Posted on 10/14/2008 12:55:09 PM PDT by Freedom_Is_Not_Free
Perhaps I should not have said “I hate money.” Douglas Adams, author of the “Hitchikers Guide to the Galaxy” and trilogy, would probably defend the the poor defenseless innocent pieces of paper. In fact, I think he might have something about this in one of his books...
Anyway, my saying “I hate money” might be likened to liberals hating guns or SUVs.
More specifically, I am sure you gleaned this, I hate “worship of money.” A big pile of money attracts corruption and white collar crime. It is irresistible. Your example of hedge funds was a perfect example.
Money itself is not evil and there are plenty of people who can handle it. But good lord, the death and suffering that has been caused on this planet for the worship of it. I don’t begrudge anyone here the security or freedom money brings or even the potential to be in position to help others in times of need.
Good luck with your fruit trees. My mother got some wonderful pears off her trees this year but they are all infested with fruit flies. All of them. She is reluctant to use poisons on the fruit trees but is reconsidering. The fruit flies burrow in and lay eggs and then the larvae are supplied with a food source as the pears grow. All the pears she picked and sliced open have a nest of developing fruit flies in the center.
She’s at wits end and figuring she needs to poison. I told her to bring a pear to a local nursery and see what they say. We’ll see.
Funny. Nothing is easy. LOL.
Aha, found it. It’s the brilliant intro to the original book. How could I forget???
Far out in the uncharted backwaters of the unfashionable end of the western spiral arm of the Galaxy lies a small unregarded yellow sun. Orbiting this at a distance of roughly ninety-two million miles is an utterly insignificant little blue green planet whose ape-descended life forms are so amazingly primitive that they still think digital watches are a pretty neat idea. This planet has - or rather had - a problem, which was this: most of the people on it were unhappy for pretty much of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movements of small green pieces of paper, which is odd because on the whole it wasn’t the small green pieces of paper that were unhappy.
And so the problem remained; lots of the people were mean, and most of them were miserable, even the ones with digital watches.
Many were increasingly of the opinion that they’d all made a big mistake in coming down from the trees in the first place. And some said that even the trees had been a bad move, and that no one should ever have left the oceans. And then, one Thursday, nearly two thousand years after one man had been nailed to a tree for saying how great it would be to be nice to people for a change, one girl sitting on her own in a small cafe in Rickmansworth suddenly realized what it was that had been going wrong all this time, and she finally knew how the world could be made a good and happy place. This time it was right, it would work, and no one would have to get nailed to anything. Sadly, however, before she could get to a phone to tell anyone about it, a terribly stupid catastrophe occurred, and the idea was lost forever. This is not her story...
(And so it goes. Great books.)
Beautifully said, and why so many people are railing adamant against any bailout, even to save the system.
I’m a huge fan of Jefferson and I wished he had won and stuffed Hamilton back in his bottle. It is unfortunate how socialist we have come after the seeds planted by Hamilton. If Jefferson had won, I think the federal government would have less power today.
I have to side with palmer. If a buck is to be made, someone will seize the easy money and make that buck. That won’t happen in this economic climate, as deflation is the order of the day. Who is going to try to flip a house or begin a commodity bubble in this climate, where all asset classes are falling in value?
But in normal times with a reasonable real inflation rate, leaving money to be borrowed far below the rate of real inflation will stimulate speculators to take that cheap money and apply in a speculative manner.
In theory nothing says that you have to make use of credit that is offered to you. In practice, easy money always finds a home. Too much easy money for too long means a credit bubble and all credit bubbles must collapse, and generally painfully.
If recession should threaten serious consequences for business (as is not indicated at present) there is little doubt that the Federal Reserve System would take steps to ease the money market, and so check the movement.”
~~Harvard Economic Society, October 19, 1929
“Business will turn for the better this month or next, recovering vigorously in the third quarter and end the year substantially above normal.”
~~Harvard Economic Society, May 17, 1930
(Note: Bernanke’s great reputation is as an Ivy League economic expert, just like the editors of the old Harvard Economic Society.)
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Priceless (No pun intended)
Through all of your good posts, you've finally managed to confuse me. The largest banks to fail or at risk of failure were five investment banks that take no deposits from the public and are not insured by the FDIC or NCUA.
Are you sure this is what you meant to write? It seems to me that by your argument, those institutions should have been allowed to fail, being they do not take public deposits and are not government insured. I am not trying to put words in your mouth, but you have confused me as to which banks you were talking about. Washington Mutual and Wachovia were bought out and didn't fail so us, their creditors, did not have to take a hit. Since I've posted, I'll ask a question that struck me earier.
In several posts you seemed to acknowledge the sanctity of economic freedom over economic security, and rightly so. In one post you even acknowledged there is no economic security. Do I understand you correctly.
If I do, if you value the sanctity of economic freedom over economic security, then how can you support the current efforts by the US government to impose economic security at the expense of economic freedom?
Aren't you being inconsistent or did I misunderstand one of your positions.
My understanding is that you are for the government taking action to use taxpayer dollars to support the financial sector against possible (likely) collapse.
On this thread, my understanding is that you are stating a support for economic freedom and recognize that there is no economic security, and economic freedom should not be subordinated to economic security in any event.
Isn't this inconsistent? Can you please clear up my confusion?
Shoot them? Just a thought...
I know that JasonC gets a lot of heat here for being contrarian to most, but I have to support him in some ways.
His writing style is 10th grade as opposed to the more comming 6th grade style we tend to write in for clarity and to reach the widest audience. That 10th grade writing style can sound pretentious. Sorry, if your reading comprehension is not up to 10th grade, please don’t blame the writer. Don’t ask him to lower his style to suit our expectations of a 5th grade writing style. That’s not fair to him.
He’s also accused of acting superior. Lots of us here have egos and act superior so that is not in short supply, and that behavior is made worse by the safety of anonymity caused by this type of communication medium.
GOPJ — sorry for replying to your post specifically, but I’ve seen these accusations toward JasonC a few times on this thread and it caused me at this time to say what I needed to say.
Collectively here, we can disagree on our views and we do and that leads to heated debated as we defend our sacred cows. I don’t share and done condone criticizing people for having a collegiate writing style or for strongly supporting their views.
William F. Buckley had a very “haughty” speaking style and generally acted superior to those he talked down to, but I loved listening to him and he backed it up with facts and sound logic.
To all: Lets attack the positions held and not the people who hold them. There are plenty of lurkers here who I am sure are getting a great deal of food for thought with all of the viewpoints fleshed out in this great ongoing debate.
GOPJ - I’m sorry to have replied on your post, I just hit a bpoint that I had to say something.
Indeed, all of JasonC's thoughts and viewpoints seem to come from this reference frame. This is what gives many the impresion here that he defend the financiers and is anxious to support them, while blaming the general public's human nature for the problems in the economic cycle. Obviously I've simplified the hell out of all of his very detailed, well thought out and well supported posts to a loose soundbite, but I think this is the perception most readers get from his posts and I think that perception is the reason why he gets so much flack.
If the former, it is hard to reconcile good=bad. If the latter, are you will to accept responsibility for the bad purposes that "free" men use cheap credit for? Did you say "no" to hedge funds using 10:1 leverage to speculate in commodities? Do you understand the connection between credit and the rise in cost of productive inputs and how that negatively impacts the rest of the economy? I think you are going to have a hard time selling your idea of government subsidies for credit without adding some element of responsibility to reduce systemic risk.
So basically you are looking for a handout. You want "free credit", as in very low rates from Greenspan and now Bernanke. But you don't care if that "free credit" raises systemic risks and leads to a meltdown because, oh well, that's how it goes when men are free.
Not a lot and not for long. We added $5 or 6 in debt for each dollar in GDP during the credit boom. That translated into a lot of paper wealth which is slowly vanishing (unlike the dot-com bust, the paper wealth associated with real estate drops a lot more slowly). The paper wealth vanishes but the debt does not.
"You get more of what you subsidize." -Freedom_Is_Not_Free
It is true that many Austrians on the other side blame credit or frational reserve banking for all economic dislocations. That is false from at least two perspectives, one, natural disasters and wars can cause economic cycles. Second, human nature exists independently of credit. Someone above explained it in terms of Atari game cartridges. Those people creating those cartridges that ultimately caused a glut were not doing it due to cheap credit but to imperfect information about potential competitors. Cheap credit was not a factor in information flow in that example.
OTOH, Jason is also wrong to exonerate cheap credit or more precisely, to embrace cheap credit as a legitimate tool for use by the Greenspans of the world with the caveat that they are human and make mistakes. There is now a two decade record of such mistakes to add to a large number of historical examples. Mistakes and cheap credit go hand-in-hand. But I gotta agree with him on one thing: it is the greatest system for economic growth ever devised. Until the inevitable mistakes are made and it all comes crashing down.
Good explanation. Thank you.
First, he consistently approaches the "banking system" as a monolith when in fact it is comprised of many banks that have invested carefully and with due diligence, and some banks that have largely failed to prudently secure their shareholders' assets. I've not seen a post by him where he addresses the effect of "rescuing" the latter upon the former.
Second, he does not grasp the concept that declining to subsidize a poorly run business is not the same thing as punishing its management.
Granted that there are many Freepers who are cheerleading for the latter - I'm not one of them, I view the current holders of bad mortgage paper not as villains but as willing dupes. Willing dupes are not guaranteed a return on bad bets in my concept of America. I don't call for their imprisonment, but I do call for them to eat their losses and start over.
(Jason - should you read this post please be aware that I have not pinged you, due to your expressed desire up-thread)
How did I miss this. Why didn't I think of that.
Listening to a young man who is one of the top personal investment advisors on CNBC, Mark Somebody, was saying that the days of buy and hold are done with for at least a decade. Regular reviews are the answer, so I suppose we had better get used to spending an hour a week reviewing the past weeks trades and what direction the market is headed if we expect to hang on to our nest eggs.
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