adrock3215

Do you actually think there is any difference between an Obama presidency and a McCain presidency? They will both govern in the same manner and with similiar pragmatic principles (that might be an oxymoron, but you know what I mean). As evidence of this fact, consider switching every reference to Obama in your post to McCain, and every reference to McCain to Obama, and notice that nothing of importance changes.

I used to be General Manager of the Domino's Pizza store that delivered to the State Department. The people who worked there were a major source of revenue for the store (and my bonus checks). Every few months or so I would go over to the building to hand out fliers, talk with people, etc. in an effort to drive sales. Sidenote: We delivered to the White House also, which was another major revenue source. We would receive 4-5 orders from the State Department daily, and 1-2 from the White House. The other major sources of revenue were the law offices along K St and the embassies on Mass Ave.

The issue is: Why would I want it if it makes me worse off?

There are valid claims against a "stimulus". For instance, the fact that government must borrow the money to fund the stimulus is a strong mark against it. It would be different if government was sending out the stimulus because it had some budget surplus, but that isn't the case. There are two options available to governments that are considering raising money through the issuance of debt. The first is to borrow from private capital. The effect of this is that government "sucks" capital from the private markets, which therefore drives up interest rates and decreases private investment spending (typically called "crowding out"). The second option is for the Federal Reserve itself to buy the debt obligations of the Treasury, i.e. for the Fed to lend to the Treasury. But remember that every time Treasury bills/notes/bonds are sold to/bought by the Federal Reserve, the funds used to buy them are simply created from thin air (typically called "debt monetization"). Either way the effect is not good. In the first case interest rates will go up which will discourage private investment spending, or in the second case currency will be printed and the dollar will continue to lose value.

Err, sorry, that was a hastily constructed post. I meant to say that there is no difference in principle between advocating the "get out of the way immediately" position and the "they can't just get out immediately, they have to transition to a free economy" position. The philosophical principle at work is "get government out of the economy", and the difference is in how one should go about achieving that end. It's not really important to the philosopher how the government gets out of the economy, or whether it happens now, or tommorow with a smoother transition. Figuring out the exact manner of implementing the principle is an area of specialization that requires a vast sum of knowledge in economics and law (and probably many other fields as well). In short: Who cares? Just get them the hell out of the way.

She spelled Nietzsche wrong also. Maybe she just has a fetish for spelling the names of philosophers phonetically. I wouldn't bother with this clown. Choose your battles wisely; this one seems too far gone.

In terms of practicality, the thought that government should help these banks with the intention of moving toward a free economy is as unlikely as a "one-day, set 'em free" fix. Neither one is going to happen. In fact, the result of this crisis will be the following: government will help the banks with the intention of moving toward a less-free economy. In terms of principles, the difference between the two positions is negligible. The principle is that government should set the economy free. The philosopher says this to the economists and lawyers, and when the time comes to do so they can best figure out how.

Wait a second....I've been in the State Department building (2201 C St) for more than 5 minutes!

This came out yesterday. Quite frankly, I see it as neither here nor there. Obama will win the election irregardless of who endorses him.

Why not? It is preeminently a value-oriented show.

I also like Whitney Houston's One Moment in Time. To me, it is a tribute to individualism: I want one moment in time When I'm more than I thought I could be When all of my dreams are a heartbeat away And the answers are all up to me Give me one moment in time When I'm racing with destiny Then in that one moment of time I will feel I will feel eternity

There is a paper written by Austrian economist Ritenour here that explains Krugman's theory of business cycles as presented in his book "The Return of Depression Economics". I learned a lot of new things from it and I recommend the short read. A few points from the article: Krugman really is a modern-day Keynesian, who writes in his book that the Latin American and Asian busts during the 90's were the result of too little inflation. Krugman's writes: "the world is lurching from crisis to crisis, all of them involving the problem of generating sufficient demand." Of course, like any economist who sees demand as a primary, the solution is: INFLATE! In his eyes, Japan should have printed enough money in the 1990's to raise inflationary expectations, so that Japanese consumers would stop saving and start spending; in other words: higher levels of inflation would have caused holding cash to be perceived as risky, so demand for money would have decreased while the supply of money in the goods market increased. Krugman finishes his book off with the obligatory pragmatic attack against capitalism: "the only important structural obstacles to world prosperity are obsolete doctrines that clutter the minds of men."

This really is a travesty. The modern banking industry has always been the most heavily regulated industry in history, so maybe that's why these executives are so receptive to the deal. Although, from what I read, a good many of them were not. The story gets worse with smaller banks. There are small banks that were looking forward to picking up market share when larger banks went under. Now, the large banks that took on too much risk are being protected, at the expense of the smaller more thrifty banks who will not be able to expand market share. This entire catastrophe is a debacle. There has not been an event that has hurt the case for free markets as large as this since the Great Depression. What gets me is that there is hardly a voice out there who is questioning the legitimacy of such a proposal. Since the entire process is being done by the Republicans, there is no supposed "free market" party in opposition to question such a scheme, and the left simply watches on the sidelines and cries: "See, I told you so...even you free market guys have to come over to our side when things get bad." Think of the precedent that these last few weeks have set. I don't know if people understand that if this can be done, anything can be done. In my estimation, if the ideas of this country don't change quickly, we are heading toward some form of dictatorship. Milton Friedman said a few smart things in his day, one of which was, “Only a crisis produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.” Look at the ideas lying around in our universities; the political actions being taken right now are the logical ends of those ideas. We've been sold short by the Humanities departments in our universities while the idiots in the SEC ban shorting in the financial markets.

A bureaucrat.

This editorial by Eugene Robinson was out in the Washington Post today. Robinson says:

This is a monumental disaster. For those of us who are working toward an MBA, the plan has thrown some uncertainty into the mix. Surely the value of an MBA has dropped drastically in the last month. We aren't going to need experts in finance anymore; we're going to need bureaucrats. My bet is that the value of a Government and Politics degree or a Law degree just skyrocketed. What we need right now is a Francisco D'Anconia. Some huge bank (Bank of America would be good) to blow up from within, and take down everything else.

I think that's why Jim Rogers was out the other day on CNBC saying he'd covered all his shorts in the financial sector last Thursday, and he has sold 20 and 30 year Treasuries. He's calling a bubble in Treasury debt securities.

That would be a tragedy. I wouldn't compare him to Keynes, that's giving this goof too much credit. Krugman is a footnote. He'll be remembered more for his NY Times Bush-bashing editorials than any intellectual accomplishment. Kendall: Had to get it off my chest.

Krugman is a liberal moron whose contribution to economics is marginal at best. The Nobel Prize is given out by certified wackjobs, as evidenced by the award to Gore. Off the top of my head, I can only think of two "non-liberal" thinkers that the prize was given out to in economics: Milton Friedman and Friedrich Hayek (and the latter shared 1/2 of the prize with another guy). The Merton-Scholes year turned out to be a disaster when it was found that their stupid "rational market" theories led to the destruction of Long-Term Capital Management. The other I can think off the top of my head is Solow, who had some valuable insights on technology and productivity and their effects. I can't stand Krugman though. The last few years have definitely been a low point for the Nobel prize.

I don't know why people always make a big deal about labeling themselves "Objectivist" or not. Call yourself a Dickhead for all I care. All that matters is your ideas in my estimation.

I think that there is a more distinct difference between the two approaches then you are saying. Under the original Paulson plan, government would hold a reverse-auction to purchase MBSs with Treasury debt securities at discounted prices from the banks who post the lowest asks. The desired outcome is that the asset side of the bank balance sheets would be sufficiently clean enough for the bank to again start making loans and operating normally, while the government would simply hold the MBSs to maturity. That's why some people were predicting that the government would actually make money by holding to maturity. Kind of like starting a government run, taxpayer funded hedge fund in my opinion. Under the equity-ownership plan, government would not directly hold MBSs. They would be exposed to MBS losses, but only to the extent that it could wipe out the equity stake. Under this plan, I suppose the reasoning is that the bank balance sheets would be strengthened, and banks would be able to again make loans and operate normally. When this crisis passes over, and housing values turn around, the MBSs will be worth more, and the banks can sell them for a small loss, or hold them until maturity on their respective balance sheets. Another aspect of the equity-ownership plan is that it would "show confidence" in the long-term value of financial institutions. This would hopefully encourage others to take equity stakes in America's financial institutions as well. Kind of like what government did with....Fannie and Freddie.

A market, by definition, requires a buyer and a seller. There are only sellers and no buyers. The central part of Paulson's plan (at least when it first passed) is to establish the government as a buyer. That's why we have a central bank. To insure that inflation is just large enough to make sure assets always increase in "value" over time, while also keeping unemployment as low as possible. It woudln't necessarily. The point is that nobody wants to buy them. The first issue is that nobody knows how to place a value on them, therefore they don't know how much to offer. The second issue is that nobody (major players who would make a significant impact) has money, because most financial institutions are already in disintegrating situations. With the uncertainty surrounding MBSs, major players that are in relatively good shape would rather just stay away from the entire mortgage market right now.

The distinct problem with re-capitalization is that it will be done under the false premises of fiat money. Any re-capitalization done under such circumstances is essentially a paper-money pyramid scheme, and is therefore inherently unstable anyway. Also, wouldn't the unwinding of such high leverage cause tremendous disruptions in the system anyway? We have never gone through such a thing in our history, so it is anyone's guess. I personally disagree with the govt taking ownership positions in banks or a 1907 style JP Morgan role. If you look at Bank of America, Citigroup, JPMorgan, etc, you will find that they are all still paying dividends. If their balance sheets are being punished, why can't they suspend dividend payments? There is no MBS market right now. The point of the government's bailout plan is to make a market for MBSs.

Jeez, those are terrible Alfa. I can't believe we're even discussing this guy. He is atrocious. His technique and style immediately discredits him from further consideration, as it is clear that he doesn't know what he is doing. His composition is terrible, his use of color shows lack of effort, his depiction of the human figure makes it look like it's made from rubber, and his brushwork is sloppy. There is no unity in the end product, and the result is the cold, austere, dead feeling that you get when looking at his work.

Interesting find. I've always liked that quote from Rand.