Saturday, February 28, 2009

The Shape of Things to Come -- Part 10

(continued from Part 9, below):
6. It would actually be possible, therefore, to maintain something resembling normalcy by indefinitely sustaining the bubble already begun. This would be accomplished by continually pouring more and more money into the failed financial institutions, money obtained either through additional borrowing (already stretched to the limit) or simply by printing it (as Bernanke is already doing). This appears to be the best idea Obama and Geithner have come up with so far:
Here’s what is most infuriating: Here we are now, fully aware of how these scams worked. Yet for all practical purposes, the government has to keep them going. Indeed, that may be the single most important reason it can’t let A.I.G. fail. If the company defaulted, hundreds of billions of dollars’ worth of credit-default swaps would “blow up,” and all those European banks whose toxic assets are supposedly insured by A.I.G. would suddenly be sitting on immense losses. Their already shaky capital structures would be destroyed. A.I.G. helped create the illusion of regulatory capital with its swaps, and now the government has to actually back up those contracts with taxpayer money to keep the banks from collapsing. It would be funny if it weren’t so awful (from Propping Up a House of Cards, by Joe Nocera).

Whether the cash infusions are administered via "nationalizing" the banks or maintaining their "private sector" status has no real bearing on the fundamental problem. In a sense, the "nationalization" question is a red herring, obscuring the far more basic issue, as described so eloquently by Nocera. While the Republicans fixate on their version of creeping socialism, the Democrats can safely pursue their own agenda by insisting on their loyalty to the tried and true "private sector" model. (Getting the hapless Republicans all worked up for nothing almost makes the whole charade worth while.)

In theory, there is no limit to the numbers of dollars the Federal Reserve can print, but in practical terms a "system" of this sort is highly unstable. Which makes it very difficult to predict exactly when or how the inevitable collapse will take place. The Chinese could decide at any time to call in their chips, or, more likely, stop investing in Treasuries altogether, forcing Bernanke's printing presses into overdrive. Since we are now in what looks like a deflationary spiral, the danger of inflation appears minimal -- a situation that's being used to justify the explosion of the money supply. But things could turn around literally on a dime if the Chinese or the Oil sheiks or Warren Buffett or George Soros, Bill Gates, etc. make any sudden moves in the wrong direction. Given the insatiable need for trillions in freshly minted dollars, it's impossible to ignore the very real danger of hyperinflation or worse -- and the high probability that the inflation will, in fact, be far worse than anything heretofor experienced or even imagined.

Meanwhile, the instability of the "Geithner fix" will be compounded by a host of forces, not only in the form of predictable Republican opposition, but also from second guessing by a long list of experienced economists, like Nocera, alarmed by its inherent weaknesses (but with no viable alternatives to offer). So the plan will lurch along half-heartedly, winding down a bit when the deficits become too alarming, picking up the pace whenever the stock market takes too steep a plunge. One thing I can say for sure, however, is that the madness will continue to the bitter end. Because, as we've learned from Vietnam, and as we've learned from Iraq, once a certain level of commitment is made, there is no going back. Once so many billions of "taxpayer" dollars have been invested, no one in government will be in a position to say, "this was a mistake, we are on the wrong track, we have to cut our losses and get out." So what we'll be hearing more and more in the coming months or years is: "Don't panic. There is light at the end of the tunnel. Stay the course."

7. Meanwhile, given the drastic downturn in literally every economy worldwide, real people in the real world are going to be suffering. North Americans tend to be politically uninformed, naive and passive. Not true of most people in other parts of the world. While the US has been predictably quiescent, we are already seeing many protests and riots in farflung corners of the "global economy" and there will certainly be many more. Most of these countries already have well established socialist parties and it's not difficult to predict that such parties are going to do really well in upcoming elections, a development that will increasingly isolate the United States from the rest of the world.

8. Nevertheless, modern socialist governments will not necessarily be in a better position to deal with the economic repercussions of the financial meltdown than their capitalist predecessors. So economic conditions will continue to deteriorate everywhere as the financial meltdown evolves into a black hole. Socialist governments will be in a better position to deal with the social aspects of the crisis, since they are far more likely to give priority to human needs, as opposed to the "needs" of investors, but these governments will nevertheless continue to assume that what they most need is money -- and money will be continually losing its value. The citizens of the United States, with its staunch opposition to socialism in any way shape manner or form, will suffer the most, because it will still be assumed, right up to the last minute, that stabilizing the economy by protecting investors at all costs must take priority over what is misleadingly called "entitlements" (i.e., basic human needs). The mantra will persist to the bitter end: what's good for Wall St. is essential for Main St.

9. At some point, with millions of people literally starving and homeless, there will be a breakthrough. A moment of truth. It will come only when the value of all the world's money finally reaches zero. Goose Egg! This will be the great awakening, the fall over the precipice, the opening of the "gateless gate," the resolution of the aporia, the passage into economic Hell . . .

(to be continued . . . )

6 comments:

  1. You are too wordy and your opening conclusion:

    the "catastrophe" everyone now fears is in fact a grand illusion (though an illusion with potentially tragic consequences)

    is weak. What are you trying to say?

    ReplyDelete
  2. Dante was also wordy. As was Walt Whitman.

    And my conclusion is not weak. It is strong. But not obvious, admittedly. What I am trying to say, in my own way, and in my own good time, will presently be revealed.

    Please stay tuned.

    ReplyDelete
  3. Might I suggest you stick to prose, as your understanding of economics and behavioral finance is raw at best.

    Money is an exchange medium for ones Time and Expertise and until you learn that and appreciate it, you will be living a socialist lie.

    It is also discerning that you do not understand the cloaking of 'closet republicans' who are too responsible for creating this bubble. Your misunderstanding of free markets is most remarkable, as you seem to want to be deeply thoughtful of the current situation.

    When money is not Earned, it has lost its integrity - this creates many of the "ism's" surrounding us today. Look up Smithian (David) Economics and maybe that will provide you some clarity. Our bubbles get bigger and bigger the longer we hold on to the idea that we are here because of unregulated or deregulated markets. We have not had UnRegulated anything since 1913 when the Federal Reserve was enacted - along with several other significant Acts.


    Bubbles in business cycles exist - they always do. However you are failing to comprehend the mega bubbles are a cause of not letting competition work out the poorly managed or overly greedy companies. Instead, barriers to entry keep bad companies in business.

    The reason this Mega Bubble is going to eventually be the worst ever felt is due to two or three things in particular:

    Explain Inflation - it is Contrary to ALL Business Fundamentals. No one would dare come into a market saying my competition does XYZ and Charges A, but I am going to start a company and do only XY and charge A+1. You do understand that would be a business that doesn't make it very long at all, don't you? No doubt you can also comprehend that in the last 5 years, the prices of many goods (lets take computers for example) have come down Considerably. Because Businesses either Create a Market and try to protect it, or competition sees a market and tries to take market share by being Cheaper, Better, Faster and the end result is lower per unit costs and margins. As well, as companies grow - the growth rate MUST diminish. This all leads to lower profits / margins as the industry matures.

    This doesn't bode well for the Tax Collector, does it?
    Lots of little companies divvying up a market, providing a lower tax roll for Uncle Sam. Otherwise known as the Free Market method of Spreading The Wealth.

    Now, why do we Invest? We all invest for one thing: Today, tomorrow or sometime in the future, we all invest for Income.

    Pensions used to provide additional protected incomes for individuals until Congress came up with Social Security and health care initiatives and of course, wage controls did not help this either. The result was Congress coming to the rescue with 401(k)'s and 403(b)'s. Can I leave it to your imagination of the "Un-Intended Consequences" this has lead to?

    Put it this way, it lead to less competition and Freedom Of Choice. now you fill in the blanks with as many poetic adverbs you would like.

    I will agree with you on the outcome - mainly because the perceptions of Business and Owner Compensation today is so agitated, that we may have a real hard time coming out of this. Normally, we would just float our artificially inflated economic activity back down to our Need Rate, but this time, it may get really destitute as there has been no appreciation from the recipients of the enormous welfare programs sponsored by the government (instead of it taking place within the Community). This has created a reciprocal resentment and provided our Vote Robbers a great Divide and Conquer tactic that allows them to point fingers at a group other than themselves.

    Human nature is lazy, so this is an easy way for the pols to create a needy people. Unfortunately, it is done at the destruction of "Commonality and Community."


    I will let you take it from here and should you decide you would like to rip my head off one to one, feel free to email me at dbrams32 at yahoo dot com.

    Happy writing!

    ReplyDelete
  4. Das Ram said...

    "Might I suggest you stick to prose, as your understanding of economics and behavioral finance is raw at best."

    I am not an economist. So it's perfectly possible that my understanding of economics is flawed. However, according to most of the economists I'm reading these days,they too are having doubts about their own ability to grasp the new situation.

    "Money is an exchange medium for ones Time and Expertise and until you learn that and appreciate it, you will be living a socialist lie."

    According to Marshall McLuhan, "the medium is the message." And I agree with him. Which socialist lie are you accusing me of living? I can't respond until you make that clear.

    "It is also discerning that you do not understand the cloaking of 'closet republicans' who are too responsible for creating this bubble. Your misunderstanding of free markets is most remarkable, as you seem to want to be deeply thoughtful of the current situation."

    Again, I have a hard time following you. Who are the 'closet republicans"?

    "When money is not Earned, it has lost its integrity - this creates many of the "ism's" surrounding us today."

    Well, clearly, when you earn billions by making bets on the market that happen to pay off, you have earned nothing. You are simply gaming the market and getting lucky.

    "Look up Smithian (David) Economics and maybe that will provide you some clarity. Our bubbles get bigger and bigger the longer we hold on to the idea that we are here because of unregulated or deregulated markets. We have not had UnRegulated anything since 1913 when the Federal Reserve was enacted - along with several other significant Acts."

    You'll need to be more explicit on this, because clearly there have been some serious lapses in regulation of the markets over the last 8 years if not earlier. If you are arguing that we have never had totally unregulated markets I suppose you have a point. So what? Due diligence has NOT been carried out, that's obvious to everyone.

    "Bubbles in business cycles exist - they always do. However you are failing to comprehend the mega bubbles are a cause of not letting competition work out the poorly managed or overly greedy companies. Instead, barriers to entry keep bad companies in business."

    Again it's hard for me to grasp your meaning here. How would more competition have prevented the mega bubble from forming? How would greater regulation have not prevented it from forming? You appear to be thinking in abstractions, Das, rather then realities.

    "The reason this Mega Bubble is going to eventually be the worst ever felt is due to two or three things in particular:

    Explain Inflation - it is Contrary to ALL Business Fundamentals. No one would dare come into a market saying my competition does XYZ and Charges A, but I am going to start a company and do only XY and charge A+1. You do understand that would be a business that doesn't make it very long at all, don't you? No doubt you can also comprehend that in the last 5 years, the prices of many goods (lets take computers for example) have come down Considerably. Because Businesses either Create a Market and try to protect it, or competition sees a market and tries to take market share by being Cheaper, Better, Faster and the end result is lower per unit costs and margins. As well, as companies grow - the growth rate MUST diminish. This all leads to lower profits / margins as the industry matures."

    Sorry, but the above comes across to me as so much gobbelygook. The problem appears to have been due to too much leveraging and easy credit, which caused profit margins to shoot up unrealistically. As I see it, when the credit streams ran out, the profits, largely on paper, vanished.

    "This doesn't bode well for the Tax Collector, does it?"

    No profits, no taxes, granted.

    "Lots of little companies divvying up a market, providing a lower tax roll for Uncle Sam. Otherwise known as the Free Market method of Spreading The Wealth."

    What is your point, Das?

    "Now, why do we Invest? We all invest for one thing: Today, tomorrow or sometime in the future, we all invest for Income."

    True. But as I see it, these stopped being investments a long time ago. They became bets. It was gambling.

    "Pensions used to provide additional protected incomes for individuals until Congress came up with Social Security and health care initiatives and of course, wage controls did not help this either."

    Sorry, but I don't see how Social Security and health care (I assume you mean Medicare) take away from anyones "protected incomes." What wage controls are you referring to? Do you mean minimum wage?

    "The result was Congress coming to the rescue with 401(k)'s and 403(b)'s. Can I leave it to your imagination of the "Un-Intended Consequences" this has lead to?"

    I agree. The 401(k)'s etc. were a bad idea.

    "Put it this way, it lead to less competition and Freedom Of Choice. now you fill in the blanks with as many poetic adverbs you would like."

    Competition among what groups, Das? Freedom of choice for whom? The 401 (k)s were supposed to provide workers with freedom of choice -- but that was a false promise. All it did was make them vulnerable to the vagaries of the market, aka the casino.

    "I will agree with you on the outcome - mainly because the perceptions of Business and Owner Compensation today is so agitated, that we may have a real hard time coming out of this."

    I don't see us coming out of it at all. Not in the sense of the restoration of so-called "free" markets.

    "Normally, we would just float our artificially inflated economic activity back down to our Need Rate, but this time, it may get really destitute as there has been no appreciation from the recipients of the enormous welfare programs sponsored by the government (instead of it taking place within the Community)."

    We no longer have those types of community. I wish we did. Without the welfare programs you would have Calcutta or Mumbai in New York and Los Angeles. Do you really want to see that?

    "This has created a reciprocal resentment and provided our Vote Robbers a great Divide and Conquer tactic that allows them to point fingers at a group other than themselves."

    I point my finger at the oligarchs. If you want to defend them by all means, be my guest.

    "Human nature is lazy, so this is an easy way for the pols to create a needy people. Unfortunately, it is done at the destruction of "Commonality and Community."

    The only lazy ones I see are those still eager to find new ways to "game" the markets. Everyone else I know is eager to work.

    "I will let you take it from here and should you decide you would like to rip my head off one to one, feel free to email me at dbrams32 at yahoo dot com."

    Thanks. I prefer to rip your head off here on my blog. But don't take it personally, Das. I appreciate your posting here and hope you'll continue to challenge my ideas through your comments.

    "Happy writing!"

    Thanks.

    ReplyDelete
  5. Good gosh, where do I start!

    Let's start with the easy - "Closet Republicans" - what I meant was Closet Democrats posing as Republicans. None of them have any values that coincide with The People today. But the ability for the media to point fingers at This One or That One needs to be put to bed. They are all on the same side of the isle, and we on the other.


    "The medium is the message." He used this concept to explain how a form of communications technology, the medium or figure, necessarily operates through its context, or ground.

    How did you translate the Meaning and Value of a Dollar to that? Where did you get lost in understanding financial literacy?

    I do not see any value of his controversial work in this conversation. There must be some link in your mind, but not at all along the lines I was describing.

    "Well, clearly, when you earn billions by making bets on the market that happen to pay off, you have earned nothing. You are simply gaming the market and getting lucky." - I guess I could be smart and just say I will take luck over skill any day, but that is not appropriate. I don't think I fully understand your disconcerting statement to Investments. I am under the impression you do not understand the basic philosophy of Public or Private Investments. You seem to have a negative tone to it, but no rationale. As a Common owner, you are up to some Luck that is no doubt, but what I am stating is that the markets and the economy has been Engineered by Congressional Interference (Laws, IRS and Taxes, Acts, Attorneys) for decades.


    "Lots of little companies divvying up a market, providing a lower tax roll for Uncle Sam. Otherwise known as the Free Market method of Spreading The Wealth."

    What is your point, Das? - Non Free-Market principles at work - more government interference for their own Revenue benefit. Is that more clear?

    "I will agree with you on the outcome - mainly because the perceptions of Business and Owner Compensation today is so agitated, that we may have a real hard time coming out of this."

    I don't see us coming out of it at all. Not in the sense of the restoration of so-called "free" markets. - We will come out of it and have been seeing plenty of activity OFF the Exchanges and out of the Limelight of the Media for quite some time.

    The Economy is no where near as bad as the media is making it out to be, but those who are so inclined to take an easier route and collect Unemployment Benefits should show some humility and shut up. Not that I blame them for taking back some of what they have put into the system, but the system should go away because it elicits this bad behavior.

    To head it off at the pass - without all the government barriers - as to encompass all economic activity in their hood (just a bigger gang of Bloods and Crips) so not to miss getting a percent of any business done with the preface that this Land Is Their Land, Not Yours and My Land. ( I know you can sing that tune!)
    Most people are very capable of developing ways to legally provide an Individual Means of providing for themselves - Until you try to not cross the IRS, City Council, ADA, etc. etc.

    "Put it this way, it lead to less competition and Freedom Of Choice. now you fill in the blanks with as many poetic adverbs you would like."

    Competition among what groups, Das? Freedom of choice for whom? The 401 (k)s were supposed to provide workers with freedom of choice -- but that was a false promise. All it did was make them vulnerable to the vagaries of the market, aka the casino. - Again, Freedom of Choice within the Retirement Umbrella, but I am almost guessing you don't quite grasp what this umbrella is? Not throwing daggers at you, just questioning your level of knowledge on the topic. I understand your contempt for the "Markets" but it is not really warranted. The playing field has been manipulated and transcended into a totally different being - but you and I already agree on the Oligarchs.

    The only thing left to discuss and decide is how to approach a solution?

    "Normally, we would just float our artificially inflated economic activity back down to our Need Rate, but this time, it may get really destitute as there has been no appreciation from the recipients of the enormous welfare programs sponsored by the government (instead of it taking place within the Community)."

    We no longer have those types of community. I wish we did. Without the welfare programs you would have Calcutta or Mumbai in New York and Los Angeles. Do you really want to see that? - No, we wouldn't have Mumbai!! Have some faith and confidence in our People Man!! You act as if the Gov is some separate and omnipotent being! It is made up of PEOPLE - the same ones from the same part of the country that can be there to help in times of need! BUT...as we have noticed in past "emergencies", distraught and dependent people have a real hard time with defining NEED! Food, Water and Shelter - and there are plenty of ways to prepare yourself and your family for Emergency Situations.

    Now the tough part - some people just refuse to do anything for themselves, and at some point, you just have to let Darwin work for them. Does that mean Mumbai, no. Not in my opinion.

    "This has created a reciprocal resentment and provided our Vote Robbers a great Divide and Conquer tactic that allows them to point fingers at a group other than themselves."

    I point my finger at the oligarchs. If you want to defend them by all means, be my guest.- Defend them? Wow, you have totally missed my point- I just go the extra step to call them as who they are - CONGRESS! I would dare not defend anything that they do - I hold them responsible above all else!

    "Human nature is lazy, so this is an easy way for the pols to create a needy people. Unfortunately, it is done at the destruction of "Commonality and Community."

    The only lazy ones I see are those still eager to find new ways to "game" the markets. Everyone else I know is eager to work. - Game the markets, is that NOT WORK? Is a hooker who enjoys sex, not working? This is where the Liberal in you shows. Would you like to get to a Utopian society where Work and compensation is measured in Mets? I think we all ready that book in grade school - it isn't going to happen.

    How about half the country walk around with shovels digging holes and the other half walk around behind them filling the holes?



    Ok, so you got that a Dollar is an Exchange Medium, think BARTAR, for our Time And Expertise?

    Integrity is eroded and ISM's abound when dollars are granted to those who have not put in any time or expertise to acquire them (Also called Thievery); AKA Welfare Recipients and the Congress that took them from someone who did earn them.

    ReplyDelete
  6. Your comment is really long, Das, but I'll try to respond to as much of it as I can. And I appreciate your willingness to go into these issues in such detail.

    >Good gosh, where do I start!

    >Let's start with the easy - "Closet Republicans" - what I meant was Closet Democrats posing as Republicans. None of them have any values that coincide with The People today. But the ability for the media to point fingers at This One or That One needs to be put to bed. They are all on the same side of the isle, and we on the other.

    So you are referring to the more liberal leaning Republicans, those willing to vote with the Dems?

    >"The medium is the message." He used this concept to explain how a form of communications technology, the medium or figure, necessarily operates through its context, or ground.

    >How did you translate the Meaning and Value of a Dollar to that? Where did you get lost in understanding financial literacy?

    One of the principal points of my blog is to make people aware that economics involves a lot more than the sorts of issues typically considered by economists. I hope to post more in futre on the relevance of McLuhan's ideas to economics and also the relevance of the field of Semiotics, which also deals with the effects of the various media used in both exchange and communication. To answer you as briefly as I can for now, I'll simply say that "the medium is the message" is very easily applied to economics, when we consider how money began as a simple token of commodity exchange and has now wound up being the tail wagging the dog, with everyone now focused on the money and very few paying attention to the production and distribution of the commodities themselves. Here is a homeless family. There is a house standing empty that no one wants. So why can't that family simply move into that house? Because we are focused on the medium, the money, rather than the social processes money was created to facilitate.

    >"Well, clearly, when you earn billions by making bets on the market that happen to pay off, you have earned nothing. You are simply gaming the market and getting lucky." - I guess I could be smart and just say I will take luck over skill any day, but that is not appropriate.

    Not really, no.

    > I don't think I fully understand your disconcerting statement to Investments. I am under the impression you do not understand the basic philosophy of Public or Private Investments. You seem to have a negative tone to it, but no rationale. As a Common owner, you are up to some Luck that is no doubt,

    Many years ago an investment could in fact be a true investment because the economic contexts were stable enough for one to know what it is one was investing in. But for the last 30 years or so, the situation has been so fluid, with so many takeovers and so many AAA businesses going broke overnight (such as Enron for example) that investing has become more and more of a gamble. That's what I meants. Also, when you earn most of your money from investments you are not really working for it, are you?

    >but what I am stating is that the markets and the economy has been Engineered by Congressional Interference (Laws, IRS and Taxes, Acts, Attorneys) for decades.

    It's clear, Ram, that you resent the efforts of the government to represent all the people and act on their behalf. You want it to represent your own class, I suppose. Or else the class you are hoping to belong to some day, if your bets pay off.

    >"Lots of little companies divvying up a market, providing a lower tax roll for Uncle Sam. Otherwise known as the Free Market method of Spreading The Wealth."

    >What is your point, Das? - Non Free-Market principles at work - more government interference for their own Revenue benefit. Is that more clear?

    The government doesn't benefit from tax revenue. The population at large does. Or should. The redistribution of wealth you resent so much is a necessary feature of the economy of all free world governments, the same governments whose actions facilitate the sort of trade that enables wealthy people to become wealthy in the first place. So tax time is payback time, why not.

    >"I will agree with you on the outcome - mainly because the perceptions of Business and Owner Compensation today is so agitated, that we may have a real hard time coming out of this."

    >I don't see us coming out of it at all. Not in the sense of the restoration of so-called "free" markets. - We will come out of it and have been seeing plenty of activity OFF the Exchanges and out of the Limelight of the Media for quite some time.

    Yes, and that hidden activity worries me, because I'm afraid there are a lot of people fiddling around with taxpayer dollars while our financial system burns to the ground.

    >The Economy is no where near as bad as the media is making it out to be, but those who are so inclined to take an easier route and collect Unemployment Benefits should show some humility and shut up.

    That's a remarkable statement, Das. So in your view the unemployed are simply taking advantage of the system? From what I'm hearing they are losing their jobs, not quitting. And if they quit, they wouldn't be eligible anyhow. And why should they show humility? Do you see them as beneath you? And if so why?

    >Not that I blame them for taking back some of what they have put into the system, but the system should go away because it elicits this bad behavior.

    What bad behavior? Is losing one's job bad behavior?

    >To head it off at the pass - without all the government barriers - as to encompass all economic activity in their hood (just a bigger gang of Bloods and Crips) so not to miss getting a percent of any business done with the preface that this Land Is Their Land, Not Yours and My Land. ( I know you can sing that tune!)
    Most people are very capable of developing ways to legally provide an Individual Means of providing for themselves - Until you try to not cross the IRS, City Council, ADA, etc. etc.

    I have no idea what you are trying to say here, Das. You think most people should start their own small business or what? How would that work I wonder? Not that it's a bad idea, but the great majority of small businesses fail after the first year, no?

    >"Put it this way, it lead to less competition and Freedom Of Choice. now you fill in the blanks with as many poetic adverbs you would like."

    >Competition among what groups, Das? Freedom of choice for whom? The 401 (k)s were supposed to provide workers with freedom of choice -- but that was a false promise. All it did was make them vulnerable to the vagaries of the market, aka the casino. - Again, Freedom of Choice within the Retirement Umbrella, but I am almost guessing you don't quite grasp what this umbrella is? Not throwing daggers at you, just questioning your level of knowledge on the topic. I understand your contempt for the "Markets" but it is not really warranted. The playing field has been manipulated and transcended into a totally different being - but you and I already agree on the Oligarchs.

    I'm glad we agree on that. It seems like you are arguing for a financial system that no longer exists and hasn't existed for some time. The manipulation you mention has been going on since the Reagan era at least. And continued into the Cinton era as well, I must admit. By now it still exists, but as you say appears to have gone undergound and out of sight. Which as I say, worries me.

    >The only thing left to discuss and decide is how to approach a solution?

    Maybe we can both agree on the need for a solution, yes. Something new, preferably, because the old models don't seem to work anymore.

    >"Normally, we would just float our artificially inflated economic activity back down to our Need Rate, but this time, it may get really destitute as there has been no appreciation from the recipients of the enormous welfare programs sponsored by the government (instead of it taking place within the Community)."

    >We no longer have those types of community. I wish we did. Without the welfare programs you would have Calcutta or Mumbai in New York and Los Angeles. Do you really want to see that? - No, we wouldn't have Mumbai!! Have some faith and confidence in our People Man!! You act as if the Gov is some separate and omnipotent being! It is made up of PEOPLE - the same ones from the same part of the country that can be there to help in times of need! BUT...as we have noticed in past "emergencies", distraught and dependent people have a real hard time with defining NEED! Food, Water and Shelter - and there are plenty of ways to prepare yourself and your family for Emergency Situations.

    This is now happening and you are right, I'm sure many people are getting help from friends and family. But when those friend and family lose their livelihood and their homes, what then?

    >Now the tough part - some people just refuse to do anything for themselves, and at some point, you just have to let Darwin work for them. Does that mean Mumbai, no. Not in my opinion.

    Social Darwinism was the basis for the Nazi philosophy and is not consistent with the values of Democracy. I've known people with views like yours who changed their minds very quickly when they lost their jobs and found themselves floundering in a sea of bad options. Suddenly they "woke up" to the realization that even the hardest working, most honest and upstanding people with the "best" breeding and intentions and the greatest abilities and training can fall on hard times and find it very difficult to survive without help.

    >"This has created a reciprocal resentment and provided our Vote Robbers a great Divide and Conquer tactic that allows them to point fingers at a group other than themselves."

    >I point my finger at the oligarchs. If you want to defend them by all means, be my guest.- Defend them? Wow, you have totally missed my point- I just go the extra step to call them as who they are - CONGRESS! I would dare not defend anything that they do - I hold them responsible above all else!

    Hah! That's a good one, Das -- though it may contain more than a grain of very ironic truth. Congressmen are supposed to be our representatives, protecting us from the oligarchs. But in many cases they have been bought by the oligarchs. I'm afraid that's the case for far too many if not all Republicans, and some Democrats as well, I'm sure. But technically an oligarch is not a congressman but someone of great wealth who uses that wealth to gain political power. Of course one can easily be both, unfortunately. The difference is that one can vote a congressmen out while one can only buy out an oligarch. If one can afford it, that is.

    >"Human nature is lazy, so this is an easy way for the pols to create a needy people. Unfortunately, it is done at the destruction of "Commonality and Community."

    >The only lazy ones I see are those still eager to find new ways to "game" the markets. Everyone else I know is eager to work. - Game the markets, is that NOT WORK?

    No.

    >Is a hooker who enjoys sex, not working?
    Interesting comparison, Das. :-)

    >This is where the Liberal in you shows.

    Liberal? Me? All along, I've been thinking of myself as a fire breathing old Bolshevik! :-)

    >Would you like to get to a Utopian society where Work and compensation is measured in Mets? I think we all ready that book in grade school - it isn't going to happen.

    I agree that we will always be very far from Utopia and that even the most equable, honest and democratic form of socialism anyone could think of would still be subject to the same old dangers of co-option, corruption, coercion, manipulation and, yes, oligarchy. But a move in that direction is nevertheless what I think we very badly need at the moment. I can't think of any alternative and it seems to be that the best alternative you can think of is a return to the status quo that got us here in the first place.

    >How about half the country walk around with shovels digging holes and the other half walk around behind them filling the holes?

    There are far too many things that badly need to be done in this country, so sorry, I can't see make-work projects on the horizon. But I do get your point. Socialst programs have often led to dead end, meaningless, boring and silly "jobs" in the past and there is always that danger in the future, agreed.



    Ok, so you got that a Dollar is an Exchange Medium, think BARTAR, for our Time And Expertise?

    Integrity is eroded and ISM's abound when dollars are granted to those who have not put in any time or expertise to acquire them (Also called Thievery); AKA Welfare Recipients and the Congress that took them from someone who did earn them.

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