New owners of eBaum's World fire ebaum and his staff(blog.ebaum.tv)
blog.ebaum.tv
New owners of eBaum's World fire ebaum and his staff
http://blog.ebaum.tv/2009/01/welcome.html
70 comments
eBaum has a reputation for plagiarism and copyright infringement-- what goes around comes around I guess.
Yeah, I would have more sympathy if it was someone else. It sounds like they were just tossed out on the street. I do find it somewhat ironic that Eric accused the new C.E.O. of basically stealing some of his personal computer files when he took all the company's computers without letting staff remove files.
Link to description of eviction:http://blog.ebaum.tv/2009/01/so-this-is-how-it-all-went-down...
Personal files shouldn't be on a company computer, simple as. I know ebaum's situation is slightly different being a startup and all, however in reality there should never be personal files on a company computer even if you own the company.
I guess our songs reached the heavens!
http://www.albinoblacksheep.com/flash/ebaumsworld
"Once upon a time, upon the internet, There was a guuyyyy. A very deeply flawed man, They called him Eric Bauman. He was a total asshole, And nobody knows why."
http://www.albinoblacksheep.com/flash/ebaumsworld
"Once upon a time, upon the internet, There was a guuyyyy. A very deeply flawed man, They called him Eric Bauman. He was a total asshole, And nobody knows why."
In the past couple of years their site format changed and they began to look more like a break.com.
Does anyone know how much actual content was stolen? I'm wondering why someone would pay a minimum of 15 million in cash to acquire a company where most of the property has been stolen. It looks like the legal penalties have been basically inconsequential for Eric.It also looks like HandHeld Entertainment has a good chance of keeping the content/stealing, but if that is what they plan on doing, I really question their ethics.
You may or may not like eBaum. But I think his new company will prevail in the long run. The modern worlds companies are extremely different from an old taylorism-ideology. You need the right people. Now eBaum is just going to rebuild the new sites in a couple of days, which is easy since they've done it before. They will probably make it better as well. They know how to gather content (legality of this content i'll rather not comment on).
The more I read about it, the less I am convinced that capitalism is all ponies and manna from heaven, like some here believe.
And it's close to its end, anyway, at least as we know it. No, I am not some raving conspiracy theorist. Automation and innovation almost guarantee that the world in 100 years will look drastically different than it does now.
And it's close to its end, anyway, at least as we know it. No, I am not some raving conspiracy theorist. Automation and innovation almost guarantee that the world in 100 years will look drastically different than it does now.
So Eric Bauman makes a site that profits from stealing other people's content. A song is written insulting him. An entire website blames their mayhem on him in revenge. He is caught altering watermarks and removing citations. He gets enough money to buy an apartment building and sponsor a boxer. His father writes insulting emails. Then suddenly another shady company buys him out and ruins his company, and it's proof that capitalism is bad? On the contrary. This is excellent evidence that the system regulates itself.
Except, I'd think, for the bit where Eric Bauman makes even more money in the sale and faces no charges for a decade of illegal business that funneled capital away from the creators who deserved it.
Dear lord, I think I just gave myself enough cognitive dissonance to stop using Bittorrent for hours.
But my point is that Bauman hasn't really repaid his debt to society. He's been shamed, and a lot of us are glad for that, but only by yet another corporate raider who will likely not redeem Ebaum's World the way College Humor redeemed itself after the IAC purchase.
Dear lord, I think I just gave myself enough cognitive dissonance to stop using Bittorrent for hours.
But my point is that Bauman hasn't really repaid his debt to society. He's been shamed, and a lot of us are glad for that, but only by yet another corporate raider who will likely not redeem Ebaum's World the way College Humor redeemed itself after the IAC purchase.
With Bittorrent and the like, your usual garden variety piracy, you at least know who you're stealing from and you know that everyone involved is simply supplying bandwidth, information alone, and that no money is changing hands. If at any point in time you prefer to purchase a legitimate copy of what you have obtained, you are free to do so, and many people often do.
What Ebaum did was claim the content as their own and act as a gateway to it, in effect making a buck off of the piracy of others. Since the original creator is no longer known, there's no way to provide compensation even if you want to.
What Ebaum did was claim the content as their own and act as a gateway to it, in effect making a buck off of the piracy of others. Since the original creator is no longer known, there's no way to provide compensation even if you want to.
You cannot steal anything with Bittorrent. Stealing necessarily involves the previous owner being a previous owner, but Bittorrent and other copying methods don't remove the item from the owner.
Refusing to let someone get their files from a computer is more like stealing (though since the computer itself is rightfully owned by the new owners of ebaumsworld, it's certainly arguable that it's just rude, not stealing). A file is part of the computer it's on.
Refusing to let someone get their files from a computer is more like stealing (though since the computer itself is rightfully owned by the new owners of ebaumsworld, it's certainly arguable that it's just rude, not stealing). A file is part of the computer it's on.
Downloading a file with bittorrent (lets assume a illegal one) is copyright infringement, which is illegal, and still a crime. One issue is that most copyright infringement cases these days are civil rather than criminal, but the criminal proceedings do exist.
I thought it was the other way round... If you ask me for a copy of Serenity, and i give it to you, then I have infringed on universal studio's copyright. You however have done nothing wrong, because unless you broke into my computer, you would be unable to make a copy without my consent.
Your way makes the whole internet ... broken. anybody can ask for anything, but the guy in control of the resource does not have to honor the request.
Your way makes the whole internet ... broken. anybody can ask for anything, but the guy in control of the resource does not have to honor the request.
I should clarify: technically this is the case. However, it is technically illegal to purchase/receive stolen goods (and you can't really argue that you were under the impression that torrented files were legit, at least for the most common torrents).
I oversimplified because it is tiresome hearing the "But it's not stealing because you don't deprive them of anything" argument.
I oversimplified because it is tiresome hearing the "But it's not stealing because you don't deprive them of anything" argument.
[deleted]
I'm not arguing that it's not copyright infringement. I'm arguing that it's not theft.
No, that whole decade bit was pretty icky. But my point was, this wasn't a nice guy getting completely screwed by a corporation. It's a slimy corporation backstabbing a slimy guy.
The initial bit... I think it would have regulated itself if somebody'd brought publicity to the people getting ripped off and made lawsuits a primary goal. I was always surprised Lowtax from Something Awful never thought it worth it to declare copyright on his Photoshop Phridays and sue Bauman until he stopped.
The initial bit... I think it would have regulated itself if somebody'd brought publicity to the people getting ripped off and made lawsuits a primary goal. I was always surprised Lowtax from Something Awful never thought it worth it to declare copyright on his Photoshop Phridays and sue Bauman until he stopped.
Punishing people for breaking the law is the role of Government- not business. This is not an example of failed capitalism, but of failed government.
[deleted]
"This is excellent evidence that the system regulates itself."
As it regulated itself with the current financial and economic crisis?
Like AIG regulated itself?
Like Lehman Brothers, Bear Stearns, et al.?
As it regulated itself with the current financial and economic crisis?
Like AIG regulated itself?
Like Lehman Brothers, Bear Stearns, et al.?
The system was trying to regulate itself. Thats why the economic crisis is happening. The companies that are in trouble are ones that can not be maintained that either need to restructure them selves or die. In the infinite wisdom of our leaders they decided to stray from the theory of capitalism and interfere.
Everyone likes to think that capitalism means that everything is happy daisy, but its not. If things go wrong in capitalism, then life can get hard but it will eventually self correct if you allow it.
Everyone likes to think that capitalism means that everything is happy daisy, but its not. If things go wrong in capitalism, then life can get hard but it will eventually self correct if you allow it.
It's regulating itself like a poorly built skyscraper that is being regulated by gravity: collapsing. We have rules about how to build skyscrapers to keep people from getting hurt. Why not the economy? Take what works, throw out what hurts.
There has to be an incentive for people to make money, but it should be ok if it's required to be within a set of guidelines. Unfettered capitalism builds an unstable system. Unstable is bad (again, think skyscraper).
Certainly, economists must have a set of rules or principles that apply here. It would be some equation with a bunch of variable coefficients. Under some values of those coefficients, the equation would have an approximate solution that is unstable, like an exponential term with an exponent that can swing from being positive to negative and back. The job of "regulations" would be to limit these coefficients.
They must have that sort of thing, right? I mean, what the fuck do they do all day?
There has to be an incentive for people to make money, but it should be ok if it's required to be within a set of guidelines. Unfettered capitalism builds an unstable system. Unstable is bad (again, think skyscraper).
Certainly, economists must have a set of rules or principles that apply here. It would be some equation with a bunch of variable coefficients. Under some values of those coefficients, the equation would have an approximate solution that is unstable, like an exponential term with an exponent that can swing from being positive to negative and back. The job of "regulations" would be to limit these coefficients.
They must have that sort of thing, right? I mean, what the fuck do they do all day?
Yep, you would think so.
But the economy is mind-bogglingly complex and nuanced, full of billions of actors who act rationally and irrationally. Lately we have computer systems thrown into the mix that move billions of dollars around without a human decision involved.
The one thing economists can say is that people usually act in their own best interests. If there is a loophole to be found, people will find it. However smart the person coming up with the rules might be, those billions of people, due to the powers of chaos and sheer numbers, will always be smarter. You can't engineer billions of people like you would a skyscraper.
The logical conclusion here is to that simple systems that are easy to understand (and likewise easy to understand how to game) are better than complex systems that still get gamed but nobody can easily figure out why.
However there is a second camp that says that the economy is like a big science experiment: pull a rope here and see what happens over there. Sure -- things might not work as expected, but somebody has to be in charge and that's how science experiments work. After all, as you pointed out, just how difficult can it be? What do those guys do all day?
The problem is that the social engineering camp always seems to have the same problem as the laissez-faire camp -- there have been panics (recessions) for as far back as we have records. So policy doesn't seem to matter that much (or if it does, we haven't hit the magic combination yet). In fact, because of the points in the first two paragraphs here, there's good evidence that the more we muck around with the economy, the worse we actually make it. There is a large and growing faction of economists that believe that the actions of the Federal Reserve (and to some extent Hoover and FDR) made the panic of 1929 into a full-blown depression -- turned something that would have taken a year or three to recover from and turned it into the biggest panic the country has ever seen.
So no, economics are chaotic, not Newtonian. the laws that apply are myriad, complex, and currently non-understandable -- and they apply at the individual rather than system level. That's why economics are so much fun (or suck so much, depending on your viewpoint.)
Hey -- if it were easy, everybody would be doing it.
But the economy is mind-bogglingly complex and nuanced, full of billions of actors who act rationally and irrationally. Lately we have computer systems thrown into the mix that move billions of dollars around without a human decision involved.
The one thing economists can say is that people usually act in their own best interests. If there is a loophole to be found, people will find it. However smart the person coming up with the rules might be, those billions of people, due to the powers of chaos and sheer numbers, will always be smarter. You can't engineer billions of people like you would a skyscraper.
The logical conclusion here is to that simple systems that are easy to understand (and likewise easy to understand how to game) are better than complex systems that still get gamed but nobody can easily figure out why.
However there is a second camp that says that the economy is like a big science experiment: pull a rope here and see what happens over there. Sure -- things might not work as expected, but somebody has to be in charge and that's how science experiments work. After all, as you pointed out, just how difficult can it be? What do those guys do all day?
The problem is that the social engineering camp always seems to have the same problem as the laissez-faire camp -- there have been panics (recessions) for as far back as we have records. So policy doesn't seem to matter that much (or if it does, we haven't hit the magic combination yet). In fact, because of the points in the first two paragraphs here, there's good evidence that the more we muck around with the economy, the worse we actually make it. There is a large and growing faction of economists that believe that the actions of the Federal Reserve (and to some extent Hoover and FDR) made the panic of 1929 into a full-blown depression -- turned something that would have taken a year or three to recover from and turned it into the biggest panic the country has ever seen.
So no, economics are chaotic, not Newtonian. the laws that apply are myriad, complex, and currently non-understandable -- and they apply at the individual rather than system level. That's why economics are so much fun (or suck so much, depending on your viewpoint.)
Hey -- if it were easy, everybody would be doing it.
"economics are chaotic, not Newtonian..." This is hugely important. First, there never will be a set of equations, that given a gazillion variables will pump out a usable long term economic forecast, but the reliance on faulty models will exacerbate the risk. Case in point: nearly all the players in the derivatives markets used the Value-at-risk model to price the riskd of their derivatives. Guess what, it was wrong, and it was so wrong that last year all the companies tanked, not just one. It was wrong because it couldn't handle the psychology of panic.
Second, the Newtonian fallacy that every effect has a direct cause, leads politicians and economists to rely on flawed models like VAR and misguided social programs where the belief is that, if you tweak the cause, the desired effect will follow.
Second, the Newtonian fallacy that every effect has a direct cause, leads politicians and economists to rely on flawed models like VAR and misguided social programs where the belief is that, if you tweak the cause, the desired effect will follow.
The one thing economists can say is that people usually act in their own best interests.
Actually, it appears that things are too complex for even this to be true. They may try, but it's entirely conceivable that they don't understand what is in their best interest and what endangers their future.
I think I prefer to think of what I am pondering as Economic engineering rather than social engineering. It seems like a very faith-based discipline, rather than one that formulates hypotheses based on evidence:
There is a large and growing faction of economists that believe that the actions of the Federal Reserve (and to some extent Hoover and FDR) made the panic of 1929 into a full-blown depression
But there is also emerging talk that Jimmy Carter prevented a global disaster like the one we are facing now. Neither claim is falsifiable, so not worth much mental energy to consider. Faith-based.
I think that is why I was so impressed with Greenspan's testimony before Congress where he basically said he felt like the underlying principles on which he based his understanding of the economy were incorrect (he specifically mentioned the one you did about acting in our best interest). Here was a guy in the field who was actually looking at evidence, and trying to learn. I don't know if he's correct or not, I'm no economist. I'm griping about the methods, not the principles themselves.
Anyway, thanks for reading my rant.
Actually, it appears that things are too complex for even this to be true. They may try, but it's entirely conceivable that they don't understand what is in their best interest and what endangers their future.
I think I prefer to think of what I am pondering as Economic engineering rather than social engineering. It seems like a very faith-based discipline, rather than one that formulates hypotheses based on evidence:
There is a large and growing faction of economists that believe that the actions of the Federal Reserve (and to some extent Hoover and FDR) made the panic of 1929 into a full-blown depression
But there is also emerging talk that Jimmy Carter prevented a global disaster like the one we are facing now. Neither claim is falsifiable, so not worth much mental energy to consider. Faith-based.
I think that is why I was so impressed with Greenspan's testimony before Congress where he basically said he felt like the underlying principles on which he based his understanding of the economy were incorrect (he specifically mentioned the one you did about acting in our best interest). Here was a guy in the field who was actually looking at evidence, and trying to learn. I don't know if he's correct or not, I'm no economist. I'm griping about the methods, not the principles themselves.
Anyway, thanks for reading my rant.
First, nice rant.
Second -- agreed. People act in what they perceive to be their best interests. We initially made the mistake of assuming this was what was actually in their best interests, but that seems more doubtful. (Unless acting strictly based on perception of best interests is the optimal condition. Then we're back to square one.)
Third -- agreed. It's to some degree faith-based. Climatology is faith-based as well, and for the same reasons. There are simply too many variables and the system is simply too huge and dynamic to be Newtonian. You get a bunch of smart guys, you make a bunch of models, and you take measurements, all the time having some "group consensus" that has as much to do with science as glow-in-the-dark watches have to do with nuclear propulsion.
I've slung some code for Greenspan and the FRB BOG (Board of Governors). The people there are all highly professional and tend to focus much more on facts than theories. But even then, in my opinion, there's no science going on. It's a lot of educated guesswork.
I wouldn't give up on the thought experiments such as what the Fed did during the Great Depression or what Carter might or might not have done. Thought experiments are powerful tools, and can lead to advances in science. To the degree that faith encourages creative explanations of what we don't know, it's a good thing. To the degree that it shuts out alternative answers, it's an obstacle. That's true in a lot of areas, not just economics.
Second -- agreed. People act in what they perceive to be their best interests. We initially made the mistake of assuming this was what was actually in their best interests, but that seems more doubtful. (Unless acting strictly based on perception of best interests is the optimal condition. Then we're back to square one.)
Third -- agreed. It's to some degree faith-based. Climatology is faith-based as well, and for the same reasons. There are simply too many variables and the system is simply too huge and dynamic to be Newtonian. You get a bunch of smart guys, you make a bunch of models, and you take measurements, all the time having some "group consensus" that has as much to do with science as glow-in-the-dark watches have to do with nuclear propulsion.
I've slung some code for Greenspan and the FRB BOG (Board of Governors). The people there are all highly professional and tend to focus much more on facts than theories. But even then, in my opinion, there's no science going on. It's a lot of educated guesswork.
I wouldn't give up on the thought experiments such as what the Fed did during the Great Depression or what Carter might or might not have done. Thought experiments are powerful tools, and can lead to advances in science. To the degree that faith encourages creative explanations of what we don't know, it's a good thing. To the degree that it shuts out alternative answers, it's an obstacle. That's true in a lot of areas, not just economics.
>n fact, because of the points in the first two paragraphs here, there's good evidence that the more we muck around with the economy, the worse we actually make it. There is a large and growing faction of economists that believe that the actions of the Federal Reserve (and to some extent Hoover and FDR) made the panic of 1929 into a full-blown depression -- turned something that would have taken a year or three to recover from and turned it into the biggest panic the country has ever seen.
That's the Austrian school of economics my friend, and in terms of "growing field" there's a lot of internet libertarians and the like that are "growing" into the field, with Ron Paul as their champion of the anti-FED.
However, amongst actual economists, the field isn't taken very seriously, because of many of its adherents semantic arguments (re-defining "inflation" outside of the standard scope, to make their argument) and its ability to ignore lots of contradicting reality. (Like, the fact that no, the Great Depression wouldn't have ended quickly, because Deficit Spending != More taxes, and our debt ratio after WWII was MULTIPLE times our GDP, and yet, our industry was booming.)
That's the Austrian school of economics my friend, and in terms of "growing field" there's a lot of internet libertarians and the like that are "growing" into the field, with Ron Paul as their champion of the anti-FED.
However, amongst actual economists, the field isn't taken very seriously, because of many of its adherents semantic arguments (re-defining "inflation" outside of the standard scope, to make their argument) and its ability to ignore lots of contradicting reality. (Like, the fact that no, the Great Depression wouldn't have ended quickly, because Deficit Spending != More taxes, and our debt ratio after WWII was MULTIPLE times our GDP, and yet, our industry was booming.)
A building is intrinsically stable. I mean that in the physics sense; if the building displaces itself one centimeter to the left, the forces in the building pull it back. No part of it is intrinsically unstable.
An economy has a large number of intrinsically unstable parts. As they displace from the "norm", they will displace even further. For example, the mere fact of a commodity's price going up can cause it to go up further as others react. This is intrinsically unstable.
An unstable system can not run like a stable system. Jerks are mathematically inevitable. The only way to prevent it is to do one of two things: Remove all such things from the system, or create an instantaneous counter force for each of these things. Neither is possible economically. The second sounds appealing, but the thing is that it has to be instantaneous to work, and completely (inhumanly!) accurate, or it becomes simply one more destabilizing force.
You can see this even in economies with no human interaction; this is the source of nature's constant ebb and flow.
The only thing you can do is make things worse by convincing people that you can stop the ebb and flow of the economy, so they don't prepare, then the storm comes anyhow and is all the worse for people not being prepared.
An economy has a large number of intrinsically unstable parts. As they displace from the "norm", they will displace even further. For example, the mere fact of a commodity's price going up can cause it to go up further as others react. This is intrinsically unstable.
An unstable system can not run like a stable system. Jerks are mathematically inevitable. The only way to prevent it is to do one of two things: Remove all such things from the system, or create an instantaneous counter force for each of these things. Neither is possible economically. The second sounds appealing, but the thing is that it has to be instantaneous to work, and completely (inhumanly!) accurate, or it becomes simply one more destabilizing force.
You can see this even in economies with no human interaction; this is the source of nature's constant ebb and flow.
The only thing you can do is make things worse by convincing people that you can stop the ebb and flow of the economy, so they don't prepare, then the storm comes anyhow and is all the worse for people not being prepared.
A building is intrinsically stable. [...] if the building displaces itself one centimeter to the left, the forces in the building pull it back. No part of it is intrinsically unstable.
http://query.nytimes.com/gst/abstract.html?res=9A03EFDA1F3BE...
January 4, 1914, Sunday [...]
Several of New York City's skyscrapers are away out of plumb and have a tendency to emulate the famous leaning tower of Pisa according to the engineering department of the Building Bureau.
http://query.nytimes.com/gst/abstract.html?res=9A03EFDA1F3BE...
January 4, 1914, Sunday [...]
Several of New York City's skyscrapers are away out of plumb and have a tendency to emulate the famous leaning tower of Pisa according to the engineering department of the Building Bureau.
The "out-of-plumb" is their set-point then. No law of nature says buildings have to be straight up. If what I described didn't happen, they'd fall over, so therefore it must happen.
To whomever thought they needed to downmod that, I recommend a study (or review) of elementary static Newtonian physics. I'm hardly making stuff up, this is Physics 101. My comment was deliberately drawn in parallel to the discussion of normal force that everyone should get when they first forget to include normal force in their force diagram, but remember gravity; if that was true, the object would fall through the table (or whatever surface), therefore clearly there is a normal force. If the forces on a building didn't stabilize it, it would therefore fall over. It sounds simple when you say it, but it's not so simple the first ten times you hand in your force diagram and get a big red mark on it, until you learn.
(Looking at the downmod pattern, though, there's someone who isn't liking the idea that regulation may not be perfect, and expressing that with downmods. Interestingly, my real point is that it can't be perfect for mathematical reasons, which is actually a completely different argument from whether or not it can improve things. But you do need to set out from a policy perspective with the goal of improving, not perfecting, because plans based on perfecting things always cause more trouble when they go wrong. The plan has no slack left over.)
(Looking at the downmod pattern, though, there's someone who isn't liking the idea that regulation may not be perfect, and expressing that with downmods. Interestingly, my real point is that it can't be perfect for mathematical reasons, which is actually a completely different argument from whether or not it can improve things. But you do need to set out from a policy perspective with the goal of improving, not perfecting, because plans based on perfecting things always cause more trouble when they go wrong. The plan has no slack left over.)
But they are in fact stable. Just the equilibrium point isn't quite where the engineers intended.
> It's regulating itself like a poorly built skyscraper that is being regulated by gravity: collapsing. We have rules about how to build skyscrapers to keep people from getting hurt. Why not the economy? Take what works, throw out what hurts.
Since much of the problem was caused by regulation ("encouraging" bogus loans, tax preferences for fannie mae investments, "mark to market" on illiquid assets, etc), faith in regulation seems misplaced.
You don't get to assume "take what works, throw out what hurts" because regulatory capture always happens.
I note that the new treasury secretary didn't bother to pay SSI despite being reimbursed for it with a separate payment and signing an acknowledgement of same, the new HUD secretary didn't bother to pay taxes on "in kind" payments, and top members of the senate committee that regulates banks and mortgages still won't talk about the sweetheart mortgages that they got.
"Regulation" gives us bailouts. It results in socialized risk. (Which, in some sense, is only fair. If govt is going to impose rules, why shouldn't govt pay for the consequences.)
Since much of the problem was caused by regulation ("encouraging" bogus loans, tax preferences for fannie mae investments, "mark to market" on illiquid assets, etc), faith in regulation seems misplaced.
You don't get to assume "take what works, throw out what hurts" because regulatory capture always happens.
I note that the new treasury secretary didn't bother to pay SSI despite being reimbursed for it with a separate payment and signing an acknowledgement of same, the new HUD secretary didn't bother to pay taxes on "in kind" payments, and top members of the senate committee that regulates banks and mortgages still won't talk about the sweetheart mortgages that they got.
"Regulation" gives us bailouts. It results in socialized risk. (Which, in some sense, is only fair. If govt is going to impose rules, why shouldn't govt pay for the consequences.)
the new treasury secretary didn't bother to pay SSI [...] the new HUD secretary didn't bother to pay taxes on "in kind" payments
What would that have to do with economic policy?
What would that have to do with economic policy?
The point is that regulators are human and humans don't have the properties assumed by the "regulation will protect us" theory. If a system only works when some of the components are made of unobtanium, the system doesn't work.
The current "stimulus" package is a great example. Well over half is just pumping up budgets for existing programs. Does anyone believe that those "enhanced" budgets will not become permanent?
Govt regulation also reduces diversity. It says that everyone pretty much has to behave the same way. We know how that works out.
Govt regulation is also political in the worst sense. Wells Fargo took a huge hit when it stayed out of the subprime mortgages. Regulators refused to let WF enage in unrelated activities (acquisitions, opening branches, etc.)because WF didn't "play ball", activities that said regulators let cooperative institutions do.
Note that regulators don't take the hit.
The current "stimulus" package is a great example. Well over half is just pumping up budgets for existing programs. Does anyone believe that those "enhanced" budgets will not become permanent?
Govt regulation also reduces diversity. It says that everyone pretty much has to behave the same way. We know how that works out.
Govt regulation is also political in the worst sense. Wells Fargo took a huge hit when it stayed out of the subprime mortgages. Regulators refused to let WF enage in unrelated activities (acquisitions, opening branches, etc.)because WF didn't "play ball", activities that said regulators let cooperative institutions do.
Note that regulators don't take the hit.
>Govt regulation also reduces diversity. It says that everyone pretty much has to behave the same way. We know how that works out.
Um, we get Food and Drugs that are safe? Drinking water that's actually drinkable and not full of stomach parasites and Cholera?
We get stable deposit banks? Notice that regional banks like BB&T, United Bank, and PNC -- non-investment banks, didn't engage in predatory lending. Their growth was stunted during the housing boom, but their customer's deposits are safe, the banks are stable, and they're in no need of a bail out. And again, due to regulation and FDIC, your money is much safer than pre-Depression era banks.
>Govt regulation is also political in the worst sense. Wells Fargo took a huge hit when it stayed out of the subprime mortgages. Regulators refused to let WF enage in unrelated activities (acquisitions, opening branches, etc.)because WF didn't "play ball", activities that said regulators let cooperative institutions do. Note that regulators don't take the hit.
I'd like to see some URLs, because (no offense) you're either being too concise or babbling non-sense. I'd like to read up more on it before concluding "regulation == ultra bad" simply from your paragraph.
Um, we get Food and Drugs that are safe? Drinking water that's actually drinkable and not full of stomach parasites and Cholera?
We get stable deposit banks? Notice that regional banks like BB&T, United Bank, and PNC -- non-investment banks, didn't engage in predatory lending. Their growth was stunted during the housing boom, but their customer's deposits are safe, the banks are stable, and they're in no need of a bail out. And again, due to regulation and FDIC, your money is much safer than pre-Depression era banks.
>Govt regulation is also political in the worst sense. Wells Fargo took a huge hit when it stayed out of the subprime mortgages. Regulators refused to let WF enage in unrelated activities (acquisitions, opening branches, etc.)because WF didn't "play ball", activities that said regulators let cooperative institutions do. Note that regulators don't take the hit.
I'd like to see some URLs, because (no offense) you're either being too concise or babbling non-sense. I'd like to read up more on it before concluding "regulation == ultra bad" simply from your paragraph.
> we get Food and Drugs that are safe?
Nope. We get blockbuster drugs, after a long delay, and that's about it. As to their safety....
We're not seeing new antibiotics.
Feel free to explain why Viagra is more profitable than a new antibiotic. (Profit = revenues - costs, so the argument should consider both revenues and costs.)
> Notice that regional banks like BB&T, United Bank, and PNC -- non-investment banks, didn't engage in predatory lending. Their growth was stunted during the housing boom
Their growth was stunted by govt action because they weren't meeting their "lend to folks who can't pay back" quota.
> And again, due to regulation and FDIC, your money is much safer than pre-Depression era banks.
Huh? Somewhere north of $2 Trillion is being pissed away because of govt regulatory failures and you think that my money is safe?
>>Govt regulation is also political in the worst sense. Wells Fargo took a huge hit when it stayed out of the subprime mortgages. Regulators refused to let WF enage in unrelated activities (acquisitions, opening branches, etc.)because WF didn't "play ball", activities that said regulators let cooperative institutions do. Note that regulators don't take the hit.
> I'd like to see some URLs, because (no offense) you're either being too concise or babbling non-sense.
http://www.tradingmarkets.com/.site/news/Stock%20News/192184...
The "Community Reinvestment Act" is code for "subprime loans".
Nope. We get blockbuster drugs, after a long delay, and that's about it. As to their safety....
We're not seeing new antibiotics.
Feel free to explain why Viagra is more profitable than a new antibiotic. (Profit = revenues - costs, so the argument should consider both revenues and costs.)
> Notice that regional banks like BB&T, United Bank, and PNC -- non-investment banks, didn't engage in predatory lending. Their growth was stunted during the housing boom
Their growth was stunted by govt action because they weren't meeting their "lend to folks who can't pay back" quota.
> And again, due to regulation and FDIC, your money is much safer than pre-Depression era banks.
Huh? Somewhere north of $2 Trillion is being pissed away because of govt regulatory failures and you think that my money is safe?
>>Govt regulation is also political in the worst sense. Wells Fargo took a huge hit when it stayed out of the subprime mortgages. Regulators refused to let WF enage in unrelated activities (acquisitions, opening branches, etc.)because WF didn't "play ball", activities that said regulators let cooperative institutions do. Note that regulators don't take the hit.
> I'd like to see some URLs, because (no offense) you're either being too concise or babbling non-sense.
http://www.tradingmarkets.com/.site/news/Stock%20News/192184...
The "Community Reinvestment Act" is code for "subprime loans".
>We're not seeing new antibiotics.
Feel free to explain why Viagra is more profitable than a new antibiotic.
Because of the same market forces you're arguing for. And we are seeing new antibiotics. SARS, for example, didn't kill everyone. Although as a side-effect, the drug used to treat SARS killed all their living bone marrow.
So developing a curative anti-biotic that germs aren't already resistant to, that doesn't box liver/kidneys/bone endocytes is a largely complex, potentially intractable problem.
The two new techniques we're seeing is RNAi "wipes" to prevent transmission of the Herpes Simplex Virus (a potentially new anti-viral drug -- and a technique to develop more anti-viral drugs), and studying Alligator Blood. Alligator's "White Blood Cells" are extremely powerful, and we may be able to synthesize proteins that are safe for humans, and yet equally powerful.
So yes, new antibiotics are here, or they're coming. They just don't warrant commercials because you're not going out to ask your doctor about the new antibiotic the same way you're going to ask about Viagra. You could argue that "nothing new is happening with battery technology? Where are all the new battery technologies?" You'd be right (nothing new worth marketing about) but you'd also be wrong (plenty of incremental improvements over the last 20 years that've dramatically changed battery performance.)
>Their growth was stunted by govt action because they weren't meeting their "lend to folks who can't pay back" quota.
Again, wrong. BB&T's CEO has stated they didn't join in the Bubble for reasons other than government regulation. Their growth was stunted in the sense that you were getting a sensible 6% return instead of the 9% you'd get with BoA or Citi. Except now your investment is still around, your competitors isn't. Its one of those "When I'm excluded from the bubble I'm losing money, but now that its over I'm raking it in" things that just happens. Its also what fuels bubbles: If your competitor is shortchanging his customers, but delivering superior returns, your customers will seek him out. So you can lose business, or your engage in short term, unsustainable thinking just like everyone else. They choose the former.
>Huh? Somewhere north of $2 Trillion is being pissed away because of govt regulatory failures and you think that my money is safe?
Again, Investment Banks != Deposit Account Banks. If you were investing in a mutual fund, there was risk. That's what you were trading higher returns for -- the risk you might lose money. If you simply dumped your money in a depository account -- something FDIC and 0% risk, then no, you couldn't have lost money. Nobody has.
And again, that's one of the reason why depository banks have been incredibly stable since the last great depression: They can survive bank runs, and even if they become insolvent, the government has $44 million of insurance money to ensure you get your money back with little hassle.
Again, after reading the URL you gave me, I think you're babbling non-sense. Yes, I get the point: The CRA allows the bank to lend to people who otherwise couldn't get loans. But the claim "Wells Fargo took a huge hit when it stayed out of the subprime mortgages. Regulators refused to let WF enage in unrelated activities (acquisitions, opening branches, etc.)because WF didn't "play ball", activities that said regulators let cooperative institutions do." is NOT substantiated by the article you linked. More HOW and WHY, less WHAT, please.
Because of the same market forces you're arguing for. And we are seeing new antibiotics. SARS, for example, didn't kill everyone. Although as a side-effect, the drug used to treat SARS killed all their living bone marrow.
So developing a curative anti-biotic that germs aren't already resistant to, that doesn't box liver/kidneys/bone endocytes is a largely complex, potentially intractable problem.
The two new techniques we're seeing is RNAi "wipes" to prevent transmission of the Herpes Simplex Virus (a potentially new anti-viral drug -- and a technique to develop more anti-viral drugs), and studying Alligator Blood. Alligator's "White Blood Cells" are extremely powerful, and we may be able to synthesize proteins that are safe for humans, and yet equally powerful.
So yes, new antibiotics are here, or they're coming. They just don't warrant commercials because you're not going out to ask your doctor about the new antibiotic the same way you're going to ask about Viagra. You could argue that "nothing new is happening with battery technology? Where are all the new battery technologies?" You'd be right (nothing new worth marketing about) but you'd also be wrong (plenty of incremental improvements over the last 20 years that've dramatically changed battery performance.)
>Their growth was stunted by govt action because they weren't meeting their "lend to folks who can't pay back" quota.
Again, wrong. BB&T's CEO has stated they didn't join in the Bubble for reasons other than government regulation. Their growth was stunted in the sense that you were getting a sensible 6% return instead of the 9% you'd get with BoA or Citi. Except now your investment is still around, your competitors isn't. Its one of those "When I'm excluded from the bubble I'm losing money, but now that its over I'm raking it in" things that just happens. Its also what fuels bubbles: If your competitor is shortchanging his customers, but delivering superior returns, your customers will seek him out. So you can lose business, or your engage in short term, unsustainable thinking just like everyone else. They choose the former.
>Huh? Somewhere north of $2 Trillion is being pissed away because of govt regulatory failures and you think that my money is safe?
Again, Investment Banks != Deposit Account Banks. If you were investing in a mutual fund, there was risk. That's what you were trading higher returns for -- the risk you might lose money. If you simply dumped your money in a depository account -- something FDIC and 0% risk, then no, you couldn't have lost money. Nobody has.
And again, that's one of the reason why depository banks have been incredibly stable since the last great depression: They can survive bank runs, and even if they become insolvent, the government has $44 million of insurance money to ensure you get your money back with little hassle.
Again, after reading the URL you gave me, I think you're babbling non-sense. Yes, I get the point: The CRA allows the bank to lend to people who otherwise couldn't get loans. But the claim "Wells Fargo took a huge hit when it stayed out of the subprime mortgages. Regulators refused to let WF enage in unrelated activities (acquisitions, opening branches, etc.)because WF didn't "play ball", activities that said regulators let cooperative institutions do." is NOT substantiated by the article you linked. More HOW and WHY, less WHAT, please.
>>Huh? Somewhere north of $2 Trillion is being pissed away because of govt regulatory failures and you think that my money is safe?
> Again, Investment Banks != Deposit Account Banks. If you were investing in a mutual fund, there was risk.
Who said anything about mutual funds and investments? The financial mess was in regulated institutions. We've pissed about $1 trillion into them so far and are about to pass a $1 trillion "stimulus" package.
It was the regulators who put tax incentives on banks holding Fannie and Freddie stock, which put many of them under when that govt created house of cards collapsed.
> The CRA allows the bank to lend to people who otherwise couldn't get loans.
No, that's not what the CRA does. The CRA "encourages" banks to make certain kinds of loans. Banks were free to make those loans without the encouragement but weren't, hence the "need" for a law.
The article that I linked to is one example of how the CRA is used to "encourage" banks to play ball. It gave "activists" a tool for blocking unrelated banking activity.
> Again, Investment Banks != Deposit Account Banks. If you were investing in a mutual fund, there was risk.
Who said anything about mutual funds and investments? The financial mess was in regulated institutions. We've pissed about $1 trillion into them so far and are about to pass a $1 trillion "stimulus" package.
It was the regulators who put tax incentives on banks holding Fannie and Freddie stock, which put many of them under when that govt created house of cards collapsed.
> The CRA allows the bank to lend to people who otherwise couldn't get loans.
No, that's not what the CRA does. The CRA "encourages" banks to make certain kinds of loans. Banks were free to make those loans without the encouragement but weren't, hence the "need" for a law.
The article that I linked to is one example of how the CRA is used to "encourage" banks to play ball. It gave "activists" a tool for blocking unrelated banking activity.
we are seeing new antibiotics.
Largely because of the costs of FDA regulation compliance, it costs ~$1-2 billion to develop the average new drug. http://en.wikipedia.org/wiki/Pharmaceutical_industry#The_cos...
How many potential drugs, each year, have not been developed, because of the difference between that cost and the potential cost in a zero-regulation environment? Thousands? Millions?
Largely because of the costs of FDA regulation compliance, it costs ~$1-2 billion to develop the average new drug. http://en.wikipedia.org/wiki/Pharmaceutical_industry#The_cos...
How many potential drugs, each year, have not been developed, because of the difference between that cost and the potential cost in a zero-regulation environment? Thousands? Millions?
we get [...] Drugs that are safe
Not unless one overcomes the barriers to pharmaceutical access.
Not unless one overcomes the barriers to pharmaceutical access.
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And meanwhile, what happens to the people who are bankrupted, ruined, cannot eat or get health care, while the system self-corrects?
Reasonably happy, non-malnourished people make better employees, you'll have to admit.
Reasonably happy, non-malnourished people make better employees, you'll have to admit.
Exactly; The system, left completely unregulated, will find the most efficient/optimal path, but at what cost? The optimal path may involve ruining the lives of 100 million people. The optimal path may bankrupt many countries, causing its citizens to starve to death. There is nothing wrong with reasonable regulation to ensure a certain amount of stability in life.
The system doesn't self-correct everywhere at the same time (unless there is a central bank point of failure, if you see where I'm going...), so if your company is bankrupt you can find a job elsewhere.
Mind you, people who were careful with their money and didn't believe in the pipe dream of ever increasing home equity need not worry about what's going on (well, they need to worry about what the government is doing, but that's another matter).
Mind you, people who were careful with their money and didn't believe in the pipe dream of ever increasing home equity need not worry about what's going on (well, they need to worry about what the government is doing, but that's another matter).
Um, we didn't have a central bank point of failure. We had 5 large investment banks, most of which had the intelligence to survive the first great depression.
The major problem is that the American economy had become entirely dependent on consumer spending, which, because of a lack of real wage growth among the bottom 80% led to a massive expansion and dependence on credit. When the housing bubble burst, credit went cold turkey, and many defaulted on their debt because of their inflated lifestyle.
As a result, everyone suffered. Consumers stopped spending, which lead to businesses credit lines being downgraded, leading to a halt in manufacturing and importing. The global ripples of having a force (like credit) simply disappear are obvious, just as they were right before the first great depression.
The major problem is that the American economy had become entirely dependent on consumer spending, which, because of a lack of real wage growth among the bottom 80% led to a massive expansion and dependence on credit. When the housing bubble burst, credit went cold turkey, and many defaulted on their debt because of their inflated lifestyle.
As a result, everyone suffered. Consumers stopped spending, which lead to businesses credit lines being downgraded, leading to a halt in manufacturing and importing. The global ripples of having a force (like credit) simply disappear are obvious, just as they were right before the first great depression.
Hybrid free/regulated systems like ours have all of the downsides of both approaches but none of the benefits. I do believe that the free market regulates itself, but we don't have a free market.
In a free market, there would be no bailouts. In our system, on the other hand, wall street counts on bailouts. You don't leverage your company 40 to 1 unless you believe there's a safety net. It's in vogue to believe that everyone in finance is an idiot, but they're not. They do exactly what makes business sense within the rules of the market. And our rules say: leverage yourself as much as you can. The fed will be there to bail you out if you fail.
In a free market, there would be no bailouts. In our system, on the other hand, wall street counts on bailouts. You don't leverage your company 40 to 1 unless you believe there's a safety net. It's in vogue to believe that everyone in finance is an idiot, but they're not. They do exactly what makes business sense within the rules of the market. And our rules say: leverage yourself as much as you can. The fed will be there to bail you out if you fail.
He didn't say each player would regulate itself, but that the system as a whole would regulate itself. The system did regulate the companies you mentioned--they went out of business. Unfortunately, the federal government threw the taxpayers under the bus in order to keep the system from working like it's supposed to.
Working like it was supposed to during, say, the Great Depression?
That was a likely outcome if we'd followed the prescriptions you seem to advocate above.
That was a likely outcome if we'd followed the prescriptions you seem to advocate above.
Actually none of those companies regulated themselves. The federal government took on the role.
Regulation has caused part of this crises via procyclical mark to market and capital requirements. Regulation also stipulated what kind of assets banks should have creating an enormous market in the deliberate obfuscation of risk.
What is your suggestion? Just because you create regulation doesn't cause people to want to follow it. Nor do the affects end with or necessarily include the stated goal.
Regulation has caused part of this crises via procyclical mark to market and capital requirements. Regulation also stipulated what kind of assets banks should have creating an enormous market in the deliberate obfuscation of risk.
What is your suggestion? Just because you create regulation doesn't cause people to want to follow it. Nor do the affects end with or necessarily include the stated goal.
I view it as, above all else, a failure of education.
People can't teach their children what money really is, if they themselves don't understand fiat currency and the power that the central banks have to expand and contract money supply.
People can't teach their children what money really is, if they themselves don't understand fiat currency and the power that the central banks have to expand and contract money supply.
are people still seriously thinking that this economic crises was because of greedy CEOs and capitalism?
Jesus Christ. :|
Jesus Christ. :|
I personally don't think it was caused by those things, though I am sure that there are those who do. I think the five major factors that contributed to it, in rough order of importance:
1) Too much leverage, without understanding the risks.
2) Trade imbalances causing capital flow imbalances.
3) Complete lack of regulation and lack of enforcement of existing regulation.
4) A culture of "gotta have it now."
5) Productivity surge that couldn't last.
As for greedy CEOs, many of them were non-productive parasites on the system (John Thain, etc.), but it wasn't their fault.
And as for capitalism, my observation was that it's going to change drastically, not that it was at fault.
1) Too much leverage, without understanding the risks.
2) Trade imbalances causing capital flow imbalances.
3) Complete lack of regulation and lack of enforcement of existing regulation.
4) A culture of "gotta have it now."
5) Productivity surge that couldn't last.
As for greedy CEOs, many of them were non-productive parasites on the system (John Thain, etc.), but it wasn't their fault.
And as for capitalism, my observation was that it's going to change drastically, not that it was at fault.
I think you are missing the systemic causes -- the low cost of money and its devaluation through inflation cause makes taking risks more economical (safe investments lose money). The markets are more regulated now than they've ever been.
The cause of this crises has been building for a long time, and goes back to the 70s when the united states went off the gold standard.
Additionally, there were things that happened that never happened before. For instance selling stock in financial institutions, which incentivises risk taking. This of course led to a mistake on the public's part of not realizing what they were investing in was riskier than they thought.
A culture of "gotta have it now." doesn't mean anything except that those participating in it will be poorer than those who don't, and lending to the first group is riskier than lending to the second so their interest rates should vary.
Productivity is constantly increasing, and will be increasing at faster rates. As for CEOs if they were acting wrongly then their board, or shareholders should revolt. If it's a private company then the owner, if the CEO is the owner then it's his to do what he wants with it.
The cause of this crises has been building for a long time, and goes back to the 70s when the united states went off the gold standard.
Additionally, there were things that happened that never happened before. For instance selling stock in financial institutions, which incentivises risk taking. This of course led to a mistake on the public's part of not realizing what they were investing in was riskier than they thought.
A culture of "gotta have it now." doesn't mean anything except that those participating in it will be poorer than those who don't, and lending to the first group is riskier than lending to the second so their interest rates should vary.
Productivity is constantly increasing, and will be increasing at faster rates. As for CEOs if they were acting wrongly then their board, or shareholders should revolt. If it's a private company then the owner, if the CEO is the owner then it's his to do what he wants with it.
Ah, the old gold standard canard again. Not even worth refuting these days, so I won't try.
" As for CEOs if they were acting wrongly then their board, or shareholders should revolt."
Hasn't happened yet, but it's a nice pie-in-the-sky fantasy.
I'm perplexed by many people's ideas here that the best way the system self-corrects is by effectively allowing the system to self-immolate.
Is there no better way?
"Productivity is constantly increasing, and will be increasing at faster rates."
Doubtful, but even if true, when will that productivity lead to better standards of living for all but the wealthy few? Incomes of the richest Americans more than doubled in the past eight years. Do you think they got twice as productive?
Before you answer, remember that in the financial sector at least, in the last two years, banks have lost more money than they have made in profits in the last 2,500 years of banking — even adjusted for inflation.
" As for CEOs if they were acting wrongly then their board, or shareholders should revolt."
Hasn't happened yet, but it's a nice pie-in-the-sky fantasy.
I'm perplexed by many people's ideas here that the best way the system self-corrects is by effectively allowing the system to self-immolate.
Is there no better way?
"Productivity is constantly increasing, and will be increasing at faster rates."
Doubtful, but even if true, when will that productivity lead to better standards of living for all but the wealthy few? Incomes of the richest Americans more than doubled in the past eight years. Do you think they got twice as productive?
Before you answer, remember that in the financial sector at least, in the last two years, banks have lost more money than they have made in profits in the last 2,500 years of banking — even adjusted for inflation.
Incomes of the richest Americans more than doubled in the past eight years.
Are every one of today's richest Americans the same individuals who were the richest Americans eight years ago? http://allfinancialmatters.com/2007/03/12/who-was-or-is-the-...
the people in the bottom 20% 10 years ago are in most cases not the same people that are in the bottom 20% today. This is the same misconception inherent in the argument that "minimum wage workers" have not gotten a raise in [X] number of years. It is highly unusual that people making minimum wage at one point in time are the same people that are making minimum wage many years later. The same is true for net worth, which almost as a rule takes time to acquire. Many of the people in the bottom 20% 10 years ago were just starting out or fairly young, and now, 10 years later, are much higher in the percentile rankings. I know it is true for me - I had negative net worth 10 years ago. So it is completely rational to expect that to some extent the lower tiers don’t grow as much as the upper tiers - you’re not taking the age/time factor into consideration.
I would be interested to see the same numbers broken down by age group - for example, how is the net worth of people in the bottom 20% and top 20% changing just for people in the 40-45 age group.
http://www.urban.org/Publications/406722.html
The [U.S. Department of Treasury (1992)] study uses income tax return data between 1979 and 1988, tracking the adjusted gross income of a group of households that paid income taxes in all ten years examined. The study finds that 86 percent of individuals who were in the bottom quintile in 1979 had moved up by 1988. An individual in the bottom quintile in 1979, in fact, was more likely in 1988 to be found in the top quintile than in the bottom one. [...]
Cox and Alm (1996) [...] use the PSID to examine individual incomes between 1975 and 1991 for individuals who were age 16 or over in 1975. 17 They find that only 5.1 percent of individuals in the lowest quintile in 1975 remain in that quintile in 1991, while 29 percent of such individuals are in the highest quintile in 1991.
Are every one of today's richest Americans the same individuals who were the richest Americans eight years ago? http://allfinancialmatters.com/2007/03/12/who-was-or-is-the-...
the people in the bottom 20% 10 years ago are in most cases not the same people that are in the bottom 20% today. This is the same misconception inherent in the argument that "minimum wage workers" have not gotten a raise in [X] number of years. It is highly unusual that people making minimum wage at one point in time are the same people that are making minimum wage many years later. The same is true for net worth, which almost as a rule takes time to acquire. Many of the people in the bottom 20% 10 years ago were just starting out or fairly young, and now, 10 years later, are much higher in the percentile rankings. I know it is true for me - I had negative net worth 10 years ago. So it is completely rational to expect that to some extent the lower tiers don’t grow as much as the upper tiers - you’re not taking the age/time factor into consideration.
I would be interested to see the same numbers broken down by age group - for example, how is the net worth of people in the bottom 20% and top 20% changing just for people in the 40-45 age group.
http://www.urban.org/Publications/406722.html
The [U.S. Department of Treasury (1992)] study uses income tax return data between 1979 and 1988, tracking the adjusted gross income of a group of households that paid income taxes in all ten years examined. The study finds that 86 percent of individuals who were in the bottom quintile in 1979 had moved up by 1988. An individual in the bottom quintile in 1979, in fact, was more likely in 1988 to be found in the top quintile than in the bottom one. [...]
Cox and Alm (1996) [...] use the PSID to examine individual incomes between 1975 and 1991 for individuals who were age 16 or over in 1975. 17 They find that only 5.1 percent of individuals in the lowest quintile in 1975 remain in that quintile in 1991, while 29 percent of such individuals are in the highest quintile in 1991.
System Correction:
Sure you can try to go in and fix a system, but a lot of people disagree with how you are going to do it. Central planning doesn't work due to information problems (lack of prices), and freedom issues. So any change you make to the system will be short lived, but then open up a can of worms as people are free to take risks and not worry about the downside. Second, a lot of people object to forcing people to do things at the point of a gun.
Productivity & Wage Increase I think you are missing a fundamental point, when productivity increases it is normally the result of a capital investment. The person who makes that investment is the one who profits, not normally the person whose productivity has increased. For instance if I'm making shoes, and my boss buys a machine that allows me to increase my productivity 10 fold, well he will see most of that reward while I may see a small increase in my wages. He took the risk of investing in that machine, and thus should see the reward.
2500 years of banking: As for you last post I don't know if that is true or not, how much actual money have the banks lost -- not lost for their clients, but lost themselves.
Productivity & Wage Increase I think you are missing a fundamental point, when productivity increases it is normally the result of a capital investment. The person who makes that investment is the one who profits, not normally the person whose productivity has increased. For instance if I'm making shoes, and my boss buys a machine that allows me to increase my productivity 10 fold, well he will see most of that reward while I may see a small increase in my wages. He took the risk of investing in that machine, and thus should see the reward.
2500 years of banking: As for you last post I don't know if that is true or not, how much actual money have the banks lost -- not lost for their clients, but lost themselves.
Incomes of the richest Americans more than doubled in the past eight years. Do you think they got twice as productive?
Well, lots of people are now coding in Ruby/Python/etc instead of Java/PHP/C++/etc.
(Written only mostly tongue in cheek)
Well, lots of people are now coding in Ruby/Python/etc instead of Java/PHP/C++/etc.
(Written only mostly tongue in cheek)
I would agree with most of your reasons, but for each of them you need to ask "why" until you get to the real source of the problem.
For the most part, the greediness of people is why we had such ridiculously leveraged financial securities and special-purpose vehicles etc. designed to stuff as many fistfuls of cash as possible into the pockets of those who could game the system the best.
Greed was the cause, and insane levels of leverage were the flimsy supports for this recent collapse of the financial house of cards.
Of course, that's not to say leverage is inherently bad, but in excess it clearly points the way to financial ruin.
For the most part, the greediness of people is why we had such ridiculously leveraged financial securities and special-purpose vehicles etc. designed to stuff as many fistfuls of cash as possible into the pockets of those who could game the system the best.
Greed was the cause, and insane levels of leverage were the flimsy supports for this recent collapse of the financial house of cards.
Of course, that's not to say leverage is inherently bad, but in excess it clearly points the way to financial ruin.
I agree with you. Well-stated.
And that's why I feel that even if regulation isn't perfect, and even if it sometimes is counterproductive (which it is!), it can often help to stave off such things as this.
And that's why I feel that even if regulation isn't perfect, and even if it sometimes is counterproductive (which it is!), it can often help to stave off such things as this.
Well, then just how much did regulation helped prevent this whole fiasco?
That's my whole point.
It didn't prevent it, but the lack of it sure contributed greatly to it all.
The biggest single example: the exempting of the four largest investment banks from the previous 12-to-1 leverage rules, allowing them to leverage up to 40-to-1, thus greatly exacerbating the fallout and causing further follow-on crises.
That, among many, many other things, would not have occurred without those IBs being exempted from previously-existing regulation.
Do you really believe non-regulation will be the panacea for all these ills?
Somalia is pretty unregulated. Maybe try your luck there.
It didn't prevent it, but the lack of it sure contributed greatly to it all.
The biggest single example: the exempting of the four largest investment banks from the previous 12-to-1 leverage rules, allowing them to leverage up to 40-to-1, thus greatly exacerbating the fallout and causing further follow-on crises.
That, among many, many other things, would not have occurred without those IBs being exempted from previously-existing regulation.
Do you really believe non-regulation will be the panacea for all these ills?
Somalia is pretty unregulated. Maybe try your luck there.
Companies doing risky stuff shouldn't be too surprised when they suddenly run out of good luck.
On the other hand, if I were running a company and I knew that my buddies in Washington would end up bailing me out with other people's money because I'm "too big to fail", I would be a fool not to take as much risk as I can. With state capitalism, you can have your cake and eat it.
On the other hand, if I were running a company and I knew that my buddies in Washington would end up bailing me out with other people's money because I'm "too big to fail", I would be a fool not to take as much risk as I can. With state capitalism, you can have your cake and eat it.
greedy CEOs, no, not really. they're more a byproduct, i think.
not all of capitalism, but some aspects of capitalism definitely did play into the problem, yes.
not all of capitalism, but some aspects of capitalism definitely did play into the problem, yes.
Bottom line: Eric Bauman got rich by stealing other people's content. I don't know how this provides evidence that the system regulates itself.
Of course, in a truly self-regulated system, there would be no such thing as copyright, so Eric Bauman wouldn't have been stealing in the first place.
Of course, in a truly self-regulated system, there would be no such thing as copyright, so Eric Bauman wouldn't have been stealing in the first place.
Capitalism I think is as much a necessary evil as democracy, we know it isn't perfect but we've found it to be very very hard to come up with a working alternative.
The best way to prove your point of course is to live it, and I'm very curious what proposal you have to replace capitalism. Socialism has been tried in the sovblock countries and it failed (due to greed and incompetence), so it seems that capitalism is better capable of dealing with those two human qualities.
The financial crisis - as bad as it is - is not nearly as bad as the situation that existed in the former USSR and its satellite states. China may come to some middle ground between capitalism and communism/socialism but they have some way to go before they can call themselves an open society.
What is your alternative ?
The best way to prove your point of course is to live it, and I'm very curious what proposal you have to replace capitalism. Socialism has been tried in the sovblock countries and it failed (due to greed and incompetence), so it seems that capitalism is better capable of dealing with those two human qualities.
The financial crisis - as bad as it is - is not nearly as bad as the situation that existed in the former USSR and its satellite states. China may come to some middle ground between capitalism and communism/socialism but they have some way to go before they can call themselves an open society.
What is your alternative ?
Do you even know what socialism, capitalism and communism are?
You appear to be stuck in the dogmatic anti-communist teachings that date back to the cold war.
All western countries are socialist, capitalism simply doesn't exist. There is a varying degree of socialism in the west, the US notoriously the least and its citizens suffer for it. A study showed that the UK's poor is healthier than the US's richest and pay less for the privilege. An American citizen pays twice as much as a UK citizen yet is sicker. The US does have better cancer treatment rates, but awful care for basic conditions like heart disease because you have to pay for it.
I moved to Canada and I've noticed one thing, everyone here is happier than people back in the UK and there's still free health care to boot. I would never live in the US because they don't have free health care, I'm a naturally healthy person, but I don't want to worry about falling off my ladder when I'm working.
You site the USSR, however they didn't have a financial crisis, they stopped themselves developing it's a completely different thing. The USSR was a perverted form of communism, they believed that everyone should have a job and then stopped allowing people to lose their job, this meant that when combine harvesters were becoming widespread in the west, the USSR refused because it would cost people jobs. Ironically, most of the people who would have lost their job could have been trained to fix the machines that replaced them!
Similar problems exist in the west. There was mass complaints here in Canada about the closure of a GM plant that produced 4 speed gearboxes. I found this absolutely absurd because I didn't even know 4 speeds existed, I thought they went the way of the dodo! I learnt on a 5 speed, my dad had a 6 speed and Volkswagen is bringing out a 7 speed. People wanted the plant to stay open, producing something that was nearly half as efficient as modern technology! That's exactly why the USSR failed, and exactly why the Chinese are succeeding, because the Chinese are working for the improvement of the whole and if it had to be done the government would close down entire industries.
Thankfully the GM plant is closed, sadly some people are out of their jobs but either they'll begin working in the plants producing 5/6 speeds, in a new plant producing 7 speeds or they'll move to another business.
It's like the phone companies trying to block VoIP usage. VoIP is the next step, instead of trying to block it phone companies should be embracing it, offering 'digital phone' for free when you subscribe to high-speed internet! It'd nail skype and give them great business. Thankfully our system isn't going the way of the USSR and governments are preventing phone companies from blocking VoIP traffic, meaning technology advances even if it will end up costing jobs in the short term.
If you haven't realised, you're already living in the alternative to capitalism!
You appear to be stuck in the dogmatic anti-communist teachings that date back to the cold war.
All western countries are socialist, capitalism simply doesn't exist. There is a varying degree of socialism in the west, the US notoriously the least and its citizens suffer for it. A study showed that the UK's poor is healthier than the US's richest and pay less for the privilege. An American citizen pays twice as much as a UK citizen yet is sicker. The US does have better cancer treatment rates, but awful care for basic conditions like heart disease because you have to pay for it.
I moved to Canada and I've noticed one thing, everyone here is happier than people back in the UK and there's still free health care to boot. I would never live in the US because they don't have free health care, I'm a naturally healthy person, but I don't want to worry about falling off my ladder when I'm working.
You site the USSR, however they didn't have a financial crisis, they stopped themselves developing it's a completely different thing. The USSR was a perverted form of communism, they believed that everyone should have a job and then stopped allowing people to lose their job, this meant that when combine harvesters were becoming widespread in the west, the USSR refused because it would cost people jobs. Ironically, most of the people who would have lost their job could have been trained to fix the machines that replaced them!
Similar problems exist in the west. There was mass complaints here in Canada about the closure of a GM plant that produced 4 speed gearboxes. I found this absolutely absurd because I didn't even know 4 speeds existed, I thought they went the way of the dodo! I learnt on a 5 speed, my dad had a 6 speed and Volkswagen is bringing out a 7 speed. People wanted the plant to stay open, producing something that was nearly half as efficient as modern technology! That's exactly why the USSR failed, and exactly why the Chinese are succeeding, because the Chinese are working for the improvement of the whole and if it had to be done the government would close down entire industries.
Thankfully the GM plant is closed, sadly some people are out of their jobs but either they'll begin working in the plants producing 5/6 speeds, in a new plant producing 7 speeds or they'll move to another business.
It's like the phone companies trying to block VoIP usage. VoIP is the next step, instead of trying to block it phone companies should be embracing it, offering 'digital phone' for free when you subscribe to high-speed internet! It'd nail skype and give them great business. Thankfully our system isn't going the way of the USSR and governments are preventing phone companies from blocking VoIP traffic, meaning technology advances even if it will end up costing jobs in the short term.
If you haven't realised, you're already living in the alternative to capitalism!
"Politics is the Mind-Killer" ->
http://www.overcomingbias.com/2007/02/politics_is_the.html
"Arguments are soldiers. Once you know which side you're on, you must support all arguments of that side, and attack all arguments that appear to favor the enemy side; otherwise it's like stabbing your soldiers in the back - providing aid and comfort to the enemy. People who would be level-headed about evenhandedly weighing all sides of an issue in their professional life as scientists, can suddenly turn into slogan-chanting zombies when there's a Blue or Green position on an issue."
Carry on with the discussion, but I was just in England last month, and "A study showed that the UK's poor is healthier than the US's richest and pay less for the privilege" is... ridiculous, mate. The poorest Englanders are wrecked up on cigarettes and liquor never leaves their blood supply, they're way overweight and suffer from the high prices of fresh produce due to the fact the UK is an island and they have to import so much stuff, and they suffer from the lack of sun. I'm in Bel Air, Los Angeles right now, and I assure you people are healthier here.
As for the HMS - most English people I know are split on it. Some think it works okay, some think it's a joke. Everyone has some complaints and ideas on how it could be better, and most people use it and are relatively healthy by historical standards.
http://www.overcomingbias.com/2007/02/politics_is_the.html
"Arguments are soldiers. Once you know which side you're on, you must support all arguments of that side, and attack all arguments that appear to favor the enemy side; otherwise it's like stabbing your soldiers in the back - providing aid and comfort to the enemy. People who would be level-headed about evenhandedly weighing all sides of an issue in their professional life as scientists, can suddenly turn into slogan-chanting zombies when there's a Blue or Green position on an issue."
Carry on with the discussion, but I was just in England last month, and "A study showed that the UK's poor is healthier than the US's richest and pay less for the privilege" is... ridiculous, mate. The poorest Englanders are wrecked up on cigarettes and liquor never leaves their blood supply, they're way overweight and suffer from the high prices of fresh produce due to the fact the UK is an island and they have to import so much stuff, and they suffer from the lack of sun. I'm in Bel Air, Los Angeles right now, and I assure you people are healthier here.
As for the HMS - most English people I know are split on it. Some think it works okay, some think it's a joke. Everyone has some complaints and ideas on how it could be better, and most people use it and are relatively healthy by historical standards.
Look what you started.