Tamerlan IED - He didn't build that.

[Guest Derek L]

The real trick is turning money back into things like fish and trees. Figure that one out and you'd be rich beyond reason.

Agreed……..Same with fresh water….clean air…..unpolluted soil etc.

I’m not so sure how to go about doing that, but enshrining Property Rights into the Charter would be a big first step for Canadians……….Environmentalists and their political advocacy groups don’t seem to understand this, in effect they put their faith in Government to “make things right”, all the while, Government can legally encroach (without compensation) on the individual. Like the farmer trusting the wolf with the safety of the chickens, sure the wolf will eat a few through the night, but the farmer will still have some chickens in the morning…….

You guarantee the individual’s right to what is theirs, you’ve created individual fiefdoms spread across what is Canada, all with their own monetary value that is deemed by the individual and can not be encroached upon by big bad Government and evil corporations without some form of recourse for the individual.

[eyeball]

enshrining Property Rights into the Charter would be a big first step for Canadians

Exchanging the tragedy of the commons for the tragedy of enclosure is no solution. Instead of too many boats chasing too few fish you have too many dollars chasing them.

[Guest Derek L]

Exchanging the tragedy of the commons for the tragedy of enclosure is no solution. Instead of too many boats chasing too few fish you have too many dollars chasing them.

Perhaps if one assumes that the individual is incapable of making the leap to what’s in their long-term interest(s)………..Hunters for example understand these long-term implications, and we’re “gun toting rednecks”…..

[eyeball]

We're dollar toting. Our money is more real to us than anything else, even our own lives.

Some individuals certainly can't figure out what's in their best interest but individuals come in many flavours which is why it's often best to leave bigger issues that effect all of us up to groups.

Instead of governments allocating transferable quotas to individual fishermen for example they should have allocated non-transferable community quotas so that 'ownership' of the fish and the water they swim around in remains rooted to the region in which they exist and everyone that lives in it.

[Pliny]

Capitalism in it's basic form involves catching a fish or cutting down a tree and trading it for things, like the fish hooks and saws used to catch fish and cut trees for example.

Basically how an economy works.

Because things like fish and trees started disappearing.

Trees are being re-planted and fish stocks are trying to be replenished.

The real trick is turning money back into things like fish and trees. Figure that one out and you'd be rich beyond reason.

Like tree farms and fish farms(ew)?

[eyeball]

Basically how an economy works.

How it used to work.

Trees are being re-planted and fish stocks are trying to be replenished.

They mostly planted the wrong type around here. Instead of replanting the species they harvested back in the day they planted what was most valuable somewhere else. It's too wet here for the fir they planted. There's next to nothing being done to restore fish habitat and the fish that once lived here are at extinction levels.

Like tree farms and fish farms(ew)?

No, more like the things that trees and fish need.

[Pliny]

eyeball, on 12 May 2013 - 7:07 PM, said:

Some individuals certainly can't figure out what's in their best interest but individuals come in many flavours which is why it's often best to leave bigger issues that effect all of us up to groups.

Unfortunately, groups usually just follow the leadership of an individual.

If you have ever read the Lord of the Flies or seen a mob in action or seen violence on a picket line or seen a vigilante mob you have an example of how well groups follow or listen to reason. They generally attack it.

Quote

Instead of governments allocating transferable quotas to individual fishermen for example they should have allocated non-transferable community quotas so that 'ownership' of the fish and the water they swim around in remains rooted to the region in which they exist and everyone that lives in it.

A closer approach to private property than currently exists but probably not as good.

It is lack of ownership that leads to irresponsibility. No one owned buffalo herds in the 1800s and they virtually disappeared - a tragedy of the commons. Does a tragedy of enclosure mean poor fish farming practices? Does private ownership necessarily mean enclosure?

[Pliny]

eyeball, on 13 May 2013 - 10:07 AM, said:

No, more like the things that trees and fish need.

Who could best provide that?

[eyeball]

A closer approach to private property than currently exists but probably not as good.

Why?

Who could best provide that?

Individuals that depend on them, authorized by those who in turn depend on the economic activity of the individuals in question and the natural capital they utilize - the community in other words.

Does private ownership necessarily mean enclosure?

Not always but too often to be trusted, especially where it involves natural resources.

[Pliny]

Why?

Responsibility. Generally, one looks after what he owns and improves it. If no one owns something that is desirable, no one takes responsibility for it and the result is often a tragedy of the commons. People grabbing what they can, while they can.

Individuals that depend on them, authorized by those who in turn depend on the economic activity of the individuals in question and the natural capital they utilize - the community in other words.

So you as a fisherman need the oversight of the community? The community will eventually make unreasonable demands that ignore your experience and knowledge - for the good of the community of course.

Where does the community start and end? Is the community Canada? If not, why not?

Not always but too often to be trusted, especially where it involves natural resources.

The State basically owns the natural resources of the country. Is that working for you?

[eyeball]

Responsibility. Generally, one looks after what he owns and improves it. If no one owns something that is desirable, no one takes responsibility for it and the result is often a tragedy of the commons. People grabbing what they can, while they can.

You seem to get it but then...

So you as a fisherman need the oversight of the community? The community will eventually make unreasonable demands that ignore your experience and knowledge - for the good of the community of course.

Why? What specific eventuality are you suggesting?

Where does the community start and end? Is the community Canada? If not, why not?

It's too big to manage from one spot. Canada's regions should be managed according to boundaries that correspond to their bio-geophysical characteristics by the people who live in them.

The State basically owns the natural resources of the country. Is that working for you?

No. You really just don't get it do you?

[kimmy]

There is mutual benefit in trade, otherwise trade would not occur. The benefits of trade improve people's standard of living. The growth of the middle class is evidence of the benefit to society. Capitalism is about free trade. It is also about reinvesting realized gains in further trade. I have some problems with Capitalism when it is entirely about money, especially fiat currencies that pass as money. But capitalism in its pure sense is about making money with money so money is an important aspect of it.

Why did it disappear? Money basically disappeared.

People didn't become greedy until they did away with the Gold Standard?

Really?

Really???

There is always an ROI. So why would he not embrace the idea, besides it being a decent human trait and reputation is important.

It appears that the large majority of CEOs don't agree.

There are some counter-examples, of course... Costco provides terrific employee salaries and benefits compared to other retailers, to name one.

But for the most part, no. Big corporations focus on the bottom line. Jobs? The environment? The future? Those things don't put money in the shareholders' pockets. There's no tangible payoff, and there's no timeline. The shareholders don't want an ROI consisting of fuzzy-wuzzy feelings, they want an ROI consisting of cash. If there is a deficit in fuzzy-wuzzy feelings, corporations can address it with a fuzzy-wuzzy PR campaign.

Long term thinking might make "big picture" sense, but the realities of business in almost every industry make short-term gain a higher priority than long-term prudence.

Outsourcing jobs might leave people unemployed and angry, but until angry unemployed people show up at the gates of your mansion, that's irrelevant to you. And there's heavily-armed police forces to disperse riots at your gate anyway.

Remember the AIG part of the 2008 financial crisis? AIG brokers were writing insurance policies for derivatives transactions as fast as they could... and ultimately it nearly destroyed the company. Why did those brokers write all those risky policies? Were they blind to the dangers it posed to the company? No, it's because they weren't paid based on stewardship of their company's long-term best interests, they were paid based on how many policies they sold *right now*. The same general pitfall can be found elsewhere in the housing bubble as well, of course. Agents who got paid on how many mortgages they wrote *right now*. CEOs who got obscenely huge bonuses based on now the company did *last quarter*, not 3 years ahead.

Reputation? Reputation is a fine thing... but companies like HSBC and Goldman Sachs have discovered that if you can make billions of dollars by acting like scum, reputation isn't everything.

-k

[Pliny]

People didn't become greedy until they did away with the Gold Standard?

I didn't say that. How do you arrive at that conclusion?

It appears that the large majority of CEOs don't agree.

There are some counter-examples, of course... Costco provides terrific employee salaries and benefits compared to other retailers, to name one.

But for the most part, no. Big corporations focus on the bottom line. Jobs? The environment? The future? Those things don't put money in the shareholders' pockets. There's no tangible payoff, and there's no timeline. The shareholders don't want an ROI consisting of fuzzy-wuzzy feelings, they want an ROI consisting of cash. If there is a deficit in fuzzy-wuzzy feelings, corporations can address it with a fuzzy-wuzzy PR campaign.

Long term thinking might make "big picture" sense, but the realities of business in almost every industry make short-term gain a higher priority than long-term prudence.

Outsourcing jobs might leave people unemployed and angry, but until angry unemployed people show up at the gates of your mansion, that's irrelevant to you. And there's heavily-armed police forces to disperse riots at your gate anyway.

Remember the AIG part of the 2008 financial crisis? AIG brokers were writing insurance policies for derivatives transactions as fast as they could... and ultimately it nearly destroyed the company. Why did those brokers write all those risky policies? Were they blind to the dangers it posed to the company? No, it's because they weren't paid based on stewardship of their company's long-term best interests, they were paid based on how many policies they sold *right now*. The same general pitfall can be found elsewhere in the housing bubble as well, of course. Agents who got paid on how many mortgages they wrote *right now*. CEOs who got obscenely huge bonuses based on now the company did *last quarter*, not 3 years ahead.

Reputation? Reputation is a fine thing... but companies like HSBC and Goldman Sachs have discovered that if you can make billions of dollars by acting like scum, reputation isn't everything.

-k

These are indeed all problems with today's crony fascist-like capitalism. Your concerns are real.

I have told you that capitalism and a free market has not existed for over a century and you are complaining about what passes for capitalism today. Our differences lie in structure and how it promotes human behavior. You must admit that all the greed and inequity you cite is not personally encouraging to you to act decently and honestly. It seems you are justifying behavior that is not any better than what you think theirs is. We need to rip them off like they are ripping off other people. Have you done this already?

[Pliny]

You seem to get it but then...

Why? What specific eventuality are you suggesting?

Exactly what you are experiencing. The only difference is the size of the "community".

It's too big to manage from one spot. Canada's regions should be managed according to boundaries that correspond to their bio-geophysical characteristics by the people who live in them.

I agree, local management is better than remote management.

No. You really just don't get it do you?

Is it true or not true that the State owns the resources?

[Pliny]

In any case, kimmy here are some great quotes from David Stockman's book: "The Great Deformation: The destruction of Capitalism in America

On money and how a currency is kept honest:

"Self-evidently, bank notes and checkbook money had long been a more convenient means of payment than gold coins, but the function of gold was financial discipline, not hand-to-hand circulation. Redeemability of bank notes and deposits gave the people an ultimate check on the monetary depredations of the state and its central banking branch. Indeed, the public’s freedom to dump its everyday money in favor of gold coins and bullion was what kept official currency and bank money honest."

At the London Conference in 1933 which FDR did not attend:

"All sides recognized that floating currencies would poison the international trading system, encourage destructive currency speculation, and fuel violent movements of “hot money” among financial centers. The latter would continuously destabilize both national money markets and confidence in the international trading system as a whole."

FDR's response:

"Roosevelt’s message was undoubtedly among the most intemperate, incoherent, and bombastic communiqués ever publicly issued by a US president. It not only stunned the assembled world leaders gathered in London and killed the monetary stabilization agreement on the spot, but it also locked in a destructive worldwide régime of economic nationalism that eventually led to war.

High tariffs and trade subsidies, state-dominated recovery and rearmament programs, and manipulated fiat currencies became universal after the London conference failed. In the months which followed, Sweden, Holland, and France were driven off the gold standard, leaving international financial markets demoralized and chaotic."

So basically honest money keeps business and politicians honest. It's power in the hands of the people.

Edited May 17, 2013 by Pliny

[bush_cheney2004]

FDR never agreed to Hoover's world stabilization agenda, and certainly was not going to forgive so much European debt owed mostly to the Americans. Europe would go on to become the 20th Century's biggest pain in the ass.

[GostHacked]

Who could best provide that?

Mother Nature, as she has been doing for a very very long time.

[GostHacked]

FDR never agreed to Hoover's world stabilization agenda, and certainly was not going to forgive so much European debt owed mostly to the Americans. Europe would go on to become the 20th Century's biggest pain in the ass.

I am feeling a little pain below the 49th myself.

[Pliny]

FDR never agreed to Hoover's world stabilization agenda, and certainly was not going to forgive so much European debt owed mostly to the Americans.

He just took all your gold.

I haven't read all that was agreed to in the London Conference but from what I read it sounded quite economically rational more so than FDR's domestic interventionist monetary and social policies to solve the problems of the depression.

Europe would go on to become the 20th Century's biggest pain in the ass.

It certainly never learned any lessons from socialism's, including Hitler's and Mussolini's brands, failures and

tyranny.

Edited May 17, 2013 by Pliny

[bush_cheney2004]

He just took all your gold.

I haven't read all that was agreed to in the London Conference but from what I read it sounded quite economically rational more so than FDR's domestic interventionist monetary and social policies to solve the problems of the depression.

Well, not all of it....besides, gold is way overrated.

FDR was not about to roll over and chose nationalism instead. In the 21st century, Europe struggles yet again as a pretend union of equals.

[Pliny]

Well, not all of it....besides, gold is way overrated.

As what?

FDR was not about to roll over and chose nationalism instead. In the 21st century, Europe struggles yet again as a pretend union of equals.

Nationalism, a la National Socialism, to Roosevelt's credit he rebuffed communism. But the thirties was a time when socialist experimentation was at its zenith. National socialism was quite popular and communism had its proponents as well.

[kimmy]

I didn't say that. How do you arrive at that conclusion?

Well you seem to blame fiat currency for all of these problems that really boil down to just plain naked greed.

But why would a gold-backed currency encourage corporations to act any differently?

If HSBC and Goldman-Sachs can reap massive profits by acting like scum, it doesn't matter whether those profits are in a gold-backed currency or a fiat currency. All that matters is they are getting richer. A gold based currency doesn't make ethical business practices more profitable.

If using shoddy environmental practices is cheap, and using responsible environmental practices is expensive, the accounting works out the same whether it's in fiat currency or gold-backed. Responsible practices reduce their profits. Gold based currency doesn't make responsible environmental practices a more attractive option.

If a broker or a banker or a CEO can make obscene bonuses based on reckless short term behavior, it doesn't matter to him whether it's a fiat currency or a gold-backed currency. He's getting an obscene bonus. A gold-backed currency doesn't give him stronger incentive to prioritize long-term stewardship over a short-term windfall.

The real issue isn't fiat currency. The real issue is that we have evolved into a system that rewards short-term thinking and doesn't reward long-term thinking.

These are indeed all problems with today's crony fascist-like capitalism. Your concerns are real.

I have told you that capitalism and a free market has not existed for over a century and you are complaining about what passes for capitalism today.

I'm talking about what exists today because that's what exists today. You seem to be talking about some sort of idealized concept that only exists in your imagination.

Our differences lie in structure and how it promotes human behavior. You must admit that all the greed and inequity you cite is not personally encouraging to you to act decently and honestly. It seems you are justifying behavior that is not any better than what you think theirs is. We need to rip them off like they are ripping off other people. Have you done this already?

Huh?

Since I object to the way many of the large corporations conduct themselves, I'm probably acting badly myself? Is what you're saying?

What bad behavior am I justifying here? Please expand on this. It seems like a bizarre leap.

So basically honest money keeps business and politicians honest. It's power in the hands of the people.

But that's just a meaningless phrase that's made to sound insightful by using words that make people empowered.

Well, not all of it....besides, gold is way overrated.

Not true! Gold has excellent electrical and chemical characteristics that make it an ideal material for many applications! It seems silly to have such a useful material locked in vaults when it could be put to good use by industry. I think that all the gold-hoarders are really accomplishing is driving up the price of electronics components.

-k

[Pliny]

Well you seem to blame fiat currency for all of these problems that really boil down to just plain naked greed.

Plain naked greed is facilitated by a fiat currency. Wish I could print all the money you need and lend it to you with

interest.

But why would a gold-backed currency encourage corporations to act any differently?

They don't mind losing their currency but they do mind losing their gold.

If HSBC and Goldman-Sachs can reap massive profits by acting like scum, it doesn't matter whether those profits are in a gold-backed currency or a fiat currency. All that matters is they are getting richer. A gold based currency doesn't make ethical business practices more profitable.

Correct. That is why it is a "fiat" currency. It is by fiat a legal tender and must be accepted in trade. Under a system of honest money it would never be accepted.

If using shoddy environmental practices is cheap, and using responsible environmental practices is expensive, the accounting works out the same whether it's in fiat currency or gold-backed. Responsible practices reduce their profits. Gold based currency doesn't make responsible environmental practices a more attractive option.

Irresponsible practices actually reduce profits. Shoddy environmental practices are irresponsible practices. Isn't that the reason for your complaint and wouldn't that perception in general contribute to a reduction in profits? You would be correct that there is a lot of irresponsibility. Responsible practices never reduce profits.

If a broker or a banker or a CEO can make obscene bonuses based on reckless short term behavior, it doesn't matter to him whether it's a fiat currency or a gold-backed currency. He's getting an obscene bonus. A gold-backed currency doesn't give him stronger incentive to prioritize long-term stewardship over a short-term windfall.

They can in a system of crony capitalism because the government will bail them out if they are among the privileged or politicians are invested in them. The politician can quickly provide him with cash under a fiat system whereas, under a gold backed system he has to fold his tent. Government cannot provide that for him. In other words he cannot provide him privilege when he has made such onerous errors.

The real issue isn't fiat currency. The real issue is that we have evolved into a system that rewards short-term thinking and doesn't reward long-term thinking.

A fiat system does precisely that and so is a greater part of the real issue.

I'm talking about what exists today because that's what exists today. You seem to be talking about some sort of idealized concept that only exists in your imagination.

Correct again.

Huh?

Since I object to the way many of the large corporations conduct themselves, I'm probably acting badly myself? Is what you're saying?

What bad behavior am I justifying here? Please expand on this. It seems like a bizarre leap.

No need for me to expand on this. We are talking about responsibility, not as blame but as being responsible for.

But that's just a meaningless phrase that's made to sound insightful by using words that make people empowered.

-k

It isn't meaningless if "Redeemability of bank notes and deposits give the people an ultimate check on the monetary depredations of the state and its central banking branch. Indeed, the public’s freedom to dump its everyday money in favor of gold coins and bullion was what kept official currency and bank money honest."

If you have an aversion to gold as money perhaps you would prefer something else. Your choice in a free market.

[kimmy]

Plain naked greed is facilitated by a fiat currency. Wish I could print all the money you need and lend it to you with interest.

Greed is facilitated by the gold standard too.

They don't mind losing their currency but they do mind losing their gold.

They quite clearly *do* mind losing their currency, as demonstrated by their ferocious opposition to tax reform and ferocious efforts to support any and all legislation that reduces their expenses.

But even if I were to agree to this premise, all it does is suggest that a gold-backed currency would make things even more cut-throat, because money would (according to you) become much more precious. Cutting employee wages would be even more crucial if you were paying wages in precious gold-backed currency, wouldn't it?

Correct. That is why it is a "fiat" currency. It is by fiat a legal tender and must be accepted in trade. Under a system of honest money it would never be accepted.

whaaaa?

Irresponsible practices actually reduce profits. Shoddy environmental practices are irresponsible practices. Isn't that the reason for your complaint and wouldn't that perception in general contribute to a reduction in profits? You would be correct that there is a lot of irresponsibility. Responsible practices never reduce profits.

All of this is completely false. Responsible practices reduce profits all the time. If it costs money to do it, it reduces your profit. In *some* instances, there might be a counteracting financial consequence to not acting responsibly, but that's hardly a given. The most profitable corporations are generally pretty good at evading financial consequences of irresponsible behavior.

If you run a pulp mill, cleaning your effluent before it goes back into the river costs money. It reduces your profit. You might respond with "yeah, but when consumers find out that your pulp mill is flushing toxic chemicals right into the river, they will punish you by not buying your product anymore!" And that might be true, *if* consumers actually know that you're flushing untreated waste straight into the river. But how many consumers actually know about the environmental practices of pump mills when they go buy a package of paper? If CheapoBrand costs $1.60 and SuperBrand costs $2.00, they'll pay $1.60 and not bother to consider that the extra 40 cents might include the costs of running an ecologically responsible operation. And if somebody discovers that your pulp mill is dumping untreated effluent straight into the river, who cares? You can do some PR work. ("Gee, we're sorry. We didn't realize the harm we were doing. To make things right, we're spending $100,000 to build a playground for homeless ducks." And you can pull CheapoBrand products off the market and rebrand them as "EcoBrand - with 10% recycled contents, to save nature!" and raise your price to $1.75 per package. And continue acting destructively, because conning consumers into thinking you've changed your ways is cheaper than actually fixing your pulp mill.

And corporations are clearly much more interested in finding ways to keep consumers from finding out what their real practices are than in improving their practices. (If you don't believe me, consider the recent outbreak of US states passing laws making it illegal to expose cruelty at meat processing facilities. It might be illegal to skin a calf alive, but if you film someone skinning a calf alive and report it to the authorities, you'll be charged as an "eco-terrorist" and do hard time.)

And, some companies are more or less immune to punishment in the form of consumer revolt, anyway. We might both agree that HSBC and Goldman Sachs are scum, but they don't make a nickel off of proles like us, so what we think is completely irrelevant to them. Gasoline prices jumped 8 cents overnight everywhere in town, and it's pretty clearly long weekend price-gouging and it's pretty obviously collusion, but my tank is pretty low and I can't picture myself boycotting gas stations for very long.

Now, there are some good examples of times when irresponsible behaviour really did reduce profits. The British Petroleum "Deep Water Horizon" disaster, for example. BP cut corners in safety engineering, and the result was a huge disaster. It cost BP a vast amount of money, in part because of their own damaged equipment and lost production, but mostly because the *government* forced them to pay massive fines and a massive amount of money to clean up their mess.

That must kind of make you mad, right? I mean, on the one hand you're arguing that unethical or irresponsible behavior just isn't profitable. And yet, the reason unethical or irresponsible behavior is occasionally unprofitable is because of collective actions-- either government-enforced fines and penalties or collective consumer backlash-- that in any other thread you'd be crying about as "bullying".

They can in a system of crony capitalism because the government will bail them out if they are among the privileged or politicians are invested in them. The politician can quickly provide him with cash under a fiat system whereas, under a gold backed system he has to fold his tent. Government cannot provide that for him. In other words he cannot provide him privilege when he has made such onerous errors.

The "other" Golden Rule says that "He who has the gold, makes the rules." The wealthy have been able to get their way for longer than there has been fiat currency. Read about the Colorado mining wars for some interesting tales from your Golden Age of Real Capitalism and how politicians literally let their rich friends get away with murder, and sometimes even helped.

You keep talking about bailouts, but the expectation of a bailout isn't the heart of the problem. Certainly the banks got their bailouts, but the people who drove the industry into the ground didn't need bailouts. They had already collected their obscene bonuses and many had already left the industry by the time the brown stuff hit the fan.

Lehman Brothers didn't get a bailout. Remember watching the video of Lehman Brothers CEO Dick Fuld testifying to a committee? Talking about how badly he felt that his company was destroyed? You might argue that it was irrational for him to take risks that ultimately destroyed his company. I would respond that the dude got paid 500 million dollars in bonus money because of all that risky behavior. If you can make a half billion dollars by engaging in reckless behavior, it's *not* reckless, it's rational. What kind of idiot would pass up the opportunity to make 500 million dollars?

Sealy Mattress didn't get a bailout. Remember Bain Capital's "vulture capitalism" takeover of Sealy Mattresses? We discussed it in another thread last fall. As you'll recall, Bain bought Sealy, proceeded to cash in by having Sealy take on massive debts to issue special payments to Bain, and proceeded to find ways to squeeze every dime out of Sealy they could by laying off people and cutting corners, and ultimately sold Sealy as a shadow of its former self. Someone said "but but, it wasn't rational for them to do that! They took a big asset and turned it into a small asset! They could have grown it!" But it was completely rational. They made a fortune by wrecking Sealy. It might not have been good for the economy as a whole that Sealy got turned from a good company into a crappy company. But it was *freaking great* for Bain Capital!

These guys get their money whether there's a bailout or not. They're just following the model that PT Barnum invented: fleece the suckers and move on to the next town before they wise up. Get paid and get out with your money, and leave the consequences to somebody else. That's what Dick Fuld did at Lehman, that's what Bain Capital did with Sealy, it's what Frank Dunn and friends did at Nortel, and on and on.

The problem isn't fiat currency or bailouts, it's that people can make a hell of a lot of money by acting for the short term, so they have no reason to care about what happens long term.

eyeball's depleted fisheries boil down to the same issue.

-k

[Pliny]

kimmy, on 18 May 2013 - 3:17 PM, said:

Greed is facilitated by the gold standard too.

No one can create it out of thin air.

Quote

They quite clearly *do* mind losing their currency, as demonstrated by their ferocious opposition to tax reform and ferocious efforts to support any and all legislation that reduces their expenses.

But even if I were to agree to this premise, all it does is suggest that a gold-backed currency would make things even more cut-throat, because money would (according to you) become much more precious. Cutting employee wages would be even more crucial if you were paying wages in precious gold-backed currency, wouldn't it?

If they have friends in Washington they aren't as worried as they should be.

Quote

whaaaa?

What does a legal tender mean?

Quote

All of this is completely false.

I see how you arrive at your point of view. A complete distrust of anyone to act in the interests of someone else.

If a company wishes to survive in the long term it must act responsibly even if there are costs in the short term.

Quote

Responsible practices reduce profits all the time. If it costs money to do it, it reduces your profit. In *some* instances, there might be a counteracting financial consequence to not acting responsibly, but that's hardly a given. The most profitable corporations are generally pretty good at evading financial consequences of irresponsible behavior.

If you run a pulp mill, cleaning your effluent before it goes back into the river costs money. It reduces your profit. You might respond with "yeah, but when consumers find out that your pulp mill is flushing toxic chemicals right into the river, they will punish you by not buying your product anymore!" And that might be true, *if* consumers actually know that you're flushing untreated waste straight into the river. But how many consumers actually know about the environmental practices of pump mills when they go buy a package of paper? If CheapoBrand costs $1.60 and SuperBrand costs $2.00, they'll pay $1.60 and not bother to consider that the extra 40 cents might include the costs of running an ecologically responsible operation. And if somebody discovers that your pulp mill is dumping untreated effluent straight into the river, who cares? You can do some PR work. ("Gee, we're sorry. We didn't realize the harm we were doing. To make things right, we're spending $100,000 to build a playground for homeless ducks." And you can pull CheapoBrand products off the market and rebrand them as "EcoBrand - with 10% recycled contents, to save nature!" and raise your price to $1.75 per package. And continue acting destructively, because conning consumers into thinking you've changed your ways is cheaper than actually fixing your pulp mill.

And corporations are clearly much more interested in finding ways to keep consumers from finding out what their real practices are than in improving their practices. (If you don't believe me, consider the recent outbreak of US states passing laws making it illegal to expose cruelty at meat processing facilities. It might be illegal to skin a calf alive, but if you film someone skinning a calf alive and report it to the authorities, you'll be charged as an "eco-terrorist" and do hard time.)

Fits your concept of humanity quite well, disgusting isn't it? If that is your concept of humanity do you consider yourself a part of that humanity? Is that how you would act then?

What hits the news is a very small part of our activities here. Certainly there are unscrupulous people in the world and many of them today have undeservedly accrued wealth and power to themselves. Your solution seems to be to have the same people who made the rules make more rules for the rest of us.

Quote

And, some companies are more or less immune to punishment in the form of consumer revolt, anyway. We might both agree that HSBC and Goldman Sachs are scum, but they don't make a nickel off of proles like us, so what we think is completely irrelevant to them. Gasoline prices jumped 8 cents overnight everywhere in town, and it's pretty clearly long weekend price-gouging and it's pretty obviously collusion, but my tank is pretty low and I can't picture myself boycotting gas stations for very long.

So, what has occurred is a system has been created that protects the wealthy and powerful. How do we end this cronyism?

I would suggest we look at how it was created and until we know nothing will change. If you solely interested in punishing the scoundrels, who if pressed will provide a few scapegoats for you and be properly incensed, write a few more rules which incidently make them more powerful, then we are destined to suffer tyranny.

Quote

Now, there are some good examples of times when irresponsible behaviour really did reduce profits. The British Petroleum "Deep Water Horizon" disaster, for example. BP cut corners in safety engineering, and the result was a huge disaster. It cost BP a vast amount of money, in part because of their own damaged equipment and lost production, but mostly because the *government* forced them to pay massive fines and a massive amount of money to clean up their mess.

The company should have been dismantled in my view.

Quote

That must kind of make you mad, right? I mean, on the one hand you're arguing that unethical or irresponsible behavior just isn't profitable. And yet, the reason unethical or irresponsible behavior is occasionally unprofitable is because of collective actions-- either government-enforced fines and penalties or collective consumer backlash-- that in any other thread you'd be crying about as "bullying".

I'm not defending irresponsibility. I'm asking for proper and just consequences, not fines and penalties.

Quote

The "other" Golden Rule says that "He who has the gold, makes the rules." The wealthy have been able to get their way for longer than there has been fiat currency. Read about the Colorado mining wars for some interesting tales from your Golden Age of Real Capitalism and how politicians literally let their rich friends get away with murder, and sometimes even helped.

You keep talking about bailouts, but the expectation of a bailout isn't the heart of the problem. Certainly the banks got their bailouts, but the people who drove the industry into the ground didn't need bailouts. They had already collected their obscene bonuses and many had already left the industry by the time the brown stuff hit the fan.

Lehman Brothers didn't get a bailout. Remember watching the video of Lehman Brothers CEO Dick Fuld testifying to a committee? Talking about how badly he felt that his company was destroyed? You might argue that it was irrational for him to take risks that ultimately destroyed his company. I would respond that the dude got paid 500 million dollars in bonus money because of all that risky behavior. If you can make a half billion dollars by engaging in reckless behavior, it's *not* reckless, it's rational. What kind of idiot would pass up the opportunity to make 500 million dollars?

Sealy Mattress didn't get a bailout. Remember Bain Capital's "vulture capitalism" takeover of Sealy Mattresses? We discussed it in another thread last fall. As you'll recall, Bain bought Sealy, proceeded to cash in by having Sealy take on massive debts to issue special payments to Bain, and proceeded to find ways to squeeze every dime out of Sealy they could by laying off people and cutting corners, and ultimately sold Sealy as a shadow of its former self. Someone said "but but, it wasn't rational for them to do that! They took a big asset and turned it into a small asset! They could have grown it!" But it was completely rational. They made a fortune by wrecking Sealy. It might not have been good for the economy as a whole that Sealy got turned from a good company into a crappy company. But it was *freaking great* for Bain Capital!

These guys get their money whether there's a bailout or not. They're just following the model that PT Barnum invented: fleece the suckers and move on to the next town before they wise up. Get paid and get out with your money, and leave the consequences to somebody else. That's what Dick Fuld did at Lehman, that's what Bain Capital did with Sealy, it's what Frank Dunn and friends did at Nortel, and on and on.

The problem isn't fiat currency or bailouts, it's that people can make a hell of a lot of money by acting for the short term, so they have no reason to care about what happens long term.

eyeball's depleted fisheries boil down to the same issue.

-k

The world is not void of criminality or injustice. Make a rule to stop and a means will be invented to circumvent it. Allow a person to ruin his life by accepting the consequences of his actions, a ruined life, and others will learn proper behavior. Your complaint is that people whose lives should be ruined are not ruined which is getting closer to identifying the problem.

Part of the problem also lies in how we remain humane and compassionate in light of any criminality and injustice that occurs. Can we stand by and watch someone ruin their life?

Most of us live a life of decency where we can maintain respect for ourselves as individuals, and really our humanity is what ameliorates some of the harshness of life. It's only a few that can make life seem like hell for the rest of us.

I suppose the only question I have is: Is your solution of a few more regulations all we need?

Edited May 19, 2013 by Pliny