. I give a fuck about Detroit. We have people leaving by the hundreds of thousands, and education funding is getting worse and worse and the fucking whole state is a shithole. Strong Detroit=strong Michigan.
-
Stop electing liberals and maybe Detroit has a chance. They are a epitome of what happens to a city controlled by the progressive movement.
-
Stop electing liberals and maybe Detroit has a chance. They are a epitome of what happens to a city controlled by the progressive movement.
:|
-
Stop electing liberals and maybe Detroit has a chance. They are a epitome of what happens to a city controlled by the progressive movement.
I should have said Northern Michigan.
-
The fact of the matter is Detroit is getting better now, and that's because we have a liberal in office and those GM bailouts. And Detroit revival has implications going way beyond Michigan; if we become the front line in clean cars, we're very much set on the road to national recovery. After all, the Motor City is importantly a symbol of the U.S. making things again, rather than just being an economy of selling houses to each other.
-
The fact of the matter is Detroit is getting better now, and that's because we have a liberal in office and those GM bailouts. And Detroit revival has implications going way beyond Michigan; if we become the front line in clean cars, we're very much set on the road to national recovery. After all, the Motor City is importantly a symbol of the U.S. making things again, rather than just being an economy of selling houses to each other.
You mean a Republican governor. We've had liberals in Detroit for DECADES.
-
Oh, I was referring to the president. I will now look up the mayor's affiliation.
And yes I know Snyder's a Republican, I voted for him (regrettably).
Edit: The mayor's a liberal and a pretty honest guy, to boot.
-
Oh, I was referring to the president. I will now look up the mayor's affiliation.
And yes I know Snyder's a Republican, I voted for him (regrettably).
Edit: The mayor's a liberal and a pretty honest guy, to boot.
I didn't vote for Snyder. I didn't vote for the other guy, either. I voted on the rest of the ballot, though. Some good local props and what not. Can't miss those. They affect me more than the governor.
-
I thought Capitalism meant private gains and private losses.
-
I thought Capitalism meant private gains and private losses.
But what do you do when the losses cease to become private?
-
I visited Detoilet last summer during a road trip. I stayed at the Motorcity Casino and went to a Tigers' game. The casino and stadium were nice (lots of security to keep out the undesirables), but the city itself looks like a third world country. The people who moved out to greener pastures were smart.
-
I saw McCartney at Comerica this summer. Literally, 3 blocks from the park and you wouldn't want to be on your own at night.
-
Well, that's what makes revival so important. Sharp increase in jobs will mean a sharp decline in crime.
-
I thought Capitalism meant private gains and private losses.
But what do you do when the losses cease to become private?
How does that happen?
-
I thought Capitalism meant private gains and private losses.
But what do you do when the losses cease to become private?
How does that happen?
I dunno, when say the people at the top of a company make some bad choices and the people at the bottom end up laid off because of them. How is that a 'private loss' anymore? Is it private because it's limited to that company only? What if it's not limited to that company anymore, what if the decisions made/enforced by a select few end up having implications country or even worldwide? Are those still considered private losses?
-
Yep. Those are still tied to the private sector.
-
Yep. Those are still tied to the private sector.
Then I just misunderstood your comment.
Carry on.
-
I thought Capitalism meant private gains and private losses.
But what do you do when the losses cease to become private?
How does that happen?
GM goes bankrupt. This sends a shock-wave through the economy, where you then have the people supplying GM with their supplies takinga huge hit, car dealerships taking a huge hit, truck companies taking a huge it. All of this causes job lose, which of course stimies the economy, and can help lead to further job loss. Because the guy trucking the metal for GM no longer has a job, he can't spend money like he used to, which means less income for other businesses in the area, which can mean they have to lay people off.
So now, GM going bankrupt can mean the server a local restaurant loses his job.
That's how private losses can become public. The idea of some monad-like, individual as an economic entity is ridiculous, and patently absurd.
-
So, your proposal would be to break GM up into smaller entities to prevent a ripple effect?
-
Yep. Those are still tied to the private sector.
ITT: Emindead lives in a world defined in binary code.
-
So, your proposal would be to break GM up into smaller entities to prevent a ripple effect?
I was simply making a point about how private losses can become a public concern. A corporationay be a private thing, but it operates in the public domain. Ideally, you dont have large companies like GM, for numerous reasons not just the one in discussion; sometimes I think it's appropriate for the people to break it up, but there are a variety of ways of getting there. And no, bankruptcy does not address the issue in its entirety.
-
So, your proposal would be to break GM up into smaller entities to prevent a ripple effect?
I was simply making a point about how private losses can become a public concern. A corporationay be a private thing, but it operates in the public domain.
Bankruptcy does not mean a complete collapse of an industry and supporting infrastructure. In a Chapter 11, it is simply a debt restructuring situation (Like GM would have been). Creditors lose their shirts, but the company continues on and tries to rebuild with renewed focus on sustainability with the extra pain of a poor credit line, but many companies emerge from this to become streamlined and healthy. If it doesn't work out, then they go to Chapter 7 where all assets are sold. This still doesn't necessarily mean tons of ripple effects hurting the "public" at large since existing competitors or new companies can come in and pick up the plant for pennies on the dollar and immediately begin to see an improvement for the "public". Bankruptcy is good for the economy on the whole.
Ideally, you dont have large companies like GM, for numerous reasons not just the one in discussion; sometimes I think it's appropriate for the people to break it up, but there are a variety of ways of getting there. And no, bankruptcy does not address the issue in its entirety.
Companies can only become so large before they lose the ability to effectively calculate profit/loss from vertical integration. The market has a natural growth cap in how big a company can get. The only known way around this is through lobbying for special interests and regulations.
-
So, your proposal would be to break GM up into smaller entities to prevent a ripple effect?
I was simply making a point about how private losses can become a public concern. A corporationay be a private thing, but it operates in the public domain.
Bankruptcy does not mean a complete collapse of an industry and supporting infrastructure. In a Chapter 11, it is simply a debt restructuring situation (Like GM would have been). Creditors lose their shirts, but the company continues on and tries to rebuild with renewed focus on sustainability with the extra pain of a poor credit line, but many companies emerge from this to become streamlined and healthy. If it doesn't work out, then they go to Chapter 7 where all assets are sold. This still doesn't necessarily mean tons of ripple effects hurting the "public" at large since existing competitors or new companies can come in and pick up the plant for pennies on the dollar and immediately begin to see an improvement for the "public". Bankruptcy is good for the economy on the whole.
I know this, which is why I wrote that last sentence that I wrote.
Ideally, you dont have large companies like GM, for numerous reasons not just the one in discussion; sometimes I think it's appropriate for the people to break it up, but there are a variety of ways of getting there. And no, bankruptcy does not address the issue in its entirety.
Companies can only become so large before they lose the ability to effectively calculate profit/loss from vertical integration. The market has a natural growth cap in how big a company can get. The only known way around this is through lobbying for special interests and regulations.
[/quote]
This is a pure conjecture, and begs numerous questions about how "government" should be defined. I might argue that, in the end, it's still better for a democratic government to get corrupted, than for there to be anarchy, and eventually a monarchy. To say that monopolies only form because they corrupt the government, is to massively ignore the role the government has in creating a truly fair market, and what the world would look like if there wasn't democratic government at all.
Also, that's one reason why I think the government needs to be involved in breaking up a monopoly. Even if I accept that monopolies only form as a result of the government, this ignores the question of what to do once there are already monopolies. The market won't work. So what then? Uncorrupted the government, and taking away governmental regulations, is still a governmental action.
-
Not to mention government is the reason we have anti-trust, anti-monopoly, and anti-cartel laws in the first place.
-
Also, that's one reason why I think the government needs to be involved in breaking up a monopoly. Even if I accept that monopolies only form as a result of the government, this ignores the question of what to do once there are already monopolies. The market won't work. So what then? Uncorrupted the government, and taking away governmental regulations, is still a governmental action.
That would be quite the contradiction. IF you accept monopolies can only result under government, we should therefore keep government to stop monopolies? The whole point of a free-market is to abolish the concept of a monopoly. If there is a free-market, a new competitor can enter the field at any time. There are no restrictions. If there is a single source supplier in a free-market they are not a monopoly, they are just the sole provider of a good. If they are making a lot of money, that is a lot of incentive to enter the market which will inevitably occur. If it is a free market, there is nothing the extant company can do to prevent it other than lower prices and be competitive. A government does nothing to "help" or expedite this process, it can only interfere by placing artificial barriers, usually to harm the smaller companies for the benefit of the larger ones. The same argument applies for so called oligopolies or cartel's. As long as there are no artifical barriers to entry, an entreprenuer will under-cut them to make a profit. Only a government can establish or maintain monopolies and cartel's.
Not to mention government is the reason we have anti-trust, anti-monopoly, and anti-cartel laws in the first place.
See above, it's funny because all of those terms are oxy-morons in Government parlance. Anti-Trust, Anti-monopoly laws only perpetuate anti-competitive and monopolistic practices. Do you want some examples?
-
:rollin
It's not a contradiction, because it's a question of what you do from here. We live in a society of concentrated power, and it doesn't matter how we got here south as how do we get out.
The milks been spilled, and youre stuck on why it got spilled instead of cleaning it up.
-
:rollin
It's not a contradiction, because it's a question of what you do from here. We live in a society of concentrated power, and it doesn't matter how we got here south as how do we get out.
The milks been spilled, and youre stuck on why it got spilled instead of cleaning it up.
Ok, so you're asking how we clean it up from the state of things now?
Shutter the FTC, DoJ, SEC, FDA, USDA, FCC repeal the Federal Reserve Act and wait about 2 years. Problem solved.
-
:rollin
It's not a contradiction, because it's a question of what you do from here. We live in a society of concentrated power, and it doesn't matter how we got here south as how do we get out.
The milks been spilled, and youre stuck on why it got spilled instead of cleaning it up.
Ok, so you're asking how we clean it up from the state of things now?
Shutter the FTC, DoJ, SEC, FDA, USDA, FCC repeal the Federal Reserve Act and wait about 2 years. Problem solved.
Hooray! E. Coli for everyone!
-
Hooray! E. Coli for everyone!
Hooray for Straw Man arguments!
-
The fact of the matter is not all government is bad. Where it is bad, the solution in order should be improvement and refinement, not just mindlessly tearing down imagined monsters. Even policy failures can have unforeseen positive side effects, and flaws coexisting with boons should not be enough to condemn an entire program. A flaw in a program is not an excuse to indiscriminately and unceremoniously cut a program, but to try to understand what went wrong and fix it. And just cutting a program doesn't really teach us anything.
-
:rollin
It's not a contradiction, because it's a question of what you do from here. We live in a society of concentrated power, and it doesn't matter how we got here south as how do we get out.
The milks been spilled, and youre stuck on why it got spilled instead of cleaning it up.
Ok, so you're asking how we clean it up from the state of things now?
Shutter the FTC, DoJ, SEC, FDA, USDA, FCC repeal the Federal Reserve Act and wait about 2 years. Problem solved.
That's an awful idea.
-
That would be quite the contradiction. IF you accept monopolies can only result under government, we should therefore keep government to stop monopolies? The whole point of a free-market is to abolish the concept of a monopoly. If there is a free-market, a new competitor can enter the field at any time. There are no restrictions. If there is a single source supplier in a free-market they are not a monopoly, they are just the sole provider of a good. If they are making a lot of money, that is a lot of incentive to enter the market which will inevitably occur. If it is a free market, there is nothing the extant company can do to prevent it other than lower prices and be competitive. A government does nothing to "help" or expedite this process, it can only interfere by placing artificial barriers, usually to harm the smaller companies for the benefit of the larger ones. The same argument applies for so called oligopolies or cartel's. As long as there are no artifical barriers to entry, an entreprenuer will under-cut them to make a profit. Only a government can establish or maintain monopolies and cartel's.
Ok, so you're asking how we clean it up from the state of things now?
Shutter the FTC, DoJ, SEC, FDA, USDA, FCC repeal the Federal Reserve Act and wait about 2 years. Problem solved.
You're making the same mistake people of your particular bent always make, which is to limit everything to binary, all or nothing options. The free market is the only solution. The free market is the solution to all of the problems. A free market has to be 100% free. I'm actually inclined to agree with you for the most part, that the free market usually is the best option, but there are definitely exceptions, which is where we usually part ways. In the case of monopolies, there will always be companies who manage to get to a point of market dominance that they can put up barriers to any competition arising. This is not good for anybody.
Likewise with your idea of shuttering all government agencies. The market would likely do a pretty good job of regulating itself without all that oversight, but there will absolutely be exceptions, and those exceptions could very well get people killed. The fact that Union Carbide's stock will take a major hit, and they might even go out of business, is of little consolation to the thousands of people who die when they try to cut corners.
Honestly, as long as the die-hard libertarian set continues to look at things in strictly black and white, all or nothing terms, most people will continue to think of them as falling somewhere between naive and just plain fucking crazy. A real shame as much of what they're after really would benefit us.
BTW, you should post here more often. I usually disagree with you, but your posts are generally solid contributions.
-
You're making the same mistake people of your particular bent always make, which is to limit everything to binary, all or nothing options. The free market is the only solution. The free market is the solution to all of the problems. A free market has to be 100% free. I'm actually inclined to agree with you for the most part, that the free market usually is the best option, but there are definitely exceptions, which is where we usually part ways. In the case of monopolies, there will always be companies who manage to get to a point of market dominance that they can put up barriers to any competition arising. This is not good for anybody.
Likewise with your idea of shuttering all government agencies. The market would likely do a pretty good job of regulating itself without all that oversight, but there will absolutely be exceptions, and those exceptions could very well get people killed. The fact that Union Carbide's stock will take a major hit, and they might even go out of business, is of little consolation to the thousands of people who die when they try to cut corners.
I understand why you think I view it as a binary issue, but there's a lot more to it than that. The reason all these agencies were created were to serve some function of oversight or control on safety, fairness, competitiveness and especially to curb monopolistic/cartel practices etc... However, there is a fatal flaw in this approach that escapes most everyone. By creating an agency like the FTC or FDA to regulate companies and ensure fairness, they have not really fixed anything. All that has been done is we created a new monopoly to oversee some market function. The monopoly has been shifted to a different level. Now, instead of just the potential of a monopoly, we have a guaranteed monopoly covering every possible aspect of the economy. These agencies are subject to the same problems and ills of an industrial monopoly.
Government agencies amount to a monocentric view of the economy. Sure, policies can change things and the appearance of pragmatism can take shape, but it is ultimately a single economic world view applied to everyone at a given time. It is then up to bureaucrats (occasionally congress) to make changes which are very slow and roadblocked by partisan politics. It is in a word, a mess.
A free market is a polycentric view of the economy. It would not mean a lack of oversight on quality, safety, working conditions and competitiveness. Instead, competing agencies of varying degrees of scope would audit/inspect and insure public safety. No longer will we have a one-size fits all, but a graded and heterogeneous approach allowing the best solutions for "regulation" to rise to the top. The key is to create business model's where profitability is tied to consumer preference. Not the other way around which is what we currently have in numerous industries regulated by government agencies.
BTW, you should post here more often. I usually disagree with you, but your posts are generally solid contributions.
I'd like to post more, but my work and personal life have been very busy as of late. Hopefully it gets better.
-
Two things:
competing agencies of varying degrees of scope would audit/inspect and insure public safety.
Problems that I see with this approach are: by whom are these competing agencies delegated? Are they just businesspeople who decide they have a passion for ensuring public safety and so they start a business? What incentives are there for people entering such an "industry" in the first place? How would the oversight costs involved be enough to keep such an agency afloat? How would you measure demand and willingness-to-pay from as public a good as public safety? Most problematic of all, in my opinion, what sort of wherewithal do such agencies possess to impose themselves upon subject firms? After all, the point of the government delegating an agency to oversee firm operations is that they're the law, and as such have the authority to say that they can oversee and assess the measures taken by that firm. What sort of authority would competitive agencies have over firms?
No longer will we have a one-size fits all
That, sadly, is more an effect of the political game than anything. From what I've learned so far about policy analysis and implementation, technocrats and policymakers actually try very hard to avoid the "one-size fits all" problem, as evident in the design of carbon cap-and-trade schemes. In fact, cap-and-trade is very much in the polycentric vein, which is why environmental and economic supporters were so keen on it. Unfortunately, no attempt at dynamic policy design will ever be perfect, and even those that are often become victims of Congressional mutilation before signed into increasingly less satisfactory forms when they become law.
-
Competing regulatory bodies, which I gather is what you're suggesting, would suffer from many of the same faults. The goal of any private interest is profit. You can take the Gordon Gecko approach and say that's a great motivator for change and improvement, but there are plenty of instances where operating at a loss to serve a public interest is better for the consumer.
In areas where safety is a concern, I see three options. One, let businesses self regulate under the notion that market forces would compel them to not let planes fall out of the sky. Bad choice, as their interest is in toeing the line between safety and profitability leaving zero margin for error. If I understand what you're getting at, you're option two is private sector certification. Delta Airlines, now sporting Dave and Bob's seal of airworthiness. It seems to me that you're merely trading government bureaucracy and corruption for private bureaucracy and corruption. Dave and Bob are in it for the money as well, and keep in mind that their customer is Delta, not you and I. Option three is an organization that has a goal outside of profit, namely to regulate the industry which it does at a loss. In this instance, I see noble intentions as being preferable to business acumen. If the FAA turns into a bloated and corrupt agency, then you deal with that. (Another binary that I keep seeing is that if something goes astray, it has to be scrapped. Not every failure is a mistake.)
-
:rollin
It's not a contradiction, because it's a question of what you do from here. We live in a society of concentrated power, and it doesn't matter how we got here south as how do we get out.
The milks been spilled, and youre stuck on why it got spilled instead of cleaning it up.
Ok, so you're asking how we clean it up from the state of things now?
Shutter the FTC, DoJ, SEC, FDA, USDA, FCC repeal the Federal Reserve Act and wait about 2 years. Problem solved.
Creating a power vacuum is hardly a good idea, and I'd garner would make things worse.
I think everyone has already basically said what I would say.
-
Even more to the point, what Paulists fail to see in their zeal is that the USA doesn't live in isolation. The international markets are chock full of Keynesians, like it or not, and when they see a guy becoming president whose platform is to dismantle the US government, they will pull their investments out of the US. The first thing Ron Paul would face is a massively devalued US dollar and lack of liquidity.
rumborak
-
I'm not sure what Ron Paul has to do with anything I've said, but I'll do my best to address all the responses so far in one post. This is a big wall of text, so I'll understand if you tl;dr.
What I'm proposing is a little different than what you would normally think of as private "regulation". I put it in quotes because it's function is different than what you are traditionally familiar with. It takes some time to wrap your head around this concept because you've been conditioned to see it in different terms. I'll do my best to explain it properly. I'm not arguing for a privatization of regulatory agencies in the way they exist now, that would most likely be an abysmal failure. There would be no "delegation" between agencies, since that would require a final authority and ultimately lead back to a monocentric approach.
El Barto listed 3 general approaches with the pros'/cons' of each, and I don't have any problem with how they are spelled out, but there is a fourth approach. I agree that option 1 is a non-statrter. Option 2 is also not going to work for the reasons you listed. For option 3, When considering the current Public agencies operating at a loss for the "good of the public", this has some problems on several levels. If you say they are operating "at a loss", what you are really saying is they are financed from taxes which everyone pays. So, you are already financially invested in this system, the problem is, the customer's have very little say in how regulations are directly applied. There is an additional complication where companies can lobby regulators, or a regulator may be guided by a personal agenda or bias. All of this makes your contribution to the system negligable. Consumer feedback is virtually non-existent and any types of changes in this approach are only reactionary and significantly delayed by bureacracy. There is also the question of, how much is too little or too much to pay for this oversight and how do we know if it is being spent wisely at all? There is no profit/loss mechanism to calculate efficiency so it has little chance to succeed.
There is a Fourth option to consider. In this system, a seller and a buyer would both agree to an independent third-party as an arbitrator and the terms of their business. This way they are the customer of both parties, and are impartial to both. This helps build a public reputation for the seller/buyer by honoring their agreements, as well as the reputation of the arbitrator for making fair assessments (otherwise no one would use them). Your reputation is your life-blood in a free society. Regardless of which system is used, there is a cost involved for oversight and regulation, but in this way, costs are upfront and efficiency can be calculated. This system isn't necessary for all transactions but would be useful for many situations. Before you jump to conclusions and write this off as non-sense, consider that this system is already in use in some limited capacities.
Ebay is a prime example of this system at work. It features a rating/feedback system to assess the reputability of each participant and they offer arbitration and loss insurance for transactions gone awry. Folks who do not honor their obligations are quickly weeded out and ostracized.
Not every situation requires a mutually agreed upon arbitrator and there are several other ways of improving customer feedback and improving ratings that are essentially free (or ad based). Some things are as cursory and informal as getting updates from friends and family by word of mouth or via facebook/twitter and blogs. Others are more structured and focused like Yelp and Angie's List. The list goes on and on and this form of communication and feedback is growing at a rapid pace. It is nearly real-time and as an aggregate beats anything a formal regulatory agency could ever hope to achieve.
This is just the tip of the iceberg, as these types of platforms improve and expand through the entire structure of production, in time, people will begin to realize how anachronistic the current regulatory paradigm really is and brush them aside to the trashbin of history.
-
A couple of points. For one thing, I'd suggest that Consumer feedback is virtually non-existent isn't necessarily a bad thing. Customer feedback often results in lowest common denominators. When trying to decide which TV you want to buy that's not a problem. When trying to insure that your plane isn't going to disintegrate mid-flight, it's somewhat of a concern. I'd just as soon see arbitrary standards set by people who's concern is safety rather than dollars.
The LCD issue is actually a big component in your example of eBay ratings. GREAT SELLER! A++++++++++++++. Leaving feedback is reflexive now. You get emails from people asking where the hell their A+++++ is. It's nice to be able to see negative ratings, but with people handling 300 transactions a day, it's not really all that informative. Furthermore, when sellers rack up enough negative feedback, they just start a new account (sort of like Valuejet!).
And while I agree that there are issues with the current system, lobbyists, corruption, graft, etc., I'd go back to my point before about fixing those problems rather than scrapping the system.
Lastly, I'm having a hard time seeing how your fourth option applies to situations that aren't made up of tons of individual transactions. Airlines fit the bill here. Are you suggesting that everybody would purchase their tickets through a vendor who has deemed Delta to be safer than the others? I don't honestly see that working, for a variety of reasons.
-
A couple of points. For one thing, I'd suggest that Consumer feedback is virtually non-existent isn't necessarily a bad thing. Customer feedback often results in lowest common denominators. When trying to decide which TV you want to buy that's not a problem. When trying to insure that your plane isn't going to disintegrate mid-flight, it's somewhat of a concern. I'd just as soon see arbitrary standards set by people who's concern is safety rather than dollars.
When trying to decide on what TV to buy, consumer feedback is just one of many sources of information. People will also rely on technical reviews and other consumer reports. With regards to an airplane, everyone involved has a vested interest in keeping them from falling out of the sky. The airline, the crew and the passenger's, thus they will ALL be involved in demanding rigorous audits and standards that meet certain minimum requirements. People need to take more responsibility for their actions and own their own safety. Look at it this way, if you go through life just assuming the FAA is going to take care of it and they are wrong, they get some egg on their face, but you still die. If no one assumed this and took a more active role in determining safety standards, there would be a lot better systems in place. Accidents will still happen, but they will happen in spite of everyone's best efforts to prevent it. The FAA is a moral hazard.
The LCD issue is actually a big component in your example of eBay ratings. GREAT SELLER! A++++++++++++++. Leaving feedback is reflexive now. You get emails from people asking where the hell their A+++++ is. It's nice to be able to see negative ratings, but with people handling 300 transactions a day, it's not really all that informative. Furthermore, when sellers rack up enough negative feedback, they just start a new account (sort of like Valuejet!).
Few will read all the reviews and feedback, the point is to get an aggregate. You'll notice that seller's who try to abuse the system like this are not nearly as successful as those who have a higher standard of business practices. Companies that have 10,000+ ratings and 99+% approval ratings charge a premium over those who have fewer ratings and 95ish% positive feedback. Buyer's are willing more likely to forgo the eBay provided loss insurance when purchasing from the highly successful seller's because they have established a stellar reputation. People will pay a little more for it.
Lastly, I'm having a hard time seeing how your fourth option applies to situations that aren't made up of tons of individual transactions. Airlines fit the bill here. Are you suggesting that everybody would purchase their tickets through a vendor who has deemed Delta to be safer than the others? I don't honestly see that working, for a variety of reasons.
Not "safer than the others", but Safe to the minimum standards they have published and are verified by independent third parties. You would then choose whether those standards meet your expectations for Safety at the time of purchase. If you purchase a ticket, all parties agree to that level of safety expectation. People will then vote with their wallets on what is acceptable levels of safety and it would establish industry standards of safety expectations from input from all participants.
-
I thought Capitalism meant private gains and private losses.
But what do you do when the losses cease to become private?
How does that happen?
GM goes bankrupt. This sends a shock-wave through the economy, where you then have the people supplying GM with their supplies takinga huge hit, car dealerships taking a huge hit, truck companies taking a huge it. All of this causes job lose, which of course stimies the economy, and can help lead to further job loss. Because the guy trucking the metal for GM no longer has a job, he can't spend money like he used to, which means less income for other businesses in the area, which can mean they have to lay people off.
So now, GM going bankrupt can mean the server a local restaurant loses his job.
That's how private losses can become public. The idea of some monad-like, individual as an economic entity is ridiculous, and patently absurd.
Not a single part in your paragraph proves that private losses become public. All of those loses are still tied to the private sector. How many times have GM been in dire straits? Giving them tax money as bailouts so you can "save" some jobs is not good. Every time that GM leads themselves to this point it costs more money to save them. THAT'S a PUBLIC LOSS going to the private sector.
Yep. Those are still tied to the private sector.
ITT: Emindead lives in a world defined in binary code.
True. Black or white. Doesn't matter. Facts are right or wrong. There's no middle ground.
-
Even more to the point, what Paulists fail to see in their zeal is that the USA doesn't live in isolation. The international markets are chock full of Keynesians, like it or not, and when they see a guy becoming president whose platform is to dismantle the US government, they will pull their investments out of the US. The first thing Ron Paul would face is a massively devalued US dollar and lack of liquidity.
rumborak
Ron Paul is not an isolationist. He is a non-interventionist...huge difference. He is for more free trade and wants to establish peace through trade, instead of imperalism, invasion, and nation building..essentially dismantling the military-industrial complex, which Eisenhower warned us about years ago.
-
That's not what I mean. I'm saying that international investors look at the US internally and judge the value of the dollar and their investments based on their perception of the ability of the US to produce/consume etc. Remember when the US dollar dropped when Congress couldn't agree on the debt limit raise?
Now imagine the international markets reacting to a president who pledged to, within one year, essentially dismantle half of the US federal departments. Like it or not, but the international community overall is FAR less libertarian (in your view, much more Keynesian) than RP. Their perception would be that the US is committing Seppuku, with the result of a major drop in the US dollar value. The first thing RP would face would be a massive devaluation of the dollar.
rumborak
-
Every time a dollar is printed it is automatically devalued. Inflation does that.
-
:facepalm:
rumborak
-
The point is that your paranoia of the dollar losing value if RP comes to that is that, crazy. Crazy because it's happening every single day and you walk around not giving a single damn. But if someone steps in to fix it you THEN get scared of what may happen.
-
Are you seriously comparing the predictable, low inflation due to money printing to the massive drops the EU and the US have seen for their inability of making sound political judgments?
And besides, for you inflation is the scourge of the earth, but a RP-induced massive drop in international market trust is something you just shrug off? Double-standard much?
rumborak
-
I thought Capitalism meant private gains and private losses.
But what do you do when the losses cease to become private?
How does that happen?
GM goes bankrupt. This sends a shock-wave through the economy, where you then have the people supplying GM with their supplies takinga huge hit, car dealerships taking a huge hit, truck companies taking a huge it. All of this causes job lose, which of course stimies the economy, and can help lead to further job loss. Because the guy trucking the metal for GM no longer has a job, he can't spend money like he used to, which means less income for other businesses in the area, which can mean they have to lay people off.
So now, GM going bankrupt can mean the server a local restaurant loses his job.
That's how private losses can become public. The idea of some monad-like, individual as an economic entity is ridiculous, and patently absurd.
Not a single part in your paragraph proves that private losses become public. All of those loses are still tied to the private sector. How many times have GM been in dire straits? Giving them tax money as bailouts so you can "save" some jobs is not good. Every time that GM leads themselves to this point it costs more money to save them. THAT'S a PUBLIC LOSS going to the private sector.
How exactly do you define "private" and "public"? See, I tend to view private at something that is, ya know, mine. Public is other people. Just because the server is owned by a private institution, doesn't mean that when GM goes bankrupt, it's still a private loss for that server to get fired. GM going bankrupt is a public affect, even if it's a private institution. How else do you argue that GM doing well is publicly beneficial (rising tides raise all boats), as you do?
By the way, does the fact that it's a loan mean nothing? It's not just "giving" money to them, it's lending them money. I wish I could go to the bank, and they would just give me money. Depending on who I listen to, we've either made that money back, or lost nearly all of it, but that doesn't mean it's impossible for the public to get it's money back, or even benefit from it - which makes it incredibly hard to say that this is purely and only a public loss.
By the way, GM was the #1 car seller in the world last year, after losing the number one slot. Doesn't your free-market ideology mean that said company is doing good, selling the best product, and wouldn't that lead to the conclusion that government intervention does not lead to a bad product, and does not mean bad news for the consumers, contrary to how you would argue?
-
And conversely, given the scenario played out in the quoted Scheavo post, consequences from the failure to intervene would have been severe, not only for Detroit or Michigan but the entire country. We're talking persistent 15% unemployment rates nationwide, a deficit through the roof, a much earlier default crisis, all that good stuff.
Honestly I think debating this is pretty ridiculous, because this isn't even a matter of ideology. Bailing out GM was a necessity for the survival of the American economy, no matter what your views on government intervention or Keynesian vs. Miltonian vs. Austrian economics.
-
No. They're no more special than any other private company that succeeds or fails. They would be better off with a real chapter 11 where there would be an actual restructuring, and not screwing over the bond holders in favor or the parasitic UAW.
Bond holders cant get screwed over in a bankruptcy? I am not sure you understand what you are talking about. Bondholders are creditors. A client of mine had his Arline Bonds default when the Arline went through bankruptcy restructuring.
-
Just to add a little piece to this picture:
https://www.slate.com/articles/business/moneybox/2012/03/economic_recovery_the_overlooked_data_that_reveal_the_economy_is_bouncing_back_.html
-
As much as I dont like being 'that guy', he's just done exactly what the media he criticised do: selectively quoting data. Tact of the matter re: the labour market is that the labour force (that is, employed and unemployed) hasn't grown in real (people) terms for close to five years...which means that looking at the unemployment rate and jobs growth don't tell you the full story. The labour market is goong through a slow, painful readjustment following the bubble. And car sales? Seriously? They tell you next to nothing about economic activity. Did they come off a low nase? Whats the six month trend? Where were the sales? There could also be latent demand that is just slowly working its way through the system because people just really need a new car.
Upward revision of GDP was (IIRC) all to do with greater inventory accumulation, which will unwind this quarter. Also re: labour market, if participation was at its decade average right now, US unemployment would be at 12.1% and rising, not falling.
-
English please? To those last few sentences, not the whole thing.
-
Haha sorry, I sometimes get a tad technical.
Labour market: As I've said a few times US labour market participation rates have dropped pretty significantly since 2007. Its currently around 63%, where as it was ~65%. Idlf the US was currently at 65%, US unemployment would be closer to 12% not 8% (assuming jobs growth remaind the same). Its why Bernanke and co. aren't happy with the recovery as yet.
Inventories: Inventories are an item in the national accounts (GDP stats) that measure physical stocks of goods (like cars, iron ore or containers of consumer goods). So they are essentially, in a given quarter, stock that is produced but not shipped overseas or sold. Due to the way the national accounts work, stock building (a positive inventories number) adds to economic growth. However, a positive contribution by inventories, by definition, is unwound in subsequent quarters. My issue with quoting the upward revision to growth as a sign that the US economy is on the up un a meaningful way is that the revision was due to increased inventory accumulation, which will mean future growth is somewhat weaker.
Does that do the trick? Econ 101 for the day: done.
-
Why does that make future growth weaker though? And hey, weak growth is better than no growth/further recession, isn't it?
-
Certainly, weak growth is better than nothing, but you can't (and probably won't) have weak growth forever because you don't create jobs in an environment of weak growth. Jobs growth kick starts the economy, because it gets people working and consuming, creating a positive feedback loop.
Its quite an abstract concept, inventories, but essentially the inventory number in the national accoutns represents a "flow" of inventories in a given quarter, so either addition to or subtraction from the total inventory stock (which is something I believe is never really known per se). A build up in inventories, represented by a positive number in the national accounts, will generally speaking preclude negative numbers in the future, which will then preclude positve numbers etc etc as businesses adjust their production levels accordingly. Its called the inventory cycle and its a pretty key pillar of Keynesian economics.
-
In your personal/professional opinion, do you think Obama can turn the economy around on his policies? Assuming the absence of political gridlock, of course.
-
I haven't done one of these in a while ;D And this is largely personal with a smattering of professional (we don't watch the US in great detail).
Haven't been keeping track in great detail his policies, so I'll rely on these sources:
https://www.nytimes.com/2012/01/25/us/politics/state-of-the-union-2012.html?pagewanted=all
https://useconomy.about.com/od/Politics/p/Obama-State-Of-The-Union-Address-2012-Summary.htm
https://www.whitehouse.gov/the-press-office/2012/01/24/remarks-president-state-union-address
His ideas for changing the tax code to be more inwardly focussed, as in attracting and retaining businesses to the US, is clearly a winner. My question would be has it come too late? Will it be enough to entice companies that have offshored to come back to the US, and is the macroeconomy configured in the correct manner elsewhere (industrial relations, infrastructure etc) in order to bring them back/keep them. I think people-wise, its a no-brainer, but on the infrastructure front there is alot that needs to be done - you've been far too focussed on building the empire that you've let Rome burn, as it were.
A large scale investment program in public infrastructure, similar to what happened following the Depression, could be a good short-term and long-term policy for the US. There's no doubt that you've got the ability, capacity and wherewithall to do it, so just do it.
Re: exports, well duh, you've debased your currency to the point where its much cheaper than it used to be for everyone to buy your stuff. Can't take full credit for that.
Teaching and learning: great policies. There's no detail in his speech, but increasing education and training will practically never harm the economy over the medium-to-long term (unless you rely heavily on cheap unskilled labour, which I don't think the US does). However, the money has to be spent smart, not just thrown at schools/other institutions.
Small business/innovation: See above, don't just thrown money around.
Gas: no brainer. The less reliance on global energy markets, which will become crowded as China, India, Brazil et al develop won't put any downward pressure on global energy prices. I'm reading a book called The Growth Map (probably a good one for the inward-looking yanks to read ;)) that expounds this view quite well and its easily digestable.
Expanding current tax cuts: Probably a good move in light of what I've said previously on the US recovery. But you can't do it forever, and at some point taxes will have to rise to cut the deficit and repay debt - the key is timing. Tax cuts today are just deferred tax increases tomorrow (assuming spending doesn't fall).
Buffet Rule: Why not? Capital gains taxation should be at step rates that work in a similar way to income tax (the higher the gain, the greater the marginal tax rate), with tough regulation so you can't split gains into various companies or entities etc.
Hopefully thats a good summary. Ofcourse, this is predominately rhetoric, isn't it? But its good rhetoric, sensible rhetoric and really does thrown dow the gauntlet to Republicans to support. I can't think of any policy in particular here that is inherently bad for the economy...although as I said reduced taxes today mean increased taxes tomorrow assuming spending remains constant, and there wasn't any real "plan" per se to bring the deficit under control.
Ofcourse, this should happen naturally as the economy improves, but I have a sneaking suspiscion that US budget settings are a bit like an old man in need of a chiro appointment - sure, he can get around with his walking stick, but wouldn't it be so much better if someone got in there and ironed out the issues forcing him to use the walking stick?
-
It's sorts sad that the above has basically come to be considered communist or an unrealistic liberal idea.
I still don't agree that participation rates can be used as a monitor of the economy, did you have anything new on that? I thought I remember you saying you were going to be dealing with that soon.
-
My team (I don't mean that as in I'm the boss, I aint, I'm a worker bee lol) are working on a series of papers on participation in the Australian and Western Australian labour market this year; work hasn't commenced yet though. I'm tied up at the moment with my own policy paper (my first major one that I'm lead author on: sovereign wealth funds), a paper on productivity (that I'm contributing to) and our quarterly publications, which is probably why I haven't posted a whole heap recently...it doesn't feel like I have anyway.
As part of these quarterly publications though, I'll be writing our global economic update section for our main publication and I'll be focussing on the US labour market, so I'll hopefully be able to give a few more insights then*.
Yeah, the US political system seems quite abstract to me - these are just good policy ideas, not communist, not even socialist really, just good ideas. Libertarianism is becoming a problem for policy making, no doubt.
EDIT: But you are right, they can't be used as an indicator per se - its not like GDP or job creation or something. But it fits into a narrative on the economy which is overlooked far too often IMO.
-
My team (I don't mean that as in I'm the boss, I aint, I'm a worker bee lol) are working on a series of papers on participation in the Australian and Western Australian labour market this year; work hasn't commenced yet though. I'm tied up at the moment with my own policy paper (my first major one that I'm lead author on: sovereign wealth funds), a paper on productivity (that I'm contributing to) and our quarterly publications, which is probably why I haven't posted a whole heap recently...it doesn't feel like I have anyway.
As part of these quarterly publications though, I'll be writing our global economic update section for our main publication and I'll be focussing on the US labour market, so I'll hopefully be able to give a few more insights then*.
Yeah, the US political system seems quite abstract to me - these are just good policy ideas, not communist, not even socialist really, just good ideas. Libertarianism is becoming a problem for policy making, no doubt.
EDIT: But you are right, they can't be used as an indicator per se - its not like GDP or job creation or something. But it fits into a narrative on the economy which is overlooked far too often IMO.
Understatement of the decade. :lol Anyway, you just laid a brick of stuff so I can't really make many in-depth comments, but on the whole I found it interesting to read.
Might as well ask an economist: do you think shifting to renewable energy sources will relieve the pressure currently and soon to be facing the world energy market?
-
Without a global price on carbon emmissions, no. I'm not really into climate change policy and the like (I leave it to the pros), but I can't see how you can achieve meaningful change without putting a price on the emmissions created by oil, coal etc that is high enough to drive innovation. Either that or it becomes so scarce that the carbon price becomes meaningless in the context of energy prices - in so far as the incentive to innovate is created that way.
Will that be the trigger? As in, will sky high traditional energy prices push companies this way without a price on emmissions...I've gotta say thats more likely to happen than a global carbon price. Which is a shame, because the scrambling to find a solution will cost more than pre-emptively moving to find a solution.
-
Unfortunately I think I have to agree with you, more unfortunate still that policy solutions like cap-and-trade met the axe, because policies like those could've gone a long way towards making emissions pricing actually pretty accommodating to the industries in question. And what with companies like GM pouring millions if not billions into think tanks bent on denying climate change, we might just have to wait till we hit rock bottom. I'm just hoping rock bottom doesn't mean waiting until we really fuck ourselves over.
But what I was referring to actually was just the market pressure that I anticipate will come with new markets in China, India, Brazil and co. It's great that their energy economies are growing, but we'll suck the world dry before we even realize what's going on. It'd be great if we could make the renewable energy shift before that so a diversified global energy market could emerge, in which we can limit our environmental impact by buffering ourselves with clean energy and not have to totally strike off dirty energy.
I'm personally actually thinking about making a career out of working for an energy or car company and showing them that their business model can actually benefit from making the shift. I've sorta come to realize that change isn't gonna come from government, and the people can't do shit, so I gotta turn to the businesses themselves.
-
Will that be the trigger? As in, will sky high traditional energy prices push companies this way without a price on emmissions...I've gotta say thats more likely to happen than a global carbon price. Which is a shame, because the scrambling to find a solution will cost more than pre-emptively moving to find a solution.
Couple of things I figured you might be interested in:
The latest job reports shows a decrease in long-term unemployment, i.e increase in our workforce.
And secondly, I can't remember what economist it was, but he was talking about gas prices and GM on TV the other day. He made a great point, in that the fuel efficiency is new cars, being built in the US today, are much much higher than they were four years ago (thanks in part to Obama administration policies), which is helping spur their purchase by people, and which of course spurs their production and manufacturing. Two years ago, when I bought my current used 1996 car, it got better mileage than numerous hybrids on the market. Now, it gets worse mileage than most new non-hybrids. The American car market is changing, it's changing quickly, and the direction it's changing is good for the future of the American car industry.
Most of that is market forces, but you can't overlook government influence, especially not when were' talking about GM and Ford. I also remember the news conference, where industry leaders were thankful for the EPA in standardizing fleet efficiency standards, but which also mandated we start putting our energy into making cars more efficient, and not necessarily the one with the most cupholders, storage space, power, or other things which can't negatively effect other people.
-
Will that be the trigger? As in, will sky high traditional energy prices push companies this way without a price on emmissions...I've gotta say thats more likely to happen than a global carbon price. Which is a shame, because the scrambling to find a solution will cost more than pre-emptively moving to find a solution.
Couple of things I figured you might be interested in:
The latest job reports shows a decrease in long-term unemployment, i.e increase in our workforce.
And secondly, I can't remember what economist it was, but he was talking about gas prices and GM on TV the other day. He made a great point, in that the fuel efficiency is new cars, being built in the US today, are much much higher than they were four years ago (thanks in part to Obama administration policies), which is helping spur their purchase by people, and which of course spurs their production and manufacturing. Two years ago, when I bought my current used 1996 car, it got better mileage than numerous hybrids on the market. Now, it gets worse mileage than most new non-hybrids. The American car market is changing, it's changing quickly, and the direction it's changing is good for the future of the American car industry.
Most of that is market forces, but you can't overlook government influence, especially not when were' talking about GM and Ford. I also remember the news conference, where industry leaders were thankful for the EPA in standardizing fleet efficiency standards, but which also mandated we start putting our energy into making cars more efficient, and not necessarily the one with the most cupholders, storage space, power, or other things which can't negatively effect other people.
It's funny, I was just learning this in Environmental Econ. :lol
-
It's too Sunday-ie right now to do econ...I'll take a look at this tomorrow morning.
-
Ok so my take on the latest jobs report:
This is likely to be what happens quite regularly over the next few years - increase in jobs & increase in participation = no fall in the unemployment rate. I've only had a look at the media release, and it appears that the amount of jobs created = the amount of people entering the workforce which left the number of unemployed unchanged and therefore the unemployment rate practically unchanged (it probably fell by a couple of basis points, but not enough to change the decimal). Long-term unemployment remained broadly unchanged, which at a high level would indicate that these people were not recipients of a job - ofcourse thats not the case but we don't get granular level data like that. So its a good report, in the main.
And re: Government & markets, naturally that kind of thing will happen when incentives are offerred, its just that the market is a stronger, more broadbased motivator than cash handouts/carrots & sticks.