Wall Street Occupation

[dmarkwick 261]

If you have an iPhone and an TV bigger than ~40", you are NOT poor.

I should say the TV size is inversley proportional to the poshness of the occupants. I'd like to propose a new definition of working class, you are working class if your TV is too big for your living room :)

[st_dux 26]

Real wages are inflation adjusted wages, so it tells you how much you can buy in a given period of time. The graph is clear. Productivity has increased but those who create the goods don't get an increased share of it.

I know what real wages are. My point is that prices for most goods, particularly staple goods, have fallen over time, and they've fallen at a rate that is significantly greater than the rate that real wages have fallen. This means that workers have more money to spend on luxury items despite the fact that they're making less money. It's a net gain.

There is both objective and subjective value, you just decide to neglect the underlying mechanisms behind value and put all factors into one term. That's not science, that's a liberal dogma, because if you do it otherwise you can't justify capitalism (unless you close your eyes). Liberal economic theories are not scientific or even empiric, they have shown to be false over and over again, just because they by dogma can't analyse the subject in an unbiased and scientific way due to political considerations. Marx has showed that there is meaning behind separating and dissecting the value concept and it's been successful.

"Objective value" isn't science; it's scientism. Labor is but one of many factors that might lead to value for someone. Picking it out as special and tying the very definition of value to it is arbitrary. Something is as valuable as someone is willing to pay for it. This is logically consistent and always true. On the other hand, something that is labor- and time-intensive might turn out to be worth nothing at all, and something that is simply found, with no labor applied to it at all, might turn out to be very valuable. Value is a function of utility combined with scarcity, not a function of labor, and it is subjective by definition. Adam Smith was wrong about this, and so was Karl Marx.

That's movie/schoolbook communism, and not the point with communism. In communism there is no economy, and the concept is completely realistic seen to increased levels of automatization. Sure, thousand of years ago no one would ever have imagined the current type of society and technology. But in fact all pre-communist societies are just constituting a transient period of human history.

As long as resources are scarce (i.e., not practically unlimited) and society exists, the economy will exist also. Automatization is not enough to solve the problem of scarcity.

---------- Post added at 11:51 AM ---------- Previous post was at 10:43 AM ----------

I put it to you that without government forces of coercion, that monoplies and cartels would develop into governments capable of this themselves.

You're talking about something completely different. Sure, if government didn't exist at all, corporations might band together and create a government. Some people would, anyway. But government using its power to prevent the violent overthrow of government by colluding corporations (kind of a ridiculous scenario to be honest) is not the same as government using its power to prevent collusion itself or break up cartels simply because they are cartels. Collusion is really just a dirty word for cooperation; it's not dangerous to consumers and shouldn't be prevented, and there is a strong incentive for each company in the agreement to break the agreement, anyway.

[Baff1 0]

Not such a ridiculous scenario.

Media barons are often accused of attempting to overthrow governments and in 20th century history, one of them almost did.

I think they made a play of it, "A Very British Coupe".

Edited October 5, 2011 by Baff1

[Minutemen 10]

unfortunately there is no according word for "Grundgesetz" in english laguage but since it serves as a constitution I tend call it that way. The german "Grundgesetz" is considered a full constitution since the reunification in 1990...it's just the name of it that was not changed.

Just the Names changeing? Nope, they change also the law 14th times. Such worthless piece of paper isn't a constitution.

But you hear all the time about "some new kind of socialism" and it works to decept people. The hole Green Revolution Thing and Hardcore Environment Movement is a troyan horse to install a communist system.

Dont be so naiv, communism doesn't come back with stalin mustache, hammer and sickle and this stuff. But with a nice yuppie face that ask you ,,wanna something for free'' ?

+1 funny troll.

And how should i call you? Best way naive.

While we talking about western europa, look at the green parties in europa. Especialy in germany, most of the leaders were communists in the past and most of them still are communists. Wanna call me a troll? Read a book for Chrissake. :rolleyes: And this isn't funny, this is real threat to the personal freedome of all of us. And people have to grow up and stop acting like stupid children which couldn't do anything without the nannystate.

By the way i mentioned before that some kids are way more smarter than most adults.

And to the wallstreet occupation:

I think the liberal esteblishment will buy off the movement as the neocons bought off the Tea Party.

[gammadust 12]

And to the wallstreet occupation:

I think the liberal esteblishment will buy off the movement as the neocons bought off the Tea Party.

DEFEATISM is the least that the movement needs.

Help raise awareness of that real possibility instead.

Help the movement or its elements understand that the "liberal establishment" is part of the problem and helped to create the current crisis.

Help the movement organize themselves and build an alternative program which includes the social concerns instead of financial ones.

One of the reasons movements don't even begin is because we are lead to believe it is condemned from the start. Yet effective movements have flourished at the same time. Defeatism is not welcome imo.

[Spokesperson 0]

"Objective value" isn't science; it's scientism. Labor is but one of many factors that might lead to value for someone. Picking it out as special and tying the very definition of value to it is arbitrary. Something is as valuable as someone is willing to pay for it. This is logically consistent and always true. On the other hand, something that is labor- and time-intensive might turn out to be worth nothing at all, and something that is simply found, with no labor applied to it at all, might turn out to be very valuable. Value is a function of utility combined with scarcity, not a function of labor, and it is subjective by definition. Adam Smith was wrong about this, and so was Karl Marx.

It really doesn't matter what you call it. You can call it value or X. X is still valid, well defined and objective, and this X makes the rest of the economic theory clear and puts things in place. As I said it works just like quarks in relation to the atom. It's complete stupidity to refuse to analyze the deeper relations of nature or economics because of ideology not approving of it. All bourgeois economic theory is politicized and just a bad attempt at justifying a system of oppression. It has failed at everything. When values mysteriously appear out of speculation and ownership you get complete collapses like those in the Baltic states or Iceland where the productive sector has been replaced by thin air. Production is the only factor that creates value, the people who produce things make it possible for people to work as doctors or teachers. Without them there are no resources for the non-productive sectors.

As long as resources are scarce (i.e., not practically unlimited) and society exists, the economy will exist also. Automatization is not enough to solve the problem of scarcity.

Resources aren't scarce under communism. That's the point.

---------- Post added at 06:28 PM ---------- Previous post was at 06:27 PM ----------

DEFEATISM is the least that the movement needs.

Help raise awareness of that real possibility instead.

Help the movement or its elements understand that the "liberal establishment" is part of the problem and helped to create the current crisis.

Help the movement organize themselves and build an alternative program which includes the social concerns instead of financial ones.

One of the reasons movements don't even begin is because we are lead to believe it is condemned from the start. Yet effective movements have flourished at the same time. Defeatism is not welcome imo.

I agree.

[Beagle 684]

Most recources are not scarce by nature, they are made scarce by stockpiling them or lower production output for speculation purposes to keep the prices rising.

[Minutemen 10]

Most recources are not scarce by nature, they are made scarce by stockpiling them or lower production output for speculation purposes to keep the prices rising.

Thats ture. Look at that "Peak oil" thing for example. There ar more and more oil founds but they keep the price rising not just by "speculation", but by taxes!

N-i9C4Ct4-s

[OrLoK 20]

I should say the TV size is inversley proportional to the poshness of the occupants. I'd like to propose a new definition of working class, you are working class if your TV is too big for your living room

Very true, if not 100p/c accurate, a very good rule of thumb.

I'm no fan the rich (unless I become monied then I'll find someone else to hate). But mainly that's just jealously.

I do, however, wish we could live in a Utopian "true" communistic society.

But that's not gonna happen an dieven if it did, some folk would be more equal than others.

As to the protestors, good luck to them, I hope they actually achieve *something*.

rgds

LoK

[Beagle 684]

That's funny from a europan viewpoint...he wines about 33% taxes on fuel...haha...we have 69% Taxes on fuel...and we know why...that money goes straight into pensions and medicare.

But in fact the cost per km have not risen to me since 1992 when i got my first car...that Golf 4x4 car consumed 10L/100km...the small one I own today only uses 4.1

Price per liter super fuel in 1992 was 1.10 D-Mark (0.56€)

Price per liter super in September 2011 is 1.56€

that's 278% increase in 19 Years.

Edited October 5, 2011 by Beagle

[Minutemen 10]

that's 278% increase in 19 Years.

And how much did a glas beer cost 19 years ago?

Its not the evil rule of the market wich increase resources, its the central bank inflation and taxation. And gues what? Non of you guys will get any cent from that taxmoney, pensions are already pledged.

...the small one I own today only uses 4.1

At least the Volkswagen looked like a car and could handle a dirtroad.

[Baff1 0]

I have to say that downsizing your car does strike me as loss of living standards and not a raise in them.

[st_dux 26]

Most recources are not scarce by nature, they are made scarce by stockpiling them or lower production output for speculation purposes to keep the prices rising.

This is simply untrue. If resources were plentiful, people would have no incentive to fight over them and trade would therefore be unnecessary. Air is an example of a plentiful resource. Most resources are nothing like this.

Remember that "scarce" in the economic sense doesn't necessarily mean rare. It just means "not unlimited."

[Beagle 684]

This is simply untrue. If resources were plentiful, people would have no incentive to fight over them and trade would therefore be unnecessary. Air is an example of a plentiful resource. Most resources are nothing like this.

Remember that "scarce" in the economic sense doesn't necessarily mean rare. It just means "not unlimited."

O.K. let me just point out a example that I do know well because it touched me professinal until recently...steel prices. Todays steel price is again at 8,15€ per kg for S235

In may 2009 price was as low as 4.20€ kg because due to crisis the demand suddently dropped...adn is stil not up to the level it was in summer 2008 with 7.90€ kg...what did happen?

Arcelor-Mittal and thyssen-Krupp and other big steel producers shut down half of the furnaces...They are stil not all up again running hence the high price...the shortage is artifical.

Teh same is doen with oil tankers...othey often wait 2-4 weeks outside of harbour for higher oil prices or are ordered to go 12 instead of 20 knots to arrive later...this is info obtained from a befriended freighter navigation officer...he showed quite a fed pictures of supertanker moored in shallow watter few nautical miles off shore waiting for the call...and a nice video of somali pirates not able to catch up to the 24 knots of his container freighter...;)

Edited October 6, 2011 by Beagle

[gammadust 12]

This is simply untrue. If resources were plentiful, people would have no incentive to fight over them and trade would therefore be unnecessary. Air is an example of a plentiful resource. Most resources are nothing like this.

Remember that "scarce" in the economic sense doesn't necessarily mean rare. It just means "not unlimited."

You are making no sense...

You took the example of Air since it is a good example of a "plentiful resource". You proceed by saying, because of that there isn't "incentive to fight over it and trading isn't necessary".

On the other hand if you take the example of Water, which is also "plentiful", it is being traded by big corporations* through concessions, and I don't simply mean bottled water, I really mean clean source water.

* Compagnie Générale des Eaux is a good example

Tap water in my country is about to be concessioned/privatized, a national resource (therefore its nationals own it) is about to become managed and exploited by a private company. I find this outrageous (not because its private in the name mind you, I have no gripes with private property) but simply because a company serves its investors interests, it is obligated by law to be so, that it is naive and unrealistic to think nationals interests will be uphold as THE priority by that companies administration. The conflicting interests issue and in this case in a matter of life or death.

If you can follow this self-evident truth it might be possible to understand that there are some resources, which by their scarcity, by their importance to populations should simply not be allowed to private exploitation.

Water is essential to life, Air as much, howcome an eventual private exploitation of the latter would be shocking just to think about it? And the former appears to be more acceptable? In my view it is the exact same thing, but due to corporate disproportional influence on government the concept is subreptitiously sliding into populations minds, many times as an accomplished fact.

Most recources are not scarce by nature, they are made scarce by stockpiling them or lower production output for speculation purposes to keep the prices rising.

This is true and I pick the example of the housing market. In this case it is speculation by "deflating a number" the number is pointed to be around 11.4% of vacant homes, but taking in account the number of foreclosures and the stagant market it is most probably much higher.

[froggyluv 2136]

******Warning -Profanity or Ebonics if ya like *******

-mAUQYn6DjM

Occupier rips FOX NEWS a new one:

6yrT-0Xbrn4

Edited October 6, 2011 by froggyluv

[st_dux 26]

Arcelor-Mittal and thyssen-Krupp and other big steel producers shut down half of the furnaces...They are stil not all up again running hence the high price...the shortage is artifical.

Teh same is doen with oil tankers...othey often wait 2-4 weeks outside of harbour for higher oil prices or are ordered to go 12 instead of 20 knots to arrive later...this is info obtained from a befriended freighter navigation officer...he showed quite a fed pictures of supertanker moored in shallow watter few nautical miles off shore waiting for the call...and a nice video of somali pirates not able to catch up to the 24 knots of his container freighter...;)

You're making some pretty bold assumptions here. Price can change for a myriad of reasons. The likelihood that all of the top steel producers are colluding to produce less than would be individually most profitable is low. Given the uncertainty of current market conditions, perhaps they are wary of over-investment. After all, they recently experienced a major drop in demand from which they are only just now recovering. With regard to the tanker example, perhaps moving at the slower speed is simply the most efficient way for the tanker to operate. If the greater market share achieved by delivering faster than competitors was enough to offset whatever additional cost is associated with traveling at the higher speed, the incentive for oil companies to do so is clear.

Regardless, the more salient point is that even if collusion in the steel and oil industries is taking place as you implicitly suspect, steel and oil are still naturally scarce. If they weren't, the price wouldn't be the equilibrium price of steel or oil; the price would be zero. You can't sell something to someone when it is available in such massive quantities that they can get it for free (unless the government is involved).

You took the example of Air since it is a good example of a "plentiful resource". You proceed by saying, because of that there isn't "incentive to fight over it and trading isn't necessary".

On the other hand if you take the example of Water, which is also "plentiful", it is being traded by big corporations* through concessions, and I don't simply mean bottled water, I really mean clean source water.

By "plentiful," I mean practically unlimited. Air is practically unlimited everywhere in the world right now. It can be consumed freely in arbitrary quantities by everyone and still we are without any risk of running out. Water does not meet these requirements. Water is therefore scarce and not plentiful.

Tap water in my country is about to be concessioned/privatized, a national resource (therefore its nationals own it) is about to become managed and exploited by a private company. I find this outrageous (not because its private in the name mind you, I have no gripes with private property) but simply because a company serves its investors interests, it is obligated by law to be so, that it is naive and unrealistic to think nationals interests will be uphold as THE priority by that companies administration. The conflicting interests issue and in this case in a matter of life or death.

What you apparently don't understand is that companies serve their investors best by maximizing profit, and profit is maximized by serving customers efficiently. Seeing as everyone requires water, water companies will be motivated to serve everyone as efficiently as possible. On the other hand, government doesn't have this motive. Government need not be efficient; they are funded by force. As a result of privatization, you will likely see either cheaper tap water prices, or if tap water was being subsidized previously, lower taxes (unless of course your government pockets the difference).

If you can follow this self-evident truth it might be possible to understand that there are some resources, which by their scarcity, by their importance to populations should simply not be allowed to private exploitation.

Scarcity is precisely the reason why we privatize property and use markets. The amount of variables involved in the efficient distribution of any resource is massive. Any attempt to calculate efficient distribution centrally is wrought with unimaginable complexity. It is simply not possible for any man or group of men to wrap their heads around the needs and capabilities of millions of individuals, attributes which are constantly changing. Markets make it so that we don't need to calculate this impossible equation. Markets organically distribute resources in an efficient way because they are based on voluntary exchange. Decisions are made by the many, not the few, and the result is a price mechanism that naturally guides production and distribution toward efficiency. This is why, although it may seem counter-intuitive to you, privatization actually leads to the widest and most efficient distribution of the most important resources. Unlike governments, private firms depend on this efficiency to survive and prosper in the open market. It is in their best interest to meet their customers' best interest.

Water is essential to life, Air as much, howcome an eventual private exploitation of the latter would be shocking just to think about it? And the former appears to be more acceptable? In my view it is the exact same thing, but due to corporate disproportional influence on government the concept is subreptitiously sliding into populations minds, many times as an accomplished fact.

If air were scarce, I could certainly see (and would fully support) private ownership and exchange of it. Unlike water, though, air truly is essentially unlimited, and as long as that remains true, it won't be possible for companies to profit from it.

This is true and I pick the example of the housing market. In this case it is speculation by "deflating a number" the number is pointed to be around 11.4% of vacant homes, but taking in account the number of foreclosures and the stagant market it is most probably much higher.

How are vacant homes a sign that houses are artificially scarce? This shows that houses are in excess supply right now, which is the opposite of their supply being kept under demand artificially. Home prices continue to go down in the United States, and the vacancy rate will lower as this occurs.

Edited October 6, 2011 by ST_Dux

[Baff1 0]

Air condiditioning. Air pollution monitoring.

Taxes on air pollution.

Aqualungs, air guns.

Carbon tax.

Wind power.

Hot air ballooning

Controlled airspace.

Airspace tax.

Plenty of people profit from air.

Water on the otherhand is so scarce that people fight to death of it.

Like in Israel or one of those old cowboy films.

[gammadust 12]

You really put a blind faith in the markets. Even when, again and again, is demonstrated how nefarious they become to the economy as a whole as they develop. The current crisis is the best corolary of this.

(...)

By "plentiful," I mean practically unlimited. Air is practically unlimited everywhere in the world right now. It can be consumed freely in arbitrary quantities by everyone and still we are without any risk of running out. Water does not meet these requirements. Water is therefore scarce and not plentiful.

What you apparently don't understand is that companies serve their investors best by maximizing profit, and profit is maximized by serving customers efficiently. Seeing as everyone requires water, water companies will be motivated to serve everyone as efficiently as possible. On the other hand, government doesn't have this motive. Government need not be efficient; they are funded by force. As a result of privatization, you will likely see either cheaper tap water prices, or if tap water was being subsidized previously, lower taxes (unless of course your government pockets the difference).

I was told the same thing when telecommunications infrastructure went private here, and when public transport followed the same route. "Competition would bring efficiency and lower prices", populations got the exact inverse in no more than a year. And these are not resources, these are simply fundamental and strategic sectors of economy. Remaining companies today are huge monopolistic conglomerates, has they always come to.

There might indeed be a stage in the process where there is not much disconnect between customers and a company's shareholders, but what we are inevitably lead to is a total disconnect between those interests.

And no, profit, by current standards, is maximized by using criteria at odds with the customers best interest, examples abound at every scale of business. But I would add that having water to drink is beyond a mere "customers' interest", it translates a basic necessity in life which by definition amounts to much more than a simple "consumer product".

Scarcity is precisely the reason why we privatize property and use markets. The amount of variables involved in the efficient distribution of any resource is massive. Any attempt to calculate efficient distribution centrally is wrought with unimaginable complexity. It is simply not possible for any man or group of men to wrap their heads around the needs and capabilities of millions of individuals, attributes which are constantly changing. Markets make it so that we don't need to calculate this impossible equation. Markets organically distribute resources in an efficient way because they are based on voluntary exchange. Decisions are made by the many, not the few, and the result is a price mechanism that naturally guides production and distribution toward efficiency. This is why, although it may seem counter-intuitive to you, privatization actually leads to the widest and most efficient distribution of the most important resources. Unlike governments, private firms depend on this efficiency to survive and prosper in the open market. It is in their best interest to meet their customers' best interest.

Austrian school of economics (completely "free deregulated market", "spontaneous order" apologists, and also detractors of science as the best means to describe reality)...

Austrian school of economics IS what is being applied as financial and economic policy TODAY in ever wider sectors. See "Financial Derivative markets" as their most preverse pinacle. I am sure Hanz_Ludwig here can share with us some input.

If air were scarce, I could certainly see (and would fully support) private ownership and exchange of it. Unlike water, though, air truly is essentially unlimited, and as long as that remains true, it won't be possible for companies to profit from it.

What is "carbon emissions trading" then? If not a way of turning into business the exchange of an indirect tax on air? Can you see how perverse all this is? (Can I hear you say green communist scare?)

How are vacant homes a sign that houses are artificially scarce? This shows that houses are in excess supply right now, which is the opposite of their supply being kept under demand artificially. Home prices continue to go down in the United States, and the vacancy rate will lower as this occurs.

I wasn't simply pointing at the vacant homes... I was trying to vehicle how artificialy vacant homes were kept throughout the lattest housing market bubble (~2001-2007) in order to inflate their end prices, and also how artificial the very publishing of those numbers are. There is alot of speculative ways the market operators extract/suck value, these I mentioned are just two of them.

Edited October 6, 2011 by gammadust

[*LK1* 10]

If you have an iPhone and an TV bigger than ~40", you are NOT poor.

you would be surprised about the special offers you can get in many shops, plus in American and other nations you have the chipiest prices for technological products. if you have spared for mounths finally you can get your 40" tv doest not qualify you as a part of the middle class.

The hoods in America are quite luxurious in many ways. People have cars. They have gardens. Their houses have more rooms than occupants. They have electricity, running water, sanitation, Internet, multiple TV's and Playstation, schooling and health care... It's a very far cry from Slumdog Millionaire.

sure, like Compton, Broklyn, and bronx a couple of years ago before the transformation. having a little garden outside your house made with wood is not synonimus of luxury, especially when you live in the most brutal and dangerous places in the western world.

But you hear all the time about "some new kind of socialism" and it works to decept people. The hole Green Revolution Thing and Hardcore Environment Movement is a troyan horse to install a communist system.

Dont be so naiv, communism doesn't come back with stalin mustache, hammer and sickle and this stuff. But with a nice yuppie face that ask you ,,wanna something for free'' ?

+1 funny troll.

And how should i call you? Best way naive.

While we talking about western europa, look at the green parties in europa. Especialy in germany, most of the leaders were communists in the past and most of them still are communists. Wanna call me a troll? Read a book for Chrissake. :rolleyes: And this isn't funny, this is real threat to the personal freedome of all of us. And people have to grow up and stop acting like stupid children which couldn't do anything without the nannystate.

By the way i mentioned before that some kids are way more smarter than most adults.

that's funny you are exposing some old and bizarre red neck style theory and you are not trolling us all? well then is even worst, cuz you really believe on what you are saying. most of that politic classes, as the german example you used, are not communist anymore, theorically and in fact, we have the post communists in italy too, and keep in mind in italy we had the biggest and stronger communist party of the western world except est-germany, but it passed a lot of decades till the last time they said something of left side.

basically the greens around the europe belongs at the left side but being a communist is something different. so, taking care of the ecological situtation of the planet does not means the communism is coming back with the nice and peaceful face of a libertarian with a joint on his mouth. free yourself from this fear. stalin will not coming back with weed on his pocket and a solar Panel on his hands.

Edited October 6, 2011 by ***LeGeNDK1LLER***

[st_dux 26]

Air condiditioning. Air pollution monitoring.

Taxes on air pollution.

Aqualungs, air guns.

Carbon tax.

Wind power.

Hot air ballooning

Controlled airspace.

Airspace tax.

Plenty of people profit from air.

The fact that people indirectly profit from certain aspects of airspace does not mean that air itself is a commodity. It costs nothing to breathe. That's my point.

I was told the same thing when telecommunications infrastructure went private here, and when public transport followed the same route. "Competition would bring efficiency and lower prices", populations got the exact inverse in no more than a year. And these are not resources, these are simply fundamental and strategic sectors of economy. Remaining companies today are huge monopolistic conglomerates, has they always come to.

All this means is that the price was previously being kept artificially low through government subsidies. If you aren't seeing some tax relief as a result of these subsidies disappearing, then your government is simply taking the savings. On the bright side, they might be redirecting it toward social programs or something you might find similarly agreeable.

But I would add that having water to drink is beyond a mere "customers' interest", it translates a basic necessity in life which by definition amounts to much more than a simple "consumer product".

Food is a basic necessity of life, too. Should all food production therefore be government-controlled (you know, like the Chinese tried under Mao)? If we can't trust the market to distribute water, why should we trust it to distribute food?

Austrian school of economics IS what is being applied as financial and economic policy TODAY in ever wider sectors. See "Financial Derivative markets" as their most preverse pinacle. I am sure Hanz_Ludwig here can share with us some input.

Modern mainstream economic policy is not even remotely close to what could be considered an Austrian School perspective. The government has its hand in everything. Regulations are everywhere. Laws creating artificial barriers to entry in industries of all kinds are innumerable. Monetary policy worldwide is increasingly inflationary, and sound money doesn't even exist. Seriously, do a little research. The Austrian School is one of the most vocal critics of contemporary economic policy.

I wasn't simply pointing at the vacant homes... I was trying to vehicle how artificialy vacant homes were kept throughout the lattest housing market bubble (~2001-2007) in order to inflate their end prices, and also how artificial the very publishing of those numbers are. There is alot of speculative ways the market operators extract/suck value, these I mentioned are just two of them.

The housing bubble wasn't created by artificially vacant homes. I have no idea where you got that idea, and quite frankly, I'm not even sure how it's supposed to make sense. The housing bubble was primarily caused by cheap credit due to an artificially low interest rate and government-guaranteed loans. This led to an almost complete absence of lending standards that encouraged a whole bunch of people who couldn't afford homes to go ahead and take out a mortgage anyway, causing a spike in demand which in turn led to increased housing prices. A vicious cycle was thus created: Artificially absent lending standards caused by government intervention led to artificially high demand for housing which then led to further demand for housing as it became more and more attractive for people to invest in real estate. It eventually got so ridiculous that yearly real estate appreciation was exceeding mortgage payments on paper; buying a house became tantamount to buying a tree that grows money, making buying a home a no-brainer even for the poorest of people. Speculators of course got involved as well, and Wall Street had meanwhile securitized all of this bad debt -- debt which would never have been lent in a truly free market -- further obfuscating its origin and deceiving ratings agencies into giving it absurdly high ratings which allowed traders to leverage the hell out of it. It was a house of cards that had to collapse, but all of the mainstream economic "experts" kept drinking the Kool-Aid, pretending like everything was going along swimmingly and smugly suggesting that housing prices would never fall (however, Austrian School economists like Peter Schiff swam against the tide of willful ignorance, offering warnings of impending collapse well before anyone else).

People are quick to blame Wall Street and the speculators for what happened, and there is no doubt that they significantly affected the severity of it, but it is extremely important to understand that none of it could have possibly happened if it wasn't for the government basically encouraging people to live the new "American Dream" and take out loans for houses they couldn't afford (as well as encouraging banks to make such loans). Wall Street and the speculators were just following market signals -- market signals which had been seriously distorted by government intervention. What's worse is that the firms that were most wreckless with mortgage-backed securities -- several of them big players on Wall Street -- would have severely suffered or even collapsed had the government not bailed them out with taxpayer money after the bubble had burst. In a truly free market, these firms would have been allowed to collapse and more competent, less wreckless entrepreneurs could have taken their place.

Real capitalism is about profit and loss. Today's economic policy is such that we try to remove loss through government will. It is not a sustainable model.

Edited October 6, 2011 by ST_Dux

[gammadust 12]

The fact that people indirectly profit from certain aspects of airspace does not mean that air itself is a commodity. It costs nothing to breathe. That's my point.

All this means is that the price was previously being kept artificially low through government subsidies. If you aren't seeing some tax relief as a result of these subsidies disappearing, then your government is simply taking the savings. On the bright side, they might be redirecting it toward social programs or something you might find similarly agreeable.

Not at all... despite some older pensionists having access to simbolic subsidies, these national companies were instead considerably lucrative, if anything these profits could be allocated to other ministries. And if is questionable how these profits were managed by the government, this was less agravating then it is now, because now neither the profits and neither their management are put at national service.

Food is a basic necessity of life, too. Should all food production therefore be government-controlled (you know, like the Chinese under Mao)? If we can't trust the market to distribute water, why should we trust it to distribute food?

Why always a all-or-nothing point of view that you have? Indeed the food issue is less about who produces it then with its distribution. But I see no problem in regulations with the stated objective to warrant better food access (ie a lower VAT tax on food products) and being effective to that end by this means.

Modern mainstream economic policy is not even remotely close to what could be considered an Austrian School perspective. The government has its hand in everything. Regulations are everywhere. Laws creating artificial barriers to entry in industries of all kinds are innumerable. Monetary policy worldwide is increasingly inflationary, and sound money doesn't even exist. Seriously, do a little research. The Austrian School is one of the most vocal critics of contemporary economic policy.

"Not even remotely close"?

I give you two very significant examples of letting the market settle for itself. The first which removed existing preventive legislation and the second which prevented regulation to be instated.

Commercial+Financial mergers - Gramm-Leach-Bliley Act 1999 (nail in the coffin for Glass-Steagall and peoples savings)

under Securities and Exchange Commission inaction

Derivatives market deregulation - Commodity Futures Modernization Act 2000 (nail in the coffin for financial markets)

under Commondity Futures Trading Commission inaction

These are both hallmarks of Austrian School of economics. Supported by both "ends" of the American political spectrum. There is no point in denying evidence. It is also relevant to understand the causal effect of this as enabling the bust of 2007, and to a lesser extent the 2001 internet bust.

The housing bubble wasn't created by artificially vacant homes. I have no idea where you got that idea, and quite frankly, I'm not even sure how it's supposed to make sense. The housing bubble was primarily caused by cheap credit due to an artificially low interest rate and government-guaranteed loans. This led to an almost complete absence of lending standards that encouraged a whole bunch of people who couldn't afford homes to go ahead and take out a mortgage anyway, causing a spike in demand which in turn led to increased housing prices. A vicious cycle was thus created: Artificially absent lending standards caused by government intervention led to artificially high demand for housing which then led to further demand for housing as it became more and more attractive for people to invest in real estate. It eventually got so ridiculous that yearly real estate appreciation was exceeding mortgage payments on paper; buying a house became tantamount to buying a tree that grows money, making buying a home a no-brainer even for the poorest of people. Speculators of course got involved as well, and Wall Street had meanwhile securitized all of this bad debt -- debt which would never have been lent in a truly free market -- further obfuscating its origin and deceiving ratings agencies into giving it absurdly high ratings which allowed traders to leverage the hell out of it. It was a house of cards that had to collapse, but all of the mainstream economic "experts" kept drinking the Kool-Aid, pretending like everything was going along swimmingly and smugly suggesting that housing prices would never fall (however, Austrian School economists like Peter Schiff swam against the tide of willful ignorance, offering warnings of impending collapse well before anyone else).

I mentioned two ways by which the housing market bubble was inflated, if I get you right you added a third valid explanation for it, even if a more relevant one. No surprise there since economic phenomenons have usualy several confluent causes. We're not exacly in disagreement unless you claim what you mention as an exclusive cause for it.

People are quick to blame Wall Street and the speculators for what happened, and there is no doubt that they significantly affected the severity of it, but it is extremely important to understand that none of it could have possibly happened if it wasn't for the government basically encouraging people to live the new "American Dream" and take out loans for houses they couldn't afford (as well as encouraging banks to make such loans). Wall Street and the speculators were just following market signals -- market signals which had been seriously distorted by government intervention. What's worse is that the firms that were most wreckless with mortgage-backed securities -- several of them big players on Wall Street -- would have severely suffered or even collapsed had the government not bailed them out with taxpayer money after the bubble had burst. In a truly free market, these firms would have been allowed to collapse and more competent, less wreckless entrepreneurs could have taken their place.

Real capitalism is about profit and loss. Today's economic policy is such that we try to remove loss through government will. It is not a sustainable model.

No doubt, but I would add: Real capitalism is about privatizing profits and socializing losses. The operating word being "Real" (de facto) as opposed to "Idilic/utopic/ideologic". Definetly not a sustainable model!

Edited October 6, 2011 by gammadust

[Hans Ludwig 0]

P6CDbJ5b4Ro

[froggyluv 2136]

LOL, the Tea Party'ers where crying non-stop not to judge them by the few freaks with outrageous demands like "Go back to Kenya you Muslim terrorist"

:rolleyes:

I don't think one could characterize Obama of wanting to "tear down the banks" that he himself bailed out. Just another country-club goob.

[st_dux 26]

@gammadust:

I'll respond to you when I have some more time.

In the meantime, check out Reason's coverage of the protests. Pay particular attention to the "Information Man" that asserts authority (in an ostensibly leaderless movement) halfway through the video:

50rpJ7EQWuI#!