If you're not rich or unemployed, blame yourself

[cybercoma]

Cain in the US said more or less these exact words and many posters on this forum seem to subscribe to this philosophy. It implies that every single person could simultaneously be rich and employed, that there's no such thing as cyclical or systemic unemployment. In other words, it contradicts the foundation of economics: scarcity.

[blueblood]

Cain in the US said more or less these exact words and many posters on this forum seem to subscribe to this philosophy. It implies that every single person could simultaneously be rich and employed, that there's no such thing as cyclical or systemic unemployment. In other words, it contradicts the foundation of economics: scarcity.

That depends on how bad you want out of poverty and how bad you want to be rich, we've had immigrants with 20 bucks to their name become millionaires. Many people are fine not putting in the effort needed to become millionaires. In north America if you want something bad enough you can get it.

Hell I want to be a billionaire, but I don't think I can do what's necessary to become one and don't want to make the sacrifices to be one.

[cybercoma]

Hell I want to be a billionaire, but I don't think I can do what's necessary to become one and don't want to make the sacrifices to be one.

You could be a billionaire, but you choose not to be?

Also, we often point to examples of people with nothing making millions, but how many people had millions and lost everything? Between the S&L scandals of the 80s, the dot com bust in the 90s and the collapse of 08, we seem to forget these things. That's not to mention the regular cyclical busts and people who have been replaced by technology in their jobs and just couldn't recover.

[bush_cheney2004]

Cain is right...before anyone blames anybody else, they need to take some responsibility for their own choices and outcomes. This is a very American idea and has broad appeal. I recall another successful president refining the idea into a fine line from an inauguration speech:

...And so, my fellow Americans, ask not what your country can do for you; ask what you can do for your country. My fellow citizens of the world, ask not what America will do for you, but what, together, we can do for the freedom of man. - JFK 1961

[blueblood]

You could be a billionaire, but you choose not to be?

Also, we often point to examples of people with nothing making millions, but how many people had millions and lost everything? Between the S&L scandals of the 80s, the dot com bust in the 90s and the collapse of 08, we seem to forget these things. That's not to mention the regular cyclical busts and people who have been replaced by technology in their jobs and just couldn't recover.

Do I have time to come up with a novel idea, do I want to take the risk and undergo extremely rapid business expansion that may be extremely risky, do I want to sacrifice all my time chasing after a magic billion? Some guys do and that's why they're billionaires, they did what was necessary.

That's the beauty of a capitalist society, free to succeed and free to fail. Smart people recovered by losing their jobs to technology ny entrepreneurship, finding another job, or working a job related to the new technology.

[cybercoma]

Some people are free to fail. The banks, however, are not. Welfare for the billionaires, while those who suffer through no fault of their own are screwed. That doesn't seem very just.

[bush_cheney2004]

Some people are free to fail. The banks, however, are not. Welfare for the billionaires, while those who suffer through no fault of their own are screwed. That doesn't seem very just.

Not true...there are plenty of recurring government outlays for those who fail, far surpassing loans to any banks. Banks with consumer deposits pay into insurance funds to guarantee accounts up to fixed amounts.

[dre]

Not true...there are plenty of recurring government outlays for those who fail, far surpassing loans to any banks. Banks with consumer deposits pay into insurance funds to guarantee accounts up to fixed amounts.

Banks dont just get loans and bailouts though. They also get almost every dollar they lend out given to them for free by the tax payer. The FDIC insures their deposits for them (meaning the public is on the hook for all the risk), and they can lend out money that they dont even have all day long because the central bank just moves money around between commercial banks to deal with spikes in withdrawal.

When you get a mortgage from a chartered bank, they might charge you 3 or 5% interest. Traditional that usury seemed fair because the banks actually HAD the money they lent out, so there was some real risk in it. But modern commercial banks dont even have the money! What is the bank really doing to earn the roughly 300K in interest you will pay by the time youre 300K mortgage is done? Almost nothing. All they do for that money is screen the applicants, and electronically collect the payments. And if you dont pay... they take the property. What just happened there? The banks turned money that didnt exist, and that they never had... into a piece of realestate!

Picture running an equipment business where the government gives you all the equipment you rent out for free

[bush_cheney2004]

The FDIC insures their deposits for them (meaning the public is on the hook for all the risk),

The FDIC is still largely financed by insurance premiums paid by banks, and any taxpayer exposure is mice nuts compared to recurring, annual outlays for many social programs. The S&L crisis and today's bank failures are not annual recurring budget outlays for US taxpayers.

If you have a problem with fractional banking in general, please recommend a better alternative that doesn't require sitting on a pot of gold.

[Bonam]

You could be a billionaire, but you choose not to be?

Perhaps not a billionaire, but a mulch-millionaire certainly. Do I want to devote my life to the pursuit of this wealth though? No, not really. I'm just fine with a middle class salary and more time off.

[Topaz]

It's a difference world out there now. I know of a person who went through the depression and came back from WW2, who went on to become a rich man through investments in the stock market BUT his family did suffer for it. They had to live like they were on welfare and the children grew up disliking their dad. Now, I don't think one could become rich by investments in today world, it would most likely through some tech. invention. I still to get a job in small communities its not what you know as much as WHO you know. I would also say that most unemployed people don't really care if they are rich, just to have the basics in life and that would be feeling like one is rich.

[fellowtraveller]

Cain in the US said more or less these exact words and many posters on this forum seem to subscribe to this philosophy. It implies that every single person could simultaneously be rich and employed, that there's no such thing as cyclical or systemic unemployment. In other words, it contradicts the foundation of economics: scarcity.

That may hold the forum record for 'Largest Strawman In An Introductory Paragraph"

Well played.

[dre]

The FDIC is still largely financed by insurance premiums paid by banks, and any taxpayer exposure is mice nuts compared to recurring, annual outlays for many social programs. The S&L crisis and today's bank failures are not annual recurring budget outlays for US taxpayers.

If you have a problem with fractional banking in general, please recommend a better alternative that doesn't require sitting on a pot of gold.

Im not sure if theres a better alternative to fractional reserve banking or not, but there is some ideas out there. I agree gold is not the asnwer. Im just saying the banking system is the ULTIMATE in corporate welfare. The taxpayer gives these banks almost every bit of the money they lend out for free... we are talking about many many trillions of dollars over the years. Probably hundreds of trillions.

If all commercial banks are going to do is screen loan applicants and electronically recieve payments, there really is no reason to give them all that usury money. They arent taking any risk (because the money they lend out did not exist prior to the mortgage being signed), and they do almost no work and provide almost no value. You might as well just nationalize these banks and make the issuing of currency a piece of national infrastructure. Or truly privatize them, and make them only lend out money they actually have. They use all this free money they are given to consolidate political power.

Thomas Jefferson had it basically right...

I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

[bush_cheney2004]

...You might as well just nationalize these banks and make the issuing of currency a piece of national infrastructure. Or truly privatize them, and make them only lend out money they actually have. They use all this free money they are given to consolidate political power.

Some nations have, with ill effect. Ideology does not an economy make, and I have no personal beef with fractional banking, the US Federal Reserve System, or support from/for political power. People who want to walk their talk can hop the next flight to Mogadishu.

Thomas Jefferson had it basically right...

Sure...he had (female) slaves too. Smart man!

[dre]

Some nations have, with ill effect. Ideology does not an economy make, and I have no personal beef with fractional banking, the US Federal Reserve System, or support from/for political power. People who want to walk their talk can hop the next flight to Mogadishu.

Sure...he had (female) slaves too. Smart man!

So you have no beef with the government providing for free the product line of an industry, and allowed that industry to sell those products that the taxpayer gave them back to the taxpayer at huge profits?

Would you support this business model for other industries? Or just banks?

[bush_cheney2004]

So you have no beef with the government providing for free the product line of an industry, and allowed that industry to sell those products that the taxpayer gave them back to the taxpayer at huge profits?

Not at all...the government reaps even more tax revenue when money changes hands, and sometimes competes with the private sector. Competition is good. There really is no disembodied "taxpayer" per se.

Would you support this business model for other industries? Or just banks?

The government subsidizes many industries directly and indirectly....business and government are wedded together. Abstract terms like "the economy" and expectations that government facilitate growth reflects this relationship.

Edited October 28, 2011 by bush_cheney2004

[dre]

Not at all...the government reaps even more tax revenue when money changes hands, and sometimes competes with the private sector. Competition is good. There really is no disembodied "taxpayer" per se.

The government subsidizes many industries directly and indirectly....business and government are wedded together. Abstract terms like "the economy" and expectations that government facilitate growth reflects this relationship.

Youre talking about apples and oranges though. The oil industry for examples gets subsidies and exploration grants and tax breaks... but this is nothing like what commercial banks get. If the government pumped the oil out of the ground, put in 40 gallon drums, and just gave it to the oil industry to sell then that would be more comparable.

[bush_cheney2004]

Youre talking about apples and oranges though. The oil industry for examples gets subsidies and exploration grants and tax breaks... but this is nothing like what commercial banks get. If the government pumped the oil out of the ground, put in 40 gallon drums, and just gave it to the oil industry to sell then that would be more comparable.

Oil is not capital, but getting oil is very dependent on getting access to capital. That is why the banking system ultimately exists...money stuffed in mattresses isn't very helpful. So government has a vested interest in making sure that capital markets exist and are healthy. If people want to live like Jed Clampett in rural Missouri they can be my guest, but most would prefer to live in Beverly Hills and keep their money in Mr. Drysdale's bank to work its fractional magic.

[dre]

Oil is not capital, but getting oil is very dependent on getting access to capital. That is why the banking system ultimately exists...money stuffed in mattresses isn't very helpful. So government has a vested interest in making sure that capital markets exist and are healthy. If people want to live like Jed Clampett in rural Missouri they can be my guest, but most would prefer to live in Beverly Hills and keep their money in Mr. Drysdale's bank to work its fractional magic.

Right, but if the government is ultimately holding the bag for issuing that currency, maintaining its value, and guaranteeing deposits, why not just have government collect usury instead of banks that provide almost no service in exchange.

Government could fund itself this way instead of through taxation, like the government of colonial Pennsylvania did.

Instead of the government putting money into the system by allowing commercial banks to lend it for usury, the government could money into the system by spending it into existance on a piece of infrastructure or a service like policing. That money would enter the money supply by being spent on wages, materials or services. The net result is the same - Youve issue some currency and put it into the economy. The difference is that instead of allowing a commercial bank to charge usury for providing almost no service, you now have a new road or bridge.

The effect from a monetary standpoint is identical. The only difference is that since the new money entered the economy by being spent on a road or bridge, you no longer have to collect tax dollars to fund that road and bridge.

You could probably achieve zero taxation, if the money generated by usury being charged over and over on the same imaginary dollars was used to fund the government instead of ending up in the pockets of a tiny group of men that do almost nothing to earn it.

[Argus]

That depends on how bad you want out of poverty and how bad you want to be rich,

It depends on a hell of a lot more than that.

[Argus]

Cain is right...before anyone blames anybody else, they need to take some responsibility for their own choices and outcomes.

Sure. But there are way too many people who did what they were told they should do, and never got rich. And there are way too many people who grew up with a certain set of societal expectations and assumptions, followed the tried and true path, then got blindsided by world events. I'm thinking of all those steelworkers, for example, or all the people in other industries who, through no fault of their own, found themselves vastly underpriced by third world countries. So say you're a steelworker, and good at it. China knocks your industry into the dustbin, so you go and get retrained as a software worker or a stock broker, then your job gets transferred to India or Singapore. To suggest that everyone who is unemployed has only themselves to blame is absurd, heartless and stupid.

[Argus]

The FDIC is still largely financed by insurance premiums paid by banks, and any taxpayer exposure is mice nuts compared to recurring, annual outlays for many social programs.

TARP was not mice nuts.

[bush_cheney2004]

TARP was not mice nuts.

TARP funds have been repaid by banks....not so 50 years of social entitlement programs.

[bush_cheney2004]

Sure. But there are way too many people who did what they were told they should do, and never got rich.

They were not supposed to "get rich" just by doing what they were told. It takes a lot more than that....ask Cain.

And there are way too many people who grew up with a certain set of societal expectations and assumptions, followed the tried and true path, then got blindsided by world events. I'm thinking of all those steelworkers, for example, or all the people in other industries who, through no fault of their own, found themselves vastly underpriced by third world countries.

Tough bounce...they should have read the business section of the newspaper in addition to the sports page.

So say you're a steelworker, and good at it. China knocks your industry into the dustbin, so you go and get retrained as a software worker or a stock broker, then your job gets transferred to India or Singapore. To suggest that everyone who is unemployed has only themselves to blame is absurd, heartless and stupid.

Life isn't fair...and that is the first lesson to be learned. I am on my FOURTH career....never afraid to retool and compete. Nobody owes me (or them) a thing. Wasting time peeing into a pity pot is on them, not anybody else.

Edited October 29, 2011 by bush_cheney2004

[cybercoma]

Which is it? Life's not fair, in other words, bad luck or it's their fault? You can't have it both ways.