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04/13/2009

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Jim

Oh Jack, I forgot to answer your last question on the alst year of life. I would mandate the fiking of an online advance directive at the time of Medicare sign-up. One could say I want everything possible done or one could say I want nothing done or something in between and specific. The mandate is constitutional because medicare is a privelege not a right. Part of the reason for the 80 billion in the last year of life is confusion and uncertainty on the part of the family, hospital, physician without clear guidelines. Might not save 80 billlion but might save some of it.

Anonymous

Those quoting Thomas Jefferson really will be called "extremists". Napolitano's Thought Police will be coming after us because those dumb enough to support our founding principles just cling to guns and religion all the time...!

Well, I'll do this before clinging to GOVERNMENT any day of the week.

Here is a nice article, don't you think?

http://www.nytimes.com/1999/09/30/business/fannie-mae-eases-credit-to-aid-mortgage-lending.html?sec=&spon=&partner=permalink&exprod=permalink

Anonymous

"As we can see in nations like Russia and many others, once an economic system is broken and laying in ruins it is VERY difficult to resurrect with strongmen, gangsters and international corporations grabbing much of the spoils."

Since we are talking about thugs and gangsters, I wonder what Chris Dodd will say when Goldman wants to payback TARP so it can get rid of government. What's in it for Dodd..., another sweetheart deal? Maybe Obama's carbon tax can provide sweet govt. subsidies and financing to wind companies that Nancy Pelosi and Al Gore own...?

FDR saved capitalism...? And government is the only solution today too, right. Well, I guess it takes govt. to fix all the problems govt. created I guess. This is just another way of saying government has to reinflate our artificial economy so we can stimulate each other in the short run. We'll just blame the next republican president for the next bubble that pops.

neilehat

"Horse and Buggy Days"? What we're experiencng now is nothing more than a good old fashioned "Bank Panic" helped along by some rather old fashioned "pig in a poke" business practices. We haven't had one (bank panic)in such a long time, everyone seems to have forgotten. Oh well, maybe people will begin to understand why all the Regulations were set up in the first place, before we deregulated just about everything.

When it comes to Econ. Policy, old T.J., would have us still shucking corn and slopping the hogs. It's a good thing Hamilton had control of the Treasury and Congress's ear, that is until Burr blew him away in duel over power politic squables. Too bad Dueling has been outlawed, we could get rid of some real hacks in Government and get this Country back on track.

Jim

Jack,

You and I are not very far apart in our views.I greatlty appreciate your intelligence and civility.

inhiniaNup

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Anonymous

Yeah, Thomas Jefferson was an idiot. He actually thought our Constitution as written actually meant something.

This govt. has added (by printing or spending what it doesn't have) $12.8 trillion into the economy. It is showing up in the banks now. It will show up all over soon enough. It is all artificial wealth creation, just like maintaining artificially low interest rates is.

It worked this time, we fooled the world. Our BS economy is not going to work much longer though. The world consumes too, and we won't be able to control the world economy forever just because we are fat consumers.

I wonder what happens when Obama takes away that $8000 rebate for first time home buyers? I guess we'll have to make up more psychobabble when then next bubble pops. We'll just demonize capitalism and markets then and we'll ignore the fact that government set rules based on fraudulent principles to prop up asset values.

Asher Meir

You write "there is some inertia in trading". I don't know if this is true, but if it is, that is an inefficiency you need to explain, not a fact that can explain inefficiencies. Efficient markets based on underlying fundamentals are not supposed to have any inertia according to prevailing theories.

neilehat

Anon. Now, I never said T.J. was an Idiot. I did imply that he was less than astute when it came to Econ. Policy and Household Budgeting. You do know he died a bankrupt. And the only reason Monticello wasn't sold off to cover his debts was because of the esteem his Creditors.

You'll be rather surprised when the U.S. Economy emerges from the current Crisis in better shape than before the Free-Traders/Free-Marketers tried to torpedo it. Perhpas we've discovered a new category of Treason, "Economic Treason".

Jack

Jim: Thanks! I'm much more interested in good debate that seeks the truth than "winning" a point.

Anon: Much of that money is being loaned to "our" rascally lending institutions. I'm not sure they are creditworthy and we KNOW that foreclosure and loan losses are going to be the highest in history........ but those will be a minor fraction of the trillions.

How have you determined that we've maintained an "artificially low interest rate?" Seems to me that China and others with whom we've run huge trade deficits have been throwing money over the transom in order to "repatriate" our dollars and keep the game going. With far more dollars than investment opps we're bound to see low interest rates. Neither myself nor Grnspan saw this game as being sustainable but, I guess, they're hoping that A the yuan will rise B The Chinese, Indians and others will become less savers and more consumers C That something will happen in the US to make US consumers save more of their earnings. Looks like all three of those are taking place now.

I'm close to the housing industry and the $8,000 first timer credit is LESS than a box office hit. A market watcher could predict what appears to be the case:

A. There are only so many first time buyers ready to buy within any 10 month period regardless of incentives. (In areas where prices are still dropping or thought to be dropping, the credit is not much of an offset.)

B. MOST first timers are looking for payments not much higher than their apartment rent...... $1,000 or so which points to homes under $150,000. (Perhaps higher in LA-NY etc)

C. There is very little new product in that price range, and the inventory of Mcmansions haven't and most likely have not fallen far enough or are not in the right areas.

D. The nation is and has been, suffering from a lack of demand (ie far too little discretionary income available to purchase "wants") and with 10% unemployment, the unemployment for young, would-be first time buyers is yet higher and instead of getting a "bump" from those coming out of college and HS this year, many of them will simply add to the unemployment roles. (If wise -- they may as well go back for more schooling IF they or their families can afford to do so)

BTW I'll predict something like the $8,000 credit will be extended as housing is one of the biggest of Keynesian spurrings for the taxpayer's buck, and that those who "scored" the cost of the program will find it having cost less than half what they projected, and! that the economy will still be waaay IN the tank come Dec 1st.

Jack

Asher: Please sigh me up for the inertia side. The Bay of Fundy and Cook Inlet in Alaska have tremendous, 30 foot tides though the open oceans nearby have tides of 5-7 feet. Like water sloshing in a bath tub the small tidal effect goes rushing up the Bay and just as the top of the huge tide hits the upper end of the Bay, the tide at the entrance is falling and no longer feeding water into the Bay. There is nothing to support the 30 feet of tide at the top of the Bay so it rushes out, often to a "negative" tide, but just in time to meet the new incoming tide.

Isn't that a lot like what's happened in recent tech, housing and oil run-ups? Money flowed into tech long after the solid companies had been pushed too high to be called an efficient valuation. Soon far too little money was being bet to push or even maintain prices. Looking back many good companies plunged lower than would seem "the right price". Likewise, I'd predict that in many areas housing prices will overshoot to the low side before rebounding as "the market" waits for a clear signal of THE bottom. Housing has to its advantage its inherent utility as a home which may mean "a buy" if it fills one's needs and is priced "OK" or "affordable".

But I dunno...... these terms? perhaps "efficient markets" include these "overruns?" As at that moment that is all the stock or home would bring? And those buying are "speculating" as they too do not have perfect knowledge of "the right price".

Arionmadysto

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张浩天

股票是否是个金融衍生品的基础平台?是否你们的购买欲望才是推动经济的根本动力?是否该建立个人们所想的到物品信息的平台,以最简易迅速地提供物品,带动市场?
股市是个促进企业融资发展的平台,应以企业的稳步发展为保障,以投机为目的的行为只会加大风险,加大市场中的更多不稳定的因素爆裂股市泡沫就会是迟早的事.对股市根据投入资金比重的大小,控制在股市中最少时间,扩大公民所能持股的利益及其所能介入的范围,使其成为一个更具联系的整体.

dicelacy

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Nathaniel B. Shepard

Thought about it:

http://seekingalpha.com/article/116493-u-s-economic-policies-engender-rationality-in-the-face-of-uncertainty

-N.B. Shepard

jeaddendon

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ty

The definition of Efficiency is not wasting resources; not wasting time, energy, effort, money, material goods, morale, etc. It is also defined on the other end by what product it delivers; in this instance I believe un-coerced happiness and contentment are what an economy is to deliver.

Bubbles are a sign of inefficiency; at their best they allocate too many resources to one sector of the market and result in a recession, at their worst you end up with a market being played like a ponzi scheme. Predatory behavior and fraudulence is, by definition, inefficient. A city of thieves produces no bread.

All bubbles, recessions, depressions, and bull markets are the result of excess credit created by fractional reserve lending. You do not have bubbles when you use hard currency; this is proven historical fact. The only problem with a single hard currency is tenancy for exceptional players to monopolize a market and destroy it for personal gain. Free markets are by definition the most efficient, effective markets but they do not stand the test of time. Neither does Totalitarianism or Fascism for that matter; technological revolution or a predatory society outgrowing its prey invariably infighting over the scraps of civilization overcomes those two states and leads to bloody revolution, anarchy, then order from the ground up.

Fractional reserve lending addresses the monopolization of markets when practiced in a decentralized fashion; when currency becomes too liquid you end up a bubble and a recession or depression, when currency becomes to illiquid you end up with excesses of debt and bankruptcy. The competition of fiat currencies vs hard currencies vs protectionist currencies (such as English Wooden Sticks) is the solution to boom bust cycles; it eliminates the size of bubbles and keeps any one player from monopolizing the market through the production of excess currency for any length of time. Suffice to say if any printer of fiat currency were to begin printing notes at a hyper inflationary pace, people would retreat to other currencies en masse. Even in systems where one currency is backed or owned by another, hard currencies and protectionist fiats would counteract that behavior. In markets where people ran to hard currencies or protectionist fiats, they would invariably wish to acquire debt to fund ventures, new fiats would be backed by those currencies and fiats, and inevitably reward those willing to take the risks of investment.

Some might say markets do not stomach competing currencies due to convenience or trends. Barter is a market of competing currencies and worked for thousands of years. Convenience has a cost; For the people of the Weimar republic that barter was superior to the costs of convenience. For Americans who choose to store their live savings in a safe, they see their money devaluing at the same rate at which they save. For gold hounds, they see trends of excesses and scarcities affecting the value of their commodity.

Without competition a market of monopoly is invariably subdued by predatory personalities.

It would be a fantastic idea to add to our constitution that the government has the right to coin and print currency, but no right to pass a law of legal tender; they can create currency but can't force us to use it.

We are already seeing emerging competing currencies to the dollar, and the banking infrastructure of the world responding violently to small innovators. The Liberty Dollar, Iraqi war, and the way Banks are being bailed out right now are good examples.

Steve

Great post!

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http://www.commoncts.blogspot.com

Steve

Great post!

Would you like a Link Exchange with COMMON CENTS?? Check us out here...
http://www.commoncts.blogspot.com

Anonymous

"You'll be rather surprised when the U.S. Economy emerges from the current Crisis in better shape than before the Free-Traders/Free-Marketers tried to torpedo it. Perhpas we've discovered a new category of Treason, "Economic Treason"."

On one hand you blame Greenspan for the tech wreck, and on the next hand you say free markets are evil and govt. is the perfect solution for getting out of bed in the morning.

This makes a ton of sense. No hypocrisy here...! Govt. caused the tech wreck but only the evil free market greedy guys on Wall St. caused the mess we are now in.

We might emerge out of this mess but if we are sacrificing capitalism in the process our economic pain has not even started yet. Your continuous short term stimulation (and psychobabblicious theories on why the free market is evil) only takes us further down the road to absolute communism. Each time we artificially inflate, it comes at a cost to our principles. Eventually we will have no principle left and our entire system will be a total fraud.

The simple fact is this govt. is completely out of control. It has gone so far beyond its proper role, scope, and size, it is train wreck waiting to happen. Psychobabblicious people actually think it is the FED's role to be the SEIZER of LAST RESORT. Indentured servitude to the State, HERE WE COME...!

I'm sure Obama will be "fair" in how he distributes our grandchildren's money. We wouldn't want any "White Construction Workers" getting any of that Keynesian stimulus, now would we...? Does anyone see another wave of slavery in our future...? Keynesianism combined with special treatment for a select few equals abuse in an indenture servitude system.

Anonymous

I am going to re-post my comment. I think it is important considering the most recent blog topic.

How long until you PSYCHOBABBLICIOUS experts realize GOVERNMENT IS THE PROBLEM...?

Each day we go down this path is another step towards absolute communism. We are almost there...! Who thinks OBAMA is giving anything back?

----

"As we can see in nations like Russia and many others, once an economic system is broken and laying in ruins it is VERY difficult to resurrect with strongmen, gangsters and international corporations grabbing much of the spoils."

Since we are talking about thugs and gangsters, I wonder what Chris Dodd will say when Goldman wants to payback TARP so it can get rid of government. What's in it for Dodd..., another sweetheart deal? Maybe Obama's carbon tax can provide sweet govt. subsidies and financing to wind companies that Nancy Pelosi and Al Gore own...?

neilehat

Anon, "Psychobabblicius"? Is this a Neologism from the "Encyclopedia of Economics". BTW, did I spell it right?

As for myself and the rest of the Nation, including the Obama Administration, we'll continue to steer a clear course within the "American School of Economics" whose main tenets are:

1. Create Financial Infrastructure
2. Create Physical Infrastructure
3. Support Universal Public Education at all levels
4. Support Research and Development
5. Support Agriculture and Industry

All of these fall under the Preamble to the U.S. Constitution which states:

"We the People of the United States, in order to form a more perfect Union; establish Justice, ensure Domestic tranquility, provide for the common Defense and promote the General Welfare; do hereby establish and ordain this Constitution."

Take close notice of the General Welfare Clause. It becomes much more fully developed under the Commerce Clauses".

If it's not to your liking, you're always Free to leave the country.

Anonymous

Instituting communism under the guise of "promoting welfare" contradicts our constitution, encroaches on our liberties, and overall reduces our quality and standard of living.

Love it or leave it...! Nice, you and Dick Cheney use the same tactics.

Anonymous

Here is Obama's economic plan for this country:

1. Abolition of property in land and application of all rents of land to public purposes. (See Kelo vs. New London - who needs property rights anyway...?)

2. A heavy progressive or graduated income tax. (California is bankrupt and they have a 10% state income tax, Obama raising federal taxes, NYC raising its City income tax while obama demonizes Wall St.)

3. Abolition of all right of inheritance.
Confiscation of the property of all emigrants and rebels. (Death tax)

4. Centralisation of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly. (Our wonderfully independent Federal Reserve using inflation and deflation)

5. Centralisation of the means of communication and transport in the hands of the State. (National Public Radio and our mainstream media. Throw in the fairness doctrine to eliminate alternatives)

6. Extension of factories and instruments of production owned by the State; the bringing into cultivation of waste-lands, and the improvement of the soil generally in accordance with a common plan. (A bit of enviroMENTALISM here. Also nationalization of industry)

7. Equal liability of all to labour. Establishment of industrial armies, especially for agriculture. (Union labor and bailing out companies that fail with tax dollars all because they use union labor. Also union labor for government jobs when govt. employs over 50% of our population before Barrack's keynesianism)

8. Combination of agriculture with manufacturing industries; gradual abolition of the distinction between town and country, by a more equal distribution of the population over the country. (State's right is a slogan only when it fits the leftist agenda - such as State Courts implementing gay marriage by judicial activism)

9. Free education for all children in public schools. Abolition of children's factory labour in its present form. Combination of education with industrial production, &c., &c. (our public school system is a thriving example of how great nationalization works, so let's nationalize healthcare now!!!)

Anonymous

In case you leftists didn't recognize it, above is the Communist Manifesto. Sounds a lot like your ideology, doesn't it...?

For Obama, you forgot to mention:

-Nationalize Healthcare
-Nationalize Energy
-Nationalize Banks
-Nationalize Insurance
-Prop up failed companies that use union labor, attack those that don't


Seriously, which part of the Communist Manifesto does Barrack Obama disagree with...?

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