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December 08, 2010

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You must have taken ECON211, my old friend...Dr. McCaleb taught us that, from the standpoint of the general economy, the worst thing that you could do with a dollar is give it to the government to spend...ECON211, Rice University, Fall 1977

I will argue the best dollar multiplier today, in terms of IROR, is a political donation. This is why we have tremendous growth in this sector every year. Just look at the 9 trillion (yes, that is 9 trillion) loaned in secret to private industry from the Federal Reserve. Who were there “deciders” regarding who received these funds and who did not? Do you think politics played a part? There are a slew of questions which arise from that action, but it seems like nobody wants to talk about it. The best capitalist thinking has picked our pockets and put us in a very tough situation. The only way out of this mess is to take a very hard turn to the left. Free market capitalism has failed in America.

Royal, I agree that the finance community, under government policy edict, created a huge housing bubble that resulted in massive transfers of wealth, much of it to various flavors of bankers. However, your solution, a "a very hard turn to the left" is like trading revolvers with a single shell for an automatic weapon with which to play Russian Roulette. The Hard Turn to The Left is a proven loser in every case. Just saying. Factual statement. Rational folks reading here might like the book "The Rational Optimist". I am going to write about it soon.

Choke you have done a good job parroting the company line about the “housing bubble” being the problem. Now it’s down to you Karl and Sean that still believe that one.
Let’s talk about something new. Let’s talk about the recent revelation the Fed secretly loaned out (and printed) 9 trillion dollars to GE, Harley Davidson, and a slew of other private companies. This was done in secret. The selection process was secret. It was kept secret from the public, although GE owns most TV networks and the news departments. It was kept secret from Congress. The secret loans were disclosed on the last day allowed by law as per the Dodd-Frank bill. Is this free market capitalism? No…free market capitalism failed and it is over in America. Choke, we are talking about 9 trillion dollars here. This is beyond socialism. We leap-frogged over socialism and are into a new space. What do you call this new system? Is it facism? I don’t know but it sure is not free market capitalism.

Royal, I fail to see how government malfeasance is a "failure of free markets" and the appropriate response is... more government. Do you think government will quit shoveling money around inappropriately if corporations didn't exist? Come on, now. Again, no success examples for what you propose, and nearly Looking Glass like your depiction of a government gone wild as "free markets" failure. The intervention of the government is defacto non-free market. A market manipulation.

Choke, you and other capitalists continually talk about “the market” as if there was some divinity associated with a “free” market, whatever that is. They talk about cream rising to the top, and their mantra is “let the market settle things out”. Now this is all well and good so long as they are part of the cream, but when they find themselves being washed out…..well something must be wrong! They then quickly turn into socialist / communists and make secret deals with the government to get staggering amounts of cash, so they won’t get washed out, and then immediately reinvent themselves, once again, as free market capitalists, without ever breaking stride, and continue rant about “dollar multipliers” and all this other crap they conveniently forgot about when they took the big big from the government. They go right back to crowing about how great Ronald Reagan was, small government…blah blah blah. In addition, they exempt themselves from regulation via political favors and create “special”, sometimes secret alliances with government to obtain a competitive advantage. Hailliburton and the former Blackwater are examples.
They get special treatment because they pump so much money into the political arena. Direct contributions, indirect contributions, lobbyists,…etc. They morph in and out of Wall Street and government. Don’t blame this last 9 trillion dollar secret deal exclusively on government. It takes two parties to pull this off. The ones that crow the loudest about free market capitalism seem to be the guys taking the money. It looks like dirty pool to me. It looks like the US has been taken over by financial thugs that call themselves capitalists. Marx spoke to this situation.
This last episode of 9 TRILLION DOLLARS is frickin off the chart. Please tell me how you feel about that.
You ask me for solutions….easy. It starts with radical campaign finance reform. Until this happens nothing will change. The capitalists can serve a purpose, but they must be regulated. They will sell you, and this country down the tube for a dollar.

Ok, RE, I am really confused now. Whenever I talk about Free Markets, you twist it to mean some sort of fascistic economic system that is clearly NOT a free market, then you decry how "free markets" don't work! In every case you give, it is central authoritative power that creates the conditions or solutions that you so vehemently rail against, which are clearly not free market solutions, and your solution is to give the central authoritative power even more power and control. Wow.

Seems to me that if we had LESS central authoritative power and control, it couldn't be used to create barriers or to bail out fraudulent malfeasance or to bestow anointed favorites. These are the things you continually cite as your evidence against status quo, which, by the way, Might not be too off the mark, but then end your thesis by exhorting us to increase the piece that creates the problem!

Choke…let me be simple and plain spoken. I am talking about the reality of our “free market”…here and now in the United States of America. You talk about a utopian dream of a free market. I am not twisting reality. I am twisting your delusional feeling of what America is supposed to be as opposed to what it is. Choke, you must realize we are in a new space now. I want to believe in the American dream. I am 55 yo and I love this place. The difference between you and me is that I can still apply critical thinking to what is happening here. We just bailed out every major American company of any consequence with the “States” money, freshly printed, and you still want to crow about free market transactions. You are a dinosaur and you are becoming irrelevant and uninteresting.
Your capitalist heroes are taking massive loans from the government in secret, to the tune of 9 trillion dollars. They can’t accept the “cream rises” theory. They want the money. They want the money. They want the money. They want the money. Goodbye free market. It fails every time. Just read Marx. As tough as it is, he predicts this behavior from capitalists. Choke you are a smart guy and I respect you, but you know this system has failed.

Royale...are you not a capitalist? Do you earn a paycheck? Do you spend the paycheck on things both needed and wanted (like most of us, more of the former and less of the latter)? Did you get a college education? Was it paid for by your capitalist pig parents or the omniwonderful government?

How can you be so ignorant and foolish? You have made Choke's case for him at every turn? Government intervention into free markets distorts the market every time it happens. Distorted markets CANNOT work to their highest level of efficiency, thereby they are skewed in favor of one (or more) of the participants.

Stop reading bullshit on blogs and experience for yourself how the world works. In fact, you little socialist, my sister is unemployed so I'm going to need you to pick up some groceries on the way over to my house to do some yardwork (for which I will pay you a few rubles you can spend on bread). When you get rich from capitalism you'll sing a different tune!

For now, just show us where socialism, marxism, communism, or any of its derivations actually work!

How about...Cuba? France? Russia? North Korea?

Ok…let me start by answering your question of “where does it work”? Let’s start with China and Viet Nam…..Both of these countries are experiencing good economic growth and are turning out manufactured products of increasing quality. The quality of life is improving, not diminishing. Just look around America and you see a country in decline. Declining quality of life. Declining education. Declining employment opportunities….etc. We are lucky to have a trading partner in COMMUNIST CHINA, so somebody can manufacture goods for us and purchase our bonds.
Government’s intervention in free market distorts the market every time? Hondo, there was no choice but to intervene at some level this time, because our system, left to its own devices failed and failed really BIG.
Neither you or Choke want to talk about the “free market” Gods taking 9 trillion dollars from the government is secret. Where was this hard core belief in free markets when they took the loot? Easy answer. They don’t care about anything but capital.
Now I have a question for you Hondo…Who are the free market capitalist leaders today? Now that most of your kind has accepted welfare bailouts, where are “real” capitalists?
Your free market heros….Goldman Sachs, Lehman Brothers, Bear Stearns, GE, Caterpillar, Chase, AIG ……on and on and on went broke. They failed BEFORE The GOVERNMENT INTERVEINED, a minor detail you and choke seem to forget. They went broke by any yardstick you choose to measure economic health. FLAT BROKE, FAILED. This condition is a broken, failed system. It just did not work. The market went broke. This is clear. It cannot be blamed on government. It can be blamed on greed. It can be partially blamed on unregulated derivative trading. It is the failure of free market capitalism, up close and personal. It is a mute point because we do not have a free market today. We have a bunch of corporations propped up by big government. The capitalists sure sang a different song when the money ran out. They stooped as low as necessary to feed from the government trough. Now they want to talk about the great free market? What a joke.
On the point of Royal the capitalist, I do admit to participating in capitalism, but unlike you and Choke, I can apply critical thinking to what is going on in America today, and rethink my positions. Try it sometime….

That is moot, not mute..sory for the sp...

Royal

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