Uh oh he's back and hes got a long post... (nh)
sandra1 said:
When I was referring to liberal economists who predicted the financial outcome I was thinking of Roubini at NYU, Krugman at Princeton and Stiglitz at Columbia, all Professors of Economics with PhDs from elite institutions.
But...
Markets don't always work the way they are explained in the textbooks and government regulation is sometimes the best option.
You previously said that academic textbook explanations don't always work and there is a lack of credibility. You later go on to cite academician economists with PhD's that teach at major universities (and often contribute to textbooks) as having credibility. It seems that you have a double standard in judging sources, where the textbooks that show pro-business examples as "not always correct", but you cite liberal economists with their large perceived credibility to back up your ideology.
I believe Schiff is a former stockbroker with an undergraduate degree from Berkeley (also an elite institution) years ago. While you may choose to believe Schiff, it's certainly not hard to find a number of highly respected economists that are liberal, published in peer review journals and highly respected in their profession
Correct me if I am wrong, but you seem to insinuate that Peter Schiff is inferior because he has an "undergraduate degree" especially compared to your previously mentioned PhD economists. The elite institutions comment is somewhat irrelevant since they all are part of elite institutions. However, what you don't get out of the "undergraduate degree" statement is that Peter Schiff runs a firm that has roughly $2 billion in accounts, Euro Pacific Capital. He's dominated PhD's and other "experts" in arguments on television interviews...I can let you Youtube that if you want. Where PhD's write peer review journals, teach classes, and gather respect among their academic peers, he's out in the private sector putting his beliefs to work.
Even conservative economists with strong credentials like Greespan and Bernanke acknowledge that deregulating the financial institutions was a fiasco
Are you making the assumption that conservatives should fall in lock step with what Alan Greenspan and Ben Bernanke say/believe? That is like believing that all Republicans who are Ron Paul supporters think George W. Bush was a great president. I stand by my statement regarding the government forcing financial institutions to give out risky loans. That seems more like over-regulation than deregulation to me.
Canada did not join the deregulation bandwagon and they have pretty much avoided a financial meltdown while Iceland and Ireland (the poster children for de-regulation and the Austrian free market advocates) are now economic disaster zones.
A few points I want to make.
Number 1: Making a blanket statement about deregulation while comparing Canada and the USA is really a difficult argument to make. They're VERY different countries.
USA GDP = 14.2 trillion in 2009, Canada GDP = 1.285 trillion in 2009.
Military expenditures (very important to note): USA, 4.06% of GDP in 2005; Canada, 1.1% of GDP in 2005.
The economies are different sizes, USA outspends Canada in military expenditures BY FAR with our foreign wars, added to the fact that the demographic makeup and population figures of the two countries are very different. The same applies for comparison from Canada to Iceland or Ireland. Blaming deregulation is a huge oversimplification when there are so many other factors in play, but blaming deregulation is easy to do when you are trying to get the "little guy" to vote for you.
Number 2: Liberals (or at least their politicians) seem to think that free market economics somehow equates to happy times forever with no bad times. Period. Any time that a recession strikes, Capitalism has FAILED and it's time to micromanage the economy from the top, down. All starting-level macroeconomics courses teach that economies are always cyclical (having up and down trends). Saying deregulation is the reason for huge problems while comparing apples to oranges isn't a very solid argument. I could make a plausible argument stating that economic cycles don't match up from country to country and at this point in time, the cycles for each country's economy is at a different point in the never-ending up/down fluctuations, which is a result of a variety of factors. I could also go on to say that government intervention has a direct effect on recovery out of recessions and different countries with different degrees of intervention affect their cycles differently.
Number 2.5: Since recessions are inevitable, the best thing to do is to shorten them. Giving business the tools to "rebuild" and start making money again does that. Lowering corporate tax rates gives businesses more incentive to hire and make more safer decisions. It's not like businesses are purposely slowing down when their main goal is to make money for their shareholders. Also, time value of money comes into play, where a dollar today is worth more than a dollar tomorrow. Businesses want to make money now as opposed to in the future. Deregulation through the cessation of policy that favors big business, redistribution of wealth through bailouts, and other burdensome micromanaging aspects that add to cost of end products will help the economy by making things more affordable, encouraging competition, and encouraging entrepreneurs to take risk. Government's only role is to make sure everybody plays by the rules, competes fairly without crossing unethical or illegal boundaries, or monopolizes an industry. What government has done wrong is that they make too many rules that puts the stranglehold on business.
And,of course BP did not want to create an oill spill. However, they made the decision to drill based on their expected future stream of profits not necessarily the potential costs to society.
BP made decision to drill based on expected future stream of profit =
that is what a business does. Any business that doesn't try to make profit is not going to exist very long. Do you know where the profits go? To shareholders, aka people who own stocks. I know people who own stocks and they are hardly rich or corporate fat cats. Potential costs to society? I'm not trying to downplay the whole oil disaster, but how often does an oil disaster of this magnitude take place? How could anyone have possibly foreseen this happening when nothing like it has ever happened before? I'm not supporting BP because they are not blameless, but I'm correcting misconceptions based on liberal talking points.
Corporations aren't these "evil" entities that populists love to imagine. They are legal entities and the businesses finance themselves by selling ownership shares(stock) in companies to regular people like you and me. We can all go get an E-trade account and buy stocks right now...you don't have to be some privileged elite to participate in ownership stake of corporations. In fact, I knew some people that worked at Wal-Mart getting paid 8 bucks an hour saying how they had the ability to purchase Wal-Mart stock. Liberals always paint this picture that profits are just earned on the backs of the innocent worker and the worker is utterly screwed regardless. Go buy some stocks, go take some risks, go start a business, go GET IT if you WANT IT.
They decided not to drill a second relief well when they built the original well because the costs were high and the likelihood of a leak was small. They were also in a hurry to get the well pumping oil and may have taken some shortcuts according to some whistleblower reports. In Canada and Norway, the government requires relief wells and yes it ends up costing BP more to drill oil off their coasts but they still make billions. Yes, BP will pay tons for the cleanup but in the end they will shift much of the long term costs to the taxpayers, fisherman, property owners, etc. And I am not even counting the costs due to the potential long run environmental consequences.
Correct me if I'm wrong, but I heard from a variety of sources that we haven't been able to build a new oil well in this country for decades. On top of that, the structures we have in place aren't built for the volume they extract now. If there was corner cutting, then yeah, let them be punished to the extent that the current rules say. I don't believe in Big Government but I DO believe in ethical business. The problem is, whenever there is a slight problem (or even when there ISN'T a problem), the progressives pander to the public about how the law doesn't work and they need to reform.
"Health care is broken, OMG! Reform reform reform! Wait what did we just pass? I don't know we passed it before anybody could read it." Or in Arizona
"Oh No! Arizona is racially profiling against Mexicans and stopping daddy and child at the ice cream shop! REFORM REFORM REFORM!" Now we have this oil spill disaster,
"Oil is evil and unnatural, we need to stop drilling for oil despite our huge dependence on it and start using windfarms instead! REFORM REFORM REFORM!" Every single scenerio I mentioned above started with a lie, and politicians created a false choice of horrible reform ideas to "solve the problem". They also try to do it as fast as possible to pull one over on the general public, when common sense would tell you to generally take a step by step approach to solving a problem instead of a ready, fire, aim, approach.
You have a right to your opinion but I would appreciate some civility and respect for those who disagree with you.
As Americans, we both have rights to our own opinions. But we also have the right to debate our opinions. I am simply pointing out major flaws in your logic.
- the upper classes of society seem to love that.
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