TCS Daily


How Republics Die

By Mark J. Boone - February 6, 2009 12:00 AM

Insofar as an economic downturn has traceable causes, the present recession seems to have origins in the behavior of at least three groups of people: reckless lenders, who encouraged people to spend their money irresponsibly; reckless borrowers, who took their advice and spent well outside the limits of need and the ability to repay; and a government which at times encouraged such behavior through organizations such as Fannie Mae and Freddie Mac.

This is old news to the astute observer and the regular reader of TCS. What they may not know is how vividly, and how long ago, great philosophers warned us just how dangerously our society was using money. The great philosophers understood that economics operates on a moral plane, indeed a spiritual plane; that economic problems are often moral problems; and that financial markets are corrupted as much by bad behavior as by bad economic theory. The antiquity of their advice only serves to belie its strikingly acute contemporary relevance.

Read along from an excerpt of Plato's Republic (Book VIII, 550d-566), and see if any of it sounds familiar. It's the tragic tale of a declining republic, a tale of war, money, and politics all gone wrong through a combination of bad judgment and disordered cravings. We begin with moneylenders who have a nasty habit of lending money to people they know will use it irresponsibly, especially to youths whom they encourage to fritter it away on useless luxuries. They prefer that their money be wasted on frivolities; the more of it is wasted today, the more they can charge in interest tomorrow.

But their clients are just as bad, if not worse. By spending others' money on frivolities, they fail to take responsibility for themselves. A group of people recklessly spending other people's money soon becomes a leech on society: a class of those who have ruined themselves burning through borrowed money.

The class of bitter, bankrupt borrowers finds it has a friend—or what looks and talks like a friend—in a group of politicians who promises them honey, served in a silver bowl at the expense of the moneylenders who got them into trouble in the first place. Their alliance only lasts until one of the honey-tongued politicians stirs up the bankrupted class, whips them into a frenzied mob, and makes war against the wealthy class, seizing their money by force. This politician emerges as a tyrant, and the old republic has died.

Republic is a complex and profound morality tale in which we can see, if darkly, the reflection of our own republic. Its story is not exactly ours, but we have a lot in common with this once-beautiful city. Specifically, we have the same moneylenders and borrowers. The eeriest similarity to Plato's moneylenders is the agressive marketing of credit cards to college students. However, the reckless use of home loans on the part of both lender and borrower has proven more devastating.

We have been blessedly spared from the final stage of the societal destruction portrayed in Republic, wherein a redistribution of wealth proceeds by way of a violent coup to tyranny. The American republic is stable enough that for the foreseeable future we need not fear such madness.

But the same disease can also kill a republic slowly. Cicero, the great Roman statesman and philosopher who was also a great reader of Plato, warns that redistributing wealth by taking it from lenders and giving it to borrowers is among the worst things a leader can do because it wreaks havoc on a credit system (On Duties, Book II, chapters 83-85). This in turn can cripple an economy and lead to the same awful result: the death of the republic. Since credit is a function of the credibility a borrower has in the eyes of a lender, nothing can damage it more than if lenders expect to be repaid with their own taxes. While we can be grateful we haven't seen more of this, we should keep a hawk's eye on the new Congress for any signs of this sort of redistribution.

After all, we would only be deceiving ourselves if we thought that our republic by virtue of its size, technology, hefty GDP, or anything else is somehow immune to what destroyed other republics. Human nature destroyed ancient republics, and it could destroy ours.

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111 Comments

The Post Sovereign Society...
We have entered a period of global history where the fundamental business of sovereignty has been undercut by the technology of industrialized global warfare. Imperialistic hegemony has been made moot. Annexing your neighbors is simply no longer an option.

Now, nations will continue to compete in the same arena that ended military engagements and replaced warfare as the game to excel at. Capitalist economics. And just like any evolving sport an unfair advantage is to be gained in the tactics of playing at it. The American model is being beaten by fresher paradigms...notably those developed in Asia.

Just as the Mongols were able to conquer the civilized Old World with superior mobility and a novel weapons system involving 160 lb (pull) bows and arrows launched accurately on the fly from horseback...delivering hardened carbon-steel points through heavy plate armor...Chinese, Indian...and soon to follow ASEAN...capitalists are deploying capitalisms that are better than ours. And our mature form has reached its technical limits. Just like it did in Japan 20 years ago and just like it will in Europe...soon enough.

Our Republic will not die. Because we need it to do certain things for us that we cannot do for ourselves. So we'll keep it around. And so will the people in other nations. They will fit their unique forms of capitalism into their own societies, in the context of their own cultures and under the laws of their own governments. And all of them will create wealth that they will keep...rather than to be exploited.

But our republics with their politicians? Just like the religions with our priests. They will stay with us as long as they have a role to play in our societies. And we cannot yet imagine a world without them quite yet.

So relax about all that and let's get ourselves back to making money.

We are far from technical limits.
I love the movie 'Disclosure'. The character Douglas plays in an engineer who his female boss is trying to fire. She went to Malaysia and replaced machine insertion with hand insertion and reduced the size of the air handlers for the clean room. All resulting in failed products.
As technology advances, the precision and quality of the tools needed increase, pushing technology limits.
Since you seem to be in PI, why are so many high tech businesses leaving?
Compare Manila to Singapore and you might find your answer.

Neither a borrower or a lender be.
Maybe this is why Christians used to disdain money lending and Muslims still do.
Those that are successful money lenders do so with much discretion and they know their customers.
BHO claims to be responsible but is promising to borrow and spend our great-great-grandchildren's wealth.

What a RELIEF to see an article on economics, with the phrase "Human Nature" in it !!!!
.

Just curious; are you the reincarnation of the "Forest" with whom Zyndryl had delightful duels?
..

Elegant oratory
The author intones with august gravity "We begin with moneylenders who have a nasty habit of lending money to people they know will use it irresponsibly, especially to youths whom they encourage to fritter it away on useless luxuries. They prefer that their money be wasted on frivolities; the more of it is wasted today, the more they can charge in interest tomorrow."

But he misses an important step. The charlatans don't get paid if they just lend money to improvident souls who haven't a prayer of paying it back. The loan itself must then be sold to some other unwitting paragon of greed. Else the perp will not prosper.

However the article strikes just the right note, to convince us in the gallery that we're being made to think ennobling thoughts about a process of wealth creation that is in fact sordid, furtive and greasy.

Gladiators in a cash sweepstakes
Forest-- You describe capitalism as though it's an arena where one nation pits its might against another. And those nations may even think that's the game they play. But it's an illusion.

Each nation has capitalists who each play against every other. And most of them use the same set of chips-- the dollar-- so each has a vested interest in preserving its health.

The nations themselves are just playing out their historic roles: as manufacturers to the world, as complacent consumers, as has-beens watching from the sidelines, etcetera. They may think they're possessed of free will.. but my thinking is that they're creatures of instinct with little power to change their circumstance through policy.

It would be useful to venture out into the court of world opinion, to see how the Chinese, the Europeans, the Russians and others view our unfolding drama. Relief is to be found, for the most part, within the halls of the US Congress at the moment. But do any of the players really have policy prescriptions to suggest that markedly differ from those now being discussed?

We all have the same interest: a healthy and predictable dollar (not necessarily a "strong" one). But where lies the disagreement as to the course we should be charting?

David Brooks has just sent out a brief questionnaire to one hundred economists, asking their views. Of those who returned his inquiry, two-thirds endorse policy approaches much like those being recommended in government.. that we act like "Keynesians" and spend our way out in some fashion. This view seems common to both our Reps and Dems, their differences being only upon the method to be used, on the quantity of cash to be thrown at the wall, and on the recipients to be targeted for relief.

One-third differs STRONGLY! Those would be the folks akin to the ones writing here, in mises.org, in capitalism.com and other fringe venues. These radical monetarists are totally at odds with the center consensus. And they're the only players whose recommendations are totally preclusive of any of the other approaches. Thus no accomodation or compromise is possible.

They are believed in implicitly by their Base. However they're not winning converts. Want to see some intelligent commentary from the other side of the globe? Check out Atimes.com. It's all over the map.

The socialists are opposed to 'stimulus'
The French and Russians don't agree with Keynes.

Putin: "reduce government control over the economy"
"This time the Russian premier spoke calmly of the need to reduce government control over the economy. He even bit the bullet when Bill Clinton joked about his commitment to the free market."
"The economic component of Putin's talks was no less important. Information I received from Moscow indicates that in exchange for a debt write-off, Putin may have offered Western financial institutions a chance to work in Russia's retail banking sector and gain a stake in the oil industry."

http://www.forbes.com/2009/02/06/putin-davos-debt-opinions-contributors_0206_dmitry_sidorov.html?feed=rss_opinions

And not ago Hugo was wanting private companies to return to save his arse.

Even hard core socialists acknowledge the power of capitalism to prop up their power.

Then, why are YOU wasting your breath HERE, at one of the FRINGE venues Roy?
When you have ALREADY concluded that

“ONLY One-third differ STRONGLY and they ONLY write here and other FRINGE venues and that they TOTALLY preclude any of the other approaches and are believed in implicitly by their BASE ONLY and are NOT WINNING any converts”?,

why are YOU, the majority worshipper, wasting your time and resources trying to CONVERT THEM by writing HERE?

You know the answer Roy, but feign ignorance.

You KNOW that RIGHT is NOT on YOUR side. You also quite possibly know but don’t (want to) articulate it loud and clear, that most people WANT to live a RIGHTEOUS and PROUD life, two things conspicuous by their absence, in the system you promote.

That is why you have to waste your time HOODWINKING people who ARE ALREADY on YOUR side; lest they realize that they have become RIGHTLESS creatures and rise in anger.

You try to accomplish this by distorting the meaning of one (RIGHT) and by making people ashamed of the other (PRIDE).

Socrates' law
Roy,

Thank you, my good man. I did indeed, in interests of brevity, leave out that step. But Plato does not leave it out; he has Socrates suggest two laws, one meant to encourage virtuous use of money on the part of borrowers, the other on the part of lenders. This second law would prescribe that loans be issued at the risk of the lender, and would prevent the repackaging of risky loans.

I'm not sure what you mean about "a process of wealth creation that is in fact sordid." I love the creation of wealth, and I can't see it happening on a large scale without credit. My worry lies in a process of wealth creation that is addicted to amounts of credit exceeding the limits of credibility.

A definition of wealth would have been good. Not all mean the same when they use that word
.

A Primer on (Human) Nature - Part I
Nature exists independent of anybody’s wishes, fears, faith, hopes, needs, wants, desires, beliefs and what have you.

Each thing (including each individual person) has a specific nature and it’s futile to wish that it were otherwise.

Things may be categorized into Classes (or Groups or Kinds or Categories or what have you) in an effort to glean the essential features that distinguish them from other Categories and help people understand them better. But there is no such thing as Category XYZ "out there in nature". There are only individual members of what we humans have decided to call Category XYZ.

The distinguishing feature of the category of things called Man is his ability to think, usually referred to as Rationality. But it's only a faculty, much like his faculty of sight and hearing and ability to reproduce. Just as a particular man possessing the ability to reproduce may not reproduce, many people may not think.

Moreover, by its very nature, the ability to think is not a thing "out there in nature". It’s the term given to a particular kind of action that Man alone can perform. Or more precisely, that we can deduce at this point in time, that Man alone can perform. It can only be deduced; it cannot be perceived directly, like many other things.

To be continued.

Tertiary Moral Syphilis
I diagnosis those esposing Socialism and Communism, it's totalitarian cousin, as suffering tertiary moral syphilis (TMS). Some of Socialism's supporters are so deranged, they actually think they are doing good.

Misplaced confidence
Recently read a blog post on NRO that related the comment from a congressional staffer that '...our economy is so big that we can afford to be stupid.'

Socialists? Wrong on all counts
One problem.. neither France nor Russia are led by socialist governments. Nicholas Sarkozy, for example, is considered by all to be a right winger.

And even so, here's his plan:

"DOUAI, France (AFP) — President Nicolas Sarkozy unveiled a massive stimulus plan worth 26 billion euros (33 billion dollars) on Thursday to help France resist the global economic slowdown.

"France's contribution to a European-wide economic stimulus drive, the plan combines major state infrastructure projects with targeted measures to improve cashflow for hard-hit businesses, protect jobs and shore up France's vital car and construction industries."

http://www.google.com/hostednews/afp/article/ALeqM5j4bidizqM3bQ75N3wm_BTv3tBAhQ

So then, to sum up: Sarkozy's not a socialist. And Sarkozy supports a large stimulus plan. Hence your premise is ass backwards.

Some problems with your theory
"Even hard core socialists acknowledge the power of capitalism to prop up their power."

A. Communism fell in the Soviet Union, back in 1991. USSR not socialist any more. In fact, not exist any more. Russia is capitalist state.

B. Putin not socialist.

C. Putin not even in charge now. Russian president named Dmitry Medvedev. Keep up with times.

D. Medvedev in favor of stimulus. In fact annoyed with #2 man, Putin, for not implementing program fast enough.

"Russian President Dmitry Medvedev has gone on the offensive , attacking former President and current Prime Minister Vladimir Putin for acting too slowly to help Russians during the economic crisis, claiming only 30% of a government economic stimulus program has been implemented and the people are suffering for the delay.

"President Medvedev added, “We must acknowledge that, at the present moment, planned measures are being fulfilled more slowly than expected and, most important, more slowly than the current situation demands.” Accomplishing this is Prime Minister Putin’s responsibility."

http://ktracy.com/?p=3137

Conclusion: knee jerk reaction to all comments not as good as doing homework first, then opening mouth up second.

"Paris rejects 'Obama-style' stimulus program"
"Prime Minister François Fillon on Monday rejected demands that the French government seek to stimulate consumer spending, "

http://www.iht.com/articles/2009/02/02/business/frecon.php

"Responding to discontent expressed in mass demonstrations last week, Mr Sarkozy said that he understood public discontent but would not be swayed from his plans for trimming Frances’s costly public sector and taxes on business. "

http://www.timesonline.co.uk/tol/news/world/europe/article5672531.ece

Sarkozy may not be a socialist, but France is still a socialist country as lamented by Sarkozy above.

Why am I here?
That's a good question to ask. I think I'm here mostly to see whether your side has any good arguments to offer the rest of us, in regard to the issues of the day. If I find any, I can then bring these cogent arguments back to the outside world and lay them on the table.

And I try to be as liberal as I can in seeing the grain of wheat hidden in the mountain of chaff. But I'll confess, most of the time I find the arguments being proposed by TCS authors and by the peanut gallery here to be insufficient, unreliant on observation and without the power to persuade.

In fact very often I find that the arguments are specious. False. Mendacious. They are cobbled together by people who should, and I'm sure do, know better.

So that brings me to the next reason I hang out here:

Amusement.

Trying to parse your arguments here, for example, is an exercise in pathology.

"You KNOW that RIGHT is NOT on YOUR side. You also quite possibly know but don’t (want to) articulate it loud and clear, that most people WANT to live a RIGHTEOUS and PROUD life, two things conspicuous by their absence, in the system you promote. That is why you have to waste your time HOODWINKING people who ARE ALREADY on YOUR side; lest they realize that they have become RIGHTLESS creatures and rise in anger. You try to accomplish this by distorting the meaning of one (RIGHT) and by making people ashamed of the other (PRIDE)."

I rest my case.

The process of wealth creation
Thanks for engaging. It's not often that a TCS author is willing to descend into the mosh pit that is the Discussion Forum. Welcome to the mud.

I did have something in mind when I described the process of wealth creation. As you know, banks get to pretty much invent the funds they lend to others. And many grand houses of cards can be built on these less than firm foundations.

So much so that the forces of "wealth creation" in this country pretty much ensure that the progress of money as it circulates through our economy gravitate upward. That is money all rapidly reaches the top level, whenever there is no countervailing force to recycle it down below.

The force normally employed to incur circulation throughout the entire system is taxation. And I'll agree, there are many abuses in the history of our elected officials that have prevented the most productive and fairest dissemination of that wealth.

But there is one thing that mitigates in favor of high taxation for corporations and wealthy individuals. That is that corrupt or incompetent elected officals can be fired and replaced. Absurdly rich financiers-- the recipients of a wholly unearned largesse-- cannot. Therefore I incline to have management of the cream off the top in the hands of representatives answerable to the American public.

I invoke an example: job creation. This sword is held over the heads of the ignorant masses who have no adequate response to the philosophy that allowing all profits to end up in the hands of the wealthiest among us creates the jobs the poor shmucks depend on.

Comes now the Bush 43 administration, standard bearer of this approach. Job creation in this era has been easily the worst of any administration since the 1970s. If you track job creation following the infamous tax cuts occurring under Bush 41, you find an instant increase in the pace of job creation. So we came out of the 1991 recession roaring like a lion.. and out of the 2001 recession mewing like a kitten.

The Trickle Up Theory works. It gives earnings to people who need the cash to spend on necessities. And their spending boosts that best of capitalist ideals, company profits. When the ordinary workers have cash in their pockets their consumption makes the whole world go round.

When they are starved for funds in periods of under- and unemployment, they must live on debt, as the rich loan them the funds they used to be able to earn through their labors.

To CONTINUE to EVADE, Roy now says he doesn't know how to identify the parts of speech in my posts
Because, that's what parsing means.

Let's start with the first sentence of the paragraph from my post that you quoted.

Here it is; "You KNOW that RIGHT is NOT on YOUR side".

Are you saying you cannot identify the various parts of speech in that sentence?

Its obvious what a "good argument" is for you; the one that agrees with your premises AND conclusion
For example, were I to accept your premise that no violence is involved in the Minimum Wage Law, that would be a good argument for you.

For another, were I to accept your implicit conclusion that people have un-chosen positive obligations towards others, for the crime of being born at the same time, THAT would also be a good argument for you.

"Many in Russia do still revere Stalin for his role during World War II "
"Former Soviet dictator Joseph Stalin was beaten by medieval prince Alexander Nevsky in a poll held by a TV station to find the greatest Russian.

Stalin came third, despite being responsible for the deaths of millions of Soviets in labour camps and purges. "

http://news.bbc.co.uk/2/hi/europe/7802485.stm

As much as you like dictators, Roy, a government cannot be judged solely on who is the current leader. One must examine the laws and structure that is established and followed.

Are they running the country?
No they are not. Down in Hoke County there are a lot of people with rebel flags on their pickups, who would be just as happy if the southern states seceded again.

Is that ever going to happen? Don't think so.

Likewise in Russia there's a lot of nostalgia for the days when everyone had social insurance, in the form of generous pensions and a job. But are they going to be going back to five year plans and collective agriculture?

Zero chance of that ever happening. Russia is in a unique place right now, one you don't begin to understand. It is absolutely NOT socialist, as it guarantees nothing to anyone.

Nor does it have much in the way of laws. They're more guidelines.

Socialism is defined by what the state guarantees?
Socialism is state control of private property.

Russia, not some company, stopped the sale of natural gas to the rest of Europe.

Russia, the state, owns and controls natural gas. What else does the state own?

Let us SPELL out some of the (IMPLICIT) premises in this latest post by Roy; and also the evasions
The Premises :-

(1) Some people have un-chosen positive obligations towards others, for the crime of being born at the same time. The specific obligation implied in this post is ”the creation and maintenance of jobs paying a Minimum Wage”. Let’s call these people Group I for ease of later use and identification.

(2) Many people have un-earned “Rights” for the privilege of being born at the same time. The specific “Right” implied in this post is ”a job, paying a Minimum Wage, created and maintained by others”. Let’s call these people Group II.

(3) Some people – for the privilege of being born at the same time and by virtue of the “power” given them by the people in Group II – have the “Right” (and “duty”) to “force” the people of Group I to comply. These are the Group III people.

And what are the Evasions?

The most important evasion is the glaring contradiction in the “reasons” Roy gives in support of the laws he approves of, which are ALSO applicable to the many laws he doesn’t approve of. He supports the Minimum Wage Law because - among “other” things - that’s what the “people” want, as reflected in the passage of the law by a majority of the 535 “representatives” of the “people”. But he doesn’t support the Jim Crow Laws even though the precise same reasoning can be applied to it, WHEN the law was passed.

It’s obvious from the above that Roy has his OWN reasons – other than the “fact” that a particular law is “wanted” by the “people” (as reflected in the passage of the law by a majority of the 535 “representatives” of the “people”) – for approving some laws and disapproving some other (laws). But whenever this is brought out, Roy diverts and evades. This is the next most important evasion.

How Republics Die: Selective enforcement of laws
It was sad and amusing to watch the SEC being raked over the coals by Congress.
The sad part is that at all government levels, including Congress, the SEC failed to see what a private expert saw 10 years ago: Madoff was a fraud.

There will be those who will cry our for more government regulations, more money for the agency that failed, etc.

What is striking to me is the the individual who uncovered the fraud did so because he had an incentive to do so. He was in the business.

The motivation of the government, at all levels, was to protect Madoff and his pals in the business that bribed them with campaign contributions.

Recalling that FDR appointed Joe Kennedy because it takes a crook to catch a crook, the SEC should be disbanded and let the market sort it out. At first, much activity will stop because no one will trust anyone. As the pressure builds, those that want to make money will work out a plan, maybe a private entity like Underwriter's Lab to certify integrity.

The government can then end all the paperwork BS and focus on prosecuting fraud without undue campaign contribution biases.

How Republics Die
Let's add Tacitus to the list of philosophers and statesmen who warned us. The latest "we gotta do something, we gotta do something" will lead to more and more legislation. Tacitus said "corruptissima re(s) publica, plurimae leges," "the more corrupt the republic, the more laws it has." We are about to reach the legislative/corruption saturation point.

So, you agree that the US of A is Socialist?
After all, the US guarantees many things to many people and it has tomes of Laws.

And since Obama is giving lot of guarantees & is going to sign many Laws, you agree he is Socialist?
Just confirming Roy.

Therein lies a tale
It's too bad you're so handicapped by your belief system, marjon. Without it you could see how fascinating the story of the End of Communism was.

What happened in 1991 was the defeat of one mafia by another. The upper levels of the CPSU were just a small group of people possessing total control over everything in the empire. And when Yeltsin stood the tanks down, a different group sprang to the fore, to rule without all that cumbersome ideological baggage.

So they took all the assets owned by the state and parceled them out among themselves and their cronies. Instantaneously, guys you never heard of before like Boris Berezovsky "owned" Gazprom. Where previously, they had had neither money nor power. Just how could that have happened?

The idea was that the new, non-soviet government was owed a kickback for removing the asset from public ownership. Only Boris said screw that, I'll keep it all for myself.

And when Putin came on the job he informed Berezovsky he'd just be taking the asset back. So now Boris lives in London, while the State (that would currently be a shadow group called the Siloviki) enjoys control of everything.

So the system is nominally capitalist, but remains the same as the old system, nominally communist. It's like the old joke:

What's the difference between capitalism and communism?

It's simple. Under capitalism, man exploits his fellow man. Whereas under communism, it's the other way around.

A unique definition
This is your definition of socialism? ".. the US guarantees many things to many people and it has tomes of Laws".

Sure under that definition, the US would be "socialist".. as would just about every government on earth. They all have social programs and they all operate under a framework of laws.

The only exceptions under your rule of thumb, the presumably non-socialist countries, would be places like North Korea, Myanmar and Zimbabwe. These obscure places are not ruled by law and they have no government funded social programs.

So are you sure about that? That's your final answer?

A political scientist would have a somewhat different definition of what constitutes socialism. And even though this country still has a government-run retirement program (Social Security) and a government-run medical benefit (Medicare-Medicaid), most academics would say we incline far more toward the capitalist end of the scale. We are, like virtually every nation on earth, organized around a mixed form of government.

Devastating logic
See above definitions, in my prior comment.

George Bush gave lots of guarantees to his Base. He also signed many laws. Therefore George Bush is-was a socialist.

Right?

So explain yourself more clearly
I didn't say I was having trouble parsing the words in your first sentence. I said I was having trouble parsing your arguments. As in, breaking them down into their constituent parts to see how those parts fit together to make a coherent whole.

So try this one again, and tell me what logical conclusion it points one toward:

"You KNOW that RIGHT is NOT on YOUR side. You also quite possibly know but don’t (want to) articulate it loud and clear, that most people WANT to live a RIGHTEOUS and PROUD life, two things conspicuous by their absence, in the system you promote. That is why you have to waste your time HOODWINKING people who ARE ALREADY on YOUR side; lest they realize that they have become RIGHTLESS creatures and rise in anger. You try to accomplish this by distorting the meaning of one (RIGHT) and by making people ashamed of the other (PRIDE)."

Not evading.. trying to comprehend
"For example, were I to accept your premise that no violence is involved in the Minimum Wage Law, that would be a good argument for you."

Again, there is no punishment for violation of the minimum wage laws involving violence, or even physical detention. The range of punishment involves payment of a fine.. and a possible court order prohibiting future violations. You do violence to the word "violence".

"For another, were I to accept your implicit conclusion that people have un-chosen positive obligations towards others, for the crime of being born at the same time, THAT would also be a good argument for you."

Yes, the bell doth toll for thee, and for me:

"Now this bell tolling softly for another, says to me, Thou must die.

"Perchance he for whom this bell tolls may be so ill as that he knows not it tolls for him; and perchance I may think myself so much better than I am, as that they who are about me and see my state may have caused it to toll for me, and I know not that. The church is catholic, universal, so are all her actions; all that she does belongs to all. When she baptizes a child, that action concerns me; for that child is thereby connected to that head which is my head too, and ingrafted into the body whereof I am a member. And when she buries a man, that action concerns me: all mankind is of one author and is one volume; when one man dies, one chapter is not torn out of the book, but translated into a better language.."

..John Donne, 1624

All men are brothers
"It’s obvious from the above that Roy has his OWN reasons – other than the “fact” that a particular law is “wanted” by the “people” (as reflected in the passage of the law by a majority of the 535 “representatives” of the “people”) – for approving some laws and disapproving some other (laws). But whenever this is brought out, Roy diverts and evades. This is the next most important evasion."

It's called personal character. I have mine, you have yours. We each get one vote in this society we share.

It's a matter of personal choice
In our society, each one of us gets to enjoy freedom of opinion and to offer up one vote in favor of the candidate of his choice. We enjoy the freedom of disagreement among ourselves.

In that light, those who prefer to sit back and watch the inexorable workings of an economy as it breaks down and self-destructs are free to counsel that no action be taken. It's "laissez le bon temps roulez".. and evil take the hindmost as unemployment becomes more and more nearly the total sum of economic activity. We have jointly created debts that all of us combined are unable to discharge.

Those among us, on the other hand, who have a humanistic view of history would counsel that we do something, anything, that appears likely to disrupt this seemingly inexorable progress toward economic anarchy. We foresse a future of universal bankruptcy down this road.. and are willing to take drastic steps, even of an experimental nature, to prevent the train from finally going off the track.

So, as I just finished telling NeaRNoaD, you get one vote and I get one vote. We live, unfortunately for all, in a zero-sum political environment. And the Republicans are out to wreck the Democrats' plan, while the D's are out to wreck the R's plan. And so the joust continues.

If I may observe, the Libertarians and the Austrians, in this war, haven't many divisions. Among the 535 Members of Congress, I can only see one: Ron Paul of Texas.

Ako...
Near No Ad

Yeah. It's me. Thanks.

It is too bad your are so hadicapped by your belief system.
Capitalism is a system that respects the individual rights of all men and women to freely trade and associate without coercion.
Russia, as you describe, is not capitalistic.

Humanistic view of history should dictate DO NOTHING.
Government interventions in the past only prolonged the pain and increased the size and scope of government power, to the detriment of our fellow man.

The limits of our form of capitalism...
Marjon,

I am talking about our form of Capitalism that seems to have matured into a process of slow expansion related to its own structures and mechanisms. Top down Managerial Capitalism dominated by large industrial corporations, funded by global banks and enabled by a very strong central government must eventually appropriate any and all substantial business opportunities...that it can be bothered with...inside its own economy. Such overwhelming power is only real when it is engaged. And the big guys do play to their strengths. However, insofar as global competition drives such entities toward consolidation and the manufacturing of commodities...high volume and low margins...with real concerns about marginal tax rates because those public companies must show taxable earnings...but those profits might be razor thin (so that tax savings regarding capital gains or deductions for investments would become significant)...such players make more money with their financial dealings than they do with their underlying manufacturing operations.

As this process goes forward the ability of a $14 trillion economy to continue growing rapidly hits its technical limitations. Those big guys have saturated the market opportunities and their new products simply displace their old products on the same shelves.

Foreign entrepreneurs exploit our markets with better, faster and cheaper business paradigms. And this is not about cheap labor really. With any volume we can go offshore and access their cheap labor pools just as they access our wealthy consumer markets. Foreign entrepreneurs are able to launch rapidly growing operations because they are able to find the funds to underwrite their working capital. Foreign bankers work with them...most often because the banks are owned by the same families who run those businesses...while our bankers treat us like strangers and beat up on small business owners.

Therefore, our model of capitalism that has gotten us this far must now evolve. We need to decentralize the mechanism of capitalism by putting the magic of banking into the hands of entities who are also engaged in the creation of wealth. Those same small banks should write and hold the mortgages that put their own workers into homes and their own businesses into commercial space. Such cash flows need to be recaptured into financial feedback loops so that the same people who create the wealth in America are able to hold onto as much of it as possible...rather than to have our cash flows structurally extracted by predatory third parties.

You have spoken in the past about downsizing sovereignty. So let's talk about that. Thanks.

always, and on everything
Sarkozy is only a right winger compared the the other European hyper socialists.

Keynes described rapidly growing economies...
Our economy in the United States is mature. The economy of Japan is also mature. Europe will get there soon.

This means that our underlying wealth creating capitalist mechanisms have reached a stage of development where the value of our income producing assets will not rise in terms of our currency...inflation...because the net present value of the typical investment opportunity no longer carries the upside premium that we will be selling into a rapidly expanding market.

When an economy is young its own domestic markets are poor and underserved. We have "demand pull" market forces at work. Keynesian inflation is healthy under this circumstance. Prices go up. One man's prices are another man's costs. Costs go up. Real estate values go up. Wages go up. The value of capital equipment...making more expensive labor more productive...goes up. The reality of inflation is factored into bank lending rates because the inflation diminished money used to pay those loans down in future periods must be discounted back to its net present value...and there is more room in that larger number for the banks to earn a greater interest rate spread.

However, in a mature economy the upside opportunites of "demand pull" are replaced by "supply side push" into market channel mechanisms...seducing wealthy consumers with goods and services they can afford...but that they probably do not really need. The economy stops growing while the large players wage price wars over shares of the same market.

Keynesian policies trying to stimulate economic activity might cause inflation but the economy itself offers few opportunites to invest. Instead that extra cash is used to hedge inflation into real estate, for example, and this quickly leads to a speculative bubble that cannot be sustained...and the economy is still not growing any faster than it would have. Stagflation.

In the current financial crisis the banks have simply stopped operating as lending institutions. Therefore, investments are not being funded and the recession we are in is crippling consumer markets as more people lose their jobs. Supply side initiatives would run up against bankrupt households...even if such corporations could find the money to expand.

This process is deflationary...as American income-producing assets now must decline in price against the dollar. Therefore, these trillion-dollar government programs will not cause inflation...because they will serve to balance underlying deflation...but they also won't create sustainable economic growth because our capitalists will not be building up their corporations. This money will simply be welfare for larger and larger numbers of unemployed workers as the economy contracts.

This is a depression. And it is inclined to feed on itself. The recession will last at least 10 years and even after the government gets the banks fixed we will never again return to rapid GDP expansion...just like the Japanese...until we evolve a fresh capitalistic paradigm and start acting like a developing young economy again...rather than a mature old one.

Definitions are important
I'm not quite sure what we have in the USA is capitalism anymore with so much government control.

The USA is really becoming a socialist state as Mises defined socialism: state control of 'private' property.

The Roman Republic technically did not 'die' either
It just became hopeless corrupt and the checks and balances that kept that from destroying the efficacy of the Republic were destroyed as well.

I mostly agree
"Keynesian policies trying to stimulate economic activity might cause inflation but the economy itself offers few opportunites to invest. Instead that extra cash is used to hedge inflation into real estate, for example, and this quickly leads to a speculative bubble that cannot be sustained...and the economy is still not growing any faster than it would have. Stagflation."

A good point. One of the main contributors to the Asian credit crisis of 1997-98 was that so much loose investment capital came streaming into the newly deregulated markets that the logical home for it would be in the area enjoying the greatest ROI-- that is, speculative real estate. What we're seeing today is in some sense a replay of that era's folly. (The details, of course, are different.)

"In the current financial crisis the banks have simply stopped operating as lending institutions. Therefore, investments are not being funded and the recession we are in is crippling consumer markets as more people lose their jobs. Supply side initiatives would run up against bankrupt households...even if such corporations could find the money to expand."

Even the best funded, cash-heavy corps are having the problem of a lack of customers. No sense in running the line when the product isn't moving off the shelves.

It would be most excellent, although a pipe dream, if the Fed could bypass their normal clientele, the big banks, and move into the currently frozen consumer lending biz. If they were offering re-fis, car and new-purchase home loans they could get a lot of business moving again. Plus, it wouldn't be spending. They'd have assets to show.. and when the economy returned to normal they could sell these assets on the market.

"This process is deflationary...as American income-producing assets now must decline in price against the dollar. Therefore, these trillion-dollar government programs will not cause inflation...because they will serve to balance underlying deflation...but they also won't create sustainable economic growth because our capitalists will not be building up their corporations. This money will simply be welfare for larger and larger numbers of unemployed workers as the economy contracts."

Indeed there's scant chance of any inflation right now. Supply and demand issues suggest prices will sag as the crisis deepens. But I think a large enough stimulus will create sufficient demand that we might return to hiring again. I doubt those furloughed workers will become a permanent burden on the welfare rolls. It might take two trillion though.

Fortunately our creditors appear (so far) to be on board with this thing. They're snapping up Treasury offerings like a lake full of hungry bass.. even at a virtual zero percent return. Obama has become the designated driver, and everyone appears to be on board.

"This is a depression. And it is inclined to feed on itself. The recession will last at least 10 years and even after the government gets the banks fixed we will never again return to rapid GDP expansion...just like the Japanese...until we evolve a fresh capitalistic paradigm and start acting like a developing young economy again...rather than a mature old one."

A truly depressing scenario, that we might replay Japan in the torpid 1990s. But we can use their experience as a guide. As you may agree, their response to a deepening recession was too little, too late. So it not only became entrenched, it spiraled downward until the cure was beyond reach.

Let's not be so cautious in our response! The world economy is in grave danger and bold steps are needed to restart the patient's heart. Don't stint with the paddles.

Taking action against a lax government
I'll have to dissent from Tacitus, if he links corruption with the number of laws on the books. It's undeniable that when corruption becomes a problem, more and more laws will be enacted in an attempt to root it out. But that's the response, whether or not it's effective. The laws do not cause the corruption.

Obviously, it's not the quantity but the quality of legislation that counts. Whether more laws or fewer laws, we need laws that get the job done. To the point and without loopholes. And with strong, nonselective enforcement. Justice should be swift and sure.

However our elected representatives have proven amply to us that they listen more closely to the suggestions of their financial enablers than they do to their ordinary constituents. So an answer must be sought outside of normal government channels.

I would begin by organizing massive demonstrations on the Capitol steps to demand that lobbyists be barred from access to the halls. And try to get at least a half million people demonstrating.. loudly! One thing we do know-- politicians get afraid when they see genuine anger in the streets.

A government is answerable to its people. But only when they wake up and start to cry.

The lessons of Rome
The fall of the Republic happened well before my time.. so it's not an episode I've been familiar with. But your comment has stirred me to do some catching up. And I find, sure enough, that it holds valuable instruction for us in our present circumstance. Especially since our own republic has been so recently threatened.

And I find that critical lines have been passed, in the transition from free citizens on the way toward becoming slaves. Once the ordinary person loses his voice in the forum the barriers to his oppression have been breached.

Our civilization flowered at the close of WW Two. Government stood behind the aspirations of the working class and mandated their elevation to middle class status.. with as many opportunities in the way of education, job access and home ownership as could be arranged through the assistance of a large and beneficial government.

Incomes came closer to being levelled than at any time before or since. The class lines were very close to being erased, and mobility assured, to the degree that a citizen was motivated to work, prosper and contribute to our mutual well being.

Then progress began to get chipped away. The rights and abilities of the richest to out-prosper the rest of us became engrained in the law. A philosophy was created that exalted that right to keep one's gain against the claims of the greater society.. and resonated among enough of us that elections began to put people in power whose aim it was to roll time backward. And erase our gains.

Workers began to lose their power to affect the terms of employment. Job security, pensions and workplace rights became a laughable notion. And buying power eroded.

In the next stage, people couldn't earn enough to buy what they felt they needed to have. So out of the money their superiors saved out of paying them wages, they were lent cash on easy terms. We transitioned into a credit-based economy, where everyone ended up owing The Man instead of being fully repaid for their labors by him. Labor lost its share of the profits it created.

The progression to slavery continues to slide today. We can learn a lesson from the slide in ancient Rome, as freeholders lost their land and went to the city for work.. only to end up slaves. Here:

"..the Second Punic War created vast disparities in wealth. Up until the Second Punic War, the plebeians were farmers, craftsmen, or laborers. They would farm their own land that, even though it was small, was still their property. As laborers or craftsmen, they worked for decent wages (or the equivalent of wages). However, Hannibal had razed the countryside; while the wealth sat secure within the walls of Rome, thousands of people had their farmlands and houses destroyed. With no land they had no work and so began to flood the cities. The wealthy, who had grown wealthier because of the spoils of war, bought up the farmlands so that by the middle of the second century, Roman agriculture was dominated by large plantations owned by fabulously wealthy landowners. This was only the tip of the iceberg, though. The Punic Wars and the Macedonian Wars flooded Rome and Roman territories with new slaves. Rome had had slave labor before then, but the second century saw a major shift in the Roman economy from a laborer economy to a slave economy. By the end of the second century BC, the majority of the population in Italy were slaves. This severly depressed job opportunities and wages. For slavery is an economic phenomenon more than anything else; slavery is an economic device to keep the remuneration of labor at or slightly below subsistence level. This meant that the poor who were not slaves either couldn't work or had to work at below subsistence wages; it also caused massive migrations of the unemployed into cities." etcetera

http://www.wsu.edu/~dee/ROME/CRISIS.HTM

Why do favor so many unenforcable laws?
You support all sorts of regulations on business which leads to the lobbyists you cry about.

Where is the responsibilty of the individual to take care of himself?

Your nanny state policies lead directly to all those corrupt laws.

What do you think about this plan?
"BHO claims to be responsible but is promising to borrow and spend our great-great-grandchildren's wealth."

BHO rightly points out, in last night's press conference, that those who recently doubled the national debt in the space of eight years (as compared to the previous 224 years) are really in no position to begin casting stones about spending.

Just when did YOU find out we were hemorrhaging money at such a great clip?

However here's something we may both be able to agree on. The Austrians regret the great powers of the Fed to be able to create money on demand.. and I concur.

Further, I see the flaw in our economy.. that the Fed only grants its loans to its "best customers". That is, to the largest banks. They therefore have the power to grant or to withhold this manna from heaven from all the rest of us. Hence their great power to hold us hostage to their designs.

I think you are with me so far. So here's the plan:

We clamor before Congress to urge that they pass into law a prohibition on lending multiples of cash held in reserve.

It's a basic change in our economy. So it would probably have to be done in stages. A first stage would be to outlaw speculative trading in the markets of the kind where one dollar can wager thirty or forty. That's entirely too much leverage for a casino to safely operate.

Next, overturn the "prudent bank" rule, where six dollars can be lent on the basis of a single dollar held in savings, money markets or CDs. Lower that to three. Then to two. Reduce the amount as needed until the power of banking is put in harness. And speculative bubbles no longer rise to the top of the pot.

Your thoughts are invited.

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