The problem with intervention
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fat_boy wrote:
Liar. You know you didnt think of it at all!
I actually started typing it and deleted it. Not for your sake, but just not to dilute the subject. Although leftists seem to have a desire to control complex systems that are beyond their understanding or control, which is just reckless. Both the markets and climate fall into that category.
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A push from Congress and the White House for huge increases in biofuels, such
as ethanol, is prompting the oil industry to scale back its plans for refinery
expansions.That could keep gasoline prices high, possibly for years to come.
The world is large and complex. The infinite interrelationships between causes and effects are not understood on even the most rudimentary levels (which is why the stock market can't be modelled). Whenever a government interferes the natural progression of the market, regardless of how good its intentions or goals are, the result is more often than not negative as the repercussions of its actions simply can't be predicted. In this case, the US government (in its zeal to capitalize on anti-Big Oil sentiment) is pushing for ethanol production increases to reduce energy costs. As a result, we have seen a 7% increase in food prices in the US, expensive tortillas in Mexico, overcapacity of ethanol refineries and now, scaled back investment into oil refining capacity, which is the bottleneck causing gasoline prices to be so high. Add that to legislation criminalizing arbitrarily defined "unconscionably high" profits and a new set of taxes on oil companies, and the problem is only worstened. The entire leftist concept of state intervention in markets is deeply flawed.
You seem to make the wonderfully simplistic assumption that 'The Market' is the natural state of affairs which is best or at least stable if only those interfering lefties would leave it alone. Even a rudimentary study of the Federal Reserve, The Bank of International Settlements and the contradictory outpourings of any random selection of 'world class' economists should very quickly convince you that this is a fallacious deception. The market as it operates today is an inherently unstable, completely artificial creation which is manipulated daily by forces both disinterested and malign. The pure mathematical concept of the market in use by economists for nearly 70 years was a lie when it was dreamt up after WWII to make the economists calculations linear and computable. In the real world world 'the market' is nothing more than 'society' simply dehumanised enough to remove any requirement for moral behaviour. Yes the leftist concept of state intervention in markets is flawed. mostly because the rightist concept of what the market is, is a lie the leftists have fallen for. As Mr S would say "A plague on both their houses."
Nothing is exactly what it seems but everything with seems can be unpicked.
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You seem to make the wonderfully simplistic assumption that 'The Market' is the natural state of affairs which is best or at least stable if only those interfering lefties would leave it alone. Even a rudimentary study of the Federal Reserve, The Bank of International Settlements and the contradictory outpourings of any random selection of 'world class' economists should very quickly convince you that this is a fallacious deception. The market as it operates today is an inherently unstable, completely artificial creation which is manipulated daily by forces both disinterested and malign. The pure mathematical concept of the market in use by economists for nearly 70 years was a lie when it was dreamt up after WWII to make the economists calculations linear and computable. In the real world world 'the market' is nothing more than 'society' simply dehumanised enough to remove any requirement for moral behaviour. Yes the leftist concept of state intervention in markets is flawed. mostly because the rightist concept of what the market is, is a lie the leftists have fallen for. As Mr S would say "A plague on both their houses."
Nothing is exactly what it seems but everything with seems can be unpicked.
I think you almost confirm what Red is asserting. He doesn't refer to the market as natural, in the same sense as grass, but it is what has arisen from what men do, not from some orderly plan.
Matthew Faithfull wrote:
The market as it operates today is an inherently unstable
Matthew Faithfull wrote:
The pure mathematical concept of the market in use by economists for nearly 70 years was a lie
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You seem to make the wonderfully simplistic assumption that 'The Market' is the natural state of affairs which is best or at least stable if only those interfering lefties would leave it alone. Even a rudimentary study of the Federal Reserve, The Bank of International Settlements and the contradictory outpourings of any random selection of 'world class' economists should very quickly convince you that this is a fallacious deception. The market as it operates today is an inherently unstable, completely artificial creation which is manipulated daily by forces both disinterested and malign. The pure mathematical concept of the market in use by economists for nearly 70 years was a lie when it was dreamt up after WWII to make the economists calculations linear and computable. In the real world world 'the market' is nothing more than 'society' simply dehumanised enough to remove any requirement for moral behaviour. Yes the leftist concept of state intervention in markets is flawed. mostly because the rightist concept of what the market is, is a lie the leftists have fallen for. As Mr S would say "A plague on both their houses."
Nothing is exactly what it seems but everything with seems can be unpicked.
The free market is, and always has been, bound by rules to increase (not decrease) its stability. It is also subject to exterior forces that attempt to control it, but often fail. You mention the Federal Reserve, which uses its power over interest rates to balance inflation and growth by tweaking the cost of borrowing. It's role is decidedly non-interventionist in that it's primary function since the early 80s has been to as much ensure monetary stability as possible without stalling the economy. Even this seemingly benign role can have effects contrary to expectation. By raising interest rates a couple of points, the federal reserve caused the economy to stall in 2001 (something that was exacerbated by 9/11). That, in turn, caused them to rapidly and drastically reduce interest rates, which pushed money into real estate (and not into more productive avenues) and caused yet another bubble which is bursting right now.
Matthew Faithfull wrote:
The market as it operates today is an inherently unstable, completely artificial creation which is manipulated daily by forces both disinterested and malign. The pure mathematical concept of the market in use by economists for nearly 70 years was a lie when it was dreamt up after WWII to make the economists calculations linear and computable.
If the market were inherently unstable, it would have fallen apart decades ago. The contrary appears to be true. Simply put, "Things" have a value assigned to them by those that desire those "things". Supply and demand is a naturally balancing force and, given the proper construct (i.e. minimizing those forces that seek to artificially manipulate the market), is very stable. The notion of inherent market instability is a leftist one and is simply incorrect and is the core justification for market interference. Such interference is contrary to the natural balance of the free market and inevitably results in unintended consequences that are more often negative than positive.
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I think you almost confirm what Red is asserting. He doesn't refer to the market as natural, in the same sense as grass, but it is what has arisen from what men do, not from some orderly plan.
Matthew Faithfull wrote:
The market as it operates today is an inherently unstable
Matthew Faithfull wrote:
The pure mathematical concept of the market in use by economists for nearly 70 years was a lie
Brady Kelly wrote:
I think you almost confirm what Red is asserting. He doesn't refer to the market as natural, in the same sense as grass, but it is what has arisen from what men do, not from some orderly plan.
That's about what I'm saying. Grass is a good analogy as it grows naturally, but needs to be mowed every now and again.
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Brady Kelly wrote:
I think you almost confirm what Red is asserting. He doesn't refer to the market as natural, in the same sense as grass, but it is what has arisen from what men do, not from some orderly plan.
That's about what I'm saying. Grass is a good analogy as it grows naturally, but needs to be mowed every now and again.
OK just 2 points. 1. We don't have a market that's just grown up naturally, we never did, at least not for 70+ years. It was fundamentally artificial and manipulted all the way along so we don't really know what a market that grew up naturally would be like in the modern world. In that sense what we have is the result of various orderly plans partly at odds with one another which have been partially implemented over the years. 2. Just because something grows up naturally from what people do without consideration for the wider consequences doesn't make it good or useful or safe or sound or stable or even survivable. The concept that such an ultimately benign market is the natural state is a false assumption, made to make a bunch of math easier, which has outlived the math itself.
Nothing is exactly what it seems but everything with seems can be unpicked.
-
OK just 2 points. 1. We don't have a market that's just grown up naturally, we never did, at least not for 70+ years. It was fundamentally artificial and manipulted all the way along so we don't really know what a market that grew up naturally would be like in the modern world. In that sense what we have is the result of various orderly plans partly at odds with one another which have been partially implemented over the years. 2. Just because something grows up naturally from what people do without consideration for the wider consequences doesn't make it good or useful or safe or sound or stable or even survivable. The concept that such an ultimately benign market is the natural state is a false assumption, made to make a bunch of math easier, which has outlived the math itself.
Nothing is exactly what it seems but everything with seems can be unpicked.
Matthew Faithfull wrote:
1. We don't have a market that's just grown up naturally, we never did, at least not for 70+ years. It was fundamentally artificial and manipulted all the way along so we don't really know what a market that grew up naturally would be like in the modern world. In that sense what we have is the result of various orderly plans partly at odds with one another which have been partially implemented over the years.
What 1930's event are you referring to that created a "fundamentally artificial and manipulted" market?
Matthew Faithfull wrote:
2. Just because something grows up naturally from what people do without consideration for the wider consequences doesn't make it good or useful or safe or sound or stable or even survivable. The concept that such an ultimately benign market is the natural state is a false assumption, made to make a bunch of math easier, which has outlived the math itself.
Not necessarily, but the fact that free markets have proven to be good and useful and safe and sound and survivable does. I don't know of any math that states a free market is the "natural state", nor any that depends on it being a "natural state". Perhaps you can elaborate?
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The free market is, and always has been, bound by rules to increase (not decrease) its stability. It is also subject to exterior forces that attempt to control it, but often fail. You mention the Federal Reserve, which uses its power over interest rates to balance inflation and growth by tweaking the cost of borrowing. It's role is decidedly non-interventionist in that it's primary function since the early 80s has been to as much ensure monetary stability as possible without stalling the economy. Even this seemingly benign role can have effects contrary to expectation. By raising interest rates a couple of points, the federal reserve caused the economy to stall in 2001 (something that was exacerbated by 9/11). That, in turn, caused them to rapidly and drastically reduce interest rates, which pushed money into real estate (and not into more productive avenues) and caused yet another bubble which is bursting right now.
Matthew Faithfull wrote:
The market as it operates today is an inherently unstable, completely artificial creation which is manipulated daily by forces both disinterested and malign. The pure mathematical concept of the market in use by economists for nearly 70 years was a lie when it was dreamt up after WWII to make the economists calculations linear and computable.
If the market were inherently unstable, it would have fallen apart decades ago. The contrary appears to be true. Simply put, "Things" have a value assigned to them by those that desire those "things". Supply and demand is a naturally balancing force and, given the proper construct (i.e. minimizing those forces that seek to artificially manipulate the market), is very stable. The notion of inherent market instability is a leftist one and is simply incorrect and is the core justification for market interference. Such interference is contrary to the natural balance of the free market and inevitably results in unintended consequences that are more often negative than positive.
Red Stateler wrote:
Even this seemingly benign role can have effects contrary to expectation
If owning the US government, which along with state governments in turn owns 25% of the US economy, under a Republican administration, has effects contrary to expectation then I'd say it was the expectation that was flawed.
Red Stateler wrote:
it's primary function since the early 80s has been to as much ensure monetary stability as possible without stalling the economy
Strange that, because its primary role hasn't obviously changed since it was set up and it didn't see fit to tell anyone the truth about it then so I doubt it would now.
Red Stateler wrote:
If the market were inherently unstable, it would have fallen apart decades ago
That's precisely what the BIS, IMF, World Bank etc are for. To ensure that the falling apart happens somewhere else. To make sure that its poor Africans or Argentinians or someone far away in South East Asia who takes the hit when the debt pile gets too big and someone has to pay. The problem with
Red Stateler wrote:
minimizing those forces that seek to artificially manipulate the market
is to find someone who has that much power but who wouldn't benefit more from manipulating the market on their own behalf. There is no such authority or in fact any
Red Stateler wrote:
natural balance of the free market
to deviate from at least not as far as we know because the market has always been massively manipulated. The chaos is sometimes the result of different groups struggling for control over the levers of manipulation but just as often it's a deliberate strategy to lower living standards or prepare public opinion for some already planned change. A nice clean example is the rise in oil prices in 2006. This was decided beforehand at a meeting in Germany. Those that were there and therfore had effective insider information would have been able to go out and make huge bets on this happening which probably helped to precipitate it as well. If that's a free market I'd rather not have one thank you. It's not that I think the socialists are or can do any better it's just that the myth of the Free Market is an illusion preventing those not blinded by socialism from actually changing anything for
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Red Stateler wrote:
Even this seemingly benign role can have effects contrary to expectation
If owning the US government, which along with state governments in turn owns 25% of the US economy, under a Republican administration, has effects contrary to expectation then I'd say it was the expectation that was flawed.
Red Stateler wrote:
it's primary function since the early 80s has been to as much ensure monetary stability as possible without stalling the economy
Strange that, because its primary role hasn't obviously changed since it was set up and it didn't see fit to tell anyone the truth about it then so I doubt it would now.
Red Stateler wrote:
If the market were inherently unstable, it would have fallen apart decades ago
That's precisely what the BIS, IMF, World Bank etc are for. To ensure that the falling apart happens somewhere else. To make sure that its poor Africans or Argentinians or someone far away in South East Asia who takes the hit when the debt pile gets too big and someone has to pay. The problem with
Red Stateler wrote:
minimizing those forces that seek to artificially manipulate the market
is to find someone who has that much power but who wouldn't benefit more from manipulating the market on their own behalf. There is no such authority or in fact any
Red Stateler wrote:
natural balance of the free market
to deviate from at least not as far as we know because the market has always been massively manipulated. The chaos is sometimes the result of different groups struggling for control over the levers of manipulation but just as often it's a deliberate strategy to lower living standards or prepare public opinion for some already planned change. A nice clean example is the rise in oil prices in 2006. This was decided beforehand at a meeting in Germany. Those that were there and therfore had effective insider information would have been able to go out and make huge bets on this happening which probably helped to precipitate it as well. If that's a free market I'd rather not have one thank you. It's not that I think the socialists are or can do any better it's just that the myth of the Free Market is an illusion preventing those not blinded by socialism from actually changing anything for
Matthew Faithfull wrote:
A nice clean example is the rise in oil prices in 2006. This was decided beforehand at a meeting in Germany. Those that were there and therfore had effective insider information would have been able to go out and make huge bets on this happening which probably helped to precipitate it as well.
Can I borrow your foil hat? Conspiracy theories offer comfort to those who want to, but can't understand a complex system.
-
A push from Congress and the White House for huge increases in biofuels, such
as ethanol, is prompting the oil industry to scale back its plans for refinery
expansions.That could keep gasoline prices high, possibly for years to come.
The world is large and complex. The infinite interrelationships between causes and effects are not understood on even the most rudimentary levels (which is why the stock market can't be modelled). Whenever a government interferes the natural progression of the market, regardless of how good its intentions or goals are, the result is more often than not negative as the repercussions of its actions simply can't be predicted. In this case, the US government (in its zeal to capitalize on anti-Big Oil sentiment) is pushing for ethanol production increases to reduce energy costs. As a result, we have seen a 7% increase in food prices in the US, expensive tortillas in Mexico, overcapacity of ethanol refineries and now, scaled back investment into oil refining capacity, which is the bottleneck causing gasoline prices to be so high. Add that to legislation criminalizing arbitrarily defined "unconscionably high" profits and a new set of taxes on oil companies, and the problem is only worstened. The entire leftist concept of state intervention in markets is deeply flawed.
Sorry. No sale. Oil refinery capacity has been "scaled back" for decades. The last major oil refinery construction in the U.S. was sometime in the 1970's. So our current squeeze has nothing to do with any government programs to promote ethanol, but rather those market forces you worship. For almost 20 years after the early 1980's, there was little profit to be made churning out gasoline, and so nobody invested. Now we're caught with our pants down, because you can't just wave a suitcase full of money and have an oil refinery magically appear. It takes years to bring one on line, and private investors can't know what gasoline prices will be years from now. As for the other nefarious side-effects of government tinkering in industry, you can thank the U.S. and Swiss governments for the fact that we can post on forums on the Web. Without NASA, the Navy, and CERN, we would have no mini/microcomputers, no networks, and no network protocols to go web surfing with. Governments provide the infrastructure and often do the basic research (the expensive stuff that you never hear too much about), and then private profiteers move in to reap the rewards of the taxpayer's investments by bringing the stuff the final leg of the trip to market. If everything were left to private enterprise with little to no government intervention, the result would be anarchy and a lack of progress in fundamental advance of the sciences. We tried it before prior to the first World War, and people starved to death in our streets. The best is somewhere in the middle. Communism didn't work where it was tried, and dog-eat-dog capitalism only served to make a few robber barons filthy rich while most other people worked 16 hour days and often starved even then. The places where life is the best for the average person are all places that have "moderated capitalism": the U.S., Europe, Japan, Korea, Australia. To the extent that the laissez-faire or the communist extremists take control, the average citizen ends up suffering.
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Matthew Faithfull wrote:
1. We don't have a market that's just grown up naturally, we never did, at least not for 70+ years. It was fundamentally artificial and manipulted all the way along so we don't really know what a market that grew up naturally would be like in the modern world. In that sense what we have is the result of various orderly plans partly at odds with one another which have been partially implemented over the years.
What 1930's event are you referring to that created a "fundamentally artificial and manipulted" market?
Matthew Faithfull wrote:
2. Just because something grows up naturally from what people do without consideration for the wider consequences doesn't make it good or useful or safe or sound or stable or even survivable. The concept that such an ultimately benign market is the natural state is a false assumption, made to make a bunch of math easier, which has outlived the math itself.
Not necessarily, but the fact that free markets have proven to be good and useful and safe and sound and survivable does. I don't know of any math that states a free market is the "natural state", nor any that depends on it being a "natural state". Perhaps you can elaborate?
Not a 1930s event as such but two things. The Bretton Woods process that went on after WWII which was predicated on a large academic effort to rationalise the mathematics of economics falsified it's results because without chaos theory and without serious computing power they just couldn't do the math for reasonably realistic economic models. For example they cut all the negative feedback out of the models to simplify them and left only positive feedback and then went on denying the exisitence of negative feedback for 30 years.:omg: The other thing they did was assume a 'natural equilibrium' model because that was the only way to get rid of the chaos enducing non-linearities which still made the math practically impossible. A good place to start looking at the history of this is M.Mitchell Waldrop's "Complexity". Not only was the math wrong but the political part of the process placed people outside and above the system by giving them unprecedented international legal immunities. no doubt a good socialist idea to make things better but of course the bankers and politicians took this power and abused it for there own ends. The other problem which goes back more than 70 years is the Federal Reserve which I've written a little about in another post here abouts. They had a chair at the table at Bretton Woods and were no doubt at least partially responsible for the institutional loop holes that have allowded them to reach the point today of pretty much owning the US Federal government while being a completely unaccountable private club with a secret membership. If you want to know more I'd recommend watching Aaron Russo's "America From Freedom to Fascism". If you can falsify any of it or any of the above or below then please do by the way. I'd be glad to know things are not as bad as they seem although I strongly suspect they're actually much worse.
Nothing is exactly what it seems but everything with seems can be unpicked.
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Matthew Faithfull wrote:
A nice clean example is the rise in oil prices in 2006. This was decided beforehand at a meeting in Germany. Those that were there and therfore had effective insider information would have been able to go out and make huge bets on this happening which probably helped to precipitate it as well.
Can I borrow your foil hat? Conspiracy theories offer comfort to those who want to, but can't understand a complex system.
No foil hat required.:laugh: I read the leaks from the meeting and then waited and watched exactly what they had talked about happen. I too could have gone out and manipulated the market if I had any capital to start with. I understand the true complexity of the system as well or better than most having a fair grip on chaos and complexity theories. I also understand that the fundamental fallacy that Thatcher and Reagan's various brains promulgated that wealth equates to moral good. That the wealthier someone is the better they must be, is the most dangerous lie to infect politics and social theory since communism itslef. I will end where I began. A plague on both their houses.
Nothing is exactly what it seems but everything with seems can be unpicked.
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Sorry. No sale. Oil refinery capacity has been "scaled back" for decades. The last major oil refinery construction in the U.S. was sometime in the 1970's. So our current squeeze has nothing to do with any government programs to promote ethanol, but rather those market forces you worship. For almost 20 years after the early 1980's, there was little profit to be made churning out gasoline, and so nobody invested. Now we're caught with our pants down, because you can't just wave a suitcase full of money and have an oil refinery magically appear. It takes years to bring one on line, and private investors can't know what gasoline prices will be years from now. As for the other nefarious side-effects of government tinkering in industry, you can thank the U.S. and Swiss governments for the fact that we can post on forums on the Web. Without NASA, the Navy, and CERN, we would have no mini/microcomputers, no networks, and no network protocols to go web surfing with. Governments provide the infrastructure and often do the basic research (the expensive stuff that you never hear too much about), and then private profiteers move in to reap the rewards of the taxpayer's investments by bringing the stuff the final leg of the trip to market. If everything were left to private enterprise with little to no government intervention, the result would be anarchy and a lack of progress in fundamental advance of the sciences. We tried it before prior to the first World War, and people starved to death in our streets. The best is somewhere in the middle. Communism didn't work where it was tried, and dog-eat-dog capitalism only served to make a few robber barons filthy rich while most other people worked 16 hour days and often starved even then. The places where life is the best for the average person are all places that have "moderated capitalism": the U.S., Europe, Japan, Korea, Australia. To the extent that the laissez-faire or the communist extremists take control, the average citizen ends up suffering.
Erik Midtskogen wrote:
Sorry. No sale. Oil refinery capacity has been "scaled back" for decades. The last major oil refinery construction in the U.S. was sometime in the 1970's.
And do you know why no oil refineries have not been built in the US? Because the government prevented refining companies (who pushed to have them built) from doing so.
Erik Midtskogen wrote:
As for the other nefarious side-effects of government tinkering in industry, you can thank the U.S. and Swiss governments for the fact that we can post on forums on the Web. Without NASA, the Navy, and CERN, we would have no mini/microcomputers, no networks, and no network protocols to go web surfing with. Governments provide the infrastructure and often do the basic research (the expensive stuff that you never hear too much about), and then private profiteers move in to reap the rewards of the taxpayer's investments by bringing the stuff the final leg of the trip to market. If everything were left to private enterprise with little to no government intervention, the result would be anarchy and a lack of progress in fundamental advance of the sciences. We tried it before prior to the first World War, and people starved to death in our streets.
I didn't refer to government-sponsored research. I was referring specifically to attempts to control free markets inevitably failing, so these things are irrelevant to what I was saying.
Erik Midtskogen wrote:
The best is somewhere in the middle. Communism didn't work where it was tried, and dog-eat-dog capitalism only served to make a few robber barons filthy rich while most other people worked 16 hour days and often starved even then. The places where life is the best for the average person are all places that have "moderated capitalism": the U.S., Europe, Japan, Australia. To the extent that the laissez-faire or the communist extremists take control, the average citizen ends up suffering.
Capitalism requires sets of rules in order to properly work. But again, those rules are irrelevant to government attempts to intervene in and define free markets. Communism and socialism entail market intervention, whereas the "moderated capitalist" nations you listed only seem to suffer when the government attempts to intervene.
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Sorry. No sale. Oil refinery capacity has been "scaled back" for decades. The last major oil refinery construction in the U.S. was sometime in the 1970's. So our current squeeze has nothing to do with any government programs to promote ethanol, but rather those market forces you worship. For almost 20 years after the early 1980's, there was little profit to be made churning out gasoline, and so nobody invested. Now we're caught with our pants down, because you can't just wave a suitcase full of money and have an oil refinery magically appear. It takes years to bring one on line, and private investors can't know what gasoline prices will be years from now. As for the other nefarious side-effects of government tinkering in industry, you can thank the U.S. and Swiss governments for the fact that we can post on forums on the Web. Without NASA, the Navy, and CERN, we would have no mini/microcomputers, no networks, and no network protocols to go web surfing with. Governments provide the infrastructure and often do the basic research (the expensive stuff that you never hear too much about), and then private profiteers move in to reap the rewards of the taxpayer's investments by bringing the stuff the final leg of the trip to market. If everything were left to private enterprise with little to no government intervention, the result would be anarchy and a lack of progress in fundamental advance of the sciences. We tried it before prior to the first World War, and people starved to death in our streets. The best is somewhere in the middle. Communism didn't work where it was tried, and dog-eat-dog capitalism only served to make a few robber barons filthy rich while most other people worked 16 hour days and often starved even then. The places where life is the best for the average person are all places that have "moderated capitalism": the U.S., Europe, Japan, Korea, Australia. To the extent that the laissez-faire or the communist extremists take control, the average citizen ends up suffering.
Well said!
Whenever an appliance, gadget, or other kind of technology you own breaks or stops performing, pray to Science for it to be saved (fixed). If it doesn't change, don't worry... just keep praying. Science works in mysterious ways! - Someone on the Internet
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The free market is, and always has been, bound by rules to increase (not decrease) its stability. It is also subject to exterior forces that attempt to control it, but often fail. You mention the Federal Reserve, which uses its power over interest rates to balance inflation and growth by tweaking the cost of borrowing. It's role is decidedly non-interventionist in that it's primary function since the early 80s has been to as much ensure monetary stability as possible without stalling the economy. Even this seemingly benign role can have effects contrary to expectation. By raising interest rates a couple of points, the federal reserve caused the economy to stall in 2001 (something that was exacerbated by 9/11). That, in turn, caused them to rapidly and drastically reduce interest rates, which pushed money into real estate (and not into more productive avenues) and caused yet another bubble which is bursting right now.
Matthew Faithfull wrote:
The market as it operates today is an inherently unstable, completely artificial creation which is manipulated daily by forces both disinterested and malign. The pure mathematical concept of the market in use by economists for nearly 70 years was a lie when it was dreamt up after WWII to make the economists calculations linear and computable.
If the market were inherently unstable, it would have fallen apart decades ago. The contrary appears to be true. Simply put, "Things" have a value assigned to them by those that desire those "things". Supply and demand is a naturally balancing force and, given the proper construct (i.e. minimizing those forces that seek to artificially manipulate the market), is very stable. The notion of inherent market instability is a leftist one and is simply incorrect and is the core justification for market interference. Such interference is contrary to the natural balance of the free market and inevitably results in unintended consequences that are more often negative than positive.
I agree that ham-fisted tinkering with the markets by government can be a bad thing--especially if their application is inconsistent or even capricious. One recent example would the the sudden rewriting of the tax laws on Canadian oil trusts that gave those investors a 50% haircut and sent investors of oil sands development running for the exits. But if you really want to see economic instability, just take your hands completely off the wheel. Economic depressions in industrialized countries were far worse before governments started asserting control through policy and controlling money supply through central banks. Even just having a society where a "free" market can exist requires some sort of centralized organization of authority. Anyone who owns a patent or even physical property only "owns" those assets because governmental forces (i.e. the police) will assert that person's ownership rights. In Burundi, if someone steals your idea and beats you to market with it, your only recourse is to hire a private militia.
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Not a 1930s event as such but two things. The Bretton Woods process that went on after WWII which was predicated on a large academic effort to rationalise the mathematics of economics falsified it's results because without chaos theory and without serious computing power they just couldn't do the math for reasonably realistic economic models. For example they cut all the negative feedback out of the models to simplify them and left only positive feedback and then went on denying the exisitence of negative feedback for 30 years.:omg: The other thing they did was assume a 'natural equilibrium' model because that was the only way to get rid of the chaos enducing non-linearities which still made the math practically impossible. A good place to start looking at the history of this is M.Mitchell Waldrop's "Complexity". Not only was the math wrong but the political part of the process placed people outside and above the system by giving them unprecedented international legal immunities. no doubt a good socialist idea to make things better but of course the bankers and politicians took this power and abused it for there own ends. The other problem which goes back more than 70 years is the Federal Reserve which I've written a little about in another post here abouts. They had a chair at the table at Bretton Woods and were no doubt at least partially responsible for the institutional loop holes that have allowded them to reach the point today of pretty much owning the US Federal government while being a completely unaccountable private club with a secret membership. If you want to know more I'd recommend watching Aaron Russo's "America From Freedom to Fascism". If you can falsify any of it or any of the above or below then please do by the way. I'd be glad to know things are not as bad as they seem although I strongly suspect they're actually much worse.
Nothing is exactly what it seems but everything with seems can be unpicked.
I hate to break this to you, but chaos theory cannot model markets. But it is true that the free market is non-linear. It is not true that it is consequently unstable as demonstrated by the long-term stability of the markets. In other words, your "theory" does not hold water when compared to reality as an unstable market would result in a failed market. And that's obviously not the case. Now I do agree that there have been various attempts to model free market economies with varying degrees of success. However, that's completely irrelevant to my question as to how the market is "fundamentally artifical and manipulated". You've failed to even attempt that.
Matthew Faithfull wrote:
The other problem which goes back more than 70 years is the Federal Reserve which I've written a little about in another post here abouts. They had a chair at the table at Bretton Woods and were no doubt at least partially responsible for the institutional loop holes that have allowded them to reach the point today of pretty much owning the US Federal government while being a completely unaccountable private club with a secret membership. If you want to know more I'd recommend watching Aaron Russo's "America From Freedom to Fascism".
Holy Cow! My tin foil hat must be REALLY broken!
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Erik Midtskogen wrote:
Sorry. No sale. Oil refinery capacity has been "scaled back" for decades. The last major oil refinery construction in the U.S. was sometime in the 1970's.
And do you know why no oil refineries have not been built in the US? Because the government prevented refining companies (who pushed to have them built) from doing so.
Erik Midtskogen wrote:
As for the other nefarious side-effects of government tinkering in industry, you can thank the U.S. and Swiss governments for the fact that we can post on forums on the Web. Without NASA, the Navy, and CERN, we would have no mini/microcomputers, no networks, and no network protocols to go web surfing with. Governments provide the infrastructure and often do the basic research (the expensive stuff that you never hear too much about), and then private profiteers move in to reap the rewards of the taxpayer's investments by bringing the stuff the final leg of the trip to market. If everything were left to private enterprise with little to no government intervention, the result would be anarchy and a lack of progress in fundamental advance of the sciences. We tried it before prior to the first World War, and people starved to death in our streets.
I didn't refer to government-sponsored research. I was referring specifically to attempts to control free markets inevitably failing, so these things are irrelevant to what I was saying.
Erik Midtskogen wrote:
The best is somewhere in the middle. Communism didn't work where it was tried, and dog-eat-dog capitalism only served to make a few robber barons filthy rich while most other people worked 16 hour days and often starved even then. The places where life is the best for the average person are all places that have "moderated capitalism": the U.S., Europe, Japan, Australia. To the extent that the laissez-faire or the communist extremists take control, the average citizen ends up suffering.
Capitalism requires sets of rules in order to properly work. But again, those rules are irrelevant to government attempts to intervene in and define free markets. Communism and socialism entail market intervention, whereas the "moderated capitalist" nations you listed only seem to suffer when the government attempts to intervene.
Red Stateler wrote:
And do you know why no oil refineries have not been built in the US? Because the government prevented refining companies (who pushed to have them built) from doing so.
Cite? Not that I don't believe you, I really have no idea.
Red Stateler wrote:
the "moderated capitalist" nations you listed only seem to suffer when the government attempts to intervene.
And the populace seems to suffer when they don't. Capitalism encourages behavior that is mitigated by having mutually-interested parties: greed to the detriment of either party. Problem is, you can't legislate enlightened (mutual) self interest. It has to be a social norm, and unfortunately it's ceasing to be one. I have no problem with someone making an honest buck. More power to you. I have a big problem with dishonest money and money earned at the expense of society (called 'externalized costs' in economics).
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Erik Midtskogen wrote:
Sorry. No sale. Oil refinery capacity has been "scaled back" for decades. The last major oil refinery construction in the U.S. was sometime in the 1970's.
And do you know why no oil refineries have not been built in the US? Because the government prevented refining companies (who pushed to have them built) from doing so.
Erik Midtskogen wrote:
As for the other nefarious side-effects of government tinkering in industry, you can thank the U.S. and Swiss governments for the fact that we can post on forums on the Web. Without NASA, the Navy, and CERN, we would have no mini/microcomputers, no networks, and no network protocols to go web surfing with. Governments provide the infrastructure and often do the basic research (the expensive stuff that you never hear too much about), and then private profiteers move in to reap the rewards of the taxpayer's investments by bringing the stuff the final leg of the trip to market. If everything were left to private enterprise with little to no government intervention, the result would be anarchy and a lack of progress in fundamental advance of the sciences. We tried it before prior to the first World War, and people starved to death in our streets.
I didn't refer to government-sponsored research. I was referring specifically to attempts to control free markets inevitably failing, so these things are irrelevant to what I was saying.
Erik Midtskogen wrote:
The best is somewhere in the middle. Communism didn't work where it was tried, and dog-eat-dog capitalism only served to make a few robber barons filthy rich while most other people worked 16 hour days and often starved even then. The places where life is the best for the average person are all places that have "moderated capitalism": the U.S., Europe, Japan, Australia. To the extent that the laissez-faire or the communist extremists take control, the average citizen ends up suffering.
Capitalism requires sets of rules in order to properly work. But again, those rules are irrelevant to government attempts to intervene in and define free markets. Communism and socialism entail market intervention, whereas the "moderated capitalist" nations you listed only seem to suffer when the government attempts to intervene.
The government prevented ExMob from setting up new oil refineries? Do tell. Where? In Yellowstone National Park? Or was it the tree-huggers who did that? Never can tell those two groups apart, you know...
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A push from Congress and the White House for huge increases in biofuels, such
as ethanol, is prompting the oil industry to scale back its plans for refinery
expansions.That could keep gasoline prices high, possibly for years to come.
The world is large and complex. The infinite interrelationships between causes and effects are not understood on even the most rudimentary levels (which is why the stock market can't be modelled). Whenever a government interferes the natural progression of the market, regardless of how good its intentions or goals are, the result is more often than not negative as the repercussions of its actions simply can't be predicted. In this case, the US government (in its zeal to capitalize on anti-Big Oil sentiment) is pushing for ethanol production increases to reduce energy costs. As a result, we have seen a 7% increase in food prices in the US, expensive tortillas in Mexico, overcapacity of ethanol refineries and now, scaled back investment into oil refining capacity, which is the bottleneck causing gasoline prices to be so high. Add that to legislation criminalizing arbitrarily defined "unconscionably high" profits and a new set of taxes on oil companies, and the problem is only worstened. The entire leftist concept of state intervention in markets is deeply flawed.
Red Stateler wrote:
The entire leftist concept of state intervention in markets is deeply flawed.
For whom? The oil companies don't give a crap. In fact, they're ecstatic to have yet another excuse to keep raking in record profits. And since you've invested in them, that's great for you too. As long as you are making lots of money, who give a crap about the effects of high gas prices on the economy?
Whenever an appliance, gadget, or other kind of technology you own breaks or stops performing, pray to Science for it to be saved (fixed). If it doesn't change, don't worry... just keep praying. Science works in mysterious ways! - Someone on the Internet
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I hate to break this to you, but chaos theory cannot model markets. But it is true that the free market is non-linear. It is not true that it is consequently unstable as demonstrated by the long-term stability of the markets. In other words, your "theory" does not hold water when compared to reality as an unstable market would result in a failed market. And that's obviously not the case. Now I do agree that there have been various attempts to model free market economies with varying degrees of success. However, that's completely irrelevant to my question as to how the market is "fundamentally artifical and manipulated". You've failed to even attempt that.
Matthew Faithfull wrote:
The other problem which goes back more than 70 years is the Federal Reserve which I've written a little about in another post here abouts. They had a chair at the table at Bretton Woods and were no doubt at least partially responsible for the institutional loop holes that have allowded them to reach the point today of pretty much owning the US Federal government while being a completely unaccountable private club with a secret membership. If you want to know more I'd recommend watching Aaron Russo's "America From Freedom to Fascism".
Holy Cow! My tin foil hat must be REALLY broken!
Red Stateler wrote:
your "theory" does not hold water when compared to reality as an unstable market would result in a failed market. And that's obviously not the case.
Yeah, now. That's why the Federal Reserve was established, and accompanying regulatory law. Much of the stability we enjoy is enforced.