Bush: "I had to become a Socialist to save the country"

[Agnapostate]

Remind me to never give you hints.

Or accurate information, evidently.

 

[FistyTheBadger]

Or accurate information, evidently.

Time for the last word.

 

[Agnapostate]

Time for the last word.

You cannot expect to have the last word inasmuch as you have misdefined socialism.

 

[Kazikli Bey]

Capitalism has been very useful, I'm not arguing against that. Following the lead of the late T.R. Young I can say it has been very useful and delivered humanity much good. But it's a debacle now. There were no mistakes in this, it was pure greed and probably a lot of criminality all allowed to flourish because of little or no regulation. The ideologically driven laissez-faire types didn't believe that the free markets needed regulation, that they would be self-correcting. As people on the internets are fond of writing - "epic fail".

Pure socialism will result in massive cock-ups - hundreds of pairs of right shoes (ironically) and not enough left ones, that type of silliness. But market socialism might be able to ameliorate some of the problems in totally planned economies. Anyway while capitalism isn't dead yet it's definitely looking very unwell, so we need to start thinking about its replacement.

I wouldn't say the system is dead or dying, but i do think that if people are going to be pro-free market, they need to look at the downfalls and see how to curb them. The problem with Libertarians is that, when they say we need unregulated capitalism, they are only looking at it from their own view of what capitalism is. The Fiat Free Market needs regulations to stop the kind of problems that we are seeing now. That means that banks need to have regulations, no more no doc and low doc loans, regulation to stop artificial inflation, etc.

 

[FistyTheBadger]

You cannot expect to have the last word inasmuch as you have misdefined socialism.

That was not the best last word, but it will have to do. I can't expect anything more.

 

[Kevin_Kennedy]

It's funny that Bush thinks that government is the answer, when it's government that caused the problem. The Federal Reserve caused the housing bubble, and now they think that throwing trillions of dollars at the problem is going to solve it.

This correction has to happen so that the market can re-allocate resources to valid businesses that won't go under without being nationalized or propped up by the federal government.

 

[Agnapostate]

That was not the best last word, but it will have to do. I can't expect anything more.

Nor can you provide anything more, as you have shown thus far.

 

[FistyTheBadger]

Nor can you provide anything more, as you have shown thus far.

I can only hope to give to those who are willing to receive.

 

[Kazikli Bey]

It's funny that Bush thinks that government is the answer, when it's government that caused the problem. The Federal Reserve caused the housing bubble, and now they think that throwing trillions of dollars at the problem is going to solve it.

No, banks caused the housing bubble by artificially inflating the housing market. The only way one could attribute this to the government is by saying that they allowed it to happen.

 

[Kevin_Kennedy]

No, banks caused the housing bubble by artificially inflating the housing market. The only way one could attribute this to the government is by saying that they allowed it to happen.

They allowed the Fed to exist and to inflate the money supply, which caused the housing bubble. They're also allowing the Fed to further worsen the situation.

 

[Kazikli Bey]

They allowed the Fed to exist and to inflate the money supply, which caused the housing bubble. They're also allowing the Fed to further worsen the situation.

No, the housing bubble was not caused by the Fed. The housing bubble was caused by banks artificially raising the prices of houses, even though it had no backing whatsoever. So, when the people had to start paying off their loans in the inflated prices, they had to foreclose and the bubble burst, and the banks realised there was no backing to the inflated prices.

However, i do agree that the Federal Government is worsening to situation by leaving the question open as to which corporation to save, which is causing instability in the market.

 

[Skull Pilot]

No, the housing bubble was not caused by the Fed. The housing bubble was caused by banks artificially raising the prices of houses, even though it had no backing whatsoever. So, when the people had to start paying off their loans in the inflated prices, they had to foreclose and the bubble burst, and the banks realised there was no backing to the inflated prices.

However, i do agree that the Federal Government is worsening to situation by leaving the question open as to which corporation to save, which is causing instability in the market.

The Housing Bubble in 4 Easy Steps

Daily Article by Mark Thornton | Posted on 9/27/2008 12:00:00 AM

1. The Federal Reserve cut interest rates to as low as 1% so that after inflation we had negative interest rates.

2. As a result, mortgage rates fell to an all time low.

3. Low rates caused borrowing and lending to explode, particularly in real estate. For example, commercial banks more than doubled the amount of real-estate loans they made.

4. All these low interest loans had to be extended to people with worse credit ratings and this increased the demand for homes and other real-estate assets. It should not be surprising that home prices skyrocketed.


Fannie Mae, Freddie Mac, mortgage-backed securities, and credit derivatives were simply the conduit that made all these bad loans and investments seem less risky than they really were. In this manner the Federal Reserve can fool the market, at least temporarily. In the end the market always reasserts itself.

 

[Kevin_Kennedy]

The Federal Reserve causes boom and bust cycles. During the boom period their funny money got invested in the housing market, which is the bubble. Now the bubble has burst, and this is the bust period of the cycle. This is when the market attempts to correct itself after being falsely propped up by the Fed's funny money.

The government isn't worsening the situation by leaving it up in the air who they're going to save, they're worsening the situation by saving anyone at all. We need to let failed businesses fail, and let their resources be re-allocated to those that are actually viable.

 

[Kazikli Bey]

The Federal Reserve causes boom and bust cycles. During the boom period their funny money got invested in the housing market, which is the bubble. Now the bubble has burst, and this is the bust period of the cycle. This is when the market attempts to correct itself after being falsely propped up by the Fed's funny money.

No, capitalism goes through boom/bust cycles and the Federal Reserve is not the sole cause of it.

The government isn't worsening the situation by leaving it up in the air who they're going to save, they're worsening the situation by saving anyone at all. We need to let failed businesses fail, and let their resources be re-allocated to those that are actually viable.

Here, from Mises: Government Intervention and Market Volatility - Benjamin Weingarten - Mises Institute

Recently, the government has decided to bail out Bear Stearns, AIG, and Fannie and Freddie, but refused to bail out Lehman Brothers, Wachovia, or Washington Mutual. The government injected capital into some of its favored remaining megabanks as well. But once the government gets into the business of deciding winners and losers, this undoubtedly causes uncertainty in the market. Right now, the government is effectively doing this in requesting that struggling companies (mainly financial institutions) fill out applications to receive cash from the $700 billion bailout appropriation — and make no mistake about it: "cash from the appropriation" means our cash: our wealth is taxed, and this money is redistributed to different companies at the whim of a handful of politicians in Washington. If we had always propped up failing industries, how would we ever have advanced to where we are today? When people started driving cars, there were certainly a lot of upset horse-drawn-carriage operators put out of work. Was the cost of their loss of business greater than the benefit of the introduction of the automobile? But alas, this is for another essay.

In addition to determining winners and losers, the government has further led the market astray with its TARP, which is apparently now getting scrapped to some extent. One of the most telling things to come out of this is the fact that John Paulson, famed fund manager who made a fortune off of the subprime debacle swooped in and bought the very securities he had shorted after the announcement that the purchasing and eventual auctioning off of toxic mortgages by the government was no longer going to be implemented. When prices drop to certain levels, prudent investors will buy. This is the silver lining in recessions — overvalued assets become affordable.

 

[Kazikli Bey]

The Housing Bubble in 4 Easy Steps

Daily Article by Mark Thornton | Posted on 9/27/2008 12:00:00 AM

1. The Federal Reserve cut interest rates to as low as 1% so that after inflation we had negative interest rates.

2. As a result, mortgage rates fell to an all time low.

3. Low rates caused borrowing and lending to explode, particularly in real estate. For example, commercial banks more than doubled the amount of real-estate loans they made.

4. All these low interest loans had to be extended to people with worse credit ratings and this increased the demand for homes and other real-estate assets. It should not be surprising that home prices skyrocketed.


Fannie Mae, Freddie Mac, mortgage-backed securities, and credit derivatives were simply the conduit that made all these bad loans and investments seem less risky than they really were. In this manner the Federal Reserve can fool the market, at least temporarily. In the end the market always reasserts itself.

I'm not disputing that, but all i am saying is that the Banks themselves were the cause of the bubble as they allowed these low and no doc loans and they themselves artificially inflated the housing market. The only way this debacle could be attributed to the Federal Government is by saying they did not regulate AGAINST allowing this sort of shit to happen.

 

[Agnapostate]

I can only hope to give to those who are willing to receive.

I have asked you to defend your misconception of socialism; you have failed to do so. What other conclusion can I come to than that you are unable to do so?

Here, from Mises: Government Intervention and Market Volatility - Benjamin Weingarten - Mises Institute

If you're trying to establish accuracy, why quote from the Mises Institute?

 

[Diuretic]

I wouldn't say the system is dead or dying, but i do think that if people are going to be pro-free market, they need to look at the downfalls and see how to curb them. The problem with Libertarians is that, when they say we need unregulated capitalism, they are only looking at it from their own view of what capitalism is. The Fiat Free Market needs regulations to stop the kind of problems that we are seeing now. That means that banks need to have regulations, no more no doc and low doc loans, regulation to stop artificial inflation, etc.

The problem with libertarians Kaz is that they inhabit a world of illusion. Unregulated capitalism has proven itself to be a failure and it could even be the end of it, it remains to be seen what happens with the current situation. But if you factor in resource shortages and issues about the Earth's environment then it seems to me that we should start to realise that capitalism's days are numbered, if not over, and we need to begin to get ready for an economic system that serves us.

 

[Kazikli Bey]

If you're trying to establish accuracy, why quote from the Mises Institute?

I was using their own sources to discredit them.

 

[Agnapostate]

I was using their own sources to discredit them.

Wouldn't that still require an honest statement on their part?

 

[Kazikli Bey]

Wouldn't that still require an honest statement on their part?

Pathetic. If their own source discredits them, it does not matter how delusional the source because they believe in it. In any which case, if you did not follow the argument, why are you bothering to respond to it?