T Nation

Too Little Too Late From the Mainstream

http://www.cnn.com/2008/POLITICS/09/23/paul.bailout/index.html

i – Many Americans today are asking themselves how the economy got to be in such a bad spot.

For years they thought the economy was booming, growth was up, job numbers and productivity were increasing. Yet now we find ourselves in what is shaping up to be one of the most severe economic downturns since the Great Depression.

Unfortunately, the government’s preferred solution to the crisis is the very thing that got us into this mess in the first place: government intervention.[/i]


Why has Ron Paul's opinion, which was was marginalized by the mainstream in the primary election, received so much attention lately?

“The solution to the problem is to end government meddling in the market. Government intervention leads to distortions in the market, and government reacts to each distortion by enacting new laws and regulations, which create their own distortions, and so on ad infinitum.”

I like this piece, but I think he is wrong on one account. We the tax payer are going to pay for this no matter what. Whether we bail them out or they declare bankruptcy, we the people will get stuck footing the bill. The bail out may be the cheaper solution in the end.
I don’t see the government as the cause but I see it as an enabler. The government’s involvement created an environment conducive to pooling and hiding money. But that doesn’t mean that these corporate leaders had to do the things they did. Taking huge risks with other peoples money, guess whose getting fucked? It ain’t the CEO of Lehman Bros.

I think I would enjoy physically beating the shit out of some of these guys. It’s good exercise too. Called it TBT.

[quote]pat wrote:
We the tax payer are going to pay for this no matter what. Whether we bail them out or they declare bankruptcy, we the people will get stuck footing the bill. The bail out may be the cheaper solution in the end.
[/quote]

Not necessarily. The financial markets do not produce anything. They steer money from this fund to that fund but in the end all their profits are from trading lesser valued stock for more valued stocks. The hurt will come when those that reinvest their profits back into actual productivity no longer can do so. The clearing of the market could actually help divert investment back to more productive means which would actually help productivity in the long run.

So while “allowing the market to fail” may or may not hurt the economy in the long run taxing people to bail-out these monumental fuck-ups will definitely hurt more and be more expensive to the average middle-class wage earner. Taxing individual consumers hurts productivity and thus slows the recovery down. Let’s not also forget all the unnecessary destructive regulation that will come on the back of this catastrophe.

[quote]LIFTICVSMAXIMVS wrote:
pat wrote:
We the tax payer are going to pay for this no matter what. Whether we bail them out or they declare bankruptcy, we the people will get stuck footing the bill. The bail out may be the cheaper solution in the end.

Not necessarily. The financial markets do not produce anything. They steer money from this fund to that fund but in the end all their profits are from trading lesser valued stock for more valued stocks. The hurt will come when those that reinvest their profits back into actual productivity no longer can do so. The clearing of the market could actually help divert investment back to more productive means which would actually help productivity in the long run.

So while “allowing the market to fail” may or may not hurt the economy in the long run taxing people to bail-out these monumental fuck-ups will definitely hurt more and be more expensive to the average middle-class wage earner. Taxing individual consumers hurts productivity and thus slows the recovery down. Let’s not also forget all the unnecessary destructive regulation that will come on the back of this catastrophe.[/quote]

Very very good.

I’m no financial expert, but I’ve been scowling for years at all this money being “made” on nothing more than moving it around. Talk about voodoo economics.

Without matching productivity in the form of goods and services to fill that with actual financial substance you eventually wind up with mystical money markets populated with lots of wealthy people without much actual wealth.

At least if I’ve understood the situation correctly.

[quote]Tiribulus wrote:
Talk about voodoo economics.
[/quote]

The real geniuses in business are always the salesmen. The people who came up with the idea to repackage debt and sell it to unsuspecting investors should receive an award.

The people who bought it also deserve an award…

It just goes to show that anyone can market anything as long as there is a good name to back it up:

Seller: “Try our new low risk, low yield AAA rated investment fund.”

Buyer: “Oh wow, AAA rated?! that’s good, right? How can I get a piece of that action?”

Was there a time when a AAA rating meant something?

[quote]Gambit_Lost wrote:
Was there a time when a AAA rating meant something? [/quote]

Yes, it was around the same time that “new and improved” meant something.

[quote]LIFTICVSMAXIMVS wrote:
Gambit_Lost wrote:
Was there a time when a AAA rating meant something?

Yes, it was around the same time that “new and improved” meant something.[/quote]

Right around the era when “all natural” was meaningful, yes?

This scenario of economic events is quite similar to the one Ayn Rand describes in Atlas Shrugged. If only the Treasury Secretary’s name was Wesley Mooch. :>

What is ruining us is our moral code. The world today is a logical consequence of our code of ethics. In fact, isn’t this exactly the world we wanted?

Help the poor, help the disenfranchised, don’t judge anyone, no one is special, the gifted and talented among us are here to serve their fellow man, to be their brothers’ keeper?

I think the world is simply following out what we wanted.

Get rid of “mark to market” accounting for high risk loans like the ones F&F were forcing lenders to make, and you get rid of the problem, and the stupidity of the last 3 posts.

EDIT: Whoops - HH got in ahead of me.

[quote]Headhunter wrote:
This scenario of economic events is quite similar to the one Ayn Rand describes in Atlas Shrugged. If only the Treasury Secretary’s name was Wesley Mooch. :>

What is ruining us is our moral code. The world today is a logical consequence of our code of ethics. In fact, isn’t this exactly the world we wanted?

Help the poor, help the disenfranchised, don’t judge anyone, no one is special, the gifted and talented among us are here to serve their fellow man, to be their brothers’ keeper?

I think the world is simply following out what we wanted.[/quote]

Ok, but none of this is truly altruistic as it’s always supposed to be done by somebody other than the ones advocating it.

If Ayn Rand meant by “altruism” the institutionalized mandate that these things be accomplished by others and with their money, by force of law then I agree. That is a disastrous philosophy.

If she meant that people voluntarily contributing their talents, their money, their time, themselves, to the good and well being of their fellow man is bad then I could not possibly disagree more.

I have never read Ayn Rand, but I keep seeing this principle pop up whereby it seems it’s being proposed that all our troubles would end on a global scale if everybody would just quit caring so much about others. If that’s what is being said then it’s insane to say the least.

Genuine over concern with others is not something the human race has ever been in danger of falling into.

People claiming concern for others as long as somebody else pays for it is another matter altogether. That is not concern for others. It is hypocrisy.

[quote]Tiribulus wrote:
Headhunter wrote:
This scenario of economic events is quite similar to the one Ayn Rand describes in Atlas Shrugged. If only the Treasury Secretary’s name was Wesley Mooch. :>

What is ruining us is our moral code. The world today is a logical consequence of our code of ethics. In fact, isn’t this exactly the world we wanted?

Help the poor, help the disenfranchised, don’t judge anyone, no one is special, the gifted and talented among us are here to serve their fellow man, to be their brothers’ keeper?

I think the world is simply following out what we wanted.

Ok, but none of this is truly altruistic as it’s always supposed to be done by somebody other than the ones advocating it.

If Ayn Rand meant by “altruism” the institutionalized mandate that these things be accomplished by others and with their money, by force of law then I agree. That is a disastrous philosophy.

If she meant that people voluntarily contributing their talents, their money, their time, themselves, to the good and well being of their fellow man is bad then I could not possibly disagree more.

I have never read Ayn Rand, but I keep seeing this principle pop up whereby it seems it’s being proposed that all our troubles would end on a global scale if everybody would just quit caring so much about others. If that’s what is being said then it’s insane to say the least.

Genuine over concern with others is not something the human race has ever been in danger of falling into.

People claiming concern for others as long as somebody else pays for it is another matter altogether. That is not concern for others. It is hypocrisy.

[/quote]

Like most honest people, you have been tricked into equating altruism with benevolence. Helping others is fine if it is your choice to do so.

Here’s where all the trouble lies: most people naturally think of themselves first. The only way to get them to act against their self-interest is through the use of force. We have to create bigger and more powerful governments to get them to act against their self-interest.

The end result of a society which actually embraces some sort of unselfishness as its moral standard is authoritarian. It must be. Look at the Soviets and the Nazis. The Soviets wanted you to live for the proletariat, the Nazis for the Aryan race. Both became hells, ironically because of unselfishness.

One of the Nazis big slogans was ‘Community Before Self!’