Fiscal cliff debate

[Skin Job]

The man-made systems that Enki rails on about can be seen to be mimetic functions of Nature. Organisms exist evolutionarily configured to provide for their own continued existence and reproduction. When they fail to do so, well, you know the rest.

It's an odd conceit that we humans (Westerners, specifically) continually place ourselves above and apart from Nature, of course this is false.

[noddy]

conservative theists would argue that when we dont carry the conceit of being above nature we start living like the worst of it.. primal law of the jungle et all.

not saying i disagree with you because i dont, however their is an ego game aspect in all this, tricking oneself into better behaviours.

[Enki]

There is a central fallacy to that idea. It's the idea that tearing out the throat of a rival with your teeth is natural, but sharing your portion in cooperation is not.

Both the basest carnal impulses and the highest moral character are 'natural'. We get to choose which path we prefer and the world that we and our offspring must live in will be the result of those choices.

[Hoosiernorm]

GOP Bullying

[Skin Job]

I'm a big fan of voluntary cooperation, and nowhere would I ever argue against it. I am arguing against assertions that eking out a living as a "unit of production" is somehow inferior to subsistence farming or being a hunter gatherer. In China, rural people vote with their feet, millions each year become one of these units, cogs in the mechanism of industry. If it's being chosen voluntarily all over the world, it must have its advantages. We don't see significant flows in the other direction, at least not yet. We should avoid romanticized versions of the alternatives to the systems in place now.

[Enki]

Apparently you didn't understand what I said. I was talking about when the units of production are no longer needed by the economy and the safety net has been dismantled. If a human being is its economic value, what is it when it has no economic value?

[Doc]

The Icelandic Success Story

December 8, 2012

Aziz Economic History, Economics, Economics for the Jilted Generation, Finance, Wall Street iceland, max keiser, reality, winning 30 Comments

Emotionally, I love Iceland’s financial policies since the crash of 2008:

Iceland

Iceland went after the people who caused the crisis — the bankers who created and sold the junk products — and tried to shield the general population.

But what Iceland did is not just emotionally satisfying. Iceland is recovering, while the rest of the Western world — which bailed out the bankers and left the general population to pay for the bankers’ excess — is not.

Bloomberg reports:

Few countries blew up more spectacularly than Iceland in the 2008 financial crisis. The local stock market plunged 90 percent; unemployment rose ninefold; inflation shot to more than 18 percent; the country’s biggest banks all failed.

This was no post-Lehman Brothers recession: It was a depression.

Since then, Iceland has turned in a pretty impressive performance. It has repaid International Monetary Fund rescue loans ahead of schedule. Growth this year will be about 2.5 percent, better than most developed economies. Unemployment has fallen by half. In February, Fitch Ratings restored the country’s investment-grade status, approvingly citing its “unorthodox crisis policy response.”

So what exactly did Iceland do?

First, they create an aid package for homeowners:

To homeowners with negative equity, the country offered write-offs that would wipe out debt above 110 percent of the property value. The government also provided means-tested subsidies to reduce mortgage-interest expenses: Those with lower earnings, less home equity and children were granted the most generous support.

Then, they redenominated foreign currency debt into devalued krone, effectively giving creditors a big haircut:

In June 2010, the nation’s Supreme Court gave debtors another break: Bank loans that were indexed to foreign currencies were declared illegal. Because the Icelandic krona plunged 80 percent during the crisis, the cost of repaying foreign debt more than doubled. The ruling let consumers repay the banks as if the loans were in krona.

These policies helped consumers erase debt equal to 13 percent of Iceland’s $14 billion economy. Now, consumers have money to spend on other things. It is no accident that the IMF, which granted Iceland loans without imposing its usual austerity strictures, says the recovery is driven by domestic demand.

What this meant is that unsustainable junk was liquidated. While I am no fan of nationalised banks and believe that eventually they should be sold off, there were no quick and easy bailouts that allowed the financial sector to continue with the same unsustainable bubble-based folly they practiced before the crisis (as has happened throughout the rest of the Western world).

And best of all, Iceland prosecuted the people who caused the crisis, providing a real disincentive (as opposed to more bailouts and bonuses):

Iceland’s special prosecutor has said it may indict as many as 90 people, while more than 200, including the former chief executives at the three biggest banks, face criminal charges.

Larus Welding, the former CEO of Glitnir Bank hf, once Iceland’s second biggest, was indicted in December for granting illegal loans and is now waiting to stand trial. The former CEO of Landsbanki Islands hf, Sigurjon Arnason, has endured stints of solitary confinement as his criminal investigation continues.

That compares with the U.S., where no top bank executives have faced criminal prosecution for their roles in the subprime mortgage meltdown. The Securities and Exchange Commission said last year it had sanctioned 39 senior officers for conduct related to the housing market meltdown.

Iceland’s approach is very much akin to what I have been advocating — write down the unsustainable debt, liquidate the junk corporations and banks that failed, disincentivise the behaviour that caused the crisis, and provide help to the ordinary individuals in the real economy (as opposed to phoney “stimulus” cash to campaign donors and big finance).

And Iceland has snapped out of its depression. The rest of the West, where banks continue to behave exactly as they did prior to the crisis, not so much.

http://azizonomics.com/2012/12/08/the-i ... ess-story/

[Skin Job]

Apparently you didn't understand what I said. I was talking about when the units of production are no longer needed by the economy and the safety net has been dismantled. If a human being is its economic value, what is it when it has no economic value?

The answer is simple, that human must create their own value without reliance on the system that has no more use for them. Participation as a "unit of production" is almost always voluntary.

[Enki]

Apparently you didn't understand what I said. I was talking about when the units of production are no longer needed by the economy and the safety net has been dismantled. If a human being is its economic value, what is it when it has no economic value?

The answer is simple, that human must create their own value without reliance on the system that has no more use for them. Participation as a "unit of production" is almost always voluntary.

What if that system enforces property ownership and you own none of it and there is no path to ownership for you? In essence, it is illegal for you to create value.

[YMix]

Boehner punishes disobedient Republicans

After House Speaker John Boehner removed four Republicans from key committees, a move that has caused consternation among some in the GOP, he reportedly addressed the issue for the first time at a closed-door Republican meeting Wednesday.

"The Steering Committee this week decided to remove committee assignments from four members, and replace them with other members. This was not done lightly. This is something the committee took seriously and hopes never to have to do again," Roll Call reported Boehner told the caucus.

Rep. Tim Huelskamp, R-Kan., was one of the members removed from a committee. He told The Hill newspaper that Boehner said the move "had nothing to do with their conservative ideology, but had to do with their voting patterns."

The decision by the Republican Steering Committee, which is heavily influenced by Republican leadership, to remove four Republicans - Reps. Tim Huelskamp, R-Kan., Justin Amash, R-Mich., Walter Jones, R-N.C., and David Schweikert, R-Ariz. - from the Budget and Financial Services committees caused uproar in Republican circles.

Conservative blogger Erick Erickson's Red State blog derided the move, writing "It's becoming clear that there is only one faction that demands ideological purity. And it's not the faction that upholds the ideology of the party."

Huelskamp and Amash attended an event at the conservative think tank the Heritage Foundation earlier this week to discuss their removal.

"We haven't been told officially. I've had to read it in the newspapers," Amash said yesterday. "I have not received a single call from anyone in leadership."

"It's not about principles, it's about blind obedience," Huelskamp said at the same event.

But Boehner reportedly denied the lawmakers' removal because of ideology when he addressed his caucus today.

"The committee's decision had nothing to do with ideology. For those suggesting otherwise, I'd respectfully suggest that you look at some of the people the Steering Committee put in charge of committees. I'd also suggest you look at some of the members who were added to the committees by the Steering Committee. If you do that and come away with the conclusion that there was a 'conservative purge,' I'd be interested [in] hearing the rationale," Boehner said, according to Roll Call.

The conservative group, Club for Growth, wrote in a statement that Republican leadership should publicly post its criteria for ranking members' votes. The group's president Chris Chocola added, "The Club for Growth PAC stands ready to make sure that Republican primary voters are also watching the voting patterns of the big government crowd in the House GOP."

How come I haven't heard of this yet from Mr. Perfect? What happened to Boehner?

[Skin Job]

Apparently you didn't understand what I said. I was talking about when the units of production are no longer needed by the economy and the safety net has been dismantled. If a human being is its economic value, what is it when it has no economic value?

The answer is simple, that human must create their own value without reliance on the system that has no more use for them. Participation as a "unit of production" is almost always voluntary.

What if that system enforces property ownership and you own none of it and there is no path to ownership for you? In essence, it is illegal for you to create value.

Yeah, what if? Are you envisioning a system that enforces a 100% success rate?

[Enki]

Apparently you didn't understand what I said. I was talking about when the units of production are no longer needed by the economy and the safety net has been dismantled. If a human being is its economic value, what is it when it has no economic value?

The answer is simple, that human must create their own value without reliance on the system that has no more use for them. Participation as a "unit of production" is almost always voluntary.

What if that system enforces property ownership and you own none of it and there is no path to ownership for you? In essence, it is illegal for you to create value.

Yeah, what if? Are you envisioning a system that enforces a 100% success rate?

I am pointing out the flaw in the thinking that people should sink or swim in an economy that is dominated by a small number of owners who have a disproportionate amount of leverage over goods and services.

[Skin Job]

Apparently you didn't understand what I said. I was talking about when the units of production are no longer needed by the economy and the safety net has been dismantled. If a human being is its economic value, what is it when it has no economic value?

The answer is simple, that human must create their own value without reliance on the system that has no more use for them. Participation as a "unit of production" is almost always voluntary.

What if that system enforces property ownership and you own none of it and there is no path to ownership for you? In essence, it is illegal for you to create value.

Yeah, what if? Are you envisioning a system that enforces a 100% success rate?

I am pointing out the flaw in the thinking that people should sink or swim in an economy that is dominated by a small number of owners who have a disproportionate amount of leverage over goods and services.

The thinking is not flawed if the thinker fails to accept your premises. Don't presume that they are self-evident.

[Enki]

The thinking is not flawed if the thinker fails to accept your premises. Don't presume that they are self-evident.

They are not self-evident. But if you look at the trend of increasing corporate profits stagnant employment and reduction in wages, it's not difficult to suss it out. Most of the job growth has occurred in the sector where it doesn't pay enough to support yourself and a family. If you remove the social safety net and it's less than 5 years until you have desperate squalid poverty all over the nation.

[noddy]

i do wonder how those graphs of worker wages versus ceo pay look when you adjust them for all the modern requirements like healthcare, various insurances,superannuation and payroll taxes.

their is a double headed beast feeding off our livelihoods and neither side will provide a safety net, this battle is between government staff and multinational wall st type corporate bosses and everyone else is but cannon fodder.

[Enki]

i do wonder how those graphs of worker wages versus ceo pay look when you adjust them for all the modern requirements like healthcare, various insurances,superannuation and payroll taxes.

their is a double headed beast feeding off our livelihoods and neither side will provide a safety net, this battle is between government staff and multinational wall st type corporate bosses and everyone else is but cannon fodder.

All I know is, my kids ain't growing up without learning Arduino.

[Ibrahim]

Apparently you didn't understand what I said. I was talking about when the units of production are no longer needed by the economy and the safety net has been dismantled. If a human being is its economic value, what is it when it has no economic value?

The answer is simple, that human must create their own value without reliance on the system that has no more use for them. Participation as a "unit of production" is almost always voluntary.

What if that system enforces property ownership and you own none of it and there is no path to ownership for you? In essence, it is illegal for you to create value.

Yeah, what if? Are you envisioning a system that enforces a 100% success rate?

I am pointing out the flaw in the thinking that people should sink or swim in an economy that is dominated by a small number of owners who have a disproportionate amount of leverage over goods and services.

The thinking is not flawed if the thinker fails to accept your premises. Don't presume that they are self-evident.

Who disputes that the economy is dominated by a small number of people who wield disproportionate influence?

[Skin Job]

Yeah, what if? Are you envisioning a system that enforces a 100% success rate?

I am pointing out the flaw in the thinking that people should sink or swim in an economy that is dominated by a small number of owners who have a disproportionate amount of leverage over goods and services.

The thinking is not flawed if the thinker fails to accept your premises. Don't presume that they are self-evident.

Who disputes that the economy is dominated by a small number of people who wield disproportionate influence?

Disproportionate is a subjective term. I've heard the word from on high that those few influence wielders did not build that, therefore it must be the have-nots that put them there. Secretly, most are happy to be led about and do tricks for table scraps. Just because some jealous busybodies can't countenance anyone having more or being better than anyone else doesn't necessarily mean that it's wrong for things to be that way.

I'm poor, but happy. I hear a lot of rich people are miserable, even with all their material excess. They can have it, I don't have a jealous bone in my little body.

[Simple Minded]

Disproportionate is a subjective term. I've heard the word from on high that those few influence wielders did not build that, therefore it must be the have-nots that put them there. Secretly, most are happy to be led about and do tricks for table scraps. Just because some jealous busybodies can't countenance anyone having more or being better than anyone else doesn't necessarily mean that it's wrong for things to be that way.

I'm poor, but happy. I hear a lot of rich people are miserable, even with all their material excess. They can have it, I don't have a jealous bone in my little body.

Bravo Dude!!!

- The desire to save the world is almost always a false front for the desire to rule the world.
- The main cause of man's unhappiness is his inability to sit quietly in a room.
- That man is richest whose pleasures are cheapest.
- What we obtain too cheaply we esteem too lightly. etc. etc.

I don't recall the source, but do recall reading an observation (poorly paraphrased, as always) that at a certain level of success, lets say 50%, people seem fairly appreciative of the 50% they have, and seem to realize that attaining another, say 30% won't add significantly to their happiness.

At a much higher level of success, lets say 80%, people seem to lose the appreciation of the 80% they have and become obcessed with attaining another 10% of what they don't have.

Examples abound...... Good ole people.....

[Ibrahim]

Yeah, what if? Are you envisioning a system that enforces a 100% success rate?

I am pointing out the flaw in the thinking that people should sink or swim in an economy that is dominated by a small number of owners who have a disproportionate amount of leverage over goods and services.

The thinking is not flawed if the thinker fails to accept your premises. Don't presume that they are self-evident.

Who disputes that the economy is dominated by a small number of people who wield disproportionate influence?

Disproportionate is a subjective term.

No it is not. If there are two people and five apples, and one person has one apple and the other person has four apples then the ratio of apples favors the second person. They have a disproportionate number of apples.

Just because some jealous busybodies can't countenance anyone having more or being better than anyone else doesn't necessarily mean that it's wrong for things to be that way.

Ah, but you're jumping ahead. So far we are only trying to determine if it is "that way." It seems like you're agreeing that it is and are already addressing the morality of such arrangement.

I'm poor, but happy. I hear a lot of rich people are miserable, even with all their material excess. They can have it, I don't have a jealous bone in my little body.

The ability of people to be content regardless of their material circumstances is yet a third issue. At least as far back as ancient Taoist sages, and probably some Egyptian poet even before that, contentment rather than the seeking of wealth has long been regarded as a virtue and good sense, so everybody should be able to agree with your position on this.

[Juggernaut Nihilism]

What if... there is no path to ownership for you?

What often throws me off is your occasional tendency to use yourself in your examples. You will talk about how you don't own any property and are therefore excluded from creating value or participating in the economy, when in fact you are a living, breathing counter-example to your own argument.

What is a real example of someone for whom there is simply no path to ownership or meaningful participation in the economy? I propose that this group of people is less than 10% of the population and that the vast majority of that group has limiting factors beyond just the structure of the corporate tax system. You seem to want to build a system that ensures the bottom 10% has a path that, if followed correctly, will make them upper middle class by the time they retire comfortably at 55. But that's crazy. Unless you invent a better mousetrap, going from poor to upper middle class ought to be a multi-generational thing, where parents accept the sacrifice of relative poverty to ensure their children can have it better.

The real transition that is occurring isn't targeting the wage worker so much as it is targeting stupid people. It just so happens that most low IQ people are wage workers. The new economy simply doesn't have as much use for people who have nothing to offer but their bodies and their time, and unfortunately there several billion of them around the world. I reject the idea that all the typical inner city banger or West Virginia bumpkin lacks is access to capital and if we reformed the system they would be web entrepreneurs. Most of our inner cities are filled with people who have 75 IQs, anxiety disorders, and 500 word vocabularies. In the past we have at least been able to hand you a shovel or teach you how to operate a machine or put you in an orange vest and give you a stop sign, but we just don't need these people anymore (economically). The few places we might realistically use them are filled instead by Mexican immigrants, which is why I can't understand how labor leaders and black activists continue to ally themselves with the Mexican immigration lobby, which runs directly counter to their interests.

[Enki]

What often throws me off is your occasional tendency to use yourself in your examples. You will talk about how you don't own any property and are therefore excluded from creating value or participating in the economy, when in fact you are a living, breathing counter-example to your own argument.

I am definitely the living breathing counter-example. I am not worried about myself, but my children and their children. I am worried about what will happen when 3D printers can make robots to replace any form of labor for very cheaply. Or maybe I shouldn't even worry about MY children who might inherit something. If my wife and I level up in our careers we probably will be able to leave an inheritance. But what about the children of those who are already being left behind?

What is a real example of someone for whom there is simply no path to ownership or meaningful participation in the economy? I propose that this group of people is less than 10% of the population and that the vast majority of that group has limiting factors beyond just the structure of the corporate tax system. You seem to want to build a system that ensures the bottom 10% has a path that, if followed correctly, will make them upper middle class by the time they retire comfortably at 55. But that's crazy. Unless you invent a better mousetrap, going from poor to upper middle class ought to be a multi-generational thing, where parents accept the sacrifice of relative poverty to ensure their children can have it better.

No, it's not about making them upper-middle class. It's about ending poverty. They may still be poor, it's just that they will have the baseline level where they COULD if they so chose pursue a path to a better life.

The real transition that is occurring isn't targeting the wage worker so much as it is targeting stupid people. It just so happens that most low IQ people are wage workers. The new economy simply doesn't have as much use for people who have nothing to offer but their bodies and their time, and unfortunately there several billion of them around the world. I reject the idea that all the typical inner city banger or West Virginia bumpkin lacks is access to capital and if we reformed the system they would be web entrepreneurs. Most of our inner cities are filled with people who have 75 IQs, anxiety disorders, and 500 word vocabularies. In the past we have at least been able to hand you a shovel or teach you how to operate a machine or put you in an orange vest and give you a stop sign, but we just don't need these people anymore (economically). The few places we might realistically use them are filled instead by Mexican immigrants, which is why I can't understand how labor leaders and black activists continue to ally themselves with the Mexican immigration lobby, which runs directly counter to their interests.

They have anxiety disorders because they are terrified that they will get shot, raped, starve or be homeless with the slightest misstep. You think that changing such savage conditions is utopian. I disagree. I think we have the material resources to end that. I also think we have a moral obligation to do so. And since it needs to be said, I do not think that government is the only method by which we can accomplish this.

[Juggernaut Nihilism]

My main contention is that we already ended poverty, except for a few outliers that will always exist. Just like we've ended racism, sex-discrimination, etc to the extent it will ever be possible. But the permanent revolution must go on, and industries depend on them, so...

That doesn't mean that I don't think there is work to be done. I just think its folly to focus on trying to lift up the bottom 10%. We should have policies to keep them from starving, but the bulk of our policies should focus on empowering the middle 60% or so of our population. In that, I agree with a statement Romney got lampooned for... that he wasn't concerned with the top people, who were doing fine, or the bottom people, for whom we have policies to support, but on the bulk in the middle.

It seems like you, and many others, would gladly accept a system that works less well, as long as it struck you as being more 'fair'. I know you will say that the more fair a system is, the better it will work, and maybe that's true, but it comes down to approach. It offends your sensibility that certain people or groups are rich when others are not, or that we have policies that make it easier for rich people to get even richer, and then try to fix that... but the fact is that most policies have ambiguous outcomes: the same policy designed to make it easier for one rich guy to expand his operations or invest in R&D will make it easier for another guy to take advantage and sock away more money. You seem willing to accept negative outcomes as long as your sense of fairness is satisfied.

I suggest that it is better to ask what works better, accepting the fact that there will always be 10-20% of any economy that don't really fit in.

[Ibrahim]

My main contention is that we already ended poverty, except for a few outliers that will always exist. Just like we've ended racism, sex-discrimination, etc

Laughable. All of these things are on the upswing, to the extent that we saw an entire Presidential campaign staked on racism and sexism. Even if its failed, that's more respectability than such rhetoric has seen in decades and these ideas are only on the rise among the hardline right in the US. As for poverty, no developed nation does less to care for its poor than the US, and such programs as exist are under constant threat.

It seems like you, and many others, would gladly accept a system that works less well, as long as it struck you as being more 'fair'.

It depends who you judge the "success" of the system. If you prefer a system which is institutionally racist, sexist, militaristic, and funnels wealth to a smaller number of people at the expense of the majority, then your mission is to defend the status quo. I understand why certain people would consider this a system that "works well" but whats really impressive is their ability to recruit so many "useful idiots" to defend it for them.

I know you will say that the more fair a system is, the better it will work, and maybe that's true, but it comes down to approach. It offends your sensibility that certain people or groups are rich when others are not, or that we have policies that make it easier for rich people to get even richer, and then try to fix that... but the fact is that most policies have ambiguous outcomes: the same policy designed to make it easier for one rich guy to expand his operations or invest in R&D will make it easier for another guy to take advantage and sock away more money. You seem willing to accept negative outcomes as long as your sense of fairness is satisfied.

What "sense" of yours is satisfied by defending the current arrangement? What emotional needs does this argument assuage for you, as opposed to those that make others oppose you?

[Juggernaut Nihilism]

What "sense" of yours is satisfied by defending the current arrangement? What emotional needs does this argument assuage for you, as opposed to those that make others oppose you?

I don't defend the current arrangement. I simply have different problems with it than you do, and attack it from another direction. There are many issues, such as the systematic discrimination against Asian Americans in favor of less talented blacks and Hispanics, that ought to be addressed.