: There are many myths about the great depression, Yes, and I just read a few more. I did admit that the Federal Reserve contributed to the duration of the Great Depression, but the simple fact that the market collapsed does not necessarily mean that the economy will also. For example, the crash '87 had no effect upon the real economy.
While shitty banking regulation and poor enforcement by the Fed may have created the collapse, there were other factors. In the 1920s, there was a very narrow market for manufactured goods, with most rural americans buying little and working class folk living on subsistence wages. Instead, most of the consumption was performed by the small, but growing, middle class which consisted mainly of professionals of the various sorts. Regardless, this class purchased their goods on credit, in fact there was a credit splurge and personal indeptness on a level that has not recurred until recently (personal savings rate currently is negative). The consumption of goods, large, defereable goods like cars, appliances, cars, etc. on credit by the middle class was driving the entire economy. Despite, the large ampount of credit used major industries were sufferring from over-capacity (or as Marx puut it, over production) So naturally, when rates started to drift upwards and the party ended the floor fell out of the economy. The question is whether the Federal Reserve was at fault. The easy money helped prolong the expansion and there aprupt reversal made the shock more jarring, but I contend that due to the nature of the expansion that a crash and subsequent depression was bound to happen anyhow even if a central bank did not exist. If the central bank had acted more responsibly (this is understandable because the nature of money was poorly understood and the proper statistical tools did not exist then in order to make an adequate analysis) a stock market bubble may have been prevented and the fall out from the subsequent crash would have also been prevented- just as it was in '87.
Still, the collapse of the american stock market was precipatated by the collapse of foreign financial markets and the subsequent collapse of foreign economies coincided with our own economic collapse. The global melt down was not the result of one beuracratic agency pulling the strings, but the intrinsic nature of capitalism, with each bust being more sever than the one before it (true historically in America).
The only way to have prevented the Great Depression was to have created a large consumer base that did not rely heavily upon credit. That would have required higher wages for factory workers and farm relief for the farmers. Essentially, a more equitable distribution of the wealth was necessary in order to realistically sustain a growing economy. Furthermore, automatic stabilizers like graduated income taxes, unemployment insurance, and welfare benefits are necessary to reduce the amplitude of the economic cycles and create an anti-cyclical environment.
: An increase in the exchangable value would be a reasonable way of putting it. see my newer discussion with RD
Thats not profit, but I'll read your posts with RD and make corrections and comments as I see them.
: Indeed, that area make me wonder - there is a lot of speculation (!) that speculators are clver followers of central bank activities and are quick to take advantage of a country trying artificially to alter the nations currency value.
So are you against floating currencies? Perhaps Bretton-Woods should be reinstitued? Besides, currency speculating is only one form there are still: derivatives, annuities, equities, bonds, and various other institutions. Besides, currency corrections and devaluations are not the sole province of central banks; other factors take part in it also.
: Or a private company can (assuming hes 'allowed') make a railroad and make a profit.
But don't you see that the expense to finance the venture is increased due to private involvement (commercial bionds have higher rate than govt bonds) and the necessity of profit adds extra cost also. A government venture can finance and build a railroad or road cheaper than a private comapny, maintain them more effectively, and provide there services more cheaply (no need for profit).
: Hmmm, hardly a 'neat' solution to people not wanting to pay is it? Doesnt stop them not wanting to pay - very authoritarian.
Its perfectly neat. People pay there taxes in America and they pay them around the world. There are only two things certain in life: death and taxes. The only deference is that in democratic coutires you have a direct voice in your taxation. After all, no taxation without representation; that's the only condition when you can start throwing fits Gee.
: What you do, what I do - dont blame 3rd parties.
There you go again with the "tough luck" excuse. Attitudes like that simply enable these problems to exist and prosper. REgardless, you failed to answer the question: What do we do with Willy Lomans? You're unvoiced response seems to be; Let them die!
: Thats a qualitative and personal measure, I could say something silly about the measure including how many operas are produced, its a personal measure.
How would you measure a society Gee? How many millionaires are there? Or they cultural, scientific, or social triumphs of a nation? I'll go with my definition and I bet there is a general consensus on with that view.
: What you do, what I do
There you go again Gee; Let the die! Let them die! These sub-humans, incapable of existing in our lovely free market...let them rot. Tough luck.
Tough luck my ass; answer the question next time. What do we do with the Willy Lomans?
: Or lousy care, thats the point.
Non sequitor.
: And it always hard to find stats for those who have been denied good treatment because they were barred (either by law or by heavy taxes) from going private.
What about those barred from treatment because they were too poor to afford it? Do you think the talent will just dry up if medicin eis federally funded? It seems that the more tax dollars that go into medicine in America, the better care is provided. it has only been whn those Nazi-esqe HMOs, after federal spending cuts, predominated that quality of care has declined.
: Precisely my point, hence they leave to where its achievable. cant just keep taking more then expecting them to work even harder all the time - theyll leave. Dont just keep goin back to the well for more.
Where shall they go? America is the last place where CEOs can make billions of dollars and not have to fear for their lives from a violent peasant revolt. Once America is socialized the "Brain Drain" will be a thing of the past. (Note- The brain drain was teh effect that happened to Britain when the medical profession was nationalized- a couple hundered research scientists left for America. Regardless, there is no reason why in a socialist society adeqiuate compensation can not be provided to doctors to preventan exodus and the loss of these doctors were inconsequential consiering the large population of the UK. Conclusion: despite a sapping of some strong minds and skilled hands, quality of care in the UK was not mterially effected.)
: And why do they know better than 'the people' in what enhances
productivity?
Because public goods can only be provided, or provided in suffient quantity, by the government! Its called externalities, a simple well established economic term. Anyhow, the "people" do deside how tax dollars will be apportioned in public goods- its called democracy.
: : Regardless, even if the government simply redisitributes money, there will still be no decrease in economic growth on the macroeconomic level, only a decrease in the reate of groth in the private sector.
: Wrong because it assumes that the return on capital invested is just as high for state directed investment as for private investment, which all command economies will attest - it isnt.
Your again confusing "profits" with "growth", real economic growth. Public industires don't have to, and shouldn't, produce a profit; it only has to produce real goods.
Besides, whos says I'm advocating a command economy? I was talking about the redistribution of wealth, not direct control of the means of production (although socialization of finance should provide sufficient indirect control). Taxation and reallocation through tax credits, subsides, and other progressive measures was what I was talking about.
: 51% ant it 49% dont - will the 49% just say "ho-hum, never mid" and work just as hard toward the goals they specifically didnt wat? More realistically - 40% want project A, 30% want project B and 30% want project C - project A 'wins' with 60% against it. A majority doesnt 'disapear' the will of the rest.
Wow, Gee understands the problems of democratic politics and the voter choice theory. You deserve a Scooby Snack! I would like you to describe a better set up than democratic government. If you can't, then you should shut about the fact that decisions are made in a democractic process that don't always concur with your own ideas. Hell, it almost never agrees with what i think, but I don't whine about it.
: I was referring to waht the private market supplies
The market MAY supply them, but in an insufficient amount (or may supply too much) in which case government action uis necessary. These are called externalities; I've discussed them before.
: Did I say *all* knowledge, or a focus on some knowledge in place of another? You have misinterpreted.
You can't say on one hand "I like knowledge" and on the other habd pull the plug on the funds. It smacks if hypocracy.
: Odd, as NASA etc seem to calculate very large budget requirements
For every one dollar invested in NASA we recieve seven back in the form of marketable technologies- and thats a conservative estimate. The spin offs from basic scientific research, like the space program more than pay for theselves, while the spin offs from the spoin offs... you see the point.
The reason why industry does not do basic scientific research is because of many reasons:
1. May or may not produce something marketable.
2. May or may not produce something marketable for decades.
3. You can not patent a theory
4. Can only become useful if combined with many other technologies, spin offs, patents, etc.
My favorite example of one and two is the development of logic. Aristotle developed it 24 centuries ago, and various thinkers added and expanded upon the system since. It has only been in the last half century that we have reaped the rewards in economic terms: computers.
: Still comes up against the "we dont want to" problem which is poorly tackled by 'go to jail' laws.
...and the democractic process. Gee do you want dome kind of benvolent dictatorship or a sort "all against all" Hobbsian anarchy?
: I think most of them are pretty clever and will have a leaving threshold
They are damn clever! But at least they'll leave there physical facilities and we can always seize there assets... oh well, I'm not so keen on nationalizing whole industries except for the financial and transportation sectors. I'm willing to abandon it if it proves to do more harm than good.
