Originally Posted by jeil

Don't you think it would be a better system in an expanding economy for prices of things to be generally falling than increasing. Your savings would become more valuable, not less.

I repeat: am I the only one here that cares about practicality?

Your system was tried in the late 19th century. Britain and the United States, the two largest creditor nations in the world at the time, maintained a strict gold standard. Deflationary policies were maintained for decades. The result? Aggregation of wealth into fewer private hands, as small enterprises were rewarded more for keeping their wealth locked up in the banks than invested into private enterprise. Disaster for small businesses and family farms, as their goods sold for lower prices but their loan values did not adjust accordingly. Meanwhile, the "moneybags" could simply sit on their wealth and watch it accumulate without lifting a finger, by the simple expedient of restricting the coinage of the currency.

I much prefer a system where you are effectively taxed (lightly) for not using your wealth to contribute to the growth of the economy, thank you very much. This is the United States, not the Most Serene Republic of Venice.

Originally Posted by jeil

If employees own and control the means of production, then that is private ownership, just like an organization composed of numerous investors is private ownership, whether you call it a coop in which participants have an ownership interest, or a corporation. In the case of a corporation or coop, owned by employees, it is a privately owned. So I don't see how you can call this Socialism.

I think Anarcho-syndicalism is a basis for a historical reference behind the concept of coops. One can also use this as a reference point to "mutualism". as in "mutual insurance companies"

Coops as defined here also show a linkage to Odin's assertion that coops have more in common with "Socialism" than "Capitalism" as the political tie in.

But if you want to use the term Socialism to define a subcategory of private ownership, fine and we can call State ownership and control then State Capitalism, a very poor term indeed in my view.

Hopefully the URL's above clear up the confusion. Socialism per se does not not require State ownership of the means of production. Of course there is a variant which does, and that form would be one I'd be opposed to, since this form of organization has been shown to be an abject failure.

My point is that whenever government involves itself in economic activity other than to prevent theft and fraud, we no longer have a free market. If the government owns and controls the means of production, it is not a free market. If the government controls privately owned property, then it is not a free market. And the consequences of not having a free market are the things about which you complain, while at the same time you beg for more government involvement.

The above is why I call for the abolition of the Federal Reserve. By means of monetary debasement, it has presided over a huge transfer of wealth from producers to the rentier class. On the Federal level, I would tend to agree, things like the Department of Education, Fannie Mae/Freddie Mac, etc. are also rubbish.

Your quibbling about semantics seems to me to be a means of avoiding the thrust of my argument that it is government bring of its only ability, force, to market activity has a negative effect on the normal distribution of wealth to the detriment of those against whom the force is used.

I don't think it's so much a semantic issue , since there is a difference. A corporation is owned by shareholders who usually are not the same people actually working for the corporation. It should be obvious that the behavior of the two is quite different. A simple example is a coop would not outsource, while corporations do this big time. It's little wonder why wealth disparity is one of the hot issues of the day. Corporations have taken this outsourcing/offshoring stuff to the extreme. I really don't think these actions have had a good effect on the economic/social situation in the US.

Now on healthcare as a service, well that's a sticky wicket to be sure. The demand for the service by a particular person does not relate to the ability of the same said person to provide goods/labor in kind. So therein lies the problem for most any private economic paradigm. I would go with Odin on this one, since I can't think of a private means of resolving that inherent conflict. The same goes for the military and police. I would consider security as also a legitimate role for the State for pretty much the same rationale. Here you also run into the problem of the ability to supply the resource vs. the ability to provide it. Also, one needs to have a democratic means of redress, which is an equal and rules based set of laws applied. So security is also a good that's best left to the State to handle for those sorts of reasons.

Originally Posted by Odin

People seem to always hate Congress but like thier congresspeople.

I thought I'd borrow Odin's post to bring the thread somewhat back to topic.

Some believe that this low rating of the Congress is due to its partisanship standing in the way of fully and successfully addressing fill in the blank. Here on the 4T Forum it comes out as the notion that the partisan stalemate is the nature of the 3T and that the 4T will bring its resolution; it also occassionally surfaces as the cause for some odd calls for Libertarianism, isolationism and even seccession.

Here is an interesting take from TNR (it's interesting, in part, for those farther to the Left (e.g., DailyKos), think of TNR as being the primary rag of the "partisan scolds"). For discussion purposes only -

TRB FROM WASHINGTON
Bloomsday
by Jonathan Chait
Post date 06.25.07 | Issue date 07.02.07

"Any successful elected executive knows that real results are more important than partisan battles and that good ideas should take precedence over rigid adherence to any particular political ideology." So declared New York City Mayor Michael Bloomberg upon renouncing his membership in the GOP last week. The problem, of course, is that people don't agree on what "real results" or "good ideas" are. Cutting taxes? Raising taxes? Funding stem-cell research? Banning stem-cell research? This is exactly why we have partisan battles in the first place.

You would think that anybody who failed to grasp this would be urged to study a high school civics textbook. Instead, Bloomberg is being urged to run for president and lauded for his statesmanship.

Bloomberg has thus become the most prominent example of what you could call partisanship scolds. These are people who believe that disagreement is the central problem in U.S. politics, that both parties are to blame in equal measure, and that rejecting party ties or ideology is synonymous with the demonstration of virtue. While partisanship scolds believe that they stand in bold contrast to Washington, they are probably more heavily represented among the Beltway elite than any other demographic.

The official lobby of the partisanship scolds is a group called "Unity '08"--a collection of graying eminences from both parties who are calling for a bipartisan presidential ticket, perhaps led by Bloomberg. Their rhetoric appears to be targeted at people who enjoy kittens, rainbows, and David Broder columns. Specifically, Unity '08 says its ticket will run on "ideas and traditions which unite and empower us as individuals and as a people."

Well, that's nice. Unfortunately, when the partisanship scolds get a little more specific, things tend to break down. The first problem is that they can't agree on whether partisanship is making Washington pay too much attention to public opinion or too little. Bloomberg says the former: "When you go to Washington now, you can feel a sense of fear in the air--the fear to do anything, or say anything, that might affect the polls, or give the other side an advantage." Unity '08, on the other hand, says the latter: Neither party, it claims, "reflects the aspirations, fears, or will of the majority of Americans."

The second problem is that the partisanship scolds are extremely vague about which chunk of Americans is being left out by the growing extremism in Washington. It is true that some broadly popular views are underrepresented in national politics. A detailed political typology released by the Pew Center in 2005 showed that Democratic voters are not as socially liberal as their leaders and Republican voters are not nearly as economically conservative. So there is a sizeable base of socially traditionalist, economically populist voters to be had. Unfortunately, the partisanship scolds invariably cater to exactly the opposite demographic: elites who favor free trade, open immigration, cutting entitlements, and social tolerance.

Third, in the age of George W. Bush, the substance of the partisanship scold ideology is no longer, by any reasonable definition, centrist. They are moderate Democrats who don't want to admit it. Unity '08 proposes to address the following issues: "Global terrorism, our national debt, our dependence on foreign oil, the emergence of India and China as strategic competitors and/or allies, nuclear proliferation, global climate change, the corruption of Washington's lobbying system, the education of our young, the health care of all, and the disappearance of the American Dream for so many of our people."

Most Democrats wouldn't disagree with anything on this list. Most Republicans, on the other hand, are happy to raise the national debt in order to cut taxes, either don't believe in global climate change or don't want to do anything serious to stop it, oppose any plan that could provide health care for all Americans, and think the American Dream is thriving. Unity '08 further insists that gun control, abortion, and gay marriage should not "dominate or even crowd our national agenda." Which party has been putting those issues at the center of the agenda? Not the Democrats.

Bloomberg's politics are even further to the left. He's an out-and-out social liberal, banning smoking in public places and going to war against the National Rifle Association. He emphasizes programs to help the poor, has worked closely with unions, and has denounced rising inequality as a threat to democracy. But for Bloomberg and his admirers to admit that their views do have a home in a major party would destroy the basis of their self-image. Thus they must maintain at all costs the pretense of transcending ideology.

This pretense can be stretched to the point of absurdity, as evidenced by Time's glowing cover story on Bloomberg and his fellow moderate Republican Arnold Schwarzenegger. The premise of the article is that the two are "doing big things that Washington has failed to do." What things? The article cites "Washington's neglect of the working poor" and the fact that "Washington rejected the Kyoto Protocol." Schwarzenegger is quoted touting his initiative to fund stem-cell research as a slap at "the Federal Government." "Washington" and "the Federal Government" are, of course, euphemisms for the Republican Party. But openly saying so would be partisan. Partisanship scolds oppose the GOP agenda, but rather than acknowledge and confront those ideological differences, they assume them away.

Indeed, the premise that ideological extremism has left no room in either party for moderates like Bloomberg is belied by Bloomberg himself. There are many things keeping Bloomberg from running on a conventional party ticket, but the alleged extremism of the two parties is not one of them. A longtime Democrat, he switched his affiliation for his initial mayoral run in 2001, but only because running as a Republican offered him a clearer path to the nomination. Bloomberg's ideology today places him firmly within the Democratic camp.

If Bloomberg took the honest route and switched back to the Democrats to run for president, he'd be condemned as a transparent opportunist. Instead, he disingenuously renounces party altogether and is praised as a visionary.

Jonathan Chait is a senior editor at The New Republic

Originally Posted by catfishncod

This is the direct analogue to the reason the Federal government eventually became involved in economic regulation: because the states were being taken advantage of by national corporations. I'm not sure, though, whether the businesses are taking or being taken by states. For instance, China sure is acquiring a hell of a lot of advanced factory capacity, isn't it? It's reminding me of the aphorism that "Hitler would never have declared war on the United States if he'd ever toured Pittsburgh"...

Very good point!

Originally Posted by catfishncod

I think a reasonable first step in your direction would be to admit credit unions to the Fed. Nothing in the Fed's operations and mechanisms seems to make such a thing impossible. Indeed, the twelve Fed Banks appear to be designed as credit unions that only banks can be members of.

Great idea. I agree.

Originally Posted by playwrite

I thought I'd borrow Odin's post to bring the thread somewhat back to topic.

Some believe that this low rating of the Congress is due to its partisanship standing in the way of fully and successfully addressing fill in the blank. Here on the 4T Forum it comes out as the notion that the partisan stalemate is the nature of the 3T and that the 4T will bring its resolution; it also occassionally surfaces as the cause for some odd calls for Libertarianism, isolationism and even seccession.

Here is an interesting take from TNR (it's interesting, in part, for those farther to the Left (e.g., DailyKos), think of TNR as being the primary rag of the "partisan scolds"). For discussion purposes only -

These "Unity '08" sound connected to the DLC wishy-washy "centrists." (and are an insult to real centrists like poster Zarathustra/Sean Love).

Originally Posted by Odin

In a fair market there must be a level playing field. Thus, there HAS to be a referee to prevent the playing field from being manipulated. There are also some goods and services, healthcare is a example, that "free" markets cannot distribute in a fair way. There is no getting around government intervention in the economy. You don't like that, though luck.

I don't like it. I think it is immoral. The government does not level the playing field, it does the exact opposite, by passing out privilege. Apparently this is a point upon which you and I cannot agree.

You introduce this idea of health care being distributed in a "fair" way, which I am assuming you mean to be available to all. Your idea that there should be minimums in the way the economic pie is distributed is where you go wrong. There is a natural distribution of wealth in a free market. This means that there is a small amount of poverty, a small amount of opulence and the majority live within one standard deviation of the mean. This is not equality, but it is what the laws of nature command. You get what you can earn in the absence of force used for or against you. Not everyone can be guaranteed everything they think they need under any system, be it food, shelter, medical care, or mink coats, but under freedom, there is not a slave underclass supporting those who manage to gain political control over them and the wealth they produce.

The question is which system is the most compassionate. The reason the US health care system is now in such a mess is because the government got involved in a big way starting back in the 1960's. This crowded out the charity in medical care as practiced in many church sponsored hospitals, and the charity of doctors who would often charge based on ability to pay.

My personal solution to the health care system would be to get government totally out of it, not only in providing insurance, but also get out of licensing of hospitals, drugs, and medical personnel. I personally would also outlaw health insurance, but not accident insurance. This may be regarded by some as inconsistent with my libertarian views, but I think a case can be made that prepaid medical services contracts (health insurance) involve fraud. The result would be a sudden and permanent drop in medical costs, a reassessment of what is considered necessary medical treatment, and an eventual increase in the variety of alternative services offered. I think people would take a lot greater interest in preventative health measures and would be much more cautious about what medical treatments they undertook, and those who did not would suffer the natural consequences instead of passing that cost on to others via the cost spreading effect of health insurance. Charity again would become a virtue instead of an obligation enforced by government, and I bet that we would all be better off, at least until 80% of the population gets wiped out as a result of the end of the industrial age.

Originally Posted by catfishncod

I feel like a Jewish prophet. Why do you worship gold, which cannot speak or move? Gold atoms make no deals.

You mentioned one aspect that serves gold well. "Gold atoms make no deals." The alternative, fiat money is a "deal" of sorts. It has its origin in debt, (usually debt issued at the federal level. ) So therein lies another problem with fiat money. It has shown itself subject to political manipulation . The other problem is that it's awfully dang hard to invest when you don't know what the value of the future investment will be in the future. It's like building a house with a yardstick that magically changes size.

What you mean is that you trust private gold dealers more than the Fed. That's your business, but in the aggregate I cannot say I am in favor of returning management of the money supply to the private sector. I know something of economic history, you see, and the last time that plan was tried, J. P. Morgan (the man, not the investment firm he founded) wound up being the one-man central bank of the United States.

I think this needs to be bifurcated into 2 items.

1. J.P. Morgan didn't run a credit union, which is a given. He most likely gathered the wealth by usury as the main instrument.

2. I think the real issue is wealth distribution, not gold per se. J.P. Morgan did his thing in the Gilded Age. The Gilded generation did what nomad generations can do, just leave things dog eat dog and shrug things off.

If you want to relax requirements for membership in the Fed, so as to increase what you call "monetary democracy", that's one thing; I'd be willing to entertain proposals to that effect. Abolishing it is quite another.

You still don't need the Fed. There's nothing precluding credit unions for example forming a mutual aid aggregate which would have the proper authority delegated.

I think there's a place for corporations still -- they're great at building new infrastructure, for instance

Which infrastructure are they building?

-- but yes, I would agree that a great number of services now provided by corporations could be better provided by co-ops. My power company growing up was also a coop, and we bought fertilizer from an ag-coop. I have had friends with better banking experiences at credit unions than at chartered banks.

I think a reasonable first step in your direction would be to admit credit unions to the Fed. Nothing in the Fed's operations and mechanisms seems to make such a thing impossible. Indeed, the twelve Fed Banks appear to be designed as credit unions that only banks can be members of.

I think it comes back to the two issues I have.
1. The Fed facillitates the creation of credit. This is a problem right now. The stock market and housing busts can easily be tied back to a Fed action of facillitating credit. There was too much credit around and look where it's taking us.

2. Monetizing.The Fed can monetize quite a few debt instruments. This is where you get inflation at times. The money is essentially "printed", which is what rips other people off. To the extent the Fed monetizes a party's debt, that same amount of value is taken from all dollar holders. I.E. it's a stealth tax.

Originally Posted by Child of Socrates

I see what you're saying, but I still think the analogy is a bit of a stretch. I will play along for the time being.

Since this is a polygamous situation, I believe that gathering two thirds of the StateSpouses together for a consultation (i.e., a constitutional convention) would be a preferable alternative to complete dissolution of the relationship. Certainly if FedSpouse is abusing one relationship, it is likely abusing others as well. They would also appreciate relief.

And as FedSpouse is nothing more than a dysfunctional system perpetuated by humans, it can be likewise be reformed by such, and the "more perfect Union" can be preserved.

So Congress = "Big Love"? What's that joke about why you should lock them in a room and feed them aphrodisiacs?"

Originally Posted by catfishncod

I repeat: am I the only one here that cares about practicality?

Your system was tried in the late 19th century. Britain and the United States, the two largest creditor nations in the world at the time, maintained a strict gold standard. Deflationary policies were maintained for decades. The result? Aggregation of wealth into fewer private hands, as small enterprises were rewarded more for keeping their wealth locked up in the banks than invested into private enterprise. Disaster for small businesses and family farms, as their goods sold for lower prices but their loan values did not adjust accordingly. Meanwhile, the "moneybags" could simply sit on their wealth and watch it accumulate without lifting a finger, by the simple expedient of restricting the coinage of the currency.

I much prefer a system where you are effectively taxed (lightly) for not using your wealth to contribute to the growth of the economy, thank you very much. This is the United States, not the Most Serene Republic of Venice.

You claim that wealth was accumulated by the financial sector, but that deflation harmed farmers and small business owners. I think that it was other factors that gave rise to these problems, not sound money.

For one thing, the this period in history was one of increasing productivity in farming. The 20th century began with oxen and mule pulling plows, and ended with steam tractors and all sorts of farm machinery which resulted in an abundance of food; no wonder prices were held down, just like computer chips today.

There was unjustified accumulation of wealth with the assistance of government intervention in free markets, but this cannot be blamed on sound money, and it paled by comparison to the maldistribution of wealth today.

People did in fact save some of the wealth they produced instead of consuming almost all of it as we do today with paper money. The fact that not everything was consumed gave rise to a pool of financial capital that could be loaned to those who put it to use building machinery and factories, thus further enhancing productive capacity.

I find it almost unimaginable that someone would argue against sound money, considering the alternative is fiat. If you look at the money supply in 1913 when the Federal Reserve came into existence, as I recall it was about $50 billion. Today it is easily 25 times that. That increase has made the purchasing power of a dollar just a few cents as compared to 1913. Money has been almost totally debased; it is just debt on the financial statements of banks except for the small amount of debased coins. And what is the reserve that the banks hold against all their debts? The reserve is mostly debts owed to the banking system by the government and the public. It is a house of cards. The last time the cards collapsed in a pile of rubble was the 1930's depression, and at that time there was still some gold and silver circulating as money.

Inflation of the money supply by the banking system, to the benefit primarily of the banks and the government is nothing but theft by the banks and additional taxation by the government.

Originally Posted by Ragnarök_62

...is why I call for the abolition of the Federal Reserve. By means of monetary debasement, it has presided over a huge transfer of wealth from producers to the rentier class. On the Federal level, I would tend to agree, things like the Department of Education, Fannie Mae/Freddie Mac, etc. are also rubbish

Now on healthcare as a service, well that's a sticky wicket to be sure. The demand for the service by a particular person does not relate to the ability of the same said person to provide goods/labor in kind. So therein lies the problem for most any private economic paradigm. I would go with Odin on this one, since I can't think of a private means of resolving that inherent conflict. The same goes for the military and police. I would consider security as also a legitimate role for the State for pretty much the same rationale. Here you also run into the problem of the ability to supply the resource vs. the ability to provide it. Also, one needs to have a democratic means of redress, which is an equal and rules based set of laws applied. So security is also a good that's best left to the State to handle for those sorts of reasons.

On the issue of the Federal Resreve, I agree.

I don't understand what your thinking is on the demand for medical services not relating to the ability to pay. Just because you need something does not mean you are entitled to it without paying or falling on the charity of those from whom you seek the service. Medical service is not in unlimited supply any more than apartment space or at times food for that matter. What makes you think it is in a special category. Maybe if people in the USA were not now consuming about 2,800 calories per day as compared to 2,200 back in 1960, then maybe this would not be such an issue anyway. As a side note, I almost laughed when I noticed Michael Moore on Jay Leno's show tonight promoting his health care expose. He must weigh at least 350, and he is complaining about medical care; sounds like he is working on a self fulfilling prophecy.

I will also point out that national defense is a proper function of the federal government, and personally I would prefer to have a Swiss style armed citizenry backup to a small military so that anyone thinking of invading us would know that there would be a gun behind every tree and every doorway. Considering the notorious waste by the military, I think it should be kept as small as possible.

The internal police force is another matter. Government police are a relatively recent invention in history. I personally would prefer to see a system of private security services integrated with insurance against crime as opposed to the present system of less than stellar government police. The court system also, I think would be better served with private arbitrators instead of government judges, even for criminal charges. And the jury system might actually work in conjunction with this if the government courts did not thwart the purpose of a jury by telling them they must only decide the facts and not whether or not the law is just or should be applied in the present case.

Just because a particularly way of doing things has become ingrained does not mean that it is the best system or that there are not better alternatives. Perhaps the tearing asunder effect of the 4T crisis period will rid us of some of these poor systems in favor of better alternatives.

Originally Posted by Odin

Who's going to regulate the money supply?

Um. The same people who regulate the shoelace supply and the calculator supply and the toothbrush supply.

Wouldn't you agree that they're doing a pretty damn good job with those? I defy you to find a better supply-regulator to task with the issue of money.

Originally Posted by Justin '77

Um. The same people who regulate the shoelace supply and the calculator supply and the toothbrush supply.

Wouldn't you agree that they're doing a pretty damn good job with those? I defy you to find a better supply-regulator to task with the issue of money.

Before the Fed was around there were economic panics caused by bank failures on a regular basis. One of the reasons the Great Depression was as bad as it was is that the Fed pretty much just sat there and did nothing while the banking system was collapsing.

Originally Posted by Odin

Before the Fed was around there were economic panics caused by bank failures on a regular basis. One of the reasons the Great Depression was as bad as it was is that the Fed pretty much just sat there and did nothing while the banking system was collapsing.

I almost forgot how funny you are!

Maybe you should actually crack a book on what happened in and around the Depression! And the economic panics that occurred prior to the socialization of money-printing risk were much milder and less drastic than the ones that have characterized the Era of Fiat Money (one could point you to Argentina, Chile, Brazil, Zimbabwe, Russia, Germany, Italy, and so forth). Now, instead of the damage being more or less limited by the number of people who had actively bought into the bubble-of-the-moment and to those industries directly surrounding it, the disjunction is systematically endemic; and the losses have been much more severe and much more widespread. With a 'regulated' monetary system, the bubble is in the base unit of measurement. Not a person can possible avoid being hit by the inevitable correction-of-overreach. And with risk being diffused, there's that much less of an incentive for each player to keep his accounts in order. Really, one of the areas in economics where logic and observation line up so well with each other...

Originally Posted by Justin '77

Originally Posted by Marx & Lennon

...Let me remind you of the Manhattan Project and NASA. Can you show anyway either effort could have been undertaken by the private sector ... with its own money?

With response to the second, I would point you towards the recent winners of the X-prize, and their ongoing efforts.

That does more to make my point than yours. The X Prize rewarded private efforts that were far exceeded by public activities 50 years ago. To say the least, I'm not impressed. In fact, those public efforts made chasing the X Prize possible in the first place.

Frankly, not up to your standards.

Originally Posted by Justin

With regards to the first, I am frankly surprised. Are you asserting that the end product of the Manhattan Project is something we should want?

H-m-m-m. I'll ignore winning the most devastating war in the history of man. There are other compelling reasons.

Look into the entire project. It was the Manhattan Project that made nuclear power possible. Prior to that effort, uranium enrichment was done by the microgram. So yes, I think it's pretty important - especially considering the state of fossil fuels and your bugaboo, global warming.

Originally Posted by Justin '77

I almost forgot how funny you are!

Maybe you should actually crack a book on what happened in and around the Depression!

I'm actually currently reading a book on the first 100 days of FDR's presidency and the months leading up to it.

Originally Posted by Marx & Lennon

That does more to make my point than yours. The X Prize rewarded private efforts that were far exceeded by public activities 50 years ago.

Efforts that were arguably misplaced in terms of meeting the needs of humanity. The X-Prize winners (and contestants) have done more to open space to people than did the first fifty years of sending certified test pilots up and down. The sole exception, satellites, is a field where governments grabbed and forcible maintained a monopoly. As the field of orbit-insertion has opened up, the private sector has outshined the public in that field as well.

As for making chasing the prize possible, the laws of physics -- and people's growing understanding of them and their application -- did that. No amount of scientist/engineer welfare programs are necessary for the truth to be discovered.

H-m-m-m. I'll ignore winning the most devastating war in the history of man.

The war was won without the Bomb; dropping it was a way of getting a leg-up over the Soviets, not bringing to a close a war with an adversary which had already been long suing for and end to hostilities.

Look into the entire project. It was the Manhattan Project that made nuclear power possible.

Again, government didn't make science or technology possible. At most, it accelerated the utilization of a particular technology by some interval -- at the expense of whatever priority people actually had. And then effectively subsidized the spread of a still-immature industry. Not to mention the vast wasted/wasting lands inside the US that fell victim to the insulated-from-consequence nature of government work. No private company would have been able to get away scot-free from the sort of damages that the US government's nuclear industry wreaked on the people unlucky enough to be living nearby/downwind.

If AGW turns out to be a serious thing, it's safe to say that many, many technologies will be developed. And if we didn't have nuclear already, it would have been a logical one to come up with in response to AGW -- that is, when it was actually worthwhile to expend scarce resources on it. Plus, if it had been done privately, we could actually have made an honest accounting of its costs versus its benefits. And with the intervening five decades worth of improvements in tools and science, we would be making a much more efficient go of discovering and refining it this time around.

Originally Posted by Odin

Before the Fed was around there were economic panics caused by bank failures on a regular basis. One of the reasons the Great Depression was as bad as it was is that the Fed pretty much just sat there and did nothing while the banking system was collapsing.

Not really, you have to go back a bit to about 1927. The Fed in order to support the English pound drove interest rates here down, which set off
a speculative bubble in the stock market. Sound familiar? Hope so. After the NASDAQ crash in 2000, the Fed did the exact same thing. It drove interest rates ( the cost of money) down to 1% which set off the current housing boom/bust. At present, a part of the banking industry is collapsing. It's the subprime lenders. But wait, there's more. Assorted pension funds invested in this garbage as well. Right now Bear Sterns is doing all it can to keep these things from getting "marked to market". They aren't doing a bailout of their hedge funds out of their dear sweet hearts.

Originally Posted by Child of Socrates

The comparison of secession to divorce is very telling.

In that he capitalized the first letters in "Great Divorce," he may have C.S Lewis in mind.

http://en.wikipedia.org/wiki/The_Great_Divorce

Originally Posted by Justin '77

Efforts that were arguably misplaced in terms of meeting the needs of humanity. The X-Prize winners (and contestants) have done more to open space to people than did the first fifty years of sending certified test pilots up and down. The sole exception, satellites, is a field where governments grabbed and forcible maintained a monopoly. As the field of orbit-insertion has opened up, the private sector has out shined the public in that field as well.

That seems to be a brash statement to me. The only "private sector" space vehicle and launch activity is Arien, and successors, all a product of EADS: wholly owned at the time by the French and German governments. I can't think of any others that not actual government entities.

Originally Posted by Justin '77

As for making chasing the prize possible, the laws of physics -- and people's growing understanding of them and their application -- did that. No amount of scientist/engineer welfare programs are necessary for the truth to be discovered.

The laws of physics were well known in the 1920s when Robert Goddard was playing with rockets in Massachusetts.

In fact, he was starting the engineering process. Engineering has been the challenge ever since ... along with funding, of course.

Originally Posted by Justin '77

The war was won without the Bomb; dropping it was a way of getting a leg-up over the Soviets, not bringing to a close a war with an adversary which had already been long suing for and end to hostilities.

That's almost revisionist history. Did Japan wish to end the war: yes. Were they willing to surrender: no.

Originally Posted by Justin '77

Again, government didn't make science or technology possible. At most, it accelerated the utilization of a particular technology by some interval -- at the expense of whatever priority people actually had. And then effectively subsidized the spread of a still-immature industry. Not to mention the vast wasted/wasting lands inside the US that fell victim to the insulated-from-consequence nature of government work. No private company would have been able to get away scot-free from the sort of damages that the US government's nuclear industry wreaked on the people unlucky enough to be living nearby/downwind.

Justin, someday you'll have to admit that private efforts rarely if ever do the grand things, because they can't. Financially, grand things require huge amounts of what is often called piss-away money. Private entities can't afford to risk near certain failure on a grand scale, actually fail, then pick themselves up and do it again. Only governments can do that. They can empower and insure private entities to do it on their behalf, but that's not different in any substantial way.

It's a corollary of this same capability that government can do great harm as well as great good. Power is amoral, and requires moral humans to manage it. Not all humans are moral, and powerful ones tend to be less moral as a group than others. It's a core issue if you desire progress.

Originally Posted by Justin '77

If AGW turns out to be a serious thing, it's safe to say that many, many technologies will be developed. And if we didn't have nuclear already, it would have been a logical one to come up with in response to AGW -- that is, when it was actually worthwhile to expend scarce resources on it. Plus, if it had been done privately, we could actually have made an honest accounting of its costs versus its benefits. And with the intervening five decades worth of improvements in tools and science, we would be making a much more efficient go of discovering and refining it this time around.

Here is an early gas diffusion plant. In todays dollars, it would cost tens of billions. Here is the final home of plutonium production. No enitiy except government can make something like Oak Ridge or Hanford happen ... and there are pleny of negatives to discuss here. But in the end, how do you get to modern technology without passing through the first steps, first.

As messed-up as the nuclear program was during WW-II and its immediatte aftermath, I'm certain that making the effort a private one would have been infinitely worse.

Originally Posted by jeil

On the issue of the Federal Resreve, I agree.

Yup. The whole fiat money thing just repeats over and over. The value of the stuff always heads towards 0.

I don't understand what your thinking is on the demand for medical services not relating to the ability to pay. Just because you need something does not mean you are entitled to it without paying or falling on the charity of those from whom you seek the service.

I'll get to Mr. Moore below. Here those who are born with some sort of handicap messes up the "ability to pay" part. Obviously if you're born with a physical handicap, it's real hard to pay. There's also mental conditions like Bipolar Disorder where the one can be so screwed up before treatment tht the ability to pay is comprimised. Now, after treatment, this sort of thing allows the person with it to work and live pretty normally. So you get a win/win. You don't have folks getting worse and worse to the point of either suicide or going off the deep end being destructive. I don't really have an issue with the "ability to pay" either, just as long as those who don't have that option is taken into account.

Medical service is not in unlimited supply any more than apartment space or at times food for that matter.

True enough. I'm just stating that one's health can interfere with the ability to pay as per the above. So that reality needs to be taken into account.

What makes you think it is in a special category. Maybe if people in the USA were not now consuming about 2,800 calories per day as compared to 2,200 back in 1960, then maybe this would not be such an issue anyway. As a side note, I almost laughed when I noticed Michael Moore on Jay Leno's show tonight promoting his health care expose. He must weigh at least 350, and he is complaining about medical care; sounds like he is working on a self fulfilling prophecy.

Sure, I'd do something like put the crack/meth users at the back of the line. That is to say, personal responsibility should be part of the equation and thus have no issue with that facet. A meth user can't pay, but there is a clear cut case of not being responsible. That word has been utterly lacking in the current 3T. Obesity is one of those gray arees. Evolution makes eating a hard thing to control. The current amount of readily available calories is colliding with an evolutionary trait that "won" because of prior famines. At another level, there are assorted genetic setpoints where one's genes will just say "I've stored enough to carry things through". These vary from people to people. The of course you have the food as a drug situation. If you get huge like Micheal Moore, then usually the term "glutton" should be applied and a little shaming is in order. I think
Mr. Moore should have been hit up with question of "why are you so fat?" and do you think those who use food as a drug need to also go to the end of the line , like other substance abusers ? My guess from your post is that question was never posed. So that's why it's a special category.
The exception to the obesity rule would apply if someone inherited the "thrift" gene. Such a thing exists. Regardless of all the self control one can muster, these folks get obese due to a no win problem. That gene will down regulate metabolism so much that even a 1500 calorie diet won't work. The Pima Indians are a perfect example of this. The whole tribe has the thrift gene so if there's not a periodic famine, they get obese.
1. There are conditions beyond one's control that hamper access.
2. The fact that at present, the concept of responsibility is utterly lacking , even with the current health system.

I will also point out that national defense is a proper function of the federal government, and personally I would prefer to have a Swiss style armed citizenry backup to a small military so that anyone thinking of invading us would know that there would be a gun behind every tree and every doorway.

Actually, gun ownership is quite common in "Red States". It's common enough that some home invader gets killed by a shotgun on the other side of the door. I see it in the paper here in Houston and in Oklahoma quite a bit. The usual storyline goes "home invader killed by shotgun blast. The case has been referred to the DA and no charges will be filed." We're also the place where "gun control" means "using both hands". There's no way any national gun control law would get implented. There is this lame registration law, but the local law just looks the other way if someone decides it violates the 2nd amendment. The law's on the books, but it flat out is not enforced down here. The form will get "lost", the background check disregarded, etc. Of course the national guard thing has gotten mucked up to no end by this Iraq mess. In theory, the national guard should be a defense force to augment the actual national armed services
Yes, I'd agree on chucking all the old Cold War detritus as well. A force structure along your lines is something I can live with.

Considering the notorious waste by the military, I think it should be kept as small as possible.

Yup. We go off and meddle too much , which results in a military policy which does encourage the above.

The internal police force is another matter. Government police are a relatively recent invention in history. I personally would prefer to see a system of private security services integrated with insurance against crime as opposed to the present system of less than stellar government police.

I have to differ here. The police force should be controlled by elected officials. It's the same logic we use for the national defense. The concept of civilian control is important.

The court system also, I think would be better served with private arbitrators instead of government judges, even for criminal charges. And the jury system might actually work in conjunction with this if the government courts did not thwart the purpose of a jury by telling them they must only decide the facts and not whether or not the law is just or should be applied in the present case.

I'd leave the institutions mentioned above as is. Yes there are problems, but that the usual 3T institutional rot. Trust me on this, they do work and will work again after the 4T strips out the cruft and makes them legitamate again. Things like ambulance chasing lawyers will be looked upon as parasitical and deleted in the 4T.

Just because a particularly way of doing things has become ingrained does not mean that it is the best system or that there are not better alternatives. Perhaps the tearing asunder effect of the 4T crisis period will rid us of some of these poor systems in favor of better alternatives.

Of course, that's what 4T's are all about.

Originally Posted by Justin '77

[img]
Hmmm... Russia.

http://en.wikipedia.org/wiki/Economy...ssia#Inflation

I know this was mess back then. Has Russia recovered from what could be called an "inflationary depression" ? I know Russia has lots of gold. It would be interesting to see if the Ruble gets some sort of implied backing at some point.

Originally Posted by Mustang

In that he capitalized the first letters in "Great Divorce," he may have C.S Lewis in mind.

http://en.wikipedia.org/wiki/The_Great_Divorce

That wouldn't surprise me.

Originally Posted by jeil

I don't like it. I think it is immoral. The government does not level the playing field, it does the exact opposite, by passing out privilege. Apparently this is a point upon which you and I cannot agree.

"Immoral". Jeil, are you a Boomer? I didn't realize that the state of nature was a "level playing field"; certainly the Native Americans might dispute such a claim. Governments can level playing fields; they can also hand out privilege. Making the assumption that one does not happen because the other does is not exactly an axiom supported by evidence; it sounds more ideological to these ears.

Originally Posted by Ragnarök_62

You mentioned one aspect that serves gold well. "Gold atoms make no deals." The alternative, fiat money is a "deal" of sorts. It has its origin in debt, (usually debt issued at the federal level. ) So therein lies another problem with fiat money. It has shown itself subject to political manipulation.

Ha! And a gold standard isn't?!

The other problem is that it's awfully dang hard to invest when you don't know what the value of the future investment will be in the future. It's like building a house with a yardstick that magically changes size.

Which is why any sane money supply management system, gold-based or otherwise, endeavours to maintain a stable money supply, where "stable" is defined as "predictability of future values". This is a separate question from maintaining a deflationary, zero-inflation, or inflationary policy. The one has to do with short-term fluctuations, the other with long-term trends.

You still don't need the Fed. There's nothing precluding credit unions for example forming a mutual aid aggregate which would have the proper authority delegated.

And if credit unions joined the Fed, and banks were later converted to credit unions, isn't that pretty much what you would indeed have?

Which infrastructure are they building?

Well, I'd be impressed to see a co-op build a railroad network. Or the telephone system. The modular design of wi-fi internet means that co-op could build municipal Internet service... but I don't think they would be good at building the fiber-optic cable network that connects wi-fi networks. I am watching with interest the recent experiments in online-mediated microlending. The key question is the efficiency with which capital accumulation for a certain purpose can occur. The advantage of a co-op is its greater democracy and responsiveness to both market and public concerns. Certain endeavours-- another good example is aerospace R&D -- require a more singular vision and a deliberate delay in responsiveness to the market (to allow the necessary development to occur).

Finally, I'm a moderate, and my conservative side says don't throw away a tool just because it can be dangerous. Fires burn and locomotives run people over, yet we keep using them.

I think it comes back to the two issues I have.
1. The Fed facillitates the creation of credit. This is a problem right now. The stock market and housing busts can easily be tied back to a Fed action of facillitating credit. There was too much credit around and look where it's taking us.

You're over-reacting to the Fed's over-reaction. As I understand Greenspan's thinking, he read the history books and understood that the Fed tightening of the credit supply after the '29 crash made things worse. So after the '00 crash he deliberately did the opposite and opened the credit spigots. Since no good deed goes unpunished, that caused the housing bust.

I do not think the stock market's state is a result of the cheap credit alone, but is also due to the far worse bubble currently occurring in China.

To the extent the Fed monetizes a party's debt, that same amount of value is taken from all dollar holders. I.E. it's a stealth tax.

Not as stealth as if it were being done privately...

Originally Posted by jeil

I find it almost unimaginable that someone would argue against sound money, considering the alternative is fiat.

Given that your reasoning method is Platonic, starting from axioms and proceeding to theorems, rather than the Aristotlean-Galilean method of starting with observations, this is not surprising.

If you look at the money supply in 1913 when the Federal Reserve came into existence, as I recall it was about $50 billion. Today it is easily 25 times that. That increase has made the purchasing power of a dollar just a few cents as compared to 1913.

Given your axiom that exactly the same amount of money exists today as in 1913, you are of course correct. Given that the economy has also expanded manyfold you are less correct. Given that the GDP of the United States has increased by approximately a factor of 22 since 1913 I find your argument to be somewhat suspect.

Originally Posted by Odin

Before the Fed was around there were economic panics caused by bank failures on a regular basis. One of the reasons the Great Depression was as bad as it was is that the Fed pretty much just sat there and did nothing while the banking system was collapsing.

But it didn't do nothing; it actively tightened the money supply and made things worse by discouraging investment and impeding the velocity of money.

Originally Posted by Justin '77

I almost forgot how funny you are!

Laugh it up, fuzzball, and see how well your system makes the same judgements before judging others too harshly. My natural suspicion is that a "free money market" would result in a private money monopoly or oligopoly without government oversight or transparency. What would you do to prevent such an occurrence?

Originally Posted by Justin '77

The war was won without the Bomb; dropping it was a way of getting a leg-up over the Soviets, not bringing to a close a war with an adversary which had already been long suing for and end to hostilities.

Pardon me? Exactly when and where did the governments of the Dritte Deutsche Reich or of the Nipponese Empire sue for peace? And I suppose the estimates of one million American and many million Japanese casualties in the invasion of the Japanese home islands, and the estimates of casulaties in the event of a blockade of the Japanese home islands, are not relevant data.

Originally Posted by Ragnarök_62

Not really, you have to go back a bit to about 1927. The Fed in order to support the English pound drove interest rates here down, which set off a speculative bubble in the stock market. Sound familiar?

Greenspan thought he was stopping the disaster, but it can't be stopped; he only delayed it, thereby making a larger crater. I just don't think you have the magic elixir that eliminates the K-cycle any more than Greenspan did.

Originally Posted by Marx & Lennon

That seems to be a brash statement to me. The only "private sector" space vehicle and launch activity is Arien

You mean Ariane.

The laws of physics were well known in the 1920s when Robert Goddard was playing with rockets in Massachusetts.

And the New York Times didn't believe him. They published a correction the day Neil, Buzz, and Michael took off from Canaveral.

Justin, someday you'll have to admit that private efforts rarely if ever do the grand things, because they can't. Financially, grand things require huge amounts of what is often called piss-away money. Private entities can't afford to risk near certain failure on a grand scale, actually fail, then pick themselves up and do it again. Only governments can do that. They can empower and insure private entities to do it on their behalf, but that's not different in any substantial way.

Hmm, not quite. Private billionaires can also piss away money; several of the dot-commers are doing that right now in their space development efforts. But to do so successfully requires a hellacious amount of private capital controlled by individuals, the mechanisms for acquisition of which you also object to. Governments also can't afford certain types of failures.

Originally Posted by Ragnarök_62

Yup. The whole fiat money thing just repeats over and over. The value of the stuff always heads towards 0.

But does it do so in a controlled and predictable fashion? That's the more important question. If you know it's going to be a lower value of approximately X in 20 years, you can compensate. The problem happens when a government collapses (like Zimbabwe's) and the predictability of the money supply evaporates... but when that happens, the gold also disappears or becomes too difficult to exchange effectively (security issues, you know), and you have the exact same problem.

Originally Posted by catfishncod

But it didn't do nothing; it actively tightened the money supply and made things worse by discouraging investment and impeding the velocity of money.

Doh! Yeah, That's correct. I must of been thinking of something else.