Is socialism really that bad?

[_dblagent007]

Certainly the mismanagement of the Fed exacerbated the problem. It's simply a load of right-wing garbage to ignore the root of the crisis in the first place, though: the failure of government to protect the working consumer, and the subsequent inability of the common consumer to purchase essential products. When the majority of the populace can't afford to purchase toilet paper and underwear, the manufacturers of toilet paper and underwear aren't going to last long. An economy cannot survive very long with its primary focus on the production of high-end luxuries: a bubble inevitably forms, and once the euphoria gives way to reality, it breaks.

The Panic of 1906-07 occurred before the massive upward redistribution of wealth had occurred in the 1920s, and the economy was thus more diverse and resilient.

Well, you have the lefty talking points down pat. Too bad they are wrong. The contraction of the money supply is what really let the depression get out of hand. If there is no money, then people can't buy things, invest in new ideas, etc.

The cause effect relationship of contracting the money supply is explained nicely in the following speech: http://www.federalreserve.gov/BOARDDOCS ... efault.htm

Do you think the reason we use the money supply to regulate the economy today came about as some fluke? If the money supply is not the cause, then why has the Federal Reserve been manically focused on using the money supply to control the economy? Why didn't we have a depression in 1987 when the market crashed? Because the Fed dumped money into the economy in tremendous amounts. By the 1988, it was a blip on the radar screen.

Why do you think the Federal Reserve is opening the money spigots right now? Not just the Federal Reserve, but also the central banks of Europe, Britain, and Japan? Why is this happening if the the real problem, according to you, is the government's failure to protect the working consumer?

Like it or not, monetary policy is widely recognized as THE way to control the economy. Back in the depression, the Federal Reserve messed it up big time. That is why we had a huge depression instead of a small recession or blip ala 1987.

Ironically, EA is right that Smoot-Hawley exacerbated the problem, and Smoot-Hawley was one of the biggest and worst pieces of legislation that was designed to "protect the working consumer" (from foreign competition in this case). On the surface, it seemed like a good idea. However, all it did was decrease the overall well being of people of the U.S.

[_Thama]

Well, you have the lefty talking points down pat. Too bad they are wrong. The contraction of the money supply is what really let the depression get out of hand. If there is no money, then people can't buy things, invest in new ideas, etc.

The cause effect relationship of contracting the money supply is explained nicely in the following speech: http://www.federalreserve.gov/BOARDDOCS ... efault.htm

Do you think the reason we use the money supply to regulate the economy today came about as some fluke? If the money supply is not the cause, then why has the Federal Reserve been manically focused on using the money supply to control the economy? Why didn't we have a depression in 1987 when the market crashed? Because the Fed dumped money into the economy in tremendous amounts. By the 1988, it was a blip on the radar screen.

Why do you think the Federal Reserve is opening the money spigots right now? Not just the Federal Reserve, but also the central banks of Europe, Britain, and Japan? Why is this happening if the the real problem, according to you, is the government's failure to protect the working consumer?

Like it or not, monetary policy is widely recognized as THE way to control the economy. Back in the depression, the Federal Reserve messed it up big time. That is why we had a huge depression instead of a small recession or blip ala 1987.

Ironically, EA is right that Smoot-Hawley exacerbated the problem, and Smoot-Hawley was one of the biggest and worst pieces of legislation that was designed to "protect the working consumer" (from foreign competition in this case). On the surface, it seemed like a good idea. However, all it did was decrease the overall well being of people of the U.S.

The reason 1907 and 1987 didn't reach full-blown depression was that the root causes weren't there. Reducing economics to a study of the stock market and annual GDP is a stupid effort that is inherently biased toward the ultra-wealthy.

It's rather amusing that you talk about "lefty talking points", when you're the one trying to explain how a decade of ultra-conservative government wasn't responsible for the economic crash that occurred right at the end of their time in power. Ironic that you're in an eerily similar situation right now... though of course you'll find a way to tell us that it was because Bush and his rubber-stamp Congress were actually too liberal.

Party of personal responsibility my ass.

[_Mercury]

since this is a Mormon board, ill piss off the john birch booster club in residence here.

Early Mormonism WAS socialism. Farm coops are socialism light.

Now...onto the meat. Tax reform where the middle class get more money than the poor IS NOT SOCIALISM.

[_Droopy]

Certainly the mismanagement of the Fed exacerbated the problem. It's simply a load of right-wing garbage to ignore the root of the crisis in the first place, though: the failure of government to protect the working consumer, and the subsequent inability of the common consumer to purchase essential products. When the majority of the populace can't afford to purchase toilet paper and underwear, the manufacturers of toilet paper and underwear aren't going to last long. An economy cannot survive very long with its primary focus on the production of high-end luxuries: a bubble inevitably forms, and once the euphoria gives way to reality, it breaks.

Pure public school nonsense -the same pap I learned in High School and watching mainstream media news magazine shows growing up. What actually happened is that FDR and his "brain trust" of would be philosopher kings took what should have been a short and severe depression and turned it into a long and severe depression. How? The Federal Reserve was created to protect the country from precisely the kind of economic collapse that occurred. But what did they do when the runs on the banks began? They let them continue, for years. Many of the nation's banks were drained of catastrophic quantities of liquid assets. Then we have the Smoot-Hawley tariff, which began a trade war with Europe and took them (and others) down with us.

But then you have another crux of the matter; the massive welfare state FDR created and the colossal tax increases needed to fund it, tax increases and steep marginal rates that siphoned vast quantities of capital out of the private sector, where it was desperately needed for investment in renewed productive economic activity and job creation, into the maw of a colossal federal bureaucracy that consumed a portion of it in administrative costs and then recycled the money back into the economy as "benefits" and subsidized public works jobs. Of course, no net wealth is created in this manner, while the capital itself is essentially lost to new productive activity.

Had it not been for WWII, FDR might have been able to extend the Great Depression even into my own time.

The idea that FDR and the New Deal "saved" capitalism or "pulled the country out of the Depression" is arguably one of the greatest political and cultural myths ever foisted on the American people by its political class, media, and educational system.

True, a speculative bubble did burst in 1929, initiating economic troubles, but the "great" in the depression was a creation of government's response to it.

[_Droopy]

a decade of ultra-conservative government

Whether Hoover was a "conservative" or not, at least in the post WWII sense, I'm not at all sure. That he in fact created many of the policies and concepts later elaborated upon by FDR under the same economic conditions is what you apparently fail to grasp:

https://mises.org/rothbard/AGD/chapter7.asp

https://mises.org/rothbard/AGD/chapter8.asp

[_ajax18]

The fact that the United States is the most captalist nation in the world is extremly depressing. We need to carve out another part of this world and build another nation. Maybe we'll learn our lesson about bringing in cheap labor and letting socialist leak inside its borders.

[_Moniker]

The fact that the United States is the most captalist nation in the world is extremly depressing. We need to carve out another part of this world and build another nation. Maybe we'll learn our lesson about bringing in cheap labor and letting socialist leak inside its borders.

You can always head to that utopia of free market economy known as Somalia. :)

~~~~~~~~~~

Scottie, socialism is evil, did you not get the memo?

Hally mentioned the invisible hand which I thought was widely known to only operate perfectly when there is not a discrepancy in known information. I just do not believe that when individuals (corporations) operate for their own well being that the end result is necessary the betterment of all.

I don't know, honestly, what should be done, yet, my intuitions on the subject of welfare in our country are as such: We have individuals that work for meager wages and we enjoy their contributions to our society (and they DO contribute if you get your oil changed, shop at Wal-Mart, have your home painted, etc...) -- with the understanding that there are hard working individuals that struggle in our society I think it is important to ensure that they have a certain standard of living. I don't think there is any perfect solution and I don't hold out hope there is one. I just am not comfortable having an underclass in our society and pretending that we don't need them or that we don't use their services. They are our fellow Americans and as such I think ethically they should have help attaining a way of life that some of us take for granted.

[Guest]

Moniker,

Assymetric information is one problem with the "market". But even with perfect information, there are issues such as "public goods", military and so on, that individuals following the "invisible hand' can't realistically provide for. And, let's not forget externalities. You are right that corporations can't operate for the betterment of all. Which is why Milton Friedman believed that government had a key role in controlling pollution.

When it comes down to it, I think that even the base of the base deserve a certain minimal standard of living. And if the ultimate, utility maximization of the market suffers a little to provide the minimum, even for ungrateful and rude people, then so be it. I believe in socialism at least that much.

What I think is interesting is that it's primarly the bottom of the barrell right-wingers, the bottom of the barell financially, who protest the loudest about welfare and defend the rights of the rich to be even richer. I'm not sure exactly how to account for this.

[_Moniker]

Gad, you're always fairly brilliant even when intoxicated. I, on the other hand, never have an excuse for my thoughts as I'm always sober. :)

Well, I think that in our country we have the honored tradition of individual property rights and negative rights. To take from one to give to another is infringing upon liberty -- I do believe that. Yet, is life not as valuable to liberty? What kind of life is truly able to achieve what we deem of as free in our society? Are we comfortable knowing that there is an underclass that struggles to make ends meet and must choose between a low paying job or returning to welfare payments (where they may exceed a low paying job)? My thoughts are very transitional when it comes to welfare, yet, I've concluded that it is more of a crime against humanity and freedom to have an underclass that we UTILIZE and not give them the benefits of simple necessities.

I'm not making must sense, I fear. Still sober.

~edited~ Why I mentioned the above is because of the bottom of the barrel right ideology you mention. It is a mantra of many that individualism and property rights are more important than anything else in our social contract. I get that the basis for our social contract is to provide the safe keeping of our property and protection of our lives. Yet, it appears, to me, that property is seen as more important to liberty than anything else, to them. That's not where I am anymore, yet, I understand that mindset as I had it for quite a while when I was younger. I absolutely thought that all individuals had the ability to rise independently and without trampling upon others. I don't think this works in reality.

[Guest]

You make some good points. I've added some cheese to the bottle of wine I'm finishing off and cheese always makes me feel like posting.

Is it really infringing on liberty? I have to think about Milton Friedman again. He is the one who argued forcefully that being born smart and rich aren't any different. Both are matters of luck. Warren Buffet, who some belive defy the doctrine of market efficiency, admits that he is willing to pay a little more in taxes given the advantages he received in luck. Maybe they are just a little "unlucky" to have their "freedom" infringed on.

The only thing I disagree with you on is the way you speak about the "trades", as there is very, very good money to be made painting and doing the dirty work. I live in CA, as I think you know. Well, at my last job, I had a conversation with a Mexican guy, mid 40's, who every night when I left from work I saw emptying trash cans. We got into this conversation, and somehow money came up, he was trying to give me advice on certain things. Well, it turns out, this guy (at that time) was making double what I made! I couldn't belive it.

Yeah, trampling on others is the way it goes. But there is the idea of cooperative games that lessens that a little.

And so what if "barrel" is spelled with one "l". lol. you just pass over that.