Markets & Government Regulation - The Collapse of 2008

[Oleg Bach]

You would be surprised where the power truely resides. If you think this stuff is not being read by those attempting to gather intelligence to be dispersed to politicals you may be naive...Intelligence must be gathered because as you know our politicals have none of their own and they know that one fact...advisory postions are available to all who want to contribute - from the comfort and privacey of your own home. For instance when Speakfreeamerica.net was in it's original form as a virtual government - the members consisted of school girls - young undergraduate males - former intelligent officers who had done tours in Iraq...lawyers - and their resident Canadian - me - the lunitic....This site was constantly scaned and the average person can now make a difference..planting small seeds can change the world.

Look at your resident Amerian member - a brilliant man who is willing to learn from the most learned and from the street level - You have a great place here - but it will wear out as all electronic communication does - once someone foolishly decided to pull the plug. Even the dumbest of us here can come up with something orignal and useful - no person is without his gift - and I don't mind being generous - neither does Bush Cheney - who is a tough one - but has heart and the capacity to love...I feel privledged in being excepted here - it was rough at first but I learned to respect and by doing so got a little back - thanks guys--and girls - You are all wonderful - You are the government - the people.

[eyeball]

EB,

You're turning the tables on me. I've shown you that your idea of monitoring public officials more closely won't fix these problems.

No you haven't. There are no examples of any society on Earth where the Telescreens have been aimed the other way.

I would say that if we have complex issues that need to be monitored, we should have people monitoring those issues, and we should have the public listening to those people.

We have complex issues that need managing. The people doing this however cannot be trusted to do that so they are what need monitoring. Like a manager who watches a clerk in a store does. I'm sure there's no hard feelings between store-clerks and the owners of the stores so I fail to see why the relationship between public officials and the public they work for should be any different.

We don't need a new institution we merely need to re-think about a few old ones, starting with religion and the crown. As I understand it at least some of the original reasoning behind the hierarchy of power in our governing system was derived from the idea that the authority to wield power literally flows down from God through a crown and into the person wearing it. This arrangement was apparently negotiated by religions that were basically competing with fuedal kings for the hearts and minds of people or more likely the justification to rule them. The people, bless their poor misguided hearts, bought into the idea that religion would somehow see to it that any abuses of power perpetrated by the wearer of a crown would be checked by the judgement of God, who as we all know is always monitoring everything everyone does.

The idea of protecting the common man from the abuse of power by having someone or something actually looking over powerful people's shoulders is an ancient one. The idea that God is still performing this miracle however is pretty much dead, thankfully however we have the Internet. OTOH perhaps God is still alive and really does help those who help themselves and that's why He gave it to us. So, I wonder how many kings and queens and hangers-on have said the same thing about their power?

Edited November 21, 2008 by eyeball

[Riverwind]

Like a manager who watches a clerk in a store does. I'm sure there's no hard feelings between store-clerks and the owners of the stores so I fail to see why the relationship between public officials and the public they work for should be any different.

Who chooses the watchers? Are the appointed by committees? If so who decides who is on the committes? Are the elected? If so why would they be any more trustworthy than the current batch of elected representatives?

[eyeball]

Who chooses the watchers?

You would be the watcher via the Internet so its more a matter of your choosing to watch.

I'm quite certain the vast majority of people would be no more bothered to monitor a meeting between a lobbyist and a cabinet minister than they are to watch C-PAC. The fact that anyone could however should be enough to keep the lobbyist and cabinet minister honest. They can be quite certain that someone will be watching and listening and that simple dynamic would change...pretty much everything about the way they conduct themselves I think.

I realize I'm asking a lot of politicians and this plan may require a new political party made up of people willing to give up their secrecy. I think anyone who does should be very richly compensated.

Perhaps that's the ticket compensate politicians to the extent that no amount of bribery could sway them from executing the public's will instead of whatever it is they do in secret.

[Michael Hardner]

No you haven't. There are no examples of any society on Earth where the Telescreens have been aimed the other way.

eb - What you're proposing is akin to having a chaperone at an orgy.

We have controls NOW. They are visible, public, and accessible. Nobody uses them. The powers that be steal from us in plain sight. Why in blazes do we need hidden cameras in such an environment ?

We have complex issues that need managing. The people doing this however cannot be trusted to do that so they are what need monitoring. Like a manager who watches a clerk in a store does. I'm sure there's no hard feelings between store-clerks and the owners of the stores so I fail to see why the relationship between public officials and the public they work for should be any different.

You're right, of course.

We don't need a new institution we merely need to re-think about a few old ones, starting with religion and the crown. As I understand it at least some of the original reasoning behind the hierarchy of power in our governing system was derived from the idea that the authority to wield power literally flows down from God through a crown and into the person wearing it. This arrangement was apparently negotiated by religions that were basically competing with fuedal kings for the hearts and minds of people or more likely the justification to rule them. The people, bless their poor misguided hearts, bought into the idea that religion would somehow see to it that any abuses of power perpetrated by the wearer of a crown would be checked by the judgement of God, who as we all know is always monitoring everything everyone does.

Actually, I never considered that. This means that without God threatening hellfire over us we've lost one of the system controls ? That's actually plausible.

The idea of protecting the common man from the abuse of power by having someone or something actually looking over powerful people's shoulders is an ancient one. The idea that God is still performing this miracle however is pretty much dead, thankfully however we have the Internet. OTOH perhaps God is still alive and really does help those who help themselves and that's why He gave it to us. So, I wonder how many kings and queens and hangers-on have said the same thing about their power?

Ok... so let's bring back... religion ?

[eyeball]

eb - What you're proposing is akin to having a chaperone at an orgy.

Some people do like to be watched you know.

We have controls NOW. They are visible, public, and accessible. Nobody uses them.

Your definition of controls and what's visible and accessible are obviously a lot different than mine. We have no control in realtime or NOW as you put it, the best we can do is hope to catch someone after the fact and its almost always too late when we do.

The powers that be steal from us in plain sight.

No they don't. They steal from us from behind a wall of official secrecy.

Why in blazes do we need hidden cameras in such an environment?

We don't, in fact hiding them would defeat the purpose.

Actually, I never considered that. This means that without God threatening hellfire over us we've lost one of the system controls ? That's actually plausible.

Well metaphorically or allegorically maybe, the point I'm making is that the fear of consequences stemming from being found out is what controls people. Forget about controlling the system, its just a thing. Its the people in it that we need to control.

Ok... so let's bring back... religion ?

NO! Christ on a stick... we want to make things better not worse. All I said is it might be useful to recall why the fear of God was used to check the abuse of power.

[Michael Hardner]

Your definition of controls and what's visible and accessible are obviously a lot different than mine. We have no control in realtime or NOW as you put it, the best we can do is hope to catch someone after the fact and its almost always too late when we do.

eb, the fact remains that these legislative changes were made publicly and without any stealth. No camera, hidden or visible, would have changed or improved the situation. There was no secrecy. Everything was done in the open, and the system failed all the same.

The premise for these them of yours is that our society is being ruined by planned evil, but the fact is that we're ruined by everyone failing to do the little things.

[Oleg Bach]

With out the daily maintainance of the little things the big thing disappates and falls apart. There is no planned evil - evil is stupidy and stupity is evil. Fear no evil! Problem is that we fear stupid people who make bad decisions - because we are to afraid to say to a person with money and power - You are stupid - Congress should have taken the three auto execs and said to them - You are stupid get out...just like that!

[Pliny]

With out the daily maintainance of the little things the big thing disappates and falls apart. There is no planned evil - evil is stupidy and stupity is evil. Fear no evil! Problem is that we fear stupid people who make bad decisions - because we are to afraid to say to a person with money and power - You are stupid - Congress should have taken the three auto execs and said to them - You are stupid get out...just like that!

Be fair now, Oleg. The three auto execs had their hands tied and had to cater to the unions until they were uncompetitive. Then when everyone was fat they had to become a finance company that made cars in order to pay the bills. Then at 0% financing they were a finance company losing money. No one wanted to give anything back to the company and they could no longer afford to go back to their roots of building automobiles. They of course have gone to government before which is nothing more than welfare and not conducive to the necessary correction and restructuring a company may need in order to compete in the market - that or die and let the vultures pick over the bones.

The opening post talks about socialism being dead and realized as unworkable. I don't think that is the case. I think people are politically naive and confused. I have trouble voting for instance because all the parties offer are different ways to spend our tax dollars for their own ideological purposes. If a political party offered to cut spending I would be happy with that. When they promise to do this or that for the taxpayer we should say you are stupid get out... just like that.

Taxpayers are the only ones that have to pay for their own stupidity. The buck stops there. FDR was wrong. It didn't stop with him...he liked to spend it as does any politician in order to garner the vote.

[Pliny]

People should spend less time pining for the good old days where their theoretical models appeared so practical (but were not so good after all) and spend more time reading about some of the details of what has gone on in the US (and other countries):

See Calculated Risk and the Big Picture.

Even the "Maestro" easy Al Greenspan has partially admitted the errors of this way.

I looked at these two blogs and Calculated Risk was interesting but the Big Picture was pretty bad.

Alan Greenspan in order to correct himself would have to turn to his '60s point of view.

The roots of the current economic crisis are not in the more recent American administrations, as market interventionists would like us to believe.

I find it very difficult to wrap my mind around the concept that deregulation during the Bush administration was the source of the meltdown.

What created the housing boom? We have to answer that question before we can come to an understanding of why no one noticed the impending bust. Why would Wall street drop it's prudence in lending almost entirely? Are these not astute business men. Who encouraged them to increase their risk margin? Do we just blame greed? I don't think so. Grabbing now and failing later is not how companies generally operate. They know that remaining viable in the long term requires an assessment of risk? Greenspan called it "unbridled exuberance" or some such thing. Same as greed. But it doesn't explain why markets would all at once all be greedy and not calculate the long term risks. Is everyone a lemming?

What were those factors that led to the boom? Answer that and you know government encouraged and almost bribed Wall Street to provide sub-prime loans. With agencies like Fanny Mae and Freddie Mac buying them up in the form of derivatives it made complete sense to go along with it. We know how many mortgage companies opened up and closed their doors after they sold their loans to Fanny and Freddie. They were smart. The warnings were there but government, a la Barney Franks and Chris Dodd assuaged everyone's concerns and said all was well - keep up the pace. The risks were ignored.

But this isn't the beginning of the problem at all. Government regulation and intervention in the market introduces a variable that makes it virtually impossible to gauge risk. The only way risk can be minimized is to guess what government is going to do. If you have an inside track on that you stand to make huge money. Government plays it's favorites though and doesn't like interlopers.

What happened with Enron and Worldcom? Was this "unbridled exuberance"? Greed? No. It was a calculated risk where the risk was made to appear minimal. How was it made to appear minimal? Once again government stood by and encouraged the exuberance until it could no longer sustain itself.

You see the big problem is that government holds itself out as the agency of correction and when it doesn't correct then risk-takers assume all is well. Then when reality hits and market self-correction necessarily takes over it is more disastrous than it had to have been because risk takers, entrepreneurs, could not gauge the risk.

They trust government will rein them in when they overstep their bounds. It is assumed all is well if Government doesn't intervene.

But that is not where the problem started. The problem started when the King clipped the coins and devalued the currency.

Obama is not going to cure the countries economic ills with his economic policies and direction. He is creating an economic disaster. I guess we wish to ignore it with "unbridled exuberance" as though we never learned. Will we ever ask the question of Obama's administration whether there was too much regulation? Or will it always be determined that there was not enough regulation?

Edited June 11, 2009 by Pliny