Thread: Does this make anyone else mad?

Originally Posted by Mephisto

Hey, we are helping the economy by purchasing our expensive soaps, oils and razors. I mean when you buy a Wade and Butcher for 200 + you can throw the "I will save money in the long run" argument out the window. Do we really need to do all this? No. But I would not go back to my three dollar can of goo.

Yeah - but would you buy a can of goo for a brother who can no longer buy anything lol?

Btw, last I checked the housing bubble was caused by people who could not afford to pay off the debt not interest rates.

Originally Posted by OCDshaver

Thanks for the clarification. I took your statement "that nearly saw capitalism as we know it fail with respect to the housing bubble" to mean that you felt that capitalism had failed. However, I disagree with your idea that the free market causes bubbles. I attribute these bubbles to cheap money (ie the Fed). Keeping interest rates lower than they should be sends signals to the economy that there are resources (money) available for long term investments. Later people find that there are less resources available than they anticipated and we find that we're over invested in one thing or another. But if the Fed were not involved with this and interest rates were allowed to adjust according to what the market would decide, this cheap money would dry up and long term investment would slow until such time that they adjust again. This is unpopular because we are always trying to tinker with the economy to force it to do what we want. When it backfires, as in the housing bubble, then it becomes justification for more tinkering. Now we use the financial crisis to justify more tinkering by the Fed. Remember that it was the Fed's charter to eliminate this fluctuation and stabilize the economy. What a great job its doing. The fact that you're telling me that the Fed, SEC, and gov't auditors should have caught all of this makes my case that gov't failed us and continues to fail us. But when the circle of people involved are working for big banks one day and the gov't the next day, its all semantics. The way I see it, the best thing you can do is get gov't out of it as much as possible.

And no, I don't view it as cop-out to feel this way. The last budget debate that took place? The bill that went into law was signed 30 minutes after it was actually published for review. Obamacare? We needed to sign it into law so we could see what was in it. Our gov't has gotten out of control and only a few of us even bother to be outraged by it. The fact is, most of the damage that gets done is done behind our sleeping backs. The people who are involved in this as a full time job don't even have the time or resources to know fully what is going on. There is no way we can either. Knowing that, do we want more or less government?

"Cheap money" from "the fed" is demanded by the market to maintain stability at points that could otherwise destabilize a whole marketplace. This is something unique to capitalism. Capitalism fails the poor, it always does, and always will. The claim that larger/stronger government is a negative thing is a tough one to prove. It is about time the US Gov't grew strong and protected it's citizens from the corporations that prey on the vulnerable.

To answer the OP, it doesn't make me mad. I feel that the means testing is strong, and harsh. Following this I feel that it will come to a moderately fair outcome in most cases. Something that humors me is that people want welfare abuse to be abolished, and a smaller government ...

Interest rates being high leads to people not being able to afford their mortgage.

Originally Posted by Mephisto

Btw, last I checked the housing bubble was caused by people who could not afford to pay off the debt not interest rates.

From Dominic Armentano in 2004. In this article, he warns that the Feds easy money policy will eventually cause the bubble to burst. Read on.

Economists generally maintain that interest rates must decrease and the Fed must provide additional liquidity when the economy is in recession. Fine, the Fed has done just that. The recession officially ended more than 20 months ago, and today the overall economy is remarkably robust. Clearly, monetary stimulus is no longer necessary; indeed, if continued, it is likely to be harmful.

Real interest rates (interest rates adjusted for inflation) are at a 30-year low and the real federal funds rate (the bank-to-bank interest rate) is nearly negative. This is now spectacularly incorrect monetary policy given the current economic reality. To see why this is so it must be understood that the Fed creates low interest rates by purchasing government securities from financial institutions (“open market operations”) the effect of which is to increase liquidity (credit) throughout the financial system. The “new” money created by the Fed is then lent out or invested by these financial institutions and finds its way into the economy.

As an example, here in Southeastern Florida the effects of the Fed’s excess liquidity are all around us in the form of a housing “boom.” Easy credit allows developers to purchase and clear land and allows builders (and their customers) to borrow and build, borrow and build. Now some home building is, of course, appropriate, but the recent vast expansion in residential housing (and the increase in prices) mostly has been fueled by “easy money” from the Federal Reserve. Absent the Fed expansion, homebuilders and developers would only be able to borrow what others had saved in savings, and interest rates would be far higher. It is time for the Fed to wean the economy back to levels of economic investment that are sustainable without Federal Reserve credit.

Higher rates will serve two purposes. First, as already argued, they will slow the pace of investment in areas where investment has been too rapid and where inflationary problems are already apparent. Second, they will increase the private savings by providing increased incentives to save. Home building will not “collapse” as the Fed withdraws liquidity; higher interest rates will encourage private savers to increase their savings, which will then fund an appropriate and sustainable amount of new investment. Further, since rates on CD’s and other fixed income assets will increase, savers will be rewarded with high incomes, which they can spend or invest.

Unfortunately the Federal Reserve has pledged publicly to maintain low rates (that is, easy money) into the foreseeable future (or at least until the next national election). Bad idea. The real estate price bubble and the weakening dollar against gold and the Euro are signaling that real interest rates must increase. By continuing its anti-recession monetary policy into the recovery phase of the business cycle, the Fed risks sowing the seeds of the next business cycle downturn.

Originally Posted by straightrazorheaven

"Cheap money" from "the fed" is demanded by the market to maintain stability at points that could otherwise destabilize a whole marketplace. This is something unique to capitalism. Capitalism fails the poor, it always does, and always will. The claim that larger/stronger government is a negative thing is a tough one to prove. It is about time the US Gov't grew strong and protected it's citizens from the corporations that prey on the vulnerable.

I beg to differ. We may have the richest poor of the entire world. Want to see real poverty? Check out the places where capitalism doesn't exist. The reason we have a welfare program at all is because of the riches created by capitalism. The reason why we have the luxury of food stamps is because of capitalism. The fact that food stamps can bring the average person milk, bread, meat, or eggs is because of capitalism. It is because people could exchange goods, services, and currency that these things exist in any quantity sufficient to sustain us as a people in the first place. The assumption that we could have even gotten to this level of productivity and resources in the absence of that economic exchange is insane.

Originally Posted by OCDshaver

I beg to differ. We may have the richest poor of the entire world. Want to see real poverty? Check out the places where capitalism doesn't exist. The reason we have a welfare program at all is because of the riches created by capitalism. The reason why we have the luxury of food stamps is because of capitalism. The fact that food stamps can bring the average person milk, bread, meat, or eggs is because of capitalism. It is because people could exchange goods, services, and currency that these things exist in any quantity sufficient to sustain us as a people in the first place. The wrong assumption is that we could have even gotten to this level of productivity and resources in the absence of that economic exchange is insane.

The fact that Capitalism got us here, knowing what a warring/greedy/selfish bunch of people we are, should make you wonder how really awesome it is if it supports that lol!!

FYI - food stamps and social programs exist in spite of Capitalism, not because of it. All "systems" have a form of "economic exchange," not just capitalism.

Originally Posted by earcutter

The fact that Capitalism got us here, knowing what a warring/greedy/selfish bunch of people we are, should make you wonder how really awesome it is if it supports that lol!!

FYI - food stamps and social programs exist in spite of Capitalism, not because of it. All "systems" have a form of "economic exchange," not just capitalism.

Sure, you can have a food stamp program outside of capitalism. But you probably won't have much to get with them. The former Soviet Union had their version of it. People were lined up down the block to get into a shop that had one lousy sausage hanging in it. This greed you find so distasteful is simply people trying to better their situation through exchange. That in itself is not problematic but natural and good. When taken to an extreme, it can be dangerous.....like anything. But it is what propels us forward. Its why production was so inefficient and indifferent in the Soviet states. The incentive was removed and people simply stopped producing. It tried to deny human nature. But the move toward communism itself was a symbol of that greed. It was the same thought process (to better themselves through some action) but directed at a false promise. So strong is this utopian fantasy that it continues to seduce people of every generation. Without capitalism and the ability to exchange goods and services, there would never have been any significant developments in production, the production needed to deliver the goods people get from food stamp programs.

Originally Posted by OCDshaver

Sure, you can have a food stamp program outside of capitalism. But you probably won't have much to get with them. The former Soviet Union had their version of it. People were lined up down the block to get into a shop that had one lousy sausage hanging in it. This greed you find so distasteful is simply people trying to better their situation through exchange. That in itself is not problematic but natural and good. When taken to an extreme, it can be dangerous.....like anything. But it is what propels us forward. Its why production was so inefficient and indifferent in the Soviet states. The incentive was removed and people simply stopped producing. It tried to deny human nature. But the move toward communism itself was a symbol of that greed. It was the same thought process (to better themselves through some action) but directed at a false promise. So strong is this utopian fantasy that it continues to seduce people of every generation. Without capitalism and the ability to exchange goods and services, there would never have been any significant developments in production, the production needed to deliver the goods people get from food stamp programs.

I know what you are saying OCD - really I do. Moreover, I understand full well the communist system and it's drawbacks. Communism however, like Capitalism needed to spread around the world to see it's true worth. It didn't, and hence we'll never know. And that's perfectly cool.

But now that Capitalism has "won," and we need not fear the boogie man that is Red Russia, perhaps it's time to fix the system we have to make it sustainable and somewhat equitable in the long-run.

Don't get me wrong - I love capitalism and all, but it's not all that. The externalitys are HUGE! As in kill the planet huge lol!! Externality - Wikipedia, the free encyclopedia

There is much work left to do - we need not sing it's praises anymore. Especially seeing the "hangovers" it creates.

Originally Posted by earcutter

But now that Capitalism has "won," and we need not fear the boogie man that is Red Russia, perhaps it's time to fix the system we have to make it sustainable and somewhat equitable in the long-run.

Communism lost round one. Red Russia may have been its first significant casualty. But some people, such as myself, see the fight still in progress. It may not be a fight that involves land or armies, but ideas. Communism could never spread over the entire world as long as there was one place left that it did not exist. Marx and Engles themselves believed that there would need to be a transition period until such time that the memory of life as it used to be was erased. Socialism was step one, Communism the long-term goal. The fight that was lost was the short path, a head to head battle. The one I see today is the long game - a gradual, long-term effort on the part of many to achieve incrementally what could not be won all at once. Its something that has been in progress for quite some time within our society and it has had little to no opposition. So I think its important to keep the record straight about the various political and economic systems. And, more important, that of human nature. Capitalism may not be perfect but that is because we are not perfect as individuals.

Originally Posted by OCDshaver

Communism lost round one. Red Russia may have been its first significant casualty. But some people, such as myself, see the fight still in progress. It may not be a fight that involves land or armies, but ideas. Communism could never spread over the entire world as long as there was one place left that it did not exist. Marx and Engles themselves believed that there would need to be a transition period until such time that the memory of life as it used to be was erased. Socialism was step one, Communism the long-term goal. The fight that was lost was the short path, a head to head battle. The one I see today is the long game - a gradual, long-term effort on the part of many to achieve incrementally what could not be won all at once. Its something that has been in progress for quite some time within our society and it has had little to no opposition. So I think its important to keep the record straight about the various political and economic systems. And, more important, that of human nature. Capitalism may not be perfect but that is because we are not perfect as individuals.

LOL - you must be a billionaire with a multinational conglomerate of company's to think that way lol!