Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Thing is, when you say the government is bailing out the banks what that really means is the tax payers.
"Taxpayers" can well stand for both "government" and "banks". It is often well to remember that the only people here is us. There isn't some bunch of non-us who busy themselves in running things like corporations, banks, and governments. It's all just us all the time. Right now the government, including but hardly limited to the Fed, is trying to organize an effort on the part of taxpayers to rescue taxpayers from what could be some very uncomfortable times. All of our livelihoods and personal well-being are in some important ways connected to efficiently functioning credit markets. That is simply the nature of a developed economy. There is too much at stake to be standing around quibbling over esoteric moral and ethical issues. When the house is on fire, put out the fire. Then we can all sit around over a beer or two and figure out whose fault the fire might originally have been...
"Taxpayers" can well stand for both "government" and "banks". It is often well to remember that the only people here is us. There isn't some bunch of non-us who busy themselves in running things like corporations, banks, and governments. It's all just us all the time. Right now the government, including but hardly limited to the Fed, is trying to organize an effort on the part of taxpayers to rescue taxpayers from what could be some very uncomfortable times. All of our livelihoods and personal well-being are in some important ways connected to efficiently functioning credit markets. That is simply the nature of a developed economy. There is too much at stake to be standing around quibbling over esoteric moral and ethical issues. When the house is on fire, put out the fire. Then we can all sit around over a beer or two and figure out whose fault the fire might originally have been...
My personal over all on this is that it is the fault of systematic greed. Not that anyone sets out to rob their brother of wealth but either by human nature or circumstance that a long period of times a plenty has caused us to forget or abandon some simple basic fundamental principles.
Now I will be the last person to claim to know much about this and hence I try to phrase this sort of thing in a question as I did here. I realize that being tied to a gold standard or a sea shell standard binds growth to it. By way of fiat we are able to grow and expand as well as become more creative and fluid with how markets function, usually far greater than being tied to something.
Whether it is better to grow slower with fewer financial bubbles or to go hell bent for leather with overall growth absorbing the mess of a popped bubble, I simple don't know. I guess I just may look at things more long term than many people do today and I am willing to pass over a chance for potential quick wealth for assured wealth down the road. You know, bird in the hand is worth two in the bush.
Outside of the whole Fed and gold standard argument, there is one thing that I do feel is quite sound in Paul's view and that is of a stable sound currency being a fundamentally important part of a health economic system. However it may be achieved.
The government is tightening control over the feds and the banks. Try getting a loan in todays day and age, its nearly impossible, causing the economy to crash even further.
You need to loosen regulation in a bad economy to get the money to move, tighten it in a good economy to slow down inflation. Right now the feds are operating backwards. Pump more money in, and then make it tougher to borrow, the whole time, choking the economy.
The main reason we have a bad economy today is because of the loosening of control. What do you think got us into this mess?
Quote:
Originally Posted by pghquest
Well by looking out for the bank, he's destroying the economy. No one can get loans for new houses, some areas they have tripled the required down payment to 15-20% down. In the meantime the house values continue to drop because no one is able to buy and when people can buy, further homes go into foreclosure.
Endless circle that they have done nothing at all to help end.
Until this mess started, it was a requirement to have a 20% downpayment. When I bought my first house, in Pittsburgh, in 1987, I was required to have a 20% downpayment.
Gee, I managed to come up with 20% + closing costs and still own the home today, with no debt.
Real estate is the most recent mole, tech before that, and so on.
Outside of all the mind numbing aspects of modern macro/micro economics, it is my understanding that the Fed is a quasi governmental-private entity in some foggy grey area between worlds. On one hand it has little if any private regulation and almost no over sight from government. So why does such an important thing like our national currency not handled by the government proper? I guess I just never understood the purpose of this "middle man" if you will.
Last edited by TnHilltopper; 03-23-2008 at 08:33 AM..
Paul might not apeal to those that fancy the redundant convoluted mess of a Govt we have today. But he's absolutely right to say if its not authorized by the constitution the Gov't cant & shouldn't do it, period.
I dont think he was losing that debate either. How can you lose when the other guy is supporting excess Govt control on free enterprise?
My personal over all on this is that it is the fault of systematic greed. Not that anyone sets out to rob their brother of wealth but either by human nature or circumstance that a long period of times a plenty has caused us to forget or abandon some simple basic fundamental principles.
Greed isn't a new player in the game. It's been there from the beginning. Any system that either designs or operates itself in such a manner that simple greed can take it down is not much of a well-designed or well-operated system. Under the current regime, it is active oversight and regulation that are supposed to be the guards against greed. Markets themselves are left to operate in general freedom, but the swindlers and hucksters are supposed to spotted and ultimately denied entry, thereby limiting the amount of damage they can do. During the current 30-year mania for deregulation and cutting back of so-called bureaucratic red-tape, it is exactly this review and screening mechanism that has been discarded. Billion-dollar hedge funds can dump huge amounts of risk into the market unnoticed because they have legally defined themselves as kitchen-table, suburban-housewife investment clubs that are exempt from registration, review, and regulation. Similarly, off-line mortgage brokers who draw their take from dollar volume can dump scads of risk into the market by saying yeah, the rest of that documentation is back at the office...I'll fax it over to you as soon as its ready. Meanwhile, the loan is pre-sold as if already made. There has to be a counter-balancing presence in the market if the ill effects of such short-term profiteering are to be avoided. That process cannot be left up to market players themselves. Free-marketeers have done all they can to diminish and disempower that critical oversight and regulatory function, so now we get to see (yet again) what the price of that particular mistake actually is.
Quote:
Originally Posted by TnHilltopper
Outside of the whole Fed and gold standard argument, there is one thing that I do feel is quite sound in Paul's view and that is of a stable sound currency being a fundamentally important part of a health economic system. However it may be achieved.
The Fed and a gold standard aren't mutually exclusive, but the larger point is that no one believes that the value of a currency is related to anything other than the capacity and productivity of the economy that backs it. At the end of the day, that is what will drive currency markets and attempts to impose artificial regimes of standardization will all ultimately fail. Standarization made some sense when the world was a patchwork of national economies in which the international regime was characterized and primarily influenced by inter-official flows. In a globalized economy, it is commercial markets that dominate, and large as they are, official players can simply no longer afford even an attempt to control the field of play.
When the house is on fire, put out the fire. Then we can all sit around over a beer or two and figure out whose fault the fire might originally have been...
But it seems like we are putting out the house on fire and not doing anything about the huge forest fire that set the house on fire in the first place. You obviously dont feel the gold standard is the answer. Tighter regulation seems to be the answer in your opinion, correct? Could you be more specific about how to put out the forrest fire so it doesn't keep growing to a point where it is completely unstoppable? These quick-fix, patches are only just that. In fact they are likely making the overall problem worse.
But it seems like we are putting out the house on fire and not doing anything about the huge forest fire that set the house on fire in the first place. You obviously dont feel the gold standard is the answer. Tighter regulation seems to be the answer in your opinion, correct? Could you be more specific about how to put out the forrest fire so it doesn't keep growing to a point where it is completely unstoppable? These quick-fix, patches are only just that. In fact they are likely making the overall problem worse.
Only time for a drive-by post or two today, but the analogy has gotten out of hand. I'm not sure what you mean by the huge forest fire. As for the quick-fix, the big problem with it is that it wasn't nearly quick enough. The problems have been allowed to come into existence, then make their way into just about every nook and cranny of the financial sector (most directly calling into question the continued orderly operation of credit markets on which almost all commerce today depends) before anyone actually decided to do anything about them. Efforts on-going at the moment are essentially a necessarily multi-pronged attempt at first containment, and then at clean-up. The next step up the ladder (which we aren't ready to tackle yet) is toward steps necessary to prevent recurrences, and that is where major increases in the scope and strength of oversight and regulatory regimes (i.e., a return to managed capitalism) come in. It is necessary to maintain the essential functions of markets while at the same time assuring that only the properly credentialed players are allowed to participate. When the markets themselves are unable to determine the difference between quality products and junk, you are going to get major inefficiencies. Systems that lack rigorous refereeing are particularly prone to finding themselves in just such situations...
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
