unclej0

What Happened to the American Dream?

Bitter experience has amply demonstrated that unregulated capitalism is inherently and painfully unstable. It is a license to cheat on a very large scale.

Regulated capitalism could work if it were properly regulated in the public interest.

Human beings are incapable, by virtue of greed, fear, and appalling incompetence, of regulating a banana republic, much less a global economy. The most greedy inmates are in charge of the asylum.

I suggest that, if a decent future is to be created, it must rely upon the automated regulation of economic activity, including taxation, monetary policy, fiscal policy, and regulations to suppress economic criminal behavior This would require the development of good (psychologically realistic) economic models and a lot of simulation, the cost of which would be relatively modest.

Why won't it happen? Well, possibly because the inmates would have to relinquish control and find some honest work.

Fannie / Freddie - What Does Treasury Know?

Politically motivated wailing is not a good substitute for problem solving. Obama may be wrong about this and that but the angry voices in the room are not helpful. He gets a passing grade for rationality in a very uncertain and troubled world.

He promised to change Washington but Washington is controlled by guys with very deep pockets. There is no certainty of success.

Why Advanced Lead-Acid Batteries Will Dominate HEV Markets

I have no data to support any choice of battery types. However, I suspect that the author is underestimating the potential of full electric vehicles. Most people drive less than 50 miles on the vast majority of days and can rent a car once or twice a year. This is not a market prediction but it warrants some consideration.

The Deteriorating Real Economy's Financial Indicators

My dear BUGGS, printing money would be just wonderful if it were not for inflation. It is the economic analog of perpetual motion.

Lets see. Assume 100,000,000 taxpayers X $200,000. That gives us

20,000,000,000,000, or, in words, twenty trillions of dollars that you have just printed. That, I suspect, will be multiplied a few times by the magic of banking and financial derivatives that hardly anyone understands.

Does anyone have an economic model to deal with that? Well, Bernanke might actually print that much and we can find out in the real world.

Charlie Gasparino: Another Crash 'Has to Happen Again'

There is no great difficulty in directing taxpayer money into more useful channels than the huge bank bonuses. The government has the power to tax incomes - so put a big league tax on the bonuses. It's fair and just to do that.

Caveat: they will fight it with all of their pr and lobbying powers.

Global Markets in Review: Despite Cheer, Risky Assets Look Weary

No doubt there are some who will thrive in the turbulent markets that seem to lie ahead. Mostly, these are people who are fairly single minded about trading.

Those who would like to look forward to a stable future while pursuing more productive lives are in jeopardy. This can be largely summed up under the platitude: the mere idea that human beings can manage a productive, humane and stable civilization flies in the face of centuries of harsh experience.

Still, we ought not give up hope. The only socio-economic systems that we can be sure will fail are the ones we have tried. There must be something better. IMHO, some aspects of market economics and some aspects of macro-economic planning will be part of it. Perhaps the macro-stability can be achieved by placing honest machines at the controls. There are too many human minds which have reached their levels of incompetence and there are too many hands just trying to game the system (any system) and politicians who are obsessed by the next election cannot be counted upon for much else.

Russian Government Set to Renege on ExxonMobil Deal. Big Surprise

That's a very human trait. It is likely to crop up in almost any setting in which you deal with an entity that's "too big to fail' or big enough to buy the Congress.

Does that concept ring a bell?

Spend, Spend, Spend - But Who Pays?

I think BARBARA BOXER had it right when she pointed out that employed people pay taxes while the unemployed must be subsidized. Therefore, when calculating the cost of the recovery package, that fact should be taken into account.

I don't have an economic model that will produce the quantitative result, but best estimates should be provided by those who do. My present, admittedly poorly informed, guess is that the recovery package is a much better deal, even with consequent inflation, than doing nothing - and that a pure tax cut is probably the worst plan because it increases the debt without improving infrastructure, education, or the development of alternative energy sources. Longer term, that is a no-brainer.

"Leaving the money with those who earned it because they know how to spend it better than the government" is so simplistic that I would classify it as demagogery. Some money must be spent for the common good.

Are luxury imports more important than recovery?

Is wasteful use of gasoline more important than recovery?

Is dead money better than recovery?

I really have no dog in this fight. I am retired, so deflation is good for me - and my time horizon is short. My chief complaint is that, while I have life and breath, stupidity, hypocrisy, and political bullcrap offend me.

Wall Street Breakfast: Must-Know News

The price of stability, as in any dynamical system, is properly designed control. Unfortunately, human beings have not yet learned to stabilize economic activity A large part of the problem is ideological. The nearly religious belief in the "invisible hand" of the market bears no relation to reality; it holds only for idealized models.

Human behavior does not exclude irrationality and cheating. Where, in the idealized model do we find monopoly, cartels, insider trading, deception, excesses of greed and fear, externalizing costs through pollution, conditions near slavery in many parts of the global labor market, etc.

Government intervention can reduce the worst offenses but governments are considerably influenced by the worst offenders. We have a lot to learn.


On Jan 02 10:01 AM JasonR wrote:

> "Investors, meanwhile, are hoping 2009 brings a turnaround, but aren't
> counting on one."
>
> Sure glad we have the Wall Street Journal to tell us investors what
> we want. Buffett seems to be the only voice of sanity in a sea full
> of weasels whining for a bailout. I, for one, don't care how the
> market performs in 2009. I am much more concerned about my government's
> intervention in the automobile, housing, banking, steel, healthcare,
> and whatever other industry I didn't think of. If all the cries for
> a bailout were dismissed at the beginning, by now we would be halfway
> out of the storm and looking forward to a full-fledged recovery.
> Americans apparently prefer stability, but stability comes at a price.
> Nothing is free.

Deere Execs on Ethanol and Commodities

The ethanol subsidy is a national disgrace.

The Next Leg of the Crisis: Unavoidable Catastrophe

I am not an economist but I am scientist enough to know that quoting von Mises or Bastiat is not a good substitute for having a decent computer model of the economy.

It is clear that our economic system is not very stable and as it hangs in the balance between inflation and deflation very careful management is needed to avoid excess in either direction. If that is Keynesianism, then it is the only sensible game in town.

Yes, disaster is possible but crying wolf without any good quantitative data is just ambient noise.

The Global Oil Scam: 50 Times Bigger than Madoff

You have offered an unjustified simplification of Adam Smith's views. There is a very relevant book review in the NY Times on how the free market fails.

www.nytimes.com/2009/1...

The observable fact is that an under regulated market invites scams and is notoriously unstable. Haven't you noticed?


On Nov 11 03:28 PM stockferret wrote:

> According to Adam Smith, in a free market each participant will try
> to maximize self-interest, and the interaction of market participants,
> leading to exchange of goods and services, enables each participant
> to be better of than when simply producing for himself/herself. He
> further said that in a free market, no regulation of any type would
> be needed to ensure that the mutually beneficial exchange of goods
> and services took place, since this "invisible hand" would guide
> market participants to trade in the most mutually beneficial manner.
>
>
> How is that working out for ya?

Marc Faber: Equities Safer than Dollars

There are plenty of culprits and you can find one in any direction you care to look. The elephant in the room is corporate money for lobbying and the venal congress that sells our birthright so cheaply. Just this week I was given to understand that the health insurance industry has for some time been legally exempt from the Sherman anti-trust act (along with major league baseball).

It seems that freedom from competition leads to big profits. I am shocked, shocked! As we have seen, the corporations will fight ferociously to avoid competing. Is that free market capitalism?

Oh yes, big agribusiness has its hand in our pockets also and most of our manufacturers have quietly folded their tents and departed for the lure of cheap labor. The treasury will pick up the tab for unemployment benefits and social services, the congressmen will continue to spend for all of their various constituencies, and the fed will create dollars out of thin air.

May I modestly suggest that there is a world of difference between prudent longer term economic stewardship and near term squabbling in unproductive ways: lying, spinning, smoke and mirrors. Obama may not be the messiah and he may have come along too late but he is the best we have had in a long time.


On Sep 30 07:39 PM TeresaE wrote:

> Nancy Pelosi has written and submitted the THREE largest single year
> budgets this country has ever seen.
>
> Clinton may have cut spending, but he still borrowed from social
> security AND raised taxes on everything and everyone (and when Bush's
> tax cuts expire, you will see why they were cut). And the SOB sold
> out our wealth generating base to a declared enemy. Which is a huge
> reason why there are no jobs now.
>
> Bush 1 was just worthless, and Reagan managed to lower taxes AND
> reduce the deficit, during a recession. Clinton couldn't do that
> in our largest ever economy.
>
> Quit picking sides and realize that in order to fix this mess, we
> first have to realize BOTH SIDES ARE AT FAULT.
>
> BOTH sides. Pointing fingers and thinking Obama is your savior is
> a prescription for our demise.

Why Economists Messed Up

"Perceptions" seems to have a good grasp of reality but not any really new insights. He is preaching to the choir.

The main feature of economics that makes it so complicated is that it is a portion of a rapidly evolving socio-economic order. Thus, we can get useful insights from many sources but not a fully usable model. Why is it rapidly evolving? Well, at least three good reasons.

1) We have not yet found any system that works, long term.
2) The facts around us, technology, population, military, political, and the availability of natural resources are changing rapidly.
3) We are a knuckle dragging, stupid, primitive species and many of us are gaming the system in our own stupid ways. Our best hope is that the leadership can hold things together long enough for science to drag us out of the current darkness. After that, perhaps we can create a smarter, better organized species and quietly shuffle off to a well earned rest.

Insulting the NY Times adds nothing to your argument.


On Sep 07 11:49 AM Alphameister wrote:

> The comment by "perceptions" is brilliant, much superior to the article
> that precipitated it. The basic problem that has led to this mess
> is the arrogant, elitist belief that economic sophistication has
> progressed to a point where super-enlightened leaders in Washington
> can eliminate the cycles that are inherent in all of human life.
> Markets are efficient only to the extent that they cycle around levels
> that tend toward rationality in the long run.
>
> Jefferson said that "a government powerful enough to give you anything
> you want is a government powerful enough to take everything you have."
> Perhaps a corollary of that is "a government big enough (and meddlesome
> enough) to moderate economic cycles and seemingly reduce risk is
> a government big and meddlesome enough to give you an eventual cycle
> that will blow your mind away (and your wealth along with it)."
>
>
> So let me add a third underlying assumption to those offered above
> by "perceptions": Markets are not always efficient, but they are
> far superior to meddlesome and incompetent governments for whom the
> long-term is defined by the next election.
>
> Anyone who would look to Paul Krugman and that rag he works for to
> provide valuable economic insights is part of the problem rather
> than part of the solution to our problems.

Will the Efficient Markets Hypothesis Survive This Crisis?

It is reasonably clear that markets are irrational. Otherwise, how could the well informed, highly educated bankers in our largest investment banks have led our economy to the brink of ruin, where it still seems to be? How could the rating services have given an AAA rating to mountains of toxic assets?

My question at this time is as follows: can the purveyors of gloom and doom among advisory services, currently Weiss and Leeb, be calling the shots as they see them or are they simply creating a self fulfilling prophesy - or both?