Quote:
Originally Posted by aerohead
Quiggin gets into this on page-74,so I've got something to share with this.
Quiggen talks of 'narrow banking'.
*reverse the burden-of-proof with financial innovation.
*discourage it until the financial sector does the equivalent of a double-blind,randomized,placebo-controlled,clinical trial and proves the economic efficacy of the derivative or other product.They can't market it unless they prove its risk-safety to the global economy first.
*no government protection without regulation.
*no government protection for a regulated entity doing business with an unregulated business.
*explicit public guarantees for clients.
*guarantee of solvency
*nationalization as last resort.
*maintain sharp boundaries between speculators.
*no limits to laissez-faire as long as all risk is borne by the risk taker and their own capital,not by the community.
*hedge funds would be completely on their own.
*finance companies would be completely on their own.
*stockbrokers would be completely on their own.
*mutual funds would be completely on their own.
*payday loan businesses would be completely on their own.
*title loan businesses would be completely on their own.
*ownership links between a regulated parent company and an unregulated subsidiary would be absolutely prohibited.
*speculate at your own peril.
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Quiggen discusses the likelihood that the U.S.A. and world is probably looking at 'mixed-
economies' as a solution.A communist-laissez-faire hybrid as you see today in Russia and China.My political science professor predicted this for the United States in 1976.
Free market capitalism hasn't worked out so well.The carnival barkers who continue to advocate for it are in on it.There is no trickle down.All it does is concentrate wealth at the top.It violates the preamble of the US Constitution.
'Everything you know is wrong!',Firesign Theatre,Dr.Demento Show,KMET Radio,Los Angeles,California,1973.
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Most of that seems reasonable to me. As I've maintained, I'm not Libertarian because "what do you care if I pee in my side of the pool" mentality doesn't address the tragedy of the commons. The pee might be diffuse all the way at the other end of the pool, and not of much consequence, but when everyone in the pool has that mentality it becomes a problem.
I completely agree that risk takers are due both the rewards of taking the risk, and the catastrophe of failure. BTW- my position on this is consistent weather we're talking about businesses or individuals. That said, I'll voluntarily help a neighbor in need if it indeed is help to them.
The fair criticism of economics is that much of it assumes perfectly rational decisions, but we know that people aren't rational. Freakonomics addresses this. Even though economics assumes rational exchanges despite that not representing reality, the principles still have predictive power, especially the fundamentals such as supply and demand.
Anyhow, I bring up the irrationality of people because that is reason enough to set boundaries and regulations on business. These regulations need to be as minimal as possible and show a net benefit to society. Requiring certification to braid hair doesn't serve the public interest. I'm skeptical of all certifications because they haven't shown to be effective at protecting people.
The higher up the government chain you go, the less effective it becomes. Government needs to be as local as possible, because it needs to be nimble to address the local problems. Only things like protection of the commons (environment) and protection from foreign enemies and securing the border are appropriate for top levels of government. Even then, the boundaries should be made as wide as possible. Instead of dictating the size, shape and fuel of a vehicle, set the limit for the thing we're trying to reduce and let the market determine how they will solve that problem.
Quote:
Originally Posted by aerohead
Jason is revealing the impoverishment of his intellect.He could be the poster child for Donald Rumsfeld's unknown unknowns.
He doesn't even know the conditionality of everything he reports.There are caveats galore.Perhaps he's a young person, unacquainted with history.
It get sick and tired of reading these perspicacity-devoid arguments.He probably actually thinks he's helping but I doubt that he is,only keeping alive extinct notions about energy, technology,and government power.
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The whole piece seemed coherent to me, if it may be off on the specifics of the problem. The argument wasn't that we do nothing, rather that we be realistic about what we're talking about doing. To do something requires evaluation of the cost and benefit, otherwise the probability of successfully solving a problem is near zero, or introduces new problems that weren't properly considered in the first place.