Derwood

Who created the real estate bubble and the financial meltdown, then?

__________________
"You can't shoot a country until it becomes a democracy." - Willravel

rahl

Bush was in office for eight years. During which time he implimented certain economic policies. As a result of those policies the economy tanked. Obama has been in office for one year. During which time he implemented certain economic policies. As a result of those policies the economy has started to recover.

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"Your life is Yours alone...Rise up and live it"

Baraka_Guru

I agree with this to a point. I think people put too much stock in the impact they have, but I do think governments play an important role in the economy.

Um, wait. What has hurt more, Obama's "rhetoric and attack" or the financial sector's history of ludicrous credit practices coming to term? The reason why banks aren't lending and credit is frozen has a hell of a lot more to do with the breakneck speed and heavy-handedness at which banks threw around their own money and the money of others. What is your opinion of Obama's recent move regarding how banks may or may not do business in the future?

Well, it's fairly clear that to a lot of conservatives, even centre politics is "left wing." It's interesting to hear that view from where I'm sitting.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

Cimarron29414

You guys are correct and I am wrong. Have a nice day.

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Gives a man a halo, does mead.

"Here lies The_Jazz: Killed by an ambitious, sparkly, pink butterfly."

Derwood

awwwwwwwwwww

__________________
"You can't shoot a country until it becomes a democracy." - Willravel

Cimarron29414

Honestly, is there anything that I can say that will make you go, "You know, that's true. I didn't think of it that way." Nope. I will convince you of nothing, so why waste the time?

__________________
Gives a man a halo, does mead.

"Here lies The_Jazz: Killed by an ambitious, sparkly, pink butterfly."

Derwood

it's called a debate. you express your views, I counter with mine. Just because no one states that the other person has swayed them doesn't mean a healthy debate isn't happening.

That said, when was the last time I convinced YOU to change your mind?

__________________
"You can't shoot a country until it becomes a democracy." - Willravel

Baraka_Guru

Well if you look at what goes on in Canadian politics, you will see actually working left politics. Real-life, self-proclaimed leftist parties holding actual real-life seats of power. You see the same thing in South America too. The U.S. is virtually surrounded by it. I won't even get into Europe.

The U.S. is essentially a two-party system. One party is essentially centrist (often Third Way), while the other is essentially centre-right. There is no left-wing political power in the U.S. There's left politics, but they operate on the fringes and in the grassroots.

Much of the "socialist" aspects in America that people are concerned with, and even those things that people don't even talk much about anymore, are so mainstream in contemporary politics that even conservative politicians have accepted them as the norm and deal with them as political realities.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

ratbastid

Hey, here's a marble you missed before you took all the rest and went home:

From my perpective you're a high-pressure firehose of bullshit. But that's just my perspective. As is the case with TFP Politics in general, you're not going to change my view and I'm not going to change yours. I wrestled with that and came to terms with it a few months back. Nature of the beast. And if you can gain some peace with that, this place gets interesting again.

aceventura3

Debates with liberals on economics is sorta fun. Let's have some more fun. Let's look at the failed cash for clunkers program or the CARS (The U.S. government’s Car Allowance Rebate System). On the surface many people got a benefit and we could argue there was a benefit by getting some gas guzzling high polluting cars off the road. I am not disputing the benefit of getting some gas guzzlers off of the road, but for everyone that got a benefit many more ended up paying higher prices for used cars.

Effect of Cash for Clunkers (CARS) on used car prices. : News.PreOwnedCar.com

I point this out to illustrate that there are no free rides, in order for the government to give there has to be an off-setting cost. Think about it - the single mom in poverty needing a used car but did not have a "cluncker" or did not participate in the program, who now goes out to buy a car, let's say a $2,000 car needed for a new job, will pay about $700 more for the car. Thanks Mr. President.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

Baraka_Guru

You're making the assumption that the prices for used cars would have remained static or would have not climbed by that $700 value in your example over the same period. Would this be realistic in this environment where, you know, people would be more reluctant to sell their cars into the used market and opt instead to hang onto their vehicles indefinitely? That puts a chokehold on the supply in the used car market.

I wouldn't call the CARS program a rousing success, but I wouldn't call it a failure either.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

Derwood

I don't know what your business does, Ace, but would you have vehemently opposed an Obama initiative that gave incentives for consumers to utilize YOUR business?

__________________
"You can't shoot a country until it becomes a democracy." - Willravel

roachboy

that would in all likelihood be understood as a self-defeating effort on the part of a state that is as it can only be which is misguided, fucked up, a mobile principle of irrationality, that would introduce distortions into the otherwise grandly functioning bidness empire that is ace's.

he's a supply-sider you know.

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

filtherton

I like it when Ace pretends to sympathize with the economic needs of poor folks to make a point.

Ace, none of the single mothers I know are in a position to buy a used car. But you're probably more concerned with single mothers as a useful crutch for your economic positions than you are in supporting economic positions that help single mothers (maybe I'm wrong about this).

aceventura3

If the Obama administration gave it as much thought as you did above I would be surprised. The primary point is that unintended consequences have to be accounted for, the costs of government programs have to be looked at, the Obama administration has a pattern of selling the benefits and ignoring the costs.

---------- Post added at 06:04 PM ---------- Previous post was at 06:01 PM ----------

Yes.

I have no interest in being beholden to the government. If you talk to the car dealers who had to jump through the government hoops to get paid, many have said it was not worth the aggravation. I just want to pay my fair share of taxes, follow the law and be done with it.

---------- Post added at 06:18 PM ---------- Previous post was at 06:04 PM ----------

I am also a free market capitalist and think it is the best system for average people in an economy.

Let's play a game, let's call it who wins, corporate America or real middle class people.

Scenario #1

We have a closed economy called America, everything else is equal. The economy supports 100 car transactions per year at a price of $10,000. Corporate America handles the transactions and gets a 10% cut - that, $10,000 x 100 x 10%, which is $100,000. Now let's say the government causes prices to increase 35%. a few things could happen, including...

let's say transaction volume stays the same, but the costs go up to $13,500. Corporate America gets 10%, now they earn $135,000, with no increase in costs, who wins?

let's say transaction volume goes down 35% at the higher cost. Corporate American makes $877,500 at a volume of 65 transaction, they fire 35% of their work force, who wins?

And so it goes, Corporate America is chalking up record profits during an economic recession with no jobs growth, and people call it corporate greed, I call it short-sighted economic policy.

I am a supply sider, don't you know.

---------- Post added at 06:21 PM ---------- Previous post was at 06:18 PM ----------

Easy credit, overly optimistic outlooks, secondary markets allowing risk transfer, mixed in with greed. We have had this combination of issues in the past and will see them again in the future, with or without Bush.

---------- Post added at 06:24 PM ---------- Previous post was at 06:21 PM ----------

Using your logic was Clinton responsible for the Dot Com bubble creation and bursting? I would say no.

That is the "rainman" argument that I alluded to earlier. If not for Obama the economy would not recover????

---------- Post added at 06:29 PM ---------- Previous post was at 06:24 PM ----------

I think the market could have handled the issues "coming to term", however, creating a panic can overwhelm what could have been an orderly unwinding of excessive risk and speculation in the market.


I think banks will find away to make and grow profits. There are armies of people trying to figure a way to make more money compared to those in Washington trying to control it. What the market needs is openness, fair and honest disclosures - that should be the focus.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

SirSeymour

You have to differentiate between the candidate and the office holder. Bottom line, Obama the candidate did not have all the facts and I don't care what you think you would do differently from your predecessor, you can't be sure until you have 100% of the facts involved in making the decision.

I fully expected to see much of what we have today in the foreign policy department, especially as it pertains to Iraq and Afghanistan. The facts being reported by the experts on the ground don't change because a Democrat moved into 1600 Penn Ave. No one, not Bush, not Obama, not the Joint Chiefs, not Congress and not the commanders in theater want to see a single American life taken needlessly or frivolously. If Obama is following many of the same policies as Bush and people view him as having broken with campaign promises then maybe they should consider that he now knows something he did not know then and that they still don't. Just a thought.

As for the domestic economy...well, we did not get into this mess overnight and no one can get us out of it overnight either.

I will say the healthcare thing is a mess and I hold not only Obama responsible but also Pelosi and Reid. They mistook the outcome of the elections 14 months ago as some sort of sweeping mandate to usher in a new populist era. It really wasn't that at all, I don't think. Rather it was a vote to change business as usual in Washington and that just simply has not happened. This was reflected in the opinion polls when you separated Obama from his policies. Obama had a personally high rating but the work on healthcare did not. Someone (Obama, Reid or Pelosi) should have noticed that sooner.

*shrug*

Can't give him a grade yet but if forced to it would be an "I" for Incomplete. Were Obama as smart as he is touted to be, he would have said the same when asked the question by Oprah.

__________________
SQL query
SELECT * FROM users WHERE clue > 0
Zero rows returned....

rahl

The dot com buble burst wasn't a result of a deregulated economy. No govn't intervention would have saved it, there just wasn't time. Clinton couldn't have changed anything about it. Bush on the other hand had 7 years of consistant deregulation before the economy fell apart.

__________________
"Your life is Yours alone...Rise up and live it"

scout

Heck we have been deregulating since the mid 90's. Deregulation didn't just happen during Bush's term. Part if the deregulation bargain between the Dems and the Republicans back in the 90's was the cause of the housing meltdown and the subsequent world wide economic meltdown.

__________________
"The beauty of the second amendment is that it will not be needed until they try to take it."
Thomas Jefferson

aceventura3

There was a bubble in technology stocks and there was a bubble in real estate, there have been other bubbles in our history and in other economies. It happens. It will happen again.

As we go through this, the seeds of the next bubble is forming. Perhaps it will be in "green" industries or perhaps carbon off-sets, who would you hold responsible for the next bubble bursting? Wouldn't it be cool if we just happened to have a Republican in charge?

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

roachboy

how quaint.
the way i figure it, ace, understanding capitalism is best undertaken by using models in conjunction with actual historical investigation. if you did any of that, you'd probably have figured out that markets don't tend toward anything in principle but historically if they've tended toward anything it's toward concentration. there's really no models under which concentration in production and "average people" making out go together.

i'm not interested in econ 101 games.
and i see no reason to take "free market capitalism" seriously in 2010. but i don't often debate religious questions with religious people. so i'll leave it at that.

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

aceventura3

First to understand markets one must understand costs, even those that are hidden.

Second, markets, even free markets trend toward concentration for predictable reasons. One of those reasons is the benefits of economies of scale, with that comes market competitive restrictions. The next phase in market evolution becomes key. There is a tendency for the "collective" (market participants or government) to protect the status quo rather than allowing or even encouraging new more agile competition. This will lead to the demise of US capitalism, as evidenced by, for example, the auto industry.

Not sure I understand your point here.

Studying markets never gets boring to me. Currently, I love being able to see the evolution of the internet and how it operates as a market. But I am weird that way, and I understand people wanting to ignore things like that, but there are still lessons to be learned.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

Derwood

In a "free" capitalist system (i.e. completely unregulated), those with the money will dominate the system. Thus, the "average guy" will generally get the shaft

__________________
"You can't shoot a country until it becomes a democracy." - Willravel

ratbastid

Studying the bible never gets boring for some people either. Doesn't mean their faith is based in facts.

Not that I'm knocking faith--faith as faith is possibly the most powerful force in all of humanity. But when you confuse faith with facts, you've got trouble.

You have faith in the free market. I got that, and more power to you. You'll do best, though, if you can keep it in a "faith and belief" space, rather than a "facts and evidence" space.

Sun Tzu

Not if that average guy has 100% intention, is not intimidated by risk, and is willing to make sacrifices for the financial goals they are shooting for. (IMO and observations)

__________________
To confine our attention to terrestrial matters would be to limit the human spirit.- Stephen Hawking

Derwood

how can someone not be intimidated by the risk of, say, trying to start up a small appliance store when Best Buy is a mile down the road?

__________________
"You can't shoot a country until it becomes a democracy." - Willravel

Cynthetiq

Well, I can ask the Chinese family that opened a pharmacy just across the street from a CVS and down the street from a 24 hour Rite Aid. Many in the neighborhood predicted their demise. They have been in business now for at least 2 years. When I went to CVS to get a prescription filled, they said it would take 3 days because it wasn't in stock and needed to be ordered from the warehouse. These guys filled it in 20 minutes.

Or the 3 appliance stores that are in my neighborhood how they are faring against Best Buy and PC Richards and Son.

__________________
I don't care if you are black, white, purple, green, Chinese, Japanese, Korean, hippie, cop, bum, admin, user, English, Irish, French, Catholic, Protestant, Jewish, Buddhist, Muslim, indian, cowboy, tall, short, fat, skinny, emo, punk, mod, rocker, straight, gay, lesbian, jock, nerd, geek, Democrat, Republican, Libertarian, Independent, driver, pedestrian, or bicyclist, either you're an asshole or you're not.

aceventura3

I have been giving examples of the "average guy" getting the shaft under liberal style capitalism, mostly through unintended consequences.

In a market the assumption is that participants have something of value to bring to the market. I do agree that as a society we have a moral obligation to those unable to take care of themselves, i.e. children, disabled, elderly and a safety net for people in transitional need. If you have followed my posts, you will find I have been consistent. I agree that there is no true "free" capitalist system. All markets have some form of regulation, even if it is self-imposed by the participants, and I think markets need some regulation to function properly. In that regard you could say I am not a "purest".

---------- Post added at 05:23 PM ---------- Previous post was at 05:18 PM ----------

Nor is worship at the alter of Obama.

I gave some very specific examples and arguments supporting my view, but your response is a broad meaningless generalization.

This is like saying I have faith in the laws of physics or math??? I don't get your point.

---------- Post added at 05:27 PM ---------- Previous post was at 05:23 PM ----------

Adding value to the consumer. Best Buy has competition. I don't buy everything that Best Buy sells at Best Buy, do you? I don't always buy the lowest price, do you? Occasionally I put a big premium on service, relationships, expertise, convenience, choice, etc., don't you?.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

Vabeachdude

This is my problem with Obama up to this point, he's been wishy washy and negative... His agenda has stifled growth, because of the uncertainty of his priorities... I think you hit the nail on the head - Proposed tax increases (Both hidden or outright), Health Care Reform, Cap and Trade.. how does he expect small businesses to expand with this type of agenda... people are scared to death of what the government might do.. and he's not instilling ANY confidence imo. Add the continued credit crisis to the mix and it's gonna stay abysmal for a long time.

FDR didn't get it all right when leading us out of the great depression, but he certainly did LEAD the country and instill confidence. Leadership is exactly what is needed right now! I think we'll see from tonights State of the Union that his administration is going to make some changes in priority and because of that, it is safe to assume we've been off course.

Derwood

You may, but history says otherwise.

My family moved to State College, PA in 1986. At that time, the entire town consisted of small, privately owned businesses. There were 7 or 8 record stores, several small grocers, half a dozen independent video rental stores, etc. First Blockbuster came in, and within 2 years, all the little guys were closed. Then Walmart came, and there went the grocers. Finally, Best Buy and Circuit City came, and this past week, the last independent record store closed it's doors (and it had been the only one for at least half a decade).

The truth is, whether the economy is good or bad, people will always buy where it's cheapest. They'll put up with lousy customer service to save a few bucks (see: Walmart, whose customer service is terrible, but sells a bajillion dollars worth of cheap crap every year)

---------- Post added at 10:06 PM ---------- Previous post was at 09:36 PM ----------

I know ace thinks Obama has no leadership, but I'm pretty excited by (and proud of) Obama for more or less calling out ALL of Congress for being petty assholes this past year. To me, this is what a President should be doing: hold his fellow leaders/public servants accountable. If nothing else comes of this State of the Union, hopefully his message will be heard by Congress.

Probably not though.....if they're not being petty assholes they don't know what to do with themselves

__________________
"You can't shoot a country until it becomes a democracy." - Willravel

pan6467

This is why we should incorporate regulations and have some modified Socialism.

Pure Socialism, Communism, Capitalism, etc. are all in the end corruptible. What lies in between and can be modified and worked into a system is, IMHO, the system we should strive for. Because that would be "the perfect system".

Each economic philosophy in and of itself has great merit, the problem is when that system is used it becomes corrupted by the leaders who corrupt the system.

It's like a milk chocolate bar. If you eat pure chocolate, expecting this great treat, it's bitter, disgusting and eventually you get very ill. If you just do the milk and expectsomething wonderful, you don't get much taste, it's flat and for most the results aren't the same as that milk chocolate bar. If you just do the sugar, you get sweet, but no taste and eventually get sick.

Now, if you combine all three ingredients in the right way, you end up with something delicious and miraculous.

Finding the right combination of economic philosophies, again IMHO, leads to the perfect social climate where ALL of humanity will prosper.

__________________
I just love people who use the excuse "I use/do this because I LOVE the feeling/joy/happiness it brings me" and expect you to be ok with that as you watch them destroy their life blindly following. My response is, "I like to put forks in an eletrical socket, just LOVE that feeling, can't ever get enough of it, so will you let me put this copper fork in that electric socket?"

aceventura3

I will select McDonald's for lunch occasionally and I will even buy off of the $1 menu...oh, never mind we obviously live in different worlds...I am one of those exorbitant people who will pay way too much for a Five Guys burger, where I live now, or an In-N-Out burger when I live in California.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

Baraka_Guru

I'm pretty sure he meant cheapest price for comparable goods.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

aceventura3

McDonald's, Five Guys and In-N-Out sell burgers, fatty ground beef patties cooked on a grill, fries and a Coke. Mmmmm, is it lunch time yet.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

Baraka_Guru

I've never heard of Five Guys or In-N-Out, but I know that I pay more for a burger from Lick's or South St. Burger Co. than I do at McDonald's. And there's a reason for it. McDonald's, if you think about it, doesn't actually make a very good burger, but they're cheap.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

aceventura3

Wasn't that my point? A burger is not a burger, small business can differentiate. A TV is not a TV, small business can differentiate, perhaps by expertise, service, relationships, etc.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

Baraka_Guru

Of course, but I think Derwood's point is that people often get hung up on price. If the product is essentially the same, many people would rather pay less—they can do without expertise, service, relationships. That's why big-box stores are so successful compared to the boutiques/independents (who care).

If people want a better burger, they don't tend to mind too much that they must pay more for quality. But I don't think it's the same thing when you're looking at more or less the same Samsung television. Consumers are increasingly price sensitive these days.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

aceventura3

Sure, I understand his point. But, even a commodity product like gas (additives don't really add value, so gas is gas), one business can differentiate it self from another and command a premium price. I agree, all things being equal I will buy the lower priced item, but my point is that all things are rarely equal and the goal of a small business in a competitive market has to be to add value that others can not. If they can not do that they go out of business, pure and simple.

Some people have the expertise, the resources, and ability to buy, transport and install a Samsung television, they buy based on price alone. The guy who needs advise, delivery, installation, integration with other items, follow-up, etc., may very well be willing to pay more for the Samsung to get access to the other services.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

Derwood

comparing a McDonald's burger to a steak house burger is like comparing a Pioneer plasma TV to an Acer.

I'm comparing two stores that sell the EXACT SAME TV, but one trades customer service for price. In THAT scenario, your average consumer will buy the TV at Walmart/Best Buy instead of Ed's Audio Video World if they can save $100

__________________
"You can't shoot a country until it becomes a democracy." - Willravel

aceventura3

I give another example. I recently purchased a GPS Garmin Nuvi 205, I shopped Ebay and Amazon on the internet. Each source listed various vendors, I did not buy the from the lowest priced vendor, because of "feedback". I would rather pay a little more up-front to avoid aggravation later, that commands a premium in my book.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

Baraka_Guru

I don't disagree....

...but I would say the lion's share of the market goes to those who provide the best prices, especially when some of the big boxes now send low-paid workers out to set up your TV at a premium. Chances are, you'd still come out ahead on cost.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot