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  1. Shadow Banking

    I'm trying to connect this with the idea of shadow banking. So the government takes on the risk of lenders, including non-bank lenders. The non-bank lenders are still subject to lending regulations when they make loans, but what about when they buy and sell loans? Treating loans as financial instruments, that's shadow banking, right? So that's not subject to banking regulations, but is it subject to any regulations? Isn't the whole idea of shadow banking to keep all these trillions of dollars in transactions off the books and away from the eyes of regulators? So when the sh*t hit the fan in the shadow banking system in 2008 and all these "banks" had to be bailed out, the government was essentially caught off-guard and had no idea how deep a hole these companies had dug themselves into. Proponents of more regulations would then argue that there needs to be stricter oversight of financial transactions, effectively doing away with shadow banking and off-the-books transactions. In this hypothetical revamped financial system, the government would be able to see when too much risk has been accumulated and step in before a crisis can happen. Now obviously the question of how the government would be able to know everything the companies are doing all the time without morphing into an Orwellian (or Kafka-esque) bureaucracy is conveniently sidestepped by regulations proponents. Nor will they listen to the argument that what we need to do is outlaw bailouts altogether so that we don't create moral hazards in the system. They dismiss that as being "too idealistic" and "impractical". "We don't need to go to extremes," they say. "We're never going back to the days when companies were completely on their own, so we must accept a compromise that allows bailouts but at the same time enables the government to contain risk."
  2. Shadow Banking

    Shadow banking is a topic I haven't heard discussed much, if at all, by Objectivists. Maybe I don't read enough Objectivist blogs or forums or listen to enough Objectivist podcasts. Anyway, I used the search function on this site and entered "shadow banking" but got no results. In a nutshell, there supposedly exists a vast "shadow banking system" that is mostly untouched by regulators. Investopedia defines it as follows: Then there's this from Investing Answers: And it goes on like this wherever you search on the subject. Every supposedly legitimate source treats this so-called "shadow banking system" that is allegedly shielded from regulations as a reality. Economist Paul McCulley is credited with coining the term in 2007, but supposedly this system has existed for decades without being threatened by lawmakers in any meaningful way. As the story goes, the shadow banking system played an important part in causing, or least exacerbating, the 2008 financial crisis. Wikipedia puts it thus: And: Variations on this narrative have been repeated by politicians, regulators and news analysts ever since the crisis, but it wasn't until a few years ago that the term "shadow banking" started to become mainstream (at least, that has been my observation). The term connotes a sinister conspiracy, and yet analysts and politicians in the know have apparently been well aware of these practices for a long time, going back to well before the subprime crisis. Leftist politicians like Bernie Sanders decry the SBS, but they don't actually do anything to regulate it in any meaningful way. Supposedly even Dodd-Frank did very little to address SBS practices. I have heard Objectivists argue that it's ridiculous to say the financial crisis was caused by lack of regulations, after all there were a ton of banking regulations in effect and basically it was the government's fault for creating a moral hazard after decades of repeated bank bailouts that only encouraged more risky lending. While these are reasonable arguments, they don't directly address the allegations that investment banks, at least prior to the meltdown, were not as heavily regulated as traditional depository banks, and so they were able to conceal their activities in the SBS until everything imploded (this is a deliberate oversimplification of the allegations, I am not heavily versed in lending jargon). Now, I'm sure that politicians and the media have exaggerated at least some facts about SBS practices, and probably have exaggerated the size and scope of the SBS, all in order to make the public scared of a rogue banking system that could easily run wild and cause a repeat of 2008. Nevertheless, I'm very interested to know just exactly how true their claims are. Is all of it B.S., or just some of it?
  3. The way I see it, the key phrase is "the harder their work and the less their gain, the more submissive the fiber of their spirit". The passage you quoted is comparing and contrasting primitive totalitarianism, the kind that controls peasants, with more modern totalitarianism, the kind that attempts to control factory workers, and observing that the former kind of tyrant had an easier go at it, whereas the latter kind has to resort to expropriating factories in order to keep the people under his thumb. She is saying that although the modern dictators act as though they just want to collect the fruits of industrialization's labor, deep down psychologically they're motivated by fear of those factories' power: the power to enable free-thinking men when unhindered by the state. A farmer in a primitive society isn't as likely to rebel against tyranny since it's so easy for the primitive tyrant to expropriate more and more from him (or just kill him). If you're the farmer in that situation, it's "rational" to submit, because otherwise you could lose your harvest and/or your life. On the other hand, the factory worker uses his mind more than the primitive farmer, needs to THINK more to do his job (you know, assuming his job involves technical expertise and not just working the assembly line), and, in a free economy, it provides him a higher standard of living than the primitive farmer (he doesn't have to worry about going hungry because of a failed harvest as market speculators will warn him through a gradual hike in food prices, giving him more time to plan for it by cutting other spending/dipping into his savings). He's more individualistic and not as easily pushed around, so long as the economy remains free. The modern tyrant needs to seize factories, impose price controls, etc., so that our factory worker has to work harder for a lower standard of living, all the while knowing that if he speaks out against the state it means the loss of his job (or worse). The modern tyrant has to "work" harder to keep people in line. That some have claimed that "civilized men are docile and tame" shows how ignorant people are of how much civilization we've actually lost, even in relatively free countries like the U.S. Yes, in many ways we've gained tremendous advancements in civilization in terms of technology and social progress, but we've also gone backwards when it comes to government regulation of the economy. The latter is important as it has resulted in, to some extent, people having to work harder for not as high standards of living. Oh yes, overall, standards of living have gone up for everyone in spite of more regulation (don't let those pounding the drum on income inequality fool you), but who knows how much more wonderful things would be now had the past century gone another way? If modern "civilized" people (especially Americans) act docile and tame, it's because they observe that they don't have it so bad, and government regulations only affect rich people anyway, they think, so what's there to rebel against? If they appear softer, it's because the insidiousness of a mixed economy has made it relatively easy for the government to conceal its role in making things a little more miserable than they otherwise would be, and so people have been lulled into the false belief that government controls are mostly benign, "for our own good", etc. If you ask, "But what about our more individualistic forebears? Why couldn't they stop this massive increase in the growth of government controls?" 1) Because it wasn't massive for them for the most part, it was gradual over years and decades. 2) To the extent that they rebelled against radical new controls (the income tax, the New Deal, etc.), they lacked the right ideas to consistently oppose them, so they gave in and compromised needlessly.
  4. Trump has been criticizing NATO, calling it "obsolete" and threatening to pull funding for it. This has rattled both liberal internationalists as well as "hawkish" American conservatives. I'm far from a Trump supporter, but I'm skeptical of the morality of NATO's purpose to say the least. It seems like pure collectivism: all these countries pool their military resources allegedly for everyone's benefit, but of course we as the country with the biggest defense budget end up pulling the most weight for the least benefit. Is that not a fair assessment of it? When I argue with NATO defenders that the U.S. military should only be for defending Americans and that other countries should have to rely on themselves, they claim I'm just ignorant of history, that without NATO Russia would invade and conquer all of Europe. Sounds highly far-fetched to me. The conservatives in particular talk about how NATO is critical to our "standing" as a "world power" (world power, world's policeman, potato, potAHto). They have this romanticized view of the purpose of our military, that we should use it to be "the good guys", fighting to defend innocents around the world (like we're Superman or something). And hey, what about all the non-U.S. NATO members who died fighting in Afghanistan because of 9/11? Yeah, I respond, it was immoral of them to sacrifice their troops when we were the ones who were attacked (and besides, we stayed way too long and lost sight of our mission in Afghanistan anyway). Liberals, of course, snarl at me that I'm "isolationist" and "cold-hearted", that we and Europe should be "united" in matters of war because, well, we just should. Was there every any moral basis for NATO's existence? As a young person (32) I may be speaking from naivete, but it seems to me that even at the height of the Cold War NATO didn't serve our national self-interest (national self-interest defined as the self-defense of individual Americans as delegated to the U.S. government). Russia was never going to attack us because we always outpaced them on military spending, particularly on nuclear weapons development (Mutually Assured Destruction and all that), so we didn't need other countries to be prepared to come to our aid. It was all about preparing to sacrifice American troops to protect Europe from invasion, and I can't see any moral justification for that. Tying this back to the present, there are those who fear that Putin is trying to bring back the Cold War (based on his buddying up with Assad in Syria, I'd say he's at least up to no good, that's for sure) and therefore, it's claimed, we must be prepared to defend our allies should he attack them. As one conservative on Twitter put it (paraphrasing), "The very reason to prevent the breakup of NATO is that Putin is for it." But I say we shouldn't play that game, that we should never have been in NATO to begin with. If Putin is scheming at rebuilding Russian power to its Cold War-era height, let him. As long as we don't fall behind on our own defense (and given our $500+ billion military budget, we'd have to fall a long way), we need not fear a direct attack, and we should just wait for his plans to inevitably collapse. Yes, he might invade Europe (although it's unlikely) and many innocents would die in that case (not to mention the destruction to the global economy, which WOULD hurt us, I don't doubt), but that would be on Putin's hands, not ours. Besides, I'm skeptical that Russia even has the resources to go back to the good ol' days of trying to take over the world what with oil prices plummeting and the ruble weakening.
  5. Being Called "Offensive"

    I would say one has the moral right to speak without being intimidated into silence by those who object to your speech, even if what you say is completely irrational and even if the intimidation from others isn't actually force. You do not have the moral right to shut down a person's speech simply because it offends you. Yes, politically you have that right insofar as it derives from your property rights, i.e., if someone is speaking on your property you have the right, at any time, for any reason, to tell them to shut up or you will make them leave. That is different from the realm of ethics. Morally, if your private property is ostensibly a "public", "open" place where the expression of ideas is supposedly encouraged, such as a university, then it is wrong to shut down speech, even abhorrent speech, just because it is abhorrent to you, because now you are discouraging free expression and going against the stated purpose of your university or whatever. Morally, you cannot encourage an honest, open discussion of ideas and simultaneously say that this idea and that idea will not be permitted for discussion. (The exception would be ideas that explicitly advocate behavior that is objectively criminal, e.g., anarchists who advocate rioting and violence.) But if you encourage such a discussion you still retain the moral right and obligation to express your belief that someone's ideas are repugnant; you are not obligated to be egalitarian in your response to others' ideas. That doesn't mean that if you run a university that you are obligated to put people on the payroll whose ideas you abhor, but at the same time you don't have the moral right to shut down students' speech (again, not unless they explicitly advocate lawless behavior). As far as guest speakers go, I would say that if a speaker's ideas align with the ideas of a significant number of students then you should invite that speaker to defend his ideas in a debate, as much as you may abhor their beliefs. Presumably you didn't provide a litmus test of the students' ideas when they applied, and in any case students can of course acquire beliefs that they didn't have before, so it's useless to tell them that they cannot express their views (in the appropriate context) or else they will be punished or dismissed. If you despise their ideas, having a prominent advocate of similar ideas defend them in a debate could expose their ideas as irrational (provided the one who debates him is good enough) and could change those students' minds. That is the only objective way to deal with the situation, but again only if you put yourself in that situation by creating an environment where open expression is encouraged. If you don't want such an environment, tell students up front that yours is not a university where debate and discussion are encouraged, or don't run a university.
  6. Walter E Williams on What's Rule of Law

    I would change the word "security" to "government protection of rights". "Security" sounds like you're talking about rent-a-cops or bouncers. But we're talking about government here, and why do you assume that a voluntarily financed government couldn't protect the rights of all?
  7. Walter E Williams on What's Rule of Law

    People voluntarily pay for what they value in a laissez-faire society. Simple as that. What don't you understand?
  8. Walter E Williams on What's Rule of Law

    If people don't want to educate themselves, how will the government's guns force them to? Force and mind are opposites. As for lack of opportunity, a truly laissez-faire capitalist society would provide more opportunities for quality education than what we have now.
  9. Walter E Williams on What's Rule of Law

    Your mistake is presuming that government monopoly of force can be evaluated and held to the same standard as government monopoly on anything else. Objectivism holds that only coercive monopoly (as opposed to de facto monopoly through productive enterprise) of anything other than force is evil. And furthermore, Objectivism holds that the government's monopoly on force cannot properly be used to initiate force. When government coercively monopolizes the use of anything else, it must initiate force to hold that monopoly. Conversely, no initiation of force is required for government to hold its monopoly on force. All it needs to maintain its monopoly on force is a big enough army/police force and powerful enough weapons, and there's no reason that these things cannot be paid for voluntarily by private citizens. True, that's not how it has worked in the entire history of man, we've always paid for armies and police with coercive taxation, but that doesn't mean it is the only way to have a government. Anyway, the point is if a government has enough police or military power backing it and the people trust it to administer justice fairly and objectively, then most people will rely on the government's force to protect them and they'll set aside their weapons.
  10. The second sentence is a non-sequitur. It does not follow that because she thought it was disgusting that therefore she wanted it banned, and in fact she explicitly said it should not be banned. Unless you're using some other sense of the word "illicit", I don't follow your logic.
  11. CIA Torture Report

    Because we are moral and they are not, that's the fundamental. If you're acting on the premise that we're immoral and we don't have the right to use whatever means necessary to defend ourselves in war, then we may as well end this discussion now. But by the way, I never said that no one is allowed to question the efficacy of torture. It's the part where you give the enemy the moral benefit of the doubt. "But what if we're WRONG?!" This is indistinguishable from the rhetoric I hear over and over from leftists, but to hear it from so-called Objectivists is appalling.
  12. CIA Torture Report

    And, I might add, the reason we don't torture common criminals is that a common criminal at least has some grudging respect for the law - when he's caught that is. You see, he doesn't have a global network of friends to fall back on who can use threats of kidnappings and bombings in order to free him. Even in the case of common gangsters we have no need to torture their captives because we know where the gang members live and we can rely on the police in the local area to capture them when they commit crimes. We don't have this luxury with terrorists who hide in countries that are unfriendly to us and/or claim ignorance about their location (Pakistan anyone?).
  13. CIA Torture Report

    Objectivists like Leonard Peikoff, Yaron Brook and Elan Journo have explained eloquently for nearly a decade and a half how we must use total war to achieve victory. I'm not saying that because they say it it must be true, but their explanations fit well with Objectivism's views on self defense and self interest (see OPAR on self-defense, I can't bring up the exact chapter, but LP writes about how an aggressor acts on the level of an animal and the victim must treat him as such if he wants to live).
  14. CIA Torture Report

    Again, more ignorance. The "neo con" line of thought is not "nuke em all" (and besides I never said that, so stuff your straw man), but rather sacrifice of Americans to build nations and bring "democracy" to our enemies.
  15. CIA Torture Report

    You put "initiated" in quotes as if it's not true, as if 9/11 were our fault, and further you give sanction to the delusional thoughts of Islamic jihadists, as if to say, "Who's to say if we're the victims? Maybe THEY'RE the real victims". This is pure moral relativism, do you hear yourself?