So what about things like the SEC and the feds control over interest rates? What about taxes on businesses?
Those are not Laissez Faire ideas, what about trust controls?
Fed control over interest rates has been said to be a bad idea by many in the business. The government and the Fed are like kids twisting knobs on a complicated piece of equipment. They have no idea just what exactly they are doing, but will fuck it all up, while still insisting that they are in control. The sheeple will follow this government intervention, and cry for more when it doesn’t work.
Leave it alone. Let those companies that will die…die. Government isn’t this big happy life insurance company. Life sucks, get used to it. If you can’te get a credit card to buy a hummer cash, its probably a good thing. Not everyone has the ability or means to own a house. If your just given a loan, or credit without earning it, well you get into the situation we are in.
The government FORCED these loans on the banks via the CRA, and empowered groups like ACORN to strong arm banks through threats of complaints of racism. The government intervention to help so called sub-prime borrowers, caused the build up of bad debt, which was bundled and sold to freddie and fanny (also semi-government orginizations) and when the governments idea went wrong, the whole thing collapsed. Then the government steps in to give huge ammounts of taxpayer money to again fix a problem, but the money isn’t used to actually fix anything. Its used for parties, dividends, merger purchases and everything but to liberate credit.
The system is fucked.
Less is more.
SEC is not related to Laissez Faire, they are suppose to regulate and protect against fraud. But apparently they all suck at their job and don’t do anything all day. They failed to notice blatant fraud, mismanaged books and over leveraging at all of those firms that are now being bailed out.
The feds control over interest rates? About 90% of the time the FED is only matching their lending rate to the markets rate. Like those emergency cuts they had, those were just the FED matching the market rate. Dont believe everything you see on TV.
Now when the FED goes against the market rate and unnaturally sets their rate, that is what causes problems. Like the housing bubble after Greenspan’s 1.0% rate. What do you think is going to happen after all this deflationary mess, with rates back at 1% and a chance of them going lower? Yep, same thing, but probably even worse again. Some type of inflationary bubble that is going to have to pop. Just remember what caused it…the FEDS UNNATURAL interest rates. More proof that government intervention hurts the economy.
Taxes on business-
that i an entirely different subject on laissez fair, because it is not control, just the issuance of a bill for services received. American companies could not have any profits without a safe place to run their business from, roads to transfer merchandise, ect. I do believe that the government is very bloated however and those taxes could be trimmed…AFTER our debt is paid off. In reality, our tax code calls for taxation on income which is defined as profit, not wages. So if you want to get technical, only companies would have an income tax. But today, that is not feasible. it would require a tremendous restructure in government. (if you are wondering how personal wages are not income…wages are a trade of time and service in exchange for currency. You technically are not earning anything. Income would be profit from investment, whether it be a store, stocks or a factory.
I still don’t believe that this country was in a state of Laissez Faire prior to this collapse. Truley not since the 20’s.
well the federal reserve was created in 1913. They caused the depression by flooding the market with easy money in the roaring 20’s.
Oh how times really haven’t changed.
And yet businesses were more than happy to lend, and then after the crash we have a system setup so that certain guidlines must exist in order to purchase securities.
The same idea needs to be placed for the housing market.
Bump because I’m finally going to take the time to read this article. From what little I have learned about macroeconomics, taking down the barriers between banks and insurers and brokerages set us up for this. But ecoshardcore knows waaaaaay more about econ than I do so hopefully I can be enlightened by this a bit… We’ll see…
Jesus Christ. Might as well have titled that “Ramblings of a schizophrenic economist.”
No we don’t have a pure laissez faire economy, nor do we have total communism.
Just like this little experiment in a government of the people, our economy and economic policies are all about continuous improvement and chasing the optimum mix of free market and socialist policies. We’re not either marching towards shackles or demanding that the federal reserve gets blown up. Our whole country and culture is based on continuous change and trying for the optimum mix, not right or wrong.
That was far too biased for me. I don’t know enough about this stuff, so I don’t know what to trust. I agree that laissez faire isn’t to blame, but I mean no shit. Can’t blame something you don’t have. It seems like just a way deeper version of the argument of whether the lenders or borrowers are to blame. In this case, the lenders and the lenders’ policy makers are being blamed.
…still digesting that article. If it was just arguing that we do not have a hands-off economy and hence a lack of government intervention is not to blame, then yeah I’ll buy that.
But we’re not going to ever have a laissez-faire economy, so if the article is arguing that we need less intervention, then :tif: It seems to me that we need to fix the regulations we have. Part of that is probably less regulation, but part is also better regulation. Chasing that optimum mix has worked pretty well so far. Living in that whole “greatest empire the world has ever seen” thing is kind of nice. :shrug: Of course that’s my opinion.
EDIT: This has really given me a lot to chew on. Who’s the guy who wrote this? JoestypeS seemed to know of him?
…I didn’t know that there were policies in place that encouraged/forced banks to give out loans that they would have otherwise said no to. Perhaps this CRA thing is something to eliminate, or at least reform. Too bad things don’t generally tend to go away once they’re created in government. :hang:
x2
And no, Democrats don’t want Communism.
And no, Republicans don’t want pure laissez faire.
But don’t tell the radicals on both sides that.
My feelings are Some government is needed but for the most part let things be. As far as buisnesses go it is survival of the fittest. If a bad company goes under, a new one will take it’s place. Such is the way of things.
Don’t be so vague give us your expert opinion on where there needs to be gov’t involvement and where there shouldn’t be.
We’re not flooding the market with money, we’re enslaving ourselves to China.
2 trillion dollars in our deficit is a reasonable expectation by the end of the Obama first term. $6,000 per person in the U.S., that we owe to China (and a smattering of other foreign countries that lend us money) with interest. Ack!
government is needed to regulate fraud and corruption, not regulate the economies’ inner workings. It is simple as that. If I have to define fraud and corruption to you get the uck out of the thread.
Currently the government is fucking with everything it possibly can and certain individuals are acting like they have the economy by puppet strings. In reality they are digging us a deeper hole.
The only thing going to get us out of this mess is hard work (increased productivity), letting bad debt fail so new debt can take its place and feeling a little bit of pain.
There is no magic heal for the economy. We have been surviving off of debt and we are now at a point in which more debt only makes things worse.