Comments on Gennady Favel's articles RSS Syndication from SeekingAlpha.com http://seekingalpha.com/author/gennady-favel/articles http://seekingalpha.com/article/125883-the-economics-of-the-past-won-t-solve-the-problems-of-the-present-and-future?source=feed#comment-426859 426859 There is nothing the govt. can do to change human nature. There will > always be bubbles ---and also wars. Those who are idealistic are > fools (Carter, Clinton and Obama). Capitalism always works out its > mistakes--the govt. is incapable of anything rational.]]> Sun, 15 Mar 2009 18:04:02 -0400 The Internet
Stem cell research
NASA

Without these evil, government-funded projects we probably would not have cell phones, orbiting communications satellites, Tang orange drink (OK, a bad example), proliferation of computer technology, etc.

In every foreign intervention that the Coporatocracy has engaged in since WW II (Iran, Nicaraugua, Argentina, Malaysia, Bolivia, Venezuela, etc.), the scheme of bribing the corrupt oligarchs to build infrastructures that benefitted the corporate interests of this country yet could not be supported by the wage levels of these countries, imposing usurous terms for IMF and World Bank loans when the country's inevitably went into default, and propping up these hand-picked right wing strong men, all led to unforeseen consequences. If you cry about the circumstances in these countries relative to our relations with their current leaders, you have no one to blame but yourself and Mr. Reagan and Bush for being so blind about the results of unfettered belief in capitalism.


On Mar 14 06:01 PM CLH wrote:

> There is nothing the govt. can do to change human nature. There will
> always be bubbles ---and also wars. Those who are idealistic are
> fools (Carter, Clinton and Obama). Capitalism always works out its
> mistakes--the govt. is incapable of anything rational.]]> http://seekingalpha.com/article/125883-the-economics-of-the-past-won-t-solve-the-problems-of-the-present-and-future?source=feed#comment-426127 426127 Sun, 15 Mar 2009 06:04:29 -0400 http://seekingalpha.com/article/125883-the-economics-of-the-past-won-t-solve-the-problems-of-the-present-and-future?source=feed#comment-425891 425891 Sat, 14 Mar 2009 18:01:52 -0400 http://seekingalpha.com/article/125883-the-economics-of-the-past-won-t-solve-the-problems-of-the-present-and-future?source=feed#comment-425783 425783 Sat, 14 Mar 2009 14:43:27 -0400
The idea that the classic determinations of efficiency such as the ratio of output to input are somehow inappropriate, inconvenient or too restrictive because they prevent Utopia formation can have the effect of preventing movement toward Utopia.

Somehow there seems to be a new Economics being created that requires that the old laws of supply and demand, elasticity, the law of diminishing returns, be ignored in much the same way that String Theory seeks to replace Einstein's Theory of Relativity. The Broken Window Fallacy seems to apply to the creation of the next bubble, green jobs, but after droning on about how these jobs are going to be high paying jobs, objections sink beneath the froth of jubilation. Who repealed basic economic concepts? Did they get a Nobel Prize for it?

There seems to be no fear that the spending spree of stimulative money and jobs represents in any way a large collection of lost opportunities. The new Keynesian seems to be, in the popular mind, free of any idea of the concept that one project might be better than another and that in a world of limited resources, the better projects should somehow float to the top of the list. ]]> http://seekingalpha.com/article/125883-the-economics-of-the-past-won-t-solve-the-problems-of-the-present-and-future?source=feed#comment-425685 425685 Sat, 14 Mar 2009 12:42:36 -0400
The whale anology is more to the point but not taken far enough. Whales DO end up stranded on the beach because they are genetically predisposed to only expect deep water. Thus, those that stray too close to shore are doomed.
I leave it to you to extrapolate that to the present economic condition.]]> http://seekingalpha.com/article/125883-the-economics-of-the-past-won-t-solve-the-problems-of-the-present-and-future?source=feed#comment-425633 425633 Sat, 14 Mar 2009 11:55:21 -0400
But what is your point? America has changed? We are pumping air into a flat tire?

O.K. Now what?

Political philosophy? Broader view of history? What does that mean?]]> http://seekingalpha.com/article/125883-the-economics-of-the-past-won-t-solve-the-problems-of-the-present-and-future?source=feed#comment-425475 425475 Sat, 14 Mar 2009 08:45:10 -0400 http://seekingalpha.com/article/125883-the-economics-of-the-past-won-t-solve-the-problems-of-the-present-and-future?source=feed#comment-425354 425354 What's even harder to accept is the fact that Bernanke's old boss > Alan Greenspan and Benanke himself caused the bubble by growing the > money supply. I don't blame the Fed for causing the debt problem. I see that the US economy was expanding and productivity was rising. Unfortunately, the GDP gains from the productivity increase was not funnelled back to the labour pool. Household income stagnated, so the political solution was to allow for expanded debt via the money supply. For the last decade wages have gone backwards. Families are poorer even accounting for inflation. Easy credit, weirdo mortgage products, securitization, and uber-cheap imports were substitutes for passing on the gains of productivity through wage increases. We were told it was more efficient for the new "ownership society" to bet debt against our houses as a means of growing net household wealth. Then we used the Fed even more to paper over (literally) this wage/productivity gap. If you strangle your middle class, there will be economic catastrophe. This will happen again unless the proceeds of economic activity are better distributed. > When's the last time you made a mess but did not know you made the > mess? Spilled some milk from the fridge last night. My sock found it the next morning.]]> Sat, 14 Mar 2009 00:38:59 -0400
> What's even harder to accept is the fact that Bernanke's old boss
> Alan Greenspan and Benanke himself caused the bubble by growing the
> money supply.

I don't blame the Fed for causing the debt problem. I see that the US economy was expanding and productivity was rising. Unfortunately, the GDP gains from the productivity increase was not funnelled back to the labour pool. Household income stagnated, so the political solution was to allow for expanded debt via the money supply. For the last decade wages have gone backwards. Families are poorer even accounting for inflation.

Easy credit, weirdo mortgage products, securitization, and uber-cheap imports were substitutes for passing on the gains of productivity through wage increases. We were told it was more efficient for the new "ownership society" to bet debt against our houses as a means of growing net household wealth.

Then we used the Fed even more to paper over (literally) this wage/productivity gap. If you strangle your middle class, there will be economic catastrophe. This will happen again unless the proceeds of economic activity are better distributed.

> When's the last time you made a mess but did not know you made the
> mess?

Spilled some milk from the fridge last night. My sock found it the next morning.]]> http://seekingalpha.com/article/125883-the-economics-of-the-past-won-t-solve-the-problems-of-the-present-and-future?source=feed#comment-425232 425232 The author wrote: > > "Modern economics since the days of John Maynard Keynes has relied > on statistics from past data to adjust the valves of monetary and > fiscal policies." > > Ah, but modern investing strategies by the "quants" on the bank payroll > came up with future prediction models. And these have failed so badly > everything is in distress. > > Historical data cannot predict, but it can frame scenarios and form > the basis for tempered reaction and policy—as long as one understands > it, especially the politicians. > > That's why Bernanke gets scorn for being spineless. As a Depression > era economic historian he should have seen a bubble. They are historically > predictable and the math looks pretty much the same. Yet Bernanke > did not see and did not act.]]> Fri, 13 Mar 2009 20:52:18 -0400
When's the last time you made a mess but did not know you made the mess?


On Mar 13 01:27 PM Aristophanes wrote:

> The author wrote:
>
> "Modern economics since the days of John Maynard Keynes has relied
> on statistics from past data to adjust the valves of monetary and
> fiscal policies."
>
> Ah, but modern investing strategies by the "quants" on the bank payroll
> came up with future prediction models. And these have failed so badly
> everything is in distress.
>
> Historical data cannot predict, but it can frame scenarios and form
> the basis for tempered reaction and policy—as long as one understands
> it, especially the politicians.
>
> That's why Bernanke gets scorn for being spineless. As a Depression
> era economic historian he should have seen a bubble. They are historically
> predictable and the math looks pretty much the same. Yet Bernanke
> did not see and did not act.]]> http://seekingalpha.com/article/125883-the-economics-of-the-past-won-t-solve-the-problems-of-the-present-and-future?source=feed#comment-424734 424734 Fri, 13 Mar 2009 13:27:27 -0400
"Modern economics since the days of John Maynard Keynes has relied on statistics from past data to adjust the valves of monetary and fiscal policies."

Ah, but modern investing strategies by the "quants" on the bank payroll came up with future prediction models. And these have failed so badly everything is in distress.

Historical data cannot predict, but it can frame scenarios and form the basis for tempered reaction and policy—as long as one understands it, especially the politicians.

That's why Bernanke gets scorn for being spineless. As a Depression era economic historian he should have seen a bubble. They are historically predictable and the math looks pretty much the same. Yet Bernanke did not see and did not act.]]> http://seekingalpha.com/article/125883-the-economics-of-the-past-won-t-solve-the-problems-of-the-present-and-future?source=feed#comment-424446 424446 Fri, 13 Mar 2009 10:55:55 -0400
What is not generally appreciated by Americans, who are still struggling with their own personal credit drying up is that the same thing can easily happen to their government. Of course, they have the option of simply printing a lot more dollars, but that will only serve to increase the rush for the exits and at the same time reduce the real value of all salaries in the US. Prices, however, will start to surge ahead to due the increase in costs of imports. At that point the resolve of Government will face its ultimate test. Will it attempt to cap wage settlements or will it let a wage/price spiral rip. This will eliminate a substantial amount of the outstanding personal debt, but at the same time it will erode the value of savings. However, this would help greatly to decelerate the crash in asset values.

It may well be that the stock market rallies are not anticipating recovery as much as price inflation.]]> http://seekingalpha.com/article/125883-the-economics-of-the-past-won-t-solve-the-problems-of-the-present-and-future?source=feed#comment-424251 424251 Fri, 13 Mar 2009 09:17:23 -0400 http://seekingalpha.com/article/107489-market-rallies-on-geithner-s-appointment-why?source=feed#comment-356174 356174 Wed, 14 Jan 2009 23:20:35 -0500 Mr. Geithner did not pay the self-employment taxes for 2001 through 2004, but of even greater concern is the fact that he did not correct 2001 and 2002 when his 2003 and 2004 returns were audited in 2006. At that point, he could certainly no longer feign ignorance. In fact, he did not correct his "honest mistake" until after his nomination to serve as Treasury Secretary, thus negating any possible argument that he was "not aware" that he owed self-employment taxes for 2001 and 2002 since he had already been audited on that exact point.
For an administration that prides itself on transparency and high moral and ethical standards, I am truly disappointed that Obama spokesman Robert Gibbs has come out with an official statement of the Obama administration indicating that this "honest mistake" does not rise to the level of disqualification. To the contrary, I think that the fact that he most assuredly was aware that he owed self-employment taxes during the course of his employment with the IMF, and absolutely knew from 2006 after his audit yet failed to correct the prior year returns, is more accurately referred to as cheating on his taxes rather than making an honest mistake. His failure to correct 2001 and 2002 after the audit of 2003 and 2004 reflects an attitude of arrogance and being above the law which is not acceptable.
Regardless of his experience and ability to serve as Treasury Secretary, I firmly believe that this failure to pay self-employment taxes, even after the audit when there was no doubt of his awareness of his legal obligation to do so, should eliminate him from consideration. To allow him to continue as the nominee under these circumstances is a slap in the face to all Americans who honestly report their income and pay the tax due.
]]> http://seekingalpha.com/article/111697-despite-everything-capitalism-is-alive-and-well?source=feed#comment-335908 335908 Mon, 22 Dec 2008 13:28:19 -0500
America is not only an economic system but also a mixture of social, political, legal and historical traditions which support economic activity.

Capitalism takes many forms.

In the past and even today, America has had many monopolies such as Standard Oil, the American Tobacco Company and AT&T.

In the present, we have many oligopolies such as the automobile industry, Big Pharma, the newspaper industry, television networks and many others.

It is difficult for small businesses to find a niche in oligopoly business. It was done in the computer industry but it was necessary for the government to break up AT&T to allow competition into the telephone market.

We have a thriving small business environment where new ideas can be tested in a tradition of willingness to trust advertisements and to try new things but it rests on the knowledge that a legal system is in place to protect against fraud.

The concept of unions are not simple either.

If you consider the unions that protect the professions but call themselves by another name, you will understand that.

Doctors, lawyers and dentists, among other professionals, are protected by closed shop unions where workers are forced to join and those who don't are not allowed to practice. These professional associations are protected and enforced by laws.

]]> http://seekingalpha.com/article/111697-despite-everything-capitalism-is-alive-and-well?source=feed#comment-335481 335481 Mon, 22 Dec 2008 07:40:23 -0500
Also, your point concerning the unimportance of the banking sector is ridiculous. The financial sectors are the clergy of capitalism. Without them, almost every other company will crumble due to the lack of financing possibilities and such.

Unless you are subscribing the the notion that government should finance small business, in which case capitalism is dead.

Your article was stupid and meaningless, a pathetic diatribe were nothing at all gets proving. It seems to me is that the only purpose for writing such rubbish is to have the title floating around the net.

Capitalism is a defunct system because it expects constant growth, and it is impossible to grow at the imaginary rate when resources are limited and more importantly when people's capacity to consume is limited as well.

You can get the masses to buy pounds upon pounds of burgers but at one point their belly will explode and you are witnessing this explosion. So next time do us all a favor and keep your mouth shut.

]]> http://seekingalpha.com/article/111697-despite-everything-capitalism-is-alive-and-well?source=feed#comment-335132 335132 Sun, 21 Dec 2008 14:48:25 -0500 http://seekingalpha.com/article/111697-despite-everything-capitalism-is-alive-and-well?source=feed#comment-335083 335083 Sun, 21 Dec 2008 13:17:05 -0500
The Stock Market is not an example of Capitalism at work.
Free Market Capitalism is about as real as the tooth fairy, and it's true location is Never-Never Land.

Second:
Ford's CEO receives (not earns) roughly $28 million/year.

Typical Assembly-line worker: $80,000/year (lots and lots of overtime figured in here).

CEO loses billions each year. Assembly-line worker produces $800,000.00 worth of product.

Now, tell me how the worker is the problem

Third:
The Author looks like a KGB Agent. Thank God he doesn't know how to find me.

]]> http://seekingalpha.com/article/111697-despite-everything-capitalism-is-alive-and-well?source=feed#comment-335076 335076 Sun, 21 Dec 2008 13:09:54 -0500
Second, the author seems to believe banks should be allowed to fail in order for capitalism to operate properly. The trouble with this is that failing banks creates a downward spiral of economic activity that leads to unemployment rates unacceptable to any responsible government. It was policy mistakes that turned a similar recession to the one we are currently experiencing into the decade long depression of the 1930s. The primary policy mistake made then was allowing banks to fail. Indeed the one glaring policy mistake our Federal Reserve has made during the current crisis was allowing Lehman Brothers to fail. The evidence of this is the Fed's rush to save other banks and insurance companies in the wake of Lehman's bankruptcy. The result of this has been a noticeable stabilization of the credit markets. Thanks to the policy actions of the Federal Reserve another depression is highly unlikely.

So capitalism is alive and well. We will always have a business cycle but they can be cushioned by responsible government institutions. ]]> http://seekingalpha.com/article/111697-despite-everything-capitalism-is-alive-and-well?source=feed#comment-335069 335069 Sun, 21 Dec 2008 12:54:47 -0500
This sub-prime phenomenon lead by the great capitalistic American financial institutions and supported by the great capitalistic leaders such as Allen Greenspan is responsible for this global recession.

Is the author so naive or simply an advocate of these corrupt institutions, providing a cover-up for them so that they can be given another chance?
America is responsible for the global recession!!

A true Capitalism does not need bailout from the tax payers' money, to provide multimillion dollar bonuses for the same corrupt executives while the unemployment continues to rise!!]]> http://seekingalpha.com/article/111697-despite-everything-capitalism-is-alive-and-well?source=feed#comment-335059 335059 Sun, 21 Dec 2008 12:35:18 -0500
If capitalism is not absence of failure then there is no need to boast about its super powers that it doesn't really have by your own admission.

The double talk by those that have caused the current financial disaster by boasting about the super powers of capitalism is easy to spot. They often bash unions and the worker class and yet they are blind to the massive corruption that capitalism has pursued and that is even after getting saved by socialism.

These claims are fabricated, they use what-if-scenarios although the boasters of purely capitalist economies were in fact on the receiving end of subsidy by socialism. The very banks and the very financial institutions that were advising to all other countries to join them, pushing for easy credit and damaging the world economy are the very high power institutions that claimed the super power of capitalism and also they were the very first institutions that begged to be saved by socialism when they "failed" and they did "fail".

To believe that all markets can stand these failures is either naive or manipulative.
]]> http://seekingalpha.com/article/111697-despite-everything-capitalism-is-alive-and-well?source=feed#comment-335058 335058 Sun, 21 Dec 2008 12:32:18 -0500 A few examples to larger impediments to “free market capitalism” are the following:
1] Legacy costs related to pensions and healthcare of older companies. If the US government does not “re-structure” this social environment, all companies will eventually shoulder this burden increasingly as they age. One potential solution in the current environment would be to only have companies that are less than 25 years old. That way a company would not have any employees retiring or requiring expensive medical care.
2] Currency manipulations by foreign governments that cause inconsistent economic value transfer into foreign markets.
3] Decades of "Bail-Ins" that state and local governments have provided primarily to transplant auto companies. Significant growth in taxpayer subsidized new auto manufacturing capacity – in the name of jobs – has demonstrated the consequences of an incoherent national industrial policy over the last 25 years. It should not go unnoticed that Senator Bob Corker, as mayor of Chattanooga, probably played a significant role in marshalling over $0.5 Billion Dollars in incentives to have a foreign automaker, VW, build a plant in Chattanooga – all in the name of 2000 plus automaker jobs in Tennessee.
The biggest paradox of so-called “free market capitalism” is that the market is NOT free of obligations and consequences. If one looks at any area where there have been incentives to grow markets like, automotive manufacturing, housing, and retail, - one can see an explosion of overcapacity that has lead to economic breakdowns for the constituents in those markets.
For many years, many have assumed that the lack of a coherent economic plan is a plan. The lack of a real US economic plan does not work in the context of foreign countries that have robust economic strategies.
Refer to this article: www.businessweek.com/m...
]]> http://seekingalpha.com/article/110600-doubling-up-on-losses-with-taxpayer-dollars?source=feed#comment-330137 330137 Mon, 15 Dec 2008 14:00:38 -0500 http://seekingalpha.com/article/110600-doubling-up-on-losses-with-taxpayer-dollars?source=feed#comment-328887 328887 Sun, 14 Dec 2008 08:58:25 -0500 http://seekingalpha.com/article/106668-four-commonsense-clues-to-a-genuine-market-bottom?source=feed#comment-321832 321832 Fri, 05 Dec 2008 13:09:47 -0500 http://seekingalpha.com/article/109063-when-a-government-loses-its-principles?source=feed#comment-321226 321226 Thu, 04 Dec 2008 21:21:49 -0500
Government Principles]]> http://seekingalpha.com/article/109063-when-a-government-loses-its-principles?source=feed#comment-320829 320829 Thu, 04 Dec 2008 11:54:17 -0500
The Supreme Court ruled that unions and the minimum wage were unconstitutional.

The work week was ten hours a day, six days a week. Child labor was common and laws against it almost non-existent.

There were no pensions and men worked until they couldn't work anymore. Less than 15% of women worked outside the home.

There was virtually no regulation of corporations and big corporations used every means possible to strangle smaller businesses. Social Darwinism was the rule and the government did virtually nothing to regulate this process of forming what were called "trusts" (monopolies.)

Upton Sinclaiir and Ida Turnbull wrote books which described this process in detail and helped create a strong socialist party in the early part of the twentieth century but socialism was crushed with the help of the army and other government institutions.

The Federal Reserve did not exist.

America was on the gold standard which meant that the money supply was tied to the amount of gold circulating in the world. During the last twenty years of the 19th century this caused mild deflation because there were no new gold fields and so the money supply could not expand. When gold was discovered in South Africa, Alaska and other places in the last years of the 19th century the money supply suddenly increased which caused inflation for about ten years into the start of the 20th century.

In the panic of 1907 the stock market lost 30% of its value in two weeks which began the process of very mild reform but which ended with the jailing of Eugene Debs, the leader of the socialist party, who obtained almost 6% of the vote for the president during the 1912 election. (He got 3% of the presidential vote in 1920 even though he ran while he was in prison.)

After the American "victory" in World War I, reforms took a back seat to the economy of the Roaring Twenties whose excesses precipitated the Great Depression.

This is a partial history, up to the 1930s, of the development of the American oligopoly economy of today where approximately 1/2 of 1% of the population controls about 40% of the wealth in America and the "bottom" 80% controls less than 10% of the wealth.

By no stretch of the imagination can you describe America as a socialist government today, or if it is, it is the most ineffective socialist government in history. (1/2 of 1% of the American population own 40% of the wealth and 80% own less than 10% of the wealth?)]]> http://seekingalpha.com/article/109063-when-a-government-loses-its-principles?source=feed#comment-320357 320357 Wed, 03 Dec 2008 20:34:01 -0500 http://seekingalpha.com/article/109063-when-a-government-loses-its-principles?source=feed#comment-320115 320115 Wed, 03 Dec 2008 15:01:37 -0500 http://seekingalpha.com/article/107489-market-rallies-on-geithner-s-appointment-why?source=feed#comment-313821 313821 Mon, 24 Nov 2008 12:57:19 -0500 After two big down days the market was aching for an excuse to get some back.]]> http://seekingalpha.com/article/107489-market-rallies-on-geithner-s-appointment-why?source=feed#comment-313752 313752 Mon, 24 Nov 2008 12:04:20 -0500
As you say, the appointment hasn't really changed anything. And the $700 billion stimulus package being bruited about only confirms that the Obama (our Hugo Chaves el norte) braintrust doesn't have a clue either (what do you expect, they're Keynsians too). The underlying problems haven't disappeared and aren't being addressed. And they really exist, they aren't just a lack of confidence, a figment of the imagination.

So there will be a relief rally as people hope that things are going to go back to the way they were. Unfortunately, that can't last long term, because reality is asking for payout. And it only accepts cash on the barrelhead. And there isn't any. About 3 trillion dollars of value has evaporated in the US economy. Who's going to pay? The answer seems to be our descendants and international central banks.]]>