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Old December 5th, 2009, 11:14 PM   #1
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Government intervention in the market (spin-off of climate controversy thread)

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Oh yea, I just happened to be on as I was taking a break from some work I am doing. As for the business aspect, of course businesses don't want more regulations- no one is denying that. The problem is, that should some of these regulations be passed, it will hurt business and in turn the economy, Main St., and the common man who works at these businesses. Why not allow the market to come up with a solution the problem? In my opinion, the green movement is fine, but it should seek to grasp people at the individual level and compel them to voluntarily change their lifestyles. This has already been happening if we look at the last few years, especially with the higher demand for hybrids and green appliances.

Also, geoengineering should really be considered as it could potentially save the planet at an extremely cheap cost and without any economic hardship.
Why not let the market fix it?

For the same reason wall street needs to be regulated and its only after the great recession that people in power realize it.

If you let people, whos sole motivation is money, try to fix a problem like global climate change, they will **** it up, let business stick to selling widgets, they clearly need to be limited to smaller things, let big business run the show and wages flatten, you get massive corruption and exploitation in the 3rd world (think bopal and shell) and more recently not having regulations in the economic sector has led to 40% of the worlds wealth to disappear.

Not sure why actually having the government do something is a bad idea, especially given the piss poor track record of "the market", sure it can get me a 5th blade for a razor but they **** up everything else they touch.

Now you might say "so does government" but at least we still have a democracy, if a leader ****s up we can boot him out, if "the market" ****s up the best we can hope for is they hang themselves and leave the rest of us to clean their mess, we have a say in government, we dont have a say in business and dont give me that "vote with ur dollar" nonsense, if a handful of companies owns most things they DICTATE what our options will be.

Last edited by myp; December 7th, 2009 at 05:14 PM. Reason: These posts moved here from climate thread (http://www.politicalfray.com/showthread.php?p=7358) because they were off-topic.
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Old December 7th, 2009, 06:18 AM   #2
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Why not let the market fix it?

For the same reason wall street needs to be regulated and its only after the great recession that people in power realize it.
Does Wall St. need to be regulated? This crisis involved the Fed, Fannie/Freddie, and the FHA pumping billions of dollars into the housing market. It involved a government that interfered in business decisions and one which created a moral hazard by essentially ensuring the insurance of these housing assets. This recession was largely the cause of government, not the market. That debate is for another thread though.

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If you let people, whos sole motivation is money, try to fix a problem like global climate change, they will **** it up, let business stick to selling widgets, they clearly need to be limited to smaller things, let big business run the show and wages flatten, you get massive corruption and exploitation in the 3rd world (think bopal and shell) and more recently not having regulations in the economic sector has led to 40% of the worlds wealth to disappear.
Again, the States have been heavily regulated with one of the highest corporate taxes in the world and a lot of government intervention- far from a free market. As for businesses solving problems, even though their motive may be profit, they tend to be a lot more efficient than government. Just look at innovation worldwide in virtually any sector- from healthcare to technology- the leaders in growth and innovation are always in the private sector.


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Not sure why actually having the government do something is a bad idea, especially given the piss poor track record of "the market", sure it can get me a 5th blade for a razor but they **** up everything else they touch.
For a third time, the government has meddled in the market a lot and distorted it in doing so. The private sector is always more efficient than government- even people in government will admit that. The market has a stellar record in human history, it is government intervention and government controlled enterprise that has a "piss poor" record.


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Now you might say "so does government" but at least we still have a democracy, if a leader ****s up we can boot him out, if "the market" ****s up the best we can hope for is they hang themselves and leave the rest of us to clean their mess, we have a say in government, we dont have a say in business and dont give me that "vote with ur dollar" nonsense, if a handful of companies owns most things they DICTATE what our options will be.
Really? Consumers won't stop buying products if a company produces them poorly? Shareholders won't complain to companies to remove CEOs if stocks fall? The market is driven by supply and demand. Bankruptcy happens all the time- it is part of the market and people "throwing companies out" that are not providing them what they want. The government, on the other hand, is a monopoly driven by very deep coffers that the treasuries can fund with inflation and taxes on the people.
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Old December 7th, 2009, 06:32 AM   #3
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Does Wall St. need to be regulated? This crisis involved the Fed, Fannie/Freddie, and the FHA pumping billions of dollars into the housing market. It involved a government that interfered in business decisions and one which created a moral hazard by essentially ensuring the insurance of these housing assets. This recession was largely the cause of government, not the market. That debate is for another thread though.

Again, the States have been heavily regulated with one of the highest corporate taxes in the world and a lot of government intervention- far from a free market. As for businesses solving problems, even though their motive may be profit, they tend to be a lot more efficient than government. Just look at innovation worldwide in virtually any sector- from healthcare to technology- the leaders in growth and innovation are always in the private sector.


For a third time, the government has meddled in the market a lot and distorted it in doing so. The private sector is always more efficient than government- even people in government will admit that. The market has a stellar record in human history, it is government intervention and government controlled enterprise that has a "piss poor" record.


Really? Consumers won't stop buying products if a company produces them poorly? Shareholders won't complain to companies to remove CEOs if stocks fall? The market is driven by supply and demand. Bankruptcy happens all the time- it is part of the market and people "throwing companies out" that are not providing them what they want. The government, on the other hand, is a monopoly driven by very deep coffers that the treasuries can fund with inflation and taxes on the people.
Very well said myp!
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Old December 7th, 2009, 08:47 AM   #4
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Quote:
Originally Posted by myp View Post
Does Wall St. need to be regulated? This crisis involved the Fed, Fannie/Freddie, and the FHA pumping billions of dollars into the housing market. It involved a government that interfered in business decisions and one which created a moral hazard by essentially ensuring the insurance of these housing assets. This recession was largely the cause of government, not the market. That debate is for another thread though.
You have got to be kidding, this happened because ...

Here ...
Quote:
A special program about the housing crisis produced in a special collaboration with NPR News. We explain it all to you. What does the housing crisis have to do with the turmoil on Wall Street? Why did banks make half-million dollar loans to people without jobs or income? And why is everyone talking so much about the 1930s? It all comes back to the Giant Pool of Money.
http://www.thislife.org/Radio_Episode.aspx?episode=355

More here ...

http://en.wikipedia.org/wiki/The_Giant_Pool_of_Money

Your blaming the government but it was the banks and business that didnt want to be regulated, that the government was more then happy to let them do whatever they wanted, that caused the problem.

Quote:
Again, the States have been heavily regulated with one of the highest corporate taxes in the world and a lot of government intervention- far from a free market. As for businesses solving problems, even though their motive may be profit, they tend to be a lot more efficient than government. Just look at innovation worldwide in virtually any sector- from healthcare to technology- the leaders in growth and innovation are always in the private sector.
Not having unions is efficient, it also means a poor lifestyle for people.

Not spending time with your kids and working is efficient for the job but it leads to being a shitty parent.

Efficiency is one of many factors that needs to be balanced, its not an end goal, at least for anyone who wants a good standard of living it shouldnt be an end goal.

The u.s. is one of the least regulated places in the modern world *LOL* Americans can profess that this isent true but by the rest of the world, modern standards your country is still the wild west and companies do whatever they damn well please and your people suffer constantly for it, granted China has less health regulations then you.

Quote:
For a third time, the government has meddled in the market a lot and distorted it in doing so. The private sector is always more efficient than government- even people in government will admit that. The market has a stellar record in human history, it is government intervention and government controlled enterprise that has a "piss poor" record.
Thats just not true, its the governments job to regulate business to make sure they dont trample on peoples rights, that they operate fairly, the mess you are in is because business was given way too much power.

Its the same reason so many americans are convinced single payer health care wont work, because insurance companies and big health industry are spending millions to spread lies about the system, they dont want any competition.

The market overseas is even worse, openly poisoning and exploiting people.

I dont need to point to enron, worldcom etc do I ?

Your business world is corrupt and its precisely because you gave business a blank cheque in the 80s and decided you didnt want to regulate them.

Quote:
Really? Consumers won't stop buying products if a company produces them poorly? Shareholders won't complain to companies to remove CEOs if stocks fall? The market is driven by supply and demand. Bankruptcy happens all the time- it is part of the market and people "throwing companies out" that are not providing them what they want. The government, on the other hand, is a monopoly driven by very deep coffers that the treasuries can fund with inflation and taxes on the people.
Government isent business *L* and noone is saying get rid of business.

You need to regulate business, their goal is to make money, if they could grind babies and sell them at a profit they would do it with a smile.

So keep business working for your dollar but government is the leash and you have to hold onto that.

You deregulated business, things ****ed up, as obviously they would have and then you turn around and blame government *LOL*
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Old December 7th, 2009, 10:24 AM   #5
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Quote:
Originally Posted by ArghMonkey View Post
You have got to be kidding, this happened because ...

Here ...


http://www.thislife.org/Radio_Episode.aspx?episode=355

More here ...

http://en.wikipedia.org/wiki/The_Giant_Pool_of_Money

Your blaming the government but it was the banks and business that didnt want to be regulated, that the government was more then happy to let them do whatever they wanted, that caused the problem.
Oh course business doesn't want to be regulated- it hurts them, no one is arguing that. Of course it was also the businesses who made the risky moves. But, the question is why?

It all comes down to risk. High risk moves tend to pay higher, but obviously since they are high risk, if they fail the losses would be huge as well. Rational people, including businesses, understand this and depending on how risk averse the business/person is, they may or may not take part in a risky investment. During the build up of the housing bubble, the Federal government directly invested in and propped up these markets with the billions of dollars they put in it. This told these businesses that even if their investments failed, they would most likely be bailed out because obviously the government would have to bail its own entities- the GSEs- out. Profit being the primary concern of businesses, this insurance simply meant that they would make investments of very high risk because even if they failed, they would be bailed out. If that government guarantee wasn't there, they would not have made decisions that were so risky. This same behavior is apparent in the creation of the Asian financial crisis of the late 90s when investors knew of the moral hazard the IMF created. In the same way, the Fed and GSEs created a moral hazard in this crisis.

Bad decisions by businesses did play a role in this crisis, but that bad behavior was driven by the government. The individuals who bought houses they couldn't afford were also to blame for simply believing lenders when they said the market would continue to go up and equity would continue to pay mortgage payments. But again, the reason these lenders made those risky loans in the first place was because of the government's role in the market as they knew Wall St would buy up their loans and Wall St knew they could package those loans into mortgage backed securities and even if they failed, there was the government bailout waiting.

You can say regulation is needed, but in reality that will only hurt business, create more unstable markets, and create more moral hazards.

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Not having unions is efficient, it also means a poor lifestyle for people.

Not spending time with your kids and working is efficient for the job but it leads to being a shitty parent.

Efficiency is one of many factors that needs to be balanced, its not an end goal, at least for anyone who wants a good standard of living it shouldnt be an end goal.
Just as with goods, there is a market in labor. If enough workers say they don't want to work 40 hours, then businesses would have to adapt to needs. If someone is willing to work long hours, then who is the government to place regulations on work just because some other people don't want to work as much or in those conditions?

Unions should be legal in my opinion, but not mandatory. Also, companies should be able to hire a new set of workers if a union goes on strike. In the end supply and demand would control the situation and set fair wages as well.

Quote:
Originally Posted by ArghMonkey View Post
The u.s. is one of the least regulated places in the modern world *LOL* Americans can profess that this isent true but by the rest of the world, modern standards your country is still the wild west and companies do whatever they damn well please and your people suffer constantly for it, granted China has less health regulations then you.
We are quickly moving away from that and in some sectors we are very heavily regulated. Just because Europe or Canada may be more regulated, does not mean you are right- in fact, our economy is a lot more robust than yours. Also, look at Hong Kong and Singapore- often described the two most capitalist places on Earth. Look at their growth, economic stability, and prosperity. Markets create prosperity and well being, government does not.


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Originally Posted by ArghMonkey View Post
Thats just not true, its the governments job to regulate business to make sure they dont trample on peoples rights, that they operate fairly, the mess you are in is because business was given way too much power.
Until you give me some proof as to how the businesses were not driven to do what they did by government, this holds no ground. As for it is the government's "job" to regulate business- that is your opinion. I would rather leave market conditions to supply and demand (the will of the people) than some politician any day. The market is far to complex for one person or a group of people to understand as there are limitless variables involved including emotion.

As for rights, no one is saying the government shouldn't protect the Constitution or basic rights. Ensuring you get paid $9/hour or holding your hand in getting what you want is not a basic right.


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Originally Posted by ArghMonkey View Post
Its the same reason so many americans are convinced single payer health care wont work, because insurance companies and big health industry are spending millions to spread lies about the system, they dont want any competition.
Or maybe its the fact that America is the world's health care leader and maybe Canada/Europe has a good system, but we feel we can improve ours without sacrificing innovation by freeing markets. Currently, we are in a state of corporatism, not capitalism, especially in the healthcare market. Insurance companies are heavily favored through gov't legislation (such as not allowing purchase across state lines.) I am not for that- I am against such regulation and I am for free market healthcare, which would have to adhere to supply/demand.


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I dont need to point to enron, worldcom etc do I ?
Fraud is a completely different issue- I am still against that. Regulation does not stop fraud though, oversight and improved information does.

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Your business world is corrupt and its precisely because you gave business a blank cheque in the 80s and decided you didnt want to regulate them.
The "blank check" is the moral hazard which was created by GOVERNMENT. I am against that- the government should stay out and if companies fail they go bankrupt- simple as that. No crony capitalism- real capitalism.

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You need to regulate business, their goal is to make money, if they could grind babies and sell them at a profit they would do it with a smile.
You understand capitalism and anarchism is different right? There would still be laws against murder and protecting the Bill of Rights and Constitution as well as property rights and contracts.
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Old December 7th, 2009, 04:26 PM   #6
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Also, look at Hong Kong and Singapore- often described the two most capitalist places on Earth. Look at their growth, economic stability, and prosperity. Markets create prosperity and well being, government does not.
Everything, even anarchy, works on a small scale. Find me a large nation that enjoys a stable economy and high living standards with no gov't doing anything.
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Old December 7th, 2009, 05:04 PM   #7
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Everything, even anarchy, works on a small scale. Find me a large nation that enjoys a stable economy and high living standards with no gov't doing anything.
China and India are doing very well after they started making the push towards capitalism. The more the shrink the state, the more growth they seem to have. Before you point to poverty and inequality, both of those occurrences have gone DOWN after regulations and state-owned enterprises have been decreased.

Also, I can throw this question right back at you- where in history has regulation worked in a large state in the long run? Also, remember that the United States as per the Constitution is supposed to have a very limited Federal government, with a lot of power lying with the states and local governments- both whom can provide that "small scale" that you think is necessary.
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Old December 7th, 2009, 11:01 PM   #8
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China and India are doing very well after they started making the push towards capitalism. The more the shrink the state, the more growth they seem to have. Before you point to poverty and inequality, both of those occurrences have gone DOWN after regulations and state-owned enterprises have been decreased.

Also, I can throw this question right back at you- where in history has regulation worked in a large state in the long run? Also, remember that the United States as per the Constitution is supposed to have a very limited Federal government, with a lot of power lying with the states and local governments- both whom can provide that "small scale" that you think is necessary.
We all know the US stopped giving 2 cents worth of care about the Constitution after the War of Southern Independence (I hate the term 'Civil War' as it makes it seem as if it it was just the 1).
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Old December 7th, 2009, 11:38 PM   #9
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We all know the US stopped giving 2 cents worth of care about the Constitution after the War of Southern Independence (I hate the term 'Civil War' as it makes it seem as if it it was just the 1).
That is part of the problem. I am a Constitutionalist and a free market capitalist- both ideas which this country seems to have forgotten.
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Old December 7th, 2009, 11:59 PM   #10
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That is part of the problem. I am a Constitutionalist and a free market capitalist- both ideas which this country seems to have forgotten.
I'm a Constitutionalist as well. The fact is the Constitution died with that dictator 'Honest Ab'. Every president since has been just another power grabber (though I'd exclude Kennedy and Eisenhower).
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Old December 8th, 2009, 05:46 AM   #11
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though I'd exclude Kennedy
The only reason Kennedy wasn't a power-grabber was because he didn't have the chance.
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Old December 8th, 2009, 06:27 AM   #12
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I'm a Constitutionalist as well. The fact is the Constitution died with that dictator 'Honest Ab'. Every president since has been just another power grabber (though I'd exclude Kennedy and Eisenhower).
I am a dumb-ass and right now I can't think of one that I like anymore.
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Old December 8th, 2009, 07:10 AM   #13
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I am a dumb-ass and right now I can't think of one that I like anymore.
Maybe it's because there weren't any, rather than your intelligence being the issue?
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Old December 8th, 2009, 07:30 AM   #14
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Maybe it's because there weren't any, rather than your intelligence being the issue?
Thinking back I am at least very disappointed with our leaders over my lifetime. And some before my time.
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Old December 8th, 2009, 07:43 AM   #15
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Thinking back I am at least very disappointed with our leaders over my lifetime. And some before my time.
It really isn't surprising though because power does often corrupt. Special interests and money are just too pushing for some people. It is another reason why small government is a necessity in a free and prosperous society. No matter what government does from healthcare to regulating the market, there will always be those politicians out there who are in it for the special interest support, which usually ends up distorting the market and hurting the people.
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Old December 8th, 2009, 09:43 AM   #16
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The only reason Kennedy wasn't a power-grabber was because he didn't have the chance.
lol I was thinking the same thing when I posted that.
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Old December 9th, 2009, 07:19 AM   #17
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Quote:
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It really isn't surprising though because power does often corrupt. Special interests and money are just too pushing for some people. It is another reason why small government is a necessity in a free and prosperous society. No matter what government does from healthcare to regulating the market, there will always be those politicians out there who are in it for the special interest support, which usually ends up distorting the market and hurting the people.
Which is happening right as we speak. I am convinced that the current "rebound" in the market is continuing from where it left before. This time fuelled by a lot of bail-out money. Instead of being filtered through to massage the economy, it has been going to the markets in order for the Banks to get "back on track". How long do you think this is going to last this time round?
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